The Truth of Credit

This afternoon I had the delight of speaking with a gentleman in his mid-50’s named Dave. Dave has cancer, and recently developed paralysis on one side of his body which now prevents him from working. Even through he is on disability, it has not allowed him to pay any of his accounts over the past few months. On top of all of that, he has a special needs child that requires not only a lot of time but also money to care for.  All of this aside, he still had a great attitude and he wanted to do the right thing. Now, the result of the conversion was not a payment but his tone left a indelible mark on me personally. Usually, like any debt collector, if you’re not going to be paying me, I’m going to try to get off the phone ASAP. Luckily, for Dave he had a friend who had gone through some similar financial troubles in the past. Dave’s friend recommended 3 options:

• File Bankruptcy – I know that there is a sub-culture of people (mostly bankruptcy lawyers) that think that bankruptcy is the only option. While it’s not the only option, in some cases it’s the best choice. However, just remember that a bankruptcy attorney only gets paid if you file; they are sales people too, remember this.

• Debt Settlement/Debt Consolidation - In my experience, Debt Consolidation is good if you can get an agreement from your creditors before they charge-off your accounts. On the other hand, Debt Settlement, well, you can read my many posts about Debt Settlement; I’m NOT a fan.

• Working with Creditors/Collection Agencies - Honestly, this is a crap-shoot. Some companies are more willing to work with you, especially now more than ever. This is probably the quickest and possibly the cheapest way to clean up your credit if you know what you’re doing. A great many people will get discouraged because someone (collector) got a little stern with them. The key is persistence, just like anything else. Don’t get talked into something you know you can’t do. If you can make a reasonable payment, they will most likely be able to help you.

In the end, Dave choose to go with a Debt Settlement Company and in his situation it’s hard not to blame him. The one thing he did that a lot of people fail to do when faced with this situation, is ask for help. Sometimes having a unbiased party look at your scenario from the outside can help you find a solution you didn’t even know existed. Meltdowns happen, most times they are impossible to avoid (Illness, Unemployment or Divorce). What you as a financially responsible person need to understand is that these issues never disappear on their own. You and only you can start yourself on the path of recovery.

Related posts:

1. If You Have a 400 Credit Score!
2. Can a Creditor Sue Me After Setting up a Payment Plan?
3. How to Write a Debt Validation