The Truth of Credit

Do you feel that God has forsaken your financial future?

Mrs. Field’s, the ever so lovable cookie-maker, despite most likely having Ivy League financial whizzes running its finance department couldn’t prevent the company from going up in smoke. So the next time someone asks if you filed bankruptcy just refer to it like major companies as a “Prepackaged Plan of Reorganization.” So many people fear bankruptcy like it’s the “plague” when in reality sometimes it really is the best option.

by jleighb

Signs it’s time to go Bankrupt

• If you were making $100,000 2 years ago and lived like the Real Estate market would never drop; you most likely aren’t making $20,000 now and are probably looking for other work (This unfortunately is the situation my realtor and mortgage broker friends have found themselves in).
• You’ve been forced cut back on every essential (i.e groceries) and paying your creditors causes you’ve fallen behind on your essential payments, such as your mortgage/rent, car payment, insurance or utilities.

Mental Signs it’s time for Bankruptcy

• You are losing sleep, constantly arguing with your spouse, considering divorce or contemplating suicide because of financial pressures.

• You are considering doing something illegal or thinking of pursuing shady credit repair strategies in order to relieve the pressure of dealing with your creditors.

Quote of the Day

It is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay. - Ralph Waldo Emerson

Related Post

• The Worst Part of Bankruptcy
• Some of my Favorite Bankruptcy Myths

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Photo by Eddie S

Do you ever wonder why there are no Payday Loans in Beverly Hills or on Park Ave in New York? Would a Rich Guy/Gal ever need the services of a Payday Loan (or equivalent)? Simply no, because to them that would be financially stupid; as stupid as not paying you heating bills or utilities

“It’s not my Fault“
Are you constantly blaming others for your problems? What are you going to do to change your predicament?

• These are the two hardest questions for people in debt to answer. One because they must take responsibility and the second because it requires them to educate their mind to find a solution.
• Stop playing the victim (unless that helps you in some weird way).

The Definition of Insanity
Are you borrowing money every month hoping things will change?

• According to Einstein the “definition of insanity is doing the same things over and over again and expecting a different result”.
• Saying that you will have money next month or next year sounds good in theory but being is a constant state of “catch-up” is not a plan for action.

Reap What you Sow

Do you deserve to be out of debt?

• Find what you can do without. Life may be short but the debt free life is so worth it. Think about how easy it would to sleep at night if you weren’t dodging phone calls or worrying about where you are going to find the money to buy groceries.
• Cash is King and when you have it the world opens up to you; no matter what race or sex you are.
  

Quote of the Day

“ Creditors have better memories than debtors.” ~Benjamin Franklin

Related Post

• The Dark Side of Payday Loans
• Turning Up the Heat
  

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Wheeeeewwwww Buddy! It’s been along time since I have written a post. To be honest there has not much to be write about lately on the collection front for myself. The month of August has been absolutely abysmal for me personally. Possibly the worst month in my career. Everyone who answers can get on the phone has attorneyed up (collection term meaning filing bankruptcy) or is on the verge of losing there home and has no way of paying anything.

Obviously, this should come as no surprise to anyone who has watched the news lately. What’s really sad is that I have more accounts than ever to work but the Credit Reports have been horrible. I had a 23 year old from Indiana whose FICO score was 379. That’s right 379 but still has 2 cell phones! Can anyone explain that one?

So, I plan to get back to my daily posting schedule and hopefully we can collect some money before this month is over.

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It has been a long while sense I have written about a “Day in the Life” of a Debt Collector. I’m kind of getting tired of writing about facts that most people really don’t care about or read for that matter. So I’m going to start writing about my days and if its boring to you so be it. I’m sure your job is boring too unless your a Navy Seal or Brett Farve. So here was my day August 8thth. Hope you enjoy:

1. Mid-Age Male from Pennsylvania calls in-A few days previous we had a pretty heated discussion regarding some bounce checks that he setup from 2 months ago. Now, after 2 months of bad checks and playing phone games he is calling in to apologize.  This almost never happens so I take it easy on him this time. He wants to reset his checks but, not for the amount we agreed to 2 months ago. So in the interest putting the account to rest I take the new checks for $250 for 2 months and then $150 there after until the balance is paid. I’m glad to get this guy off my desk.
2. Business Owner from Arizona-This poor guys credit was completely shot and had 2 foreclosures. He picked up the phone right away and I could tell he knew the routine. He goes on to explain that this debt $10,000 is not a priority to him and that he is basically there nothing he could do. Now, most of the time I would push the issue but he has literally “NOTHING” and no way of getting a loan. It’s still early in the month I’m positive I can get him on the phone again but, I’m not going to waste my time now.
3. Government Employment for California- This lady was a real fireball. She was with Campos Law Firm (Debt Settlement Company) and was making payments religiously to them over the last 5 months. However, she found out they were not contacting her creditors or doing any of the another things that she was promised (usually the case). So she wants to make payments but those aren’t an option anymore. Obviously, she works with government and has retirement which she vigorously denies but then later fesses up. Personally, I hate to see people dip into retirement to pay these off kinds of debts but she got some bad advice and my client should not have to pay the price for that. I give her a 75% settlement in the range of $5,000 she will get back to me tomorrow.
4. Housewife in Colorado- Here is classic case of someone hanging up right as you identify yourself. These are the people that give you the “thrill of chase” because now she knows why I’m calling. Maybe her neighbor could get her a message or maybe a relative? I’ll keep you updated on her.
5. Experienced Entrepreneur in Georgia- This lady really was so nice but her story so sad. She had a thriving retail business that recently went belly-up. Getting up in years she handed the business over to a granddaughter who obviously had no clue. Unfortunately, for her the company cards were still in her name leaving her legally obligated which she admitted. As you can imagine this is a relatively large debt ($30,000) she is offering nothing. After a good conversation she is going to try to sell some old inventory to at least make some form of payment. My guess however, is this has judgment written all over it she has assets and a home that is paid off.

Money collected today: $250 (BOOO!!!!)

YouTube video of the day!

No I don’t endorse this crap!

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The 28/36 ratio is the standard formula used by mortgage lenders to calculate your mortgage affordability.  It consists of your debt to income ratio, and is a figurative way of determining how much of your income should go toward your monthly mortgage payment after all your other monthly debts are paid. There is generally a debt limit associated with different types of mortgages, such as the 28/36 qualifying ratio associated with conventional loans.

The first number in a qualifying ratio is the maximum percentage of your monthly income that should be applied to your housing payment. When we say monthly income, we mean your gross monthly income before any withholding taxes are removed. Your housing payment includes the loan principal and interest, hazard insurance, and property taxes. Your housing payment does not include utility bills like telephone, natural gas/electrical service, or cable TV.

The second number in the ratio is the maximum percentage of your gross monthly income that underwriters will allow to be applied to your housing payment plus your “recurring debt.” Recurring debt includes any debt (not utility bills) that you’re are required to pay each and every month. This includes installment loans like car loans or student loans. It also includes alimony, child support and revolving credit card payments. Even if you pay off your credit card statement every month, the underwriter will include a minimum payment in the ratios whether you like it or not.

The TRUTH is that qualifying ratios are guidelines that mortgage lenders have used for years to calculate the loan amount you can receive. Although current underwriting software has modified the need for these ratios a great deal, every underwriter eventually approves your loan based on what percentage of your income is going toward your house payment.

Quick Example:

Gross monthly income of $2,500 x .28 = $700 can be applied to your housing payment.

Gross monthly income of $2,500 x .36 = $900 can be applied to housing payment plus recurring debt.

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