The hard truth may be that you can’t fulfill all of your financial commitments according to the loan agreement. Realize this and move on! For me, reaching this conclusion was the hardest part of this process. It was frightening because I didn’t know what would happen when I broke the agreement. Try to relax and take a deep breath, everything is going to be O.K..

Sometimes you just have to be creative. I had two vehicle loans and only needed one car. My father, on the other hand, was driving a ten year old Mazda B2200. Conveniently he just turned 62 and his Social Security checks began coming in. I didn’t have enough equity built up in either vehicle to sell without having to come out of my pocket. So I convinced my father to sell his old truck and take up the notes on mine. This is what we did and that freed up $300 per month, and Dad looked great in his newer Ford F-150. That helped. My student loan was financed through Sallie Mae. They have a deferment program where you can put off making monthly payments if you’re in financial trouble. So I took a 6 month break from paying them – during which time I consolidated my student loans and am currently only paying $120 per month. I would like to pay more but the consolidation loan has a much lower interest rate than BOA and Citi – they are at 32.6% remember?

I owed 11 more payments on my Mitsubishi. Since I had to have a car I decided to pay that off first. I decided to continue to pay Discover Card (for some reason they kept a lower interest rate – today 28%), and as for Bank of America and Citibank – they received a letter.… more


When all the money you make each month isn’t enough to pay your minimum payments it can be quite disheartening. I remember in the summer of 2015 not being able to make ends meet and not sleeping well. My phone was ringing off the hook from bill collectors and I was extremely stressed out. It really seemed as though there was no way out. The real problem was that I didn’t know what my options were.

Filing Bankruptcy is bad for a number of reasons. First and foremost, it means your going back on your word. If you aren’t the type of person that is interested in honoring your commitments then this article isn’t for you. By all means – go ahead and give your money to some lawyers. But if honoring your word means something to you, then relax and take a deep breath, everything is going to be O.K.. Bankruptcy is bad. You’ve seen the loan applications that have that question Have you ever filed bankruptcy? It doesn’t specify in the last seven years. So once you go down that road, you’re branded as untrustworthy or High Risk. Don’t get me wrong. Eventually your credit score will improve and you’ll be able to borrow money again. But bankruptcy should be the last option – only after you’ve honestly tried every other available option and failed.

Perhaps you’ve seen the commercials on television. Some nice financial do-gooders who are going to help you lower your monthly note while at the same time settling your credit card debts for a fraction of what you owe. It seems like such a wonderful idea. Basic premise: you save money while sticking it to those BMW driving Bank CEO’s. In other words, you should be aware of what kind of bottom dwellers you are dealing with. I have to give this subject some extra attention. Bankruptcy and settling your credit card debt is a large part of the problem driving today’s high credit card rates. After I failed to pay Bank of America and Citibank for three consecutive months my interest rate went from 21% up to 32.6%. This is called the default rate and is applied to a customer when they become High Risk. Believe me I was angry and wrote them letters requesting it be lowered. Of course they didn’t and looking back I don’t blame them.

Basically the Bank is using me to settle the score against the people that do in fact file bankruptcy or settle their accounts. Since they are losing money by loaning to those High Risk customers they need to recoup it from others. Hence 32.6% default rate. The Banking sector in today’s U.S. market is without a doubt one of America’s most profitable endeavors. American culture has convinced everyone that they need anything they want and now (when they can’t afford it) instead of later (when they could afford it). Banks are not all bad. They keep this monster machine rolling. People can build houses and buy cars because of banks. Our economy is dependent upon them and they should be profitable. This doesn’t make me feel all good inside either but it’s still what makes the cookie crumble. The point is that this default rate is necessary. Not to mention that it wouldn’t be my problem if I had been more responsible in the first place.

The problem with using the financial do-gooders is that they fail to mention the negative consequences of using their service. Back in the summer of 2015 I called one of these companies I had seen advertised. A person answered the phone and asked me some questions about my income and my bills. In 3 minutes she had concluded that I was eligible to be in their program. It happened so fast I felt like I was another victim of a high pressure sales presentation. Under the guidance of their opportunistic lawyers I would pay their company $600 per month. Of this $600 they would keep $60 for themselves (handling fees?) and the rest would go into an account which they would watch over for me. When this account had reached a certain amount, they would make the first Bank an offer. For example, I owed Bank of America $6,800. Once my account has about $3,500 they make Bank of America an offer to settle at roughly 50%. It becomes a bargaining game as Bank of America shoots for a higher percentage. These lawyers (negotiating on my behalf), tell Bank of America that if they don’t take the offer then this money will be offered to Citibank as a settlement and they might accept it. This means that Bank of America may be looking at another year or two before they get another offer from me the client! If you are like me then you’re probably asking yourself ‘Why can’t I just do this myself and keep my money?’ You can!

What’s bad about this is that you’re now giving money to a third party that could be applied to your debts. And this third party now has ALL of your money. Does that sound like a good idea to you – someone else having all your money? In the package that these lawyers sent to me, it described the manner in which I could confiscate my funds away from them, if in the course of things, I changed my mind and wanted my money back. From what I can remember reading it didn’t sound like fun. Also, while all of this is going on, your credit history and score suffers. And even once the balances are settled, you’re still left with a gaping hole in your credit report. This means that on future loans you’ll pay a higher interest rate. Paying a higher interest rate on future loans will prove more costly than paying what you owe and salvaging your credit now. Not to mention, while your money is growing in their account the interest and fees are still being charged to the money you owe Bank of America. So what started out as $6,800 one year later is now $10,220!

Once I received this packet of information (which I paid $50.00 for) I realized there was even more for me to worry about. It stated that monies I owed Citibank could not be settled – so I would still owe Citibank the full amount. It was actually an AT&T Universal credit card. But as it turns out, Citibank had bought them out some time ago. These professors of law and good will didn’t tell me this – I found out about it on my own.… more

5 ways to get out of credit card debt

For all of you out there who are in trouble, I have decided to write 5 Ways to Get Out of Credit Card Debt after going through a tough experience with credit cards. I have been through times, when I became six months behind and debt collectors were calling my house many times a day. Being at the brink of bankruptcy and debt settlement has forced me to change the ways I manage and appreciate money. Currently all of my 3 credit card debts are under the limit, and the fees, penalties, and phone calls have stopped. This was accomplished without the help of lawyers and third party agencies /debt settlement agencies.

I realize that some people may have an enormous amount of debt from medical bills or some similar circumstance. This article won’t apply to everyone. I try to detail a few simple ideas and habits that I hope will assist you in your endeavor. The methods I have used are for the average person who has just borrowed their way into financial red ink. By May of 2014 I had accumulated roughly $18,000 in credit card debt and was taking a serious look at bankruptcy. Between this and other debts I had incurred, I was unable to meet my minimum payments. My monthly income and expenses looked like this:

Gross Income $4,200.00 and Net Income $2,700.00 (After Taxes etc.)

There is a problem with having a monthly budget that leaves you nothing at the end of the month – unexpected expenses! There are always things in life that pop up that are unexpected and unplanned. This puts you in a position where you don’t have enough money to pay all your bills. Once poor decisions bring you here, you’re finances are like a car driving off a cliff – you’re not in control and it gains momentum on the way down. Getting here may have been easy, but escaping with good credit will prove hard.

The following are the best ways I know to turn your life around and regain control of your finances – hope this helps.… more