Once a month I may get something from a company that wants to partner with Enemy of Debt in some way. The one I received today was a little different but not really. She claimed to read a blog of mine, but maybe she needed to read more of them before contacting me. Her company was nothing more than a debt CONsolidation and negotiation company. My response was respectful, but to the point.
The OFFER:
Hi! I was checking out an article called “I Hate Debt, What About You” on your site www.enemyofdebt.com, and was thinking that I have a resource you may find valuable. My name is Colleen *****, and I represent ****.com, which is a website dedicated to helping people relieve themselves of the financial burdens that come with debt. I think this could be a great tool for your people wanting to spend less money in their daily lives! This site provides people heavily in debt a way out, without ruining their credit for years. This way, if they would like to make some great financial decisions, like using money more wisely after being laid off, they will be able to do so. By providing a link from your site to ours with words like how to decrease credit card debt, you may find that your readers find great advice for reducing their debts, as well as being wiser with their money in the future. Please E-mail me back and let me know what you think of the idea. Thanks for your time!
Colleen
My Response:
Hi Colleen,
First I would like to thank you for contacting me. I have to respectfully decline working with you for a number of reasons. For starters I do not believe in teaching anyone to pay a company to solve their financial problems. (i.e. debt consolidation, debt management, debt negotiating companies.) It has been proven that families already have that ability to do the same thing themselves without paying fees in the process. Not to mention it does nothing for the families ability to remain out of financial trouble because the behavior is not addressed. Statistics tell us that most people that use these companies go right back to where they were. It’s the same when someone pays off a credit card. All they see is a zero balance and an opportunity to go buy something else they can’t really afford.
I am also not a believer in the credit system, or the FICO score. That score is derived from the constant accumulation of debt, and as you can see I am the ENEMY of DEBT, not the Ally of Debt. The reason people are finding themselves in their current situation is because they believed the MYTH that told them to go get debt in order to “build” their credit score. Instead of building their credit, I believe they should be building their wealth. Imagine a land where people use wealth to buy things rather than debt. Ahhh…utopia!
Your company may have good intentions, but I just cannot work with anyone who has conflicting beliefs. Integrity is most important to me and I will not jeopardize that for anything, especially a few bucks. I am very strict with this policy but I thank you again for your offer.
Additional Thoughts On Debt CONsolidation
Stay away from these companies! Learn how to get out of debt yourself, and without paying expensive fees to do so. You have the ability to negotiate your own debt settlement. The money paid in fees could be used to pay off debt! Using these companies is just like sweeping dirt under the rug. The dirt (your financial habits) is still there, it’s just that no one can see it-including yourself. ATTACK the problem, not the symptom by addressing what caused the problem in the first place. Get rid of the dirt, don’t hide it!
Lesson For The Day
Take control of YOUR life and hold yourself personally accountable for your mistakes.
Hi,
How do we learn how to do debt negotiations with credit card companies ourselves instead of paying someone else to do it? We’re right on the edge of bankruptcy, and trying to keep from “tipping over”.
I second the question.
I believe in the wealth, and am beliving that I don’t care about my score anymore. But… I want to be on the up and up. Must I go through the CC company failure routines before they will talk?
Dana- Things are feeling pretty rough for you right now but I know you can get through this. First I was wondering at what stage in the collections process are you in? Has there been a judgment?
The deal is that you can’t let these companies bully you into paying money that you don’t have, just because they say so. Even if there is a judgment already it isn’t until they decide to execute, that it becomes a problem. I would suggest that you get on the phone immediately with them and if they are acting like adults, explain to them that you have every intention on paying your debt. Tell them that you are working on a plan to pay them off and you’ll call them again in two weeks. This is important because in order to get past the vicious dogs you have to feed them something they want, like reassurance.
Explain to them that if they decide to execute on the judgment that it is going to force you into bankruptcy. Emphasize your desire to pay them instead. Okay now the dogs are off your back! You have to save $1000 as quick as you can so you can strengthen your position. Dave Ramsey calls it catching life’s little things! It’s easier to pay off your debts when you have a cushion to absorb those emergencies. This $1000 is only for emergencies and maybe you can put together a yard sale or cut something to get it built fast. The sooner you do the sooner you can fulfill your promise to pay back your debt.Next you put all of your debt on a piece of paper from smallest debt to largest debt down the page. All of the extra money that you can use to pay the smallest one off do it. It is during this process that you get to finally making some calls to start negotiating. The older the debt or the further you are into the collection process the easier it is to negotiate settlement. Don’t lie to them in order to persuade their decision though. Consider a compromise that is a win win for both parties. If the charges are loaded with fees and extra charges ask for a itemized list of what you are being charged for. It is very important that you get whatever they agree to in writing before payment is sent certified mail signature required. Do not give them electronic access to your account. (I settled on two old debts that were almost $1200 each. I paid about $1200 to settle both debts.)
If the creditors are still trying to bite, and you have more than one breathing down your neck, another option would be to consider a pro rata plan. This gives all of your creditors a piece of their share of your extra debt payments each month. For you it would be like giving them the minimum payment that you can afford. But this still means that you will need to pay off the smallest debt with all you have above your pro rata minimums. The plan will give you a little more time to prove you have a plan.That is it in a nutshell and I will probably post this as a blog so it will be more visible to others with the same questions.
Dave Orath- I hope that everything I said above will help you as well. The answer to your question is that it is never a bad idea to talk with them as long as they are being friendly. If your debt is not yet in default then try to keep it that way, however if you find that you are taking away from your necessities to stay current then you should default. Necessities are food, shelter, clothing, basic transportation and utilities. It would be worth it if you decided to get that emergency fund, list your debts in the snowball and attack them with intensity until they are gone. Before you know it you will be debt free and loving it. The Total Money Makeover by Dave Ramsey is a MUST READ! Good luck and both of you please feel free to ask any more questions you may have.
I agree with you, as long as you’re in debt, the worst thing you can do is to plunge into a deeper debt, paying a debt consolidation agency to help you manage your financial problems. If you don’t have a clue about your paying off plan, it’s better to start asking some friends, relatives, neighbors, etc for advices and to read some financial forums and blogs, where experienced people might have a clue about how you can deal with the debt collectors. You have to keep in mind that usually after six months the initial creditor tends to sell the debt to a collection agency and these agents are more willing to settle, wanting as much money as possible in no time. They are also less inclined to sue you, even if they menace a lot, so, if you prove the will to pay the debt, you have all the chances to obtain a good settlement.