Debt settlement process ripened my debt like a sweet mango

If you are new to the blog, click HERE to start at the beginning of my story.
POST #15
Before I start today, I want to mention that I did a radio interview with Marc Pearlman on YourMoneyMattersRadio. It is set to air on Monday, May 3, 2010 on AM radio, podcasts and iTunes Radio. Marc is a top-notch financial advisor and runs an excellent consulting firm and radio show. Please visit YourMoneyMattersRadio and find out where you can hear the show.
Now back to my story.
After 100 days past due, things started heating up. As they say in the debt settlement business, “The debts are getting ripe.”

Ripe Red Apples - Ready for Picking - Filoli G...
Image by Jill Clardy via Flickr

Essentially, the debt moved to another department whose representatives (salesman!!!) were responsible for cutting settlement deals in the 50%-85% range.
On November 23, 2009 I was 132 days late on one of my accounts.
I called the bank for the 15th time and told them my story. However, since it was over 90 days passed due and the debt had been transferred to a new department, it was time to float the word “settlement”. I took a deep breath before I mentioned that word, thinking it would come at great resistance. I felt like a hospice nurse asking the family if it was okay to “pull the plug” on their dear loving family member. I expected the rep to be outraged by my egregious and forthright suggestion. Instead, the conversation didn’t skip a beat and the rep said we could work something out.
Wow! That was easy…..almost.

Their offer was for 85%.


I said that would be impossible but I MIGHT be able to come up with $10K if I can make 3 payments over 3 months. The rep was hesistant and then put me on hold.
I was filled with excitement at the prospect of settling my first account. The fact that they were even considering a debt settlement was amazing!
The rep came back on the line, and instead of addressing my offer, tried to get me to make a payment of $500.  He said if I make a payment of $500, it would prevent my account from going to “charge off” and give us more time to negotiate a deal.
Charge off is when the bank writes off your account as a bad debt and a business loss.  This is seemingly bad for me as a consumer because it hurts my credit rating. However, the ship had sailed on trying to protect my credit rating. I had already come to terms with that reality once I committed to debt settlement. Rebuilding my credit was another task to address once the debt settlement process was complete.  Sorry bank….you can’t lord that over me anymore!  As for making a payment to prevent charge off, that was another story and my CRN rep gave me some advice.


In the next post, I’ll discuss why that is good advice and how it worked out for me.
Stay tuned. Stay afloat. Wealth and freedom are in your future.

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Debt Settlement – 90 days of collections calls

If you are new to the blog, click HERE to start at the beginning of my story.

POST #14

waiting in line.
Image by ChrisM70 via Flickr

Nothing much happened here. It was pedantic. Kind of like waiting in line at the DMV before they started making appts. Remember that? You would get there at 7am and wait in line with 200 other poor souls for 4-5 hours. When you get to the desk it takes all of 10 minutes to deal with your DMV issue, but you had to jump through all those hoops. All formality. That was the first 90 days of debt settlement.
At some point the bank knows this is headed for debt settlement, and obviously you do, too. But you have to do the 90 days of dating before the bank will kiss you. That sounds weird, I guess. But actually, Wells Fargo took such pity of my situation that I feel like they both kissed me and hugged me.
Yes I did have to jump through the hoops and do 90 days of dating. But it was worth it. Debt settlement was worth the effort and the wait.
So for about 90 days, Wells left messages on my voicemail 4-5 times a week.  The messages were mostly from an automated system and all basically said the same thing. Certainly the calls from days 30-90 were incrementally escalated in sense of urgency, but nothing scary.  They wanted me to call them and they wanted a payment, but no one threatened me during this time period.
For my part, I called Wells Fargo reps every 2 weeks and told them the same story over and over again. Everytime, they tried to get me to make a payment.  I just kept telling them I was in a financial hardship and was unable to make a payment. There was very little conflict and very little to tell. I was surprised at how uneventlful it was. I kept a detailed log of every call made and updated my CRN rep to make sure I was on track. She assured me things were going as planned.
However, as I alluded to in an earlier post, it did get nasty in one of my negotiations. Surprisingly, this nasty conversation I am referring to was my first debt settlement.
In the next post, I’ll walk you through the debt settlement and my phone calls leading up to it.
Stay tuned. Stay afloat. Wealth and freedom are in your future.

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Credit Card Debt: 7 biggest mistakes I made

If you are new to the blog, click HERE to start at the beginning of my story.

POST #13
The first 90 days of debt settlement are fairly uneventful.  You are making a lot calls to your creditor, retelling the same story over and over and logging everything that is said. The action in debt settlement starts to happen around 100 days.
This post will address some of the bone-head mistakes I made with my credit cards.
Let me say upfront, credit cards are not evil. Neither are guns. But both can be abused and both can kill you. I was one of those consumers that loved to charge stuff. Never did I consider the true cost.
When I was making tons of money, my thinking was, “I will pay this in full at the end of the month.” And I did.  When I was NOT making tons of money, my thinking was, “I need this now. Money will come in and I’ll pay for it later.” But the money never came fast enough. Never does when you think this way.
There was a fundamental idea I was misunderstanding. We have all been told this, but it doesn’t make sense until you are facing bankruptcy and you try to figure out how you got there.  Here is the simple truth.



First 4 digits of a credit card
Image via Wikipedia

You have heard the following explanation before, but if you are reading my blog because you in trouble, it’s likely you didn’t absorb the idea.

Let’s say you have $10,000 on a credit card at 15% interest (a modest rate these days!)

If you make the minimum payment plus 1% of principal, you will pay $225/month. At that rate,

It will take you 335 months to pay it off.

You will pay $11,979.29 in interest.

That is absurd. So that jacket on sale for 50% off that I just HAD TO HAVE really cost 20% more than retail. I would have been better off paying full price in cash. Wow cash, what a concept!



  1. Spent more money on my card than I earned that month – I ACTUALLY DID THIS!!!

  2. Opened as many cards as I could, just in case I needed them.

  3. Played the shell game with 0% cards

  4. Justified spending because of airline points – completely idiotic!

  5. Used them on luxury items for retail therapy.

  6. Used them for business expenses that I didn’t really need for my business.

  7. Yo Yo spending. Maxed out the card. Paid it down. Maxed it back up.

There are million ways to abuse credit cards. Now, I have 3 credit cards with minimum balances and low APRs. I have them strictly to build my credit and use in case of an emergency. Everything else is paid for using my debt card or checks. There is no overdraft protection on my bank account. So, if I don’t have it, I don’t spend it!  What a concept!
Stay tuned. Stay afloat. Wealth and freedom are in your future.

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Credit Card Withdrawal

If you are new to the blog, click HERE to start at the beginning of my story.

POST #12
At this point I am on the path to becoming debt free.

  • I acknowledged that I needed to make a change.
  • Chose debt settlement.
  • Found the right debt settlement company for my needs.
  • Stopped making payments.
  • Called my bank to let them know I was in a financial hardship.


This next step in the process was probably the biggest shocker of them all. You see, since I had committed my lines of credit and credit card to a settlement program, I could no longer use them.

day 76 - credit cards
Image by JudeanPeoplesFront via Flickr


I can’t charge anything?

How will I live?

This was a real wake up call. I soon realized that I couldn’t actually afford my lifestyle. The first change I made was to either pay cash or use my debit card for all of my purchases.  This forced me to make hard decisions. If I didn’t have the money in my account, I wouldn’t buy it.
Simple enough………to say that is.  But not that simple to do. I had to undo decades of habitual overspending.
Time to start making choices. So what would I cut out? There were dozens of adjustments I made, but here are a few:

  • No more Starbucks
  • No more impromptu lunches out with friends.
  • Probably don’t need that Netflix subscription.
  • Say goodbye to HBO.
  • Whole Foods is WAY TOO EXPENSIVE and off the hit list.
  • Costco is my friend.
  • Instead of turning on the heat, I put on a sweater.
  • Cancel the cleaning lady and the gardener. Sunday is family cleaning day.
  • Do I really need the extra soft toilet paper?
  • I LOVE generic everything! 🙂

The most interesting by-product of these changes was that I started living more consciously.  Every decision was challenged. A distinction was made between my needs and my wants.
I have a greater appreciation for the thriftiness of my grandparents. I used to make fun of my grandmother for delicately unwrapping presents in hopes of trying to re-use the wrapping paper……well….I still laugh about that one. Some things really are ridiculous!!
Stay tuned. Stay afloat. Wealth and freedom are in your future.
P.S. As an aside, I did keep a few low balance, low interest credit cards out of the program for emergency purposes. I have kids, so I do need a safety net. That said, I made a promise to myself, and my family, that these cards were to be used for emergencies only. No frivolous usage.

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Debt Collections Calls – the first 30 days

If you are new to the blog, click HERE to start at the beginning of my story.

POST #11
In mid August, I made my first calls to the bank explaining my situation. Was I nervous?


This was the first of many pro-active calls I made.  I had written a cheat sheet to make sure the call went smoothly.  Here’s what was on it:

  1. Stay calm, sincere and friendly.

  2. Keep the call short and direct.

  3. Explain that I am experiencing a financial hardship.

  4. Explain that I am father of 2 and husband, doing my best to take care of my family.

  5. Don’t offer any information regarding my specific place of employment.

  6. Don’t make a payment. Never. Ever. Ever. Ever. JUST DON’T DO IT. This will kill the process and you’ll have to start over again.

  7. Don’t allow the rep to get me angry or defensive.

  8. Don’t mention debt settlement yet!!!!

All of the above was true for me. This is an important aspect of the debt settlement process. You are telling the bank a TRUE story. If you start lying, they will likely catch you and the process will crumble. As a reminder, debt settlement is NOT a way to avoid your debts. It’s a way to recover from financial hardship while attempting to offer your bank a portion of the money owed.

Image by oceandesetoiles via Flickr

During the call, I expected to be scolded by the teacher for being extremely tardy to school.
But really, it was more like, “We understand. Thank you for your call. Let us know when you are back on your feet.”
Keep in mind, this was during the first 30 days – not serious delinquency yet.
I don’t imagine it will be this smooth for everyone, but it was for me.
Good thing I was being coached by my CRN rep, Dayna. She gave me a reality check, “Don’t get too comfortable.  IT WILL GET NASTY!” And she was right, it took another 3 months, but it got there.  And once it got nasty, it got really nasty.
Surprisingly, not all of the reps were nasty, but when you’re dealing with people, you are subject to good and bad moods. When you catch someone in a good mood, you’ll get a better deal. Bad mood, bad deal. Sounds arbitrary, but it makes sense. Sure there are settlement rules for the bank, but there is also leeway. Ask yourself this question:

Who do you think will get a better deal?

The angry indignant customer?


The father of 2 who is calling every 2 weeks, telling his story with humility and offering to pay a portion of the debt?

In an upcoming post, I’ll share with you what happened when I got on the phone with a collections rep who was not having a good day. Let’s just say, I used every technique in the book to land that settlement.  🙂
Stay tuned. Stay afloat. Wealth and freedom are in your future.

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Debt Settlement: a simple truth

If you are new to the blog, click HERE to start at the beginning of my story.

POST #10
Debt settlement presented many challenges.

  • I had to stay focused on my goal.

  • Trust the process.

  • Stop making payments on my credit cards and lines of credit.

Wait….what did I just say? Stop making payments?!!?


Yes, this is true. The banks won’t consider negotiation if you are making your monthly payments on your loan. What is their incentive? You haven’t proven any need. It seems weird at first, but it makes sense. This process is predicated on need. The clearest way to show the bank that you are experiencing a financial hardship is to stop paying.
Please let me clarify. I am in no way condoning that you stop making payments just because you don’t feel paying your bill anymore. I am saying that if you are in a financial hardship and have decided debt settlement is your best option, the first step you will take is to stop making your monthly payments.
This was VERY hard for me to do.
You see, I never missed a bill, never was late. I was definitely irresponsible with money, but for some reason I thought being late was a real no no. I had no problem borrowing more than I could afford, but dammit if I was going to be late on a payment.
So….in August 2009, I stopped paying the monthly charges for my 3 lines of credit and 1 credit card.

The Cops are Here
Image by hernan.seoane via Flickr

It was a bit scary at first. Yes, the calls started, yes the questions started and I have to admit it was a weird feeling. And by weird, I mean CRAPPY IN EVERY SENSE OF THE WORD. I expected the sky to fall. I expected the cops to show up and haul me off in hand cuffs.
Much to my surprise, none of this happened. In fact, when I called the banks to explain my situation, they were quite sympathetic. I didn’t receive any snarky attitude for the first 30 days of delinquency.
In the coming posts, I’ll discuss how things changed (or didn’t!) as I got more delinquent.
BTW: I constantly stayed in touch with the banks. As a result, they knew I wasn’t on the lamb. This continual communication had a positive impact on my process. Yes, it was difficult to repeat my hardship story over and over. Often it made me feel like a loser. BUT….I knew it was part of the process. I kept my eye on the ball, checked my ego at the door and moved forward.
Stay tuned. Stay afloat. Wealth and freedom are in your future.

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Debt Settlement Lies

Grainy B&W image of supposed UFO, Passoria, Ne...
Image via Wikipedia

If you are new to the blog, click HERE to start at the beginning of my story.

What the heck has happened to your country that every decision we make is based on FEAR?
I am afraid I will go broke?  I am afraid I will die? I am afraid I will get sued? I am afraid of being abducted by aliens!
Really? Is this what our society has come to? What ever happened to personal power and positive thinking? I am not talking about head in the clouds Voo-Doo thinking. I am just talking about common sense, clear thinking backed by research (!!!) and reasoning. Put it all together and strive for a positive outcome. Okay, I am ranting. Let me get to the point.
Debt settlement doesn’t have to be scary. But the debt settlement companies want you to think otherwise. They use half truths to manipulate you (scare you) into thinking you can’t do this without them.
Here are my top 10 lies I heard from debt settlement companies. My commentary is beneath each statement.

#10 You can’t do this without us.

There are thousands of people like me who are proof that this is not true.

#9 We can get you a better deal because we have a relationship with the bank.

Really? Then what will prevent them from cutting a sweetheart deal with the bank?

#8 We can get the banks to stop calling you.

Sorry folks. The banks will not stop calling. No matter what.

#7 It is cheaper to do it with us than any other company.

Unless they are doing it for $1200 or less, you can bet there is a cheaper way.

#6 We charge more because we are the best.

Love this one. I would immediately hang up the phone.

#5 Debt settlement is always better than bankruptcy.

True for some people but not all. This is a sales tool.

#4 We use an escrow account because it’s a safer place to keep your money.

Baloney! The best place for your money IS WITH YOU!   Also, I thought hiding money under my mattress was the safest place.

#3 We guarantee to get you a settlement of 50% or less.

By now, we all know there are no guarantees in life, especially those told to us by salesman.  If the company is so sure they are the best and warrant the high fees, they should take their cut AFTER THEY PERFORM THE PROMISED SETTLEMENT!!!!

#2 This is your only way to recover.

ABSURD. There is never just one way to do anything.

#1 Just sign up with us and we will take care of the rest!!

This is by far my favorite. RUN don’t walk from a company that says this. Single biggest lie you will hear. If you sign up with this company, there is good chance they will take your money and not pay your creditors. You will likely get sued and end up declaring bankruptcy. Debt settlement has run amok with fraudulence and the FCC is reworking the federal guidelines.
Stay tuned. Stay afloat. Wealth and freedom are in your future.

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Debt Settlement DIY or Hire The Guy

If you are new to the blog, click HERE to start at the beginning of my story.

Should I do it myself or hire a company?
At first I thought, if I can’t manage my finances, how can I handle the debt settlement process?  After more research, (am I getting my point across about research? :-)) I realized there were several good reasons for DIY.

  1. The banks respond to real people and their authentic story.

  2. ?

  3. Why should I incur MORE debt by hiring someone? Won’t the bank ask why I am paying someone $10k but not paying my $10k credit card bill?

  4. ?

  5. I decided to take control of my life. Why would I HAND OVER CONTROL to a company I hardly knew?

  6. ???

  7. It didn’t seem difficult.

  8. ??

I almost went with Credit Solutions. They tried to hard sell me by saying they had an advantage because they negotiate a huge amount of debt with banks. They also have relationships which makes the process easier.  The bulk debt reason, I understand. Relationships with the bank??  Wait a second?
At Credit Solutions, the client pays a HUGE upfront fee based on total debt. What is their incentive to get a better deal for the client? Since the bank is their primary relationship, won’t they pad the in favor of them?
People! Don’t fall for it!!!
There is so much information out there. Granted, it can be overwhelming. As such, I chose a cross between DIY and hiring a company.
With Consumer Recovery Network, after you purchase the DIY CDs for $495, and pay $100 per account you enroll,

CRN charges only $50 per month for unlimited phone and email support.

I know it sounds crazy, and you’re probably thinking I am just selling you here, but it’s true.

  • $495 for the DIY CDs
  • $400 to register my accounts (4 accounts at $100/each)
  • Total upfront fee: $895.

Each month I paid $50 and if they had to step in to negotiate for me, ALL the fees thus far would be applied to their commission.  Let me tell you, this is a steal. My first call with my CRN counselor was 3 hours long! I spoke to her again probably 4 more times that month and exchanged over 20 emails.
For $50/month I got:

  1. Unlimited phone and email support.

  2. ?

  3. Training on the language to use when speaking to the bank.

  4. ?

  5. Coaching on making my phone calls at specific times during the month – YES THAT MATTERS A LOT!!

  6. ?

  7. Advice on how to structure the negotiations in a way that allowed me to leverage my hardship position.

I am a big fan of this hybrid. You have complete control of the process, but if you get stuck, you have a bailout.
Jonathan Grossman

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Debt Vs You – are you ready to slay Goliath?

If you are new to the blog, click HERE to start at the beginning of the story.


The biggest benefit of debt settlement is the feeling of control. For the the first time in 3 years, I feel like the captain of my ship.
In an earlier post, I mentioned the concept of passing the threshold of caring. You convince yourself its okay to spend more money by saying, “I am already $100,000 in debt. What’s another $1200?”
As of my phone call to CRN on July 2nd 2009, I went back into the THRESHOLD OF CARING!
This was a HUGE step in my personal recovery from debt. I immediately felt better. This is an important point and a big part of why debt settlement can be successful.

  • Even before I removed a penny of debt, I felt like a new person.

  • I had taken back control of my life

Debt had been running my life, or should I say RUINING my life. Now that was going to stop. I had committed to change. I had talked about my problem with someone, WHO I TRUSTED, and that person knew how to help me.


The minute I started caring, I stopped spending. Instead of ignoring my debt, I was focusing on eliminating it. I could envision a life of being debt-free. I could see the path to freedom.

Debt settlement was my slingshot to kill this Goliath.

David and Goliath: 13th century Jewish illustr...
Image via Wikipedia

Up until that point, I was in a tailspin and couldn’t see a way out. Now I could see a clear path to recovery. Because the program made sense, I was able to fully engage and get excited about it.  Based on my situation, using the DIY debt settlement program with CRN, the dragon would be slayed within 12 months (or less)….and I could see it.

Debt settlement isn’t for everyone. Among other factors, you have to be willing to face your problems head on; you must get honest with yourself; and you must be tenacious.

The benefit of debt settlement goes far beyond getting out of debt. It is really about taking control of your financial life. Once you decide to take control you will IMMEDIATELY feel better. Trust me.

After committing, I asked myself:

“If I feel this great by committing to this program, what will I feel like when I actually settle my debt?”

Freedom was in my future and that future was NOW!


Jonathan Grossman

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