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