If you are new to the blog, click HERE to start at the beginning of my story.
I was content to let my account charge off at the end of February and go to the Recovery Department until my CRN coach tried to talk me out of it.
There was a complication that she wanted to avoid. Very soon, I was going to apply for a loan mod on my house (yes my story continues!). She thought it might be risky to play chicken with the bank this one last time. There were for 2 reasons:
If I got sued by my VISA account, it would destroy my chances at a loan mod.
My mortgage bank would be less likely to grant a loan mod if I had outstanding unsecured debt.
With the loan mod on deck, her advice was to not screw around. Let’s land this last deal and move on.
I trusted CRN implicitly so I went along with the advice. I called the VISA department 6 times between 2/25-2/28 in an effort to settle. My CRN rep even decided to step in and make the calls for me. This would end up costing me a bit more money if she landed the deal, but it would be worth it.
We called on Friday, Saturday, Sunday – multiple times each day. We re-told the story over and over. We spoke with call centers in Iowa and Oregon. We weathered threats of judgments and law suits.
Unfortunately, nothing worked. The VISA collections department was firm. And when I say firm, I mean” firm like the buttocks of a body builder” firm.
THEY DID NOT BUDGE.
After our last ditch effort failed on Sunday 2/28, we resolved ourselves to charge off. But not all was lost.
On Sunday evening 2/28 we called the Recovery Department. Apparently, the account would be there on Monday morning. We wanted to get a head start so we called them. We told the rep that our prior offers were for $5000, but I put my ego aside and asked one more friend to loan me $2500. This would make our total offer $7500. The rep was impressed with my tenacity. He was sympathetic, smart and straight forward. He listened.
From his point of view it was a long shot – a BIG long shot. But he read through my notes and could tell I was sincere and up front. As long as the account hit his system in the morning, he agreed to bring it to his supervisor first thing.
We could only pray that the account would appear in his computer the next day and NOT end up in purgatory.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
POST # 2
When I look back on what happened, the writing was on the wall. If I had been smart enough to have a business manager, this would have never happened.
In 2004, things were going great. I was newly married, had no kids, no debt and had just bought my first home. I was composing music for the hit television show Joan of Arcadia. Money was no object. I was like a kid in candy store. Just 4 years earlier, I was living in a mini-van with my wife (then girlfriend) touring the United States as a folk rock duo, Dogwood Moon. We were lucky to make $5,000/month and if we did, we felt like we had money.
All of sudden I got a lucky break and I was making well over $400,000/yr. I had no debt aside from my home. My savings account was steadily growing and about to hit $100,000. Neither my wife, nor I, could spend all the money. It was nice, to say the least.
We went about our business for the next 2 years. Saving a bunch and spending a bunch. I justified my spending because I had a great job and was saving a butt-load of cash every month. Why not spend!?!?
Mistake number 1:
ASSUMING THE GOOD TIMES WILL LAST FOREVER
Fast forward to 2006.
My TV show got canceled.
The economy tanked.
My interest only 2 yr ARM was about to be called.
My wife gave birth to our first beautiful child.
None of my contacts in the biz were working.
I went thru all of my savings…..yup ALL $100,000 of it.
I borrowed another $80,000 from a line of credit on my house.
There were a lot red flags….but I ignored them.
I kept thinking that big gig was right around the corner. Well guess what? It wasn’t.
But that didn’t stop me. I kept acting like I was still making a lot of money. I had the POTENTIAL didn’t I? Why severely adjust my lifestyle when things will pick up any minute?
By the end of 2006, I finally made some changes. Here’s where I stood:
I sold my home for a profit.
I paid off the $80,000 line of credit.
I had about $80,000 in cash profit from the sale.
No job, but lots of prospects.
Ignorant hope that everything would just work itself out.
Instead of socking that money away and downsizing to an apartment within our means. I did what any wide-eyed monkey with a little bit of money and the ignorant hope of future success would do:
I BOUGHT ANOTHER HOUSE AND SUNK ALL OF THAT MONEY INTO REMODELING IT.
You see, I had turned a nice profit from my first house. That was easy, right? It would happen again, right. WRONG. That wrong assumption was the straw the broke the camel’s back.
From July 2007- July 2009 I dug myself into the deepest financial hole of my life.
Here were my other BIG MISTAKES:
I lived beyond my means.
Instead of saving some of my small real estate profit, I put it back into the sagging real estate market.
I continued to spend most of my time trying to get gigs in the TV market – which had crashed.
And finally: DENIAL, DENIAL, DENIAL!
In July 2009, things came to a head. I was $130,000 in debt and living off my lines of credit. I had 2 more months of that until there would be no choice other than bankruptcy.
Desperation is the mother of invention. I would feel humiliated to go bankrupt, foreclose on our house. I couldn’t let myself be a Hollywood statistic……even though I already was!
After 6 weeks of research I came to the conclusion that debt settlement was the right choice for me. In the next few posts I’ll discuss:
Why I chose debt settlement over bankruptcy, consumer credit counseling or debt consolidation?
What companies I chose to avoid and why?
Stay tuned, stay afloat. WEALTH AND FREEDOM ARE IN YOUR FUTURE!