If you are overwhelmed with DEBT, don't give up, and don't despair.

[El Pinko]

If you're making a modest income, and have revolving debts equaling about what you make in a year, it will take you DECADES to pay it off paying the minimums, even if you don't use the cards.
And if you're like a lot of us, by the time you've paid the minimums and the insane cost of housing and food, you are forced to use the cards again just to feed the kids.

The debt starts off so innocently, just a few hundred, maybe a thousand dollars, but before you know it, it's ten, fifteen, twenty thousand, and suddenly your card company raises your rate to the "Default Rate" of 28%.

What? I never even made a late payment!! you say, but the card company is within it's rights. They have reviewed your credit records and found that you have too much debt, and thus have jacked your rates so high that you'll never pay it off.

At least that's what they want. They want you to go to one of the "nonprofit credit counselors" (which, except for ACORN and a few others, are funded by the credit card industry), so that they can get you locked into a "lower rate payment plan" and get your balances low enough so that you can start the whole vicious cycle all over again. (never mind that their payment plan has payments so high you would never be able to eat, much less pay rent)


If you are in this situation, you may feel despair or guilt or think about resorting to something drastic.

Now by all means, if you think that you can somehow get those creditors paid off in a few years with a payment plan, go for it.

But if you are where I was, with a huge debt and far too little income to make a dent in it and still pay for essentials, then you should not be afraid or ashamed to walk away if need be.

There is no dishonor in doing what it takes to save your butt and save your family in the face of the coming economic shit-storm.

The credit card companies market their "product" relentlessly, then are ruthless in doing everything they can to enslave people, including knowingly lending people more debt than they can handle.

They KNOW That many people will be trapped into a cycle of paying the minimum, then using the cards to buy groceries, and that for many people, it would take 40 years to pay the damn things off even paying as much as they possibly could per month.

I did it, I walked away, and do not feel the least bit of guilt. The 450 bucks a month I was paying out to credit card companies now goes to buying food and shoes and other things that my kids need. They can sue me, and if they win, the amount they are allowed to garnish from my paycheck by law is STILL less than I was paying in minimums before. But luckily, they usually don't sue, and there is a statute of limitations on debt.

Don't commit suicide, and if you are already way in default, don't fall for it when the collectors try to get you to send in 50 or 100 bucks. That resets the statute of limitations and does NOTHING to pay down the debt (which the collector has bought from your original creditor for pennies on the dollar).

These are HUGE and ruthless corporations that engage in usury. Don't let them do a number on your mind.

Set yourself free.

There are resources out there that can help you through it.

http://www.budhibbs.com /

http://www.naca.net /

www.acorn.org

Your rights under the law:

http://www.expertlaw.com/library/consumer/fair_debt_col...


Let the wingnuts spout their shit about "personal responsibility". For some reason, they don't have a problem with CEOS getting golden parachutes financed by government bailouts of companies they bankrupted.

That's okay, but somebody who makes $20k per year raising 2 kids is supposed to feel guilt about reneging on a debt they have already paid thousands in interest on?

DON'T FALL FOR THE GUILT TRIP. FREE YOURSELF. START OVER. LIFE GOES ON.

And I mean this from the heart.

[dkf]

1. Living on a cash basis is better anyway.

Everyone should simply cut up all their credit cards. Then you pay no interest at all.

[El Pinko]

3. Totally.

I haven't had a card or bought anything on credit in two years.

I sleep better nights and have lost 100 lbs since then and don't have to drink my troubles away.

There are ways of getting the collectors off your back too, BTW...

[NNN0LHI]

8. Thats what I did and I used to swear by credit cards

Last winter with an aching back from shoveling I was going to Sears to purchase a snowblower.

When I got there I could not let go of the Benjamins. If I was going to use plastic which is just so easy I would have bought it and regretted it to this day.

Instead I came home without the 1000 dollar snowblower and made a couple of calls and worked out a much better snow removal system with a guy who has a John Deer tractor and a blade on the back of it. For twenty bucks he cleans my driveway perfectly.

Sure glad I didn't buy that 100+ pound monstrosity for moving snow a few times a year. I would have if I was using plastic that day. Cash just seems more precious and I don't want to let it go.

Don

[El Pinko]

13. Sadly, Mr. Bernanke has done everything in his power of late to devalue that cash.

I wonder what we should stock up on for the dust bowl times on the way, because our sawbucks aren't going to be worth the paper they're printed on if things keep going the way they're going.

[OPERATIONMINDCRIME]

2. Your Plan Is Dumb.

[El Pinko]

5. Really? Starving my kids to pay the card companies would have been smart?

Feel free to explain.

But I am aware that you are the darling of "the site that shall not be named" for a reason...


By the way, there is no one-size-fits-all plan.

Bankruptcy may be right for some, walking right for others, payment plans may cut it for others.

It has a lot to do with whether or not you have a home, how much you make and can expect to make, and whether or not you live in one of the housing bubble areas where even 1BR hovels still rent for $1500/mo.


People can think for themselves what to do. My point is to not be a sucker and let guilt make you do something "dumb".

[tbyg52]

15. I paid off a huge amount of debt down to the last penny

(not directly my fault - overly trusting, which I've learned my lesson about) and I have no problem at all with your choice.

It is disgusting that instead of trying to work with people who are over their heads in debt, they jack the rates up so you *really* can't pay it off, and what you *are* able to pay goes straight to interest. And there is *no* excuse for raising the interest rate on a debt you are current on.

I'm all for giving people credit, but most of the card companies want you to pay the minimum forever, because that maximizes their profits, and there are effectively no usury laws anymore.

[Maestro]

4. Banks are disgusting in that they market

these cards to the most vulnerable to get them locked into the viscious cycle. My wife and I had always controlled our revolving debt, but after our kids were born, a few bad times with car repairs, some medical bills and some frivolous spending on our part we got in deep. It was then that the offers for more cards starting coming in relentlessly with introductory low rates. We started moving balances from one card to the other in a never-ending battle to manage the debt while at the same pay all the other montly expenses. Luckily, we got out of this work cycle and paid the debt off and we will never go back!

Our own government is a bad example since it operates in huge debt. It's almost like we have a debt economy that won't function unless there is massive debt. :eyes:

If anyone is caught in this horrible seek help from one of the links above and rip up the cards!

[Warpy]

6. The point has to be made that the enormous interest payments

that people who pay the minimum balance every month are making really have paid off the original debt and are now gravy for the credit card companies, even though they count the original debt as unpaid on their balance sheets.

However, a wholesale walkaway from credit card debt will sink the financial industry, period.

The OP is right. If you can use ACORN or another service and get a reasonable interest rate and manage to pay the damned things off while maintaining a fair credit rating, then do so. It's to your advantage to do so.

However, if they've gotten greedy through no fault of your own to the point that the only way to service the debt is to go hungry, then make them take you to court. However, this will trash what's left of your credit rating and you will still have to pay them, even though you'll be paying them less per month. You can give up the idea of getting any kind of loan for the duration: car loan, second mortgage, personal loan, new credit card. Most people can't afford to do that so make damned sure you can before you take such a drastic step.

The best policy is to pay off the card with the lowest balance first and then start tackling the big boys. Then as you pay them off, cut them up and send them in. The very best policy of all is not having any credit cards and that is what most people in debt should be working toward.

[El Pinko]

7. "However, a wholesale walkaway from credit card debt will sink the financial industry, period."

You act as though that would be an entirely bad thing.

The financial industry has hinged on using low wages to pressure middle-class and lower people into taking on more and more debt just to stay afloat for decades now, and it was (mostly) wealthy investors that benefited.

A wholesale walkaway would be disastrous for the economy, but the status quo of the last 25 years has been disastrous for most Americans, anyway.

[Warpy]

9. The one thing worse than a predatory financial industry

is having no financial industry.

Think about it for a while.

Think about all the elderly people who would suddenly be completely destitute with no way to earn a living and few goods to barter for food.

Think of having everybody's life savings gone in an instant.

Think of going to work and getting your paycheck and having no place to turn it into an exchange medium for your family's food.

Think it through.

Yes, we want the greedy fuckers punished. My own feeling is that the greedy fuckers will be punished as a direct consequence of their greed causing them to invest in ultra high risk, insecure securities.

However, I am not naive enough to think that throwing the baby out with the bathwater ever works.

[dkf]

10. I could have sworn people used to be upset that banks aren't loaning to the disadvantaged

Ironic.

[El Pinko]

11. Honestly, I passed the stage where I thought the people would get a fair shake...

...at the ballot box or elsewhere a long time ago.

I'm not saying I want this to happen. But if it did, it would probably be the only thing that would ever make the people stand up and take control of this country back from the ultra-rich.

"However, I am not naive enough to think that throwing the baby out with the bathwater ever works."

Maybe. I'm not naive enough to think that the system we have works.


I think our country needs change much more radical than anything Barack has to offer.



But my point in the OP is not really about that. Its about the fact that things are going south very quickly, and I sincerely believe that those of us who have no houses or Lexuses to sell, and whose job security is the least secure, and of course are shouldering the most debt, we need to get our house in order because it is going to be Dust Bowl Okie times a lot sooner than we think, and if it takes cutting the card companies loose to do so, so be it.


I will qualify my OP by saying that I am still paying my student loans. DO NOT TRY TO WALK AWAY FROM THEM. There is no statute of limitations on them, and the government has extra powers for getting the money out of you.

[Marrah_G]

12. Thanks Pinko- you have a good heart

There have been times in the past where I wished I could take the easy way out, but my kids keep me strong. Never over a debt.... but having basic living expenses over whelm you is worse. A debt is serious yes.... but no food on the table when you have kids...that is unacceptable.

Sometimes the stress of living paycheck to paycheck, doing it all alone, all the time seems more then I can bear. Usually its not one crisis that arrives, its a few all at once. When things start to snowball it takes forever to fix.

[mike_c]

14. I agree completely-- why spend your life and your family's happiness...

...enslaved to someone else's greed? It makes no sense to volunteer for that.

[mdmc]

16. thanks for these links

I found them helpful

[RebelOne]

17. Your statement that they usually don't sue is wrong.

"But luckily, they usually don't sue, and there is a statute of limitations on debt."

I had three judgments on me and one paycheck garnishment. I was finally forced to declare a Chapter 13 bankruptcy.