Wandering into Trouble

I’ve enjoyed many hiking and camping trips since I was a young child.  Walking through the forest, listening to the sounds of wildlife and seeing the sun gleaming through the trees, I’ve had a chance to appreciate the beauty and creativity of our Father’s world.  Occasionally, my hikes have become extended for a bit longer than I was planning on, due to an underestimation of how long a climb might take or a casual disregard for things like maps and compasses…. 

Oblivious to the Peril

The funny thing about getting lost is that you don’t realize you’re about to get yourself in trouble until you suddenly realize that you are in trouble!  On a certain camping trip with a buddy of mine in Arizona, we hiked out into the desert loaded with many gallons of water.  We found a good site, set our provisions down, and trotted off in search of a good “sitting log” to place beside the firepit.  We found a good one a short while later, and began carrying it back to our campsite.  At first, we thought it was pretty funny that our campsite was taking so long to get to.  “Strange how it only took us 10 minutes to find this log, but we’re taking 20 minutes to carry it back,”  we laughed.  Slowly we realized that we were actually lost, and we’d been walking for so long because we didn’t know where we’d left our jackets and water!

A few hours later, tired and thirsty, we found our campsite as the sun finally set.  This set us up for a cold night (the coldest night of my life, in fact), since we’d wasted our afternoon and now had only a half-built shelter.  But we were thankful at least for the jackets and water that we had nearly lost.

This story is an example of how we can be walking along unaware, and suddenly find ourselves in an overwhelming situation.  We were too confident that we wouldn’t get lost, and by the time we recognized our precarious position, it was too late.

Common Financial Dangers

In a similar way, we can tend to be very blasé with debt in America today.  We look around at our friends and neighbors, and many of them have student loans.  Everyone’s got a mortgage, and some debt on their cars.  And of course we’ve all got to have our credit cards!  But even though we all know that people get trapped and pulled under by debt, we mistakenly think that this can never happen to us.

Confident of our ability to keep our debt in control, we walk right along the edge of a financial cliff.  We buy a nice big house, great new cars, and a brand new living room set—all on payments.  At the end of the month, we’ve got $25 leftover after all the credit payments are made, and we think, “All right! Everything’s going great!”  But then comes something unexpected, and all of a sudden we’re $175 under instead.  No big deal, we think, “I’ll just pay the minimum credit card payment this month, then get everything cleaned up next month.”  But again, something unexpected comes, and now the balance we carried last month is compounding on us.  On and on it goes, and the debt pulls us down deeper and deeper.

Recognize the Trap

This story has sadly happened to too many people who are able to escape only through a long and painful bankruptcy.  If you’re fighting this now, know this:  many have overcome this situation through wise money management, hard work, and tenacity.  If you’re still dabbling with debt and don’t think this could ever happen to you, think again.  Banks are not evil, but they are concerned with making money, not ensuring that you keep your head above water.  Knowing what you can afford and what you cannot is your responsibility, and you owe it to your family and to God to manage the money He’s given you wisely.

The most reliable way to make sure that you can afford something is to simply buy only with cash (or debit cards/checks).  The one exception might be a mortgage on a 15-year fixed rate with the monthly payment of 25% of your take-home pay, which can be a reasonable debt, provided that you have a substantial down payment.  And some financial experts would contend that there are a few other “reasonably safe” debts as well, but use these very carefully.  It is much easier to lose your way than you think.  Decide instead to take control of your financial life by eliminating debt and paying with cash.  The confidence and freedom that come with becoming debt-free will serve you well on your path to a thriving life.

3 thoughts on “Wandering into Trouble”

    1. There are sources of funds for painyg off debts, but it may not be in your best interests to pay the debt at this time.You don’t say what type of debt it is; you don’t say who is doing the collecting and you give no information about your personal resources or other financial situation. It is hard to answer your question in such a vacuum.However, just because someone is trying to collect a “debt” is not good enough reason to pay it, unless you know a few things.1.Do you know the collector? By that I mean, is it the original creditor or is it a collection agency? It makes a difference. You need to be certain that, if you pay the collector, the obligation will actually be satisfied.2.Does the collector have proof of the debt? a.Whether it is the original creditor or a collection agency, it is important that they have the ability to prove that you actually owe them something and how much you owe. b.If a collection agency that is attempting to collect the debt, they also have to prove that the obligation has been assigned to them. c.Collection agencies also have to prove that they have the legal right to collect it in your state.You have the right to require them to validate their claim. Talking to the collector is generally not a good idea. You permit them to create a “record” of the conversation, based on the notes they take of the conversations you have. Those conversations are almost never recorded. Consequently, their version of what was said becomes the “official” business record. Since it is a record they keep in the ordinary course of business, it may become admissible in court (if it goes that far) and it won’t matter what you say actually happened, their record will paint the picture. You don’t want to give them the paints and the brush and let them paint whatever picture they want.Your best bet in dealing with collectors, is to insist that everything be done in writing. The writing then creates a record of what actually occurred. You get to paint too.The amount in question, $ 2,000, is not a lot of money (although it may seem like a lot at the moment). Most original creditors won’t actually take you to court over that amount. It costs them too much in time and legal fees to do that. They usually sell their claim to a collection agency.Most collection agencies will call and harass you and make you feel guilty for not painyg the debt. Some will threaten you with all sorts of horrible consequences, if you don’t pay up. There are actually severe penalties against COLLECTION AGENCIES for engaging in certain harsh collection practices under the Fair Debt Collection Practices Act, a Federal law. That is another reason why requiring them to put everything in writing is important. Over the phone, where it is your word against their official “business record”, they might overstep the bounds of what they can legally do. They will stick to the law if they have to put everything in writing.Ordinarily collection agencies purchase the claims they are collecting for pennies on the dollar. So while you may have had a $ 2,000 obligation, the collection agency may have $ 50 invested in the claim.They may be trying to collect the entire amount (or even more, if they are adding a “collection fee” to the claim), but the truth is, they really do not want to invest too much time and effort into collecting the debt.Also, because they buy these claims in bulk and so little is involved financially on a per claim basis, it is not at all unusual for them to be collecting claims they do not have a formal assignment transferring the obligation to them. (In other words, they frequently are not able to “validate” their claim.)If you properly demand that they validate the claim and they are not able to do it, they are legally required to stop collection activities and remove their collection from your credit report.Also, if the claim was assigned to them, the original creditor has charged it off and moved on. It will not want to go through the effort of documenting a claim it no longer has an economic interest in collecting. Chances are, even if the collection agency asks for the proper documentation, the original creditor will not provide it.In a nutshell, what this means to you is that, if you are dealing with a collection agency, you should be able to settle for far less than the $ 2,000 they claim you owe, if you choose to settle at all.Since the obligation and the late payments are on your credit report already (as would be both the “assignment for collection” and the collection itself), you will need to make sure your credit report is cleaned up.According to the Federal Trade Commission, you should be able to do remove derogatory items yourself. However, it is not as easy as it sounds. You may want the help of a reputable credit restoration service. Some of them have excellent track records and have been able to remove, not only collections, but inquiries, late payments, charge-offs, repossessions, judgments, foreclosures, bankruptcies, student loans, child support, tax liens and more.You may want to check some out.Good luck!

      1. Most of these companies prsrusee your creditors into settling for less money by stopping payment. The amount they reduce your debt is usually the late fees and penalties(that they caused by not paying your bills). It will ruin your credit rating and you could potentially wind up in court if the creditors choose to sue. Most of these are scams that make a living off of you being in debt. Look for a not for profit company that has no incentive to keep you in debt. You could also try to negotiate a settlement yourself. If you must go this route then research the company very carefully. If they have tons of money to spend on advertising they had to get it from somewhere. Given their business, it is likely a profit they made off of people in your situation. If you can’t afford to pay your bills in full then your credit rating should be bad. Would you loan money to someone who couldn’t pay the bill they currently have? Would you be happy if you made a loan and they wanted 60% off of the payback?Be very careful in dealing with these companies, do your homework on the companies, do some research on settling your debts on your own, read the fair debt collection practices act

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