I have listened to the Dave Ramsey show just about every day for the last 2 years. Over those years I have heard many people call in asking questions about filing for bankruptcy. Its been very cool to listen to their situation get unpacked right there on the radio. Most of the time it all boils down to a few factors, cars houses, and credit cards.
A lot of times Dave will tell people, if you want to get rid of the credit cards just don't pay them! It always seems to shock and amaze the callers and they don't unusually understand why he says to do that. Today I am going to explain a little bit about how debt settlement works, hopefully none of my readers are in a bind but just in case!
I have had a LOT of experience dealing with creditors over the years and if any body knows about how nasty bill collectors can be its me. They know a great deal about the art of manipulation and how important it is to get under peoples skin. I actually had one bill collector tell me they were going to call the police on me, pretty scary right!
Truth told there are only a few things that collectors can do and most of the time it can be a while before they ever get around to doing anything with your file once its gone past due.
After a debt has gone past due say 30 days. You will first start to get phone calls. Yes they are a bit annoying but other than block the number and hang up on them is about all you can do.
You will get past due bills pretty much from 6 months to a year past due before they turn you over to a collection company that is not the original debtor. More phone calls come from that, but just different people with different scare tactics.
I recently settled a debt that was 2 years old. They had not been able to reach me to pay the debt since I moved with no new address. I was served with court papers and they did actually file a judgment. Now I don't suggest anyone wait 2 whole years to pay a debt but this is just an example of how long it can be before anything can happen to you.
If you do not respond to a court date they will receive what is called an automatic judgment and at that point they have the right to garnish wadges and bank accounts. However you ALWAYS ALWAYS ALWAYS, have a right to settle the account even after a lien has been placed on accounts and wadges begin to be garnished. Company's usually settle for 25 cents on the dollar just 6 months after a delinquency has taken place. I always encourage people to negotiate before you take any offer to settle.
Never set up a payment plan on delinquent accounts. If you can't settle in full in one lump sum don't do it. Always have the offer in writing and NEVER give anyone electronic access to your bank account.
Hopefully I have helped shed some light on how bill collectors work. Never let them bully you because most of them have little to no power to do anything at all. So if your afraid and thinking about filing bankruptcy because of credit card debt DON'T, just toss the bills in the trash and call em up when you are able to pay them!