Letter To a Creditor

Dear Creditor,

Its been a while since we have spoken. I know I have been avoiding your calls for some time now. You know its not that I don't want to talk to you, its just that every time one of your representatives call my house they are so rude. I know I owe you money, and I intend to pay you back, soon as I get a job and make enough money to feed my family. Last week you called my house and threatened to take me to court and garish my bank account. While I appreciate your enthusiasm Its unfortunate that you won't be collecting this time around.

You see you have fallen below the yellow line this month. I realized that when I did my budget I had to first feed my family, keep a roof over their heads, make sure they had lights and heat. When I got to the end of the money there was nothing left to give you. I do hope you understand this and don't take offense because its nothing personal, I do all my creditors this way. Now that I know my rights I won't continue to allow you to harassment me day in and day out. You can't harm my family with your tactics and you cannot convince me any longer that YOU come before them. So you say you can hurt my credit, well go ahead, turns out I won't be borrowing money ever again so I guess it doesn't even matter. I do however want you to know that I am a person of integrity and I intend to pay you back as soon as I am able to, after all I did purchase that flat screen, dvd player, digital camera and laptop with YOUR money.

Again, I thank you for calling me checking up on me and I hope to talk to you soon. Please though, don't call me I will call you......

Sincerely,
Mikki

Before You File Bankrupt

For the first nine months of the year, individual bankruptcy filings totaled 1.07 million, according to U.S. Bankruptcy Court statistics compiled by Automated Access to Court Electronic Records. Between July and September, more than 5,900 bankruptcy petitions were filed each day in courts across the nation, AACER statistics show. They peaked at more than 6,000 per day in May, and have edged down only slightly since that time.

I remember back in 2007 when I was contemplating filing for bankruptcy. I was way in over my head at the time. I had a new car, a new house, student loans and other random debts like store cards and credit cards. Thankfully, since attending Financial Peace university I have not only learned how to avoid filing bankruptcy I have actually paid most of my creditors back and I am down to 2 YES 2 Final bills. There are many situations in which bankruptcy is not the best solution available, you need to study your situation closely. Here are five cases in which bankruptcy is not the best option:

1. You can pay off your debts within a few years while maintaining a reasonable standard of living

Sometimes having some discipline and setting a budget is all you need to do in order to pay off your debts within a reasonable time. You don't need to starve yourself, but if you can stick to a simple plan and eliminate your debt within the next few years, then bankruptcy may not be necessary after all.

2. Your most worrisome debts will not be eliminated in bankruptcy

You should be aware that some kinds of financial obligations do not usually go away when you file bankruptcy. If you are most concerned about student loans, child support obligations, or criminal fines, then bankruptcy is not the solution. In most cases, these financial obligations will remain.

What about federal income taxes? That depends, but be aware that in many cases they will not be discharged.

3. You don't want to lose your assets.

When you file Chapter 7, you will need to liquidate any nonexempt assets in order to help pay for your debts. You may not want to give away these assets, such as a second house or an expensive car. Finding a way to pay off your debt without bankruptcy can help you keep these assets safe from creditors.

4. Most of your debts are secured by collateral.

If your unsecured debts are only a small portion of your total obligations, then bankruptcy doesn't make sense. Chapter 7 will not eliminate your responsibilities such as paying off your mortgage or car loans. If you want to keep the house, you'll have to keep making the mortgage payments. Otherwise, you can just lose the house without having to declare bankruptcy and spent $1,000 to do it!

I realize things can get frustrating after thing such as an illness, job loss or divorce causing people to just give up. I completely understand it because I fell into a rut myself a while ago. If you are contemplating filing bankruptcy I urge you to think about it long and hard before doing so. Deciding NOT to file was one of the best things I did for myself now I am on the road to recovering WITHOUT a judge looming over my head and it feels great!!

How To Fight Back Against Creditors

Have you ever had a bill collector call and threaten to take your paycheck or your children? I have a few times and I can't tell you how upsetting it is to have someone harass you day in and day out.

Interestingly enough I have been on BOTH yes BOTH sides of the fence. I have been the debtor and the creditor calling doing the harassing. A few years ago (5 exactly) I worked for a large collection agency. We collected mostly tax money (the worst) and traffic violation payments. Though the government is held to a semi moral standard we still had the ability to brow beat people into paying us. Back then I didn't really understand who I was hurting I just wanted to make my bonus bigger.

Now being on the other side of things its really frustrating to hear stories of people (including my own) dealing with creditors. They can be so nasty and cause stress beyond belief. Some creditors have even talked people into paying bills they don't owe or paying them before they fed their own family. Can you imagine having a $400 credit limit and a foreclosure sign on your door just because of a threatening phone call?? Its the pits and way to many people have dealt with this more than we know.

Today at Divine & Debt Free we are going to share ways of how to FIGHT BACK! Thats right we are going to get those nasty bill collectors off your back once and for all. If your skeptical about these tactics trust me they work because I have used them more than once even!! So lets go.....

1. Hang up on Them - Oh yes this sounds like the most obvious thing to do outside of pretending to speak another language, but it actually works. There should never be a time where they can get you so worked up that you are about ready to hand over every dime in your pocket, EVER!!! If they can't be nice, you can't either.

2. Send a cease and desist letter - according to the FAIR DEBT Collection Practices Act (FDCPA), They must stop contacting you immediately!! However do NOT send this letter via regular mail. It may cost you a few extra bucks to send a letter certified return receipt requested but it is well worth it. They are really good at getting people worked up especially at work and in these difficult economic times that is the last thing we need. Here is a sample letter.....

Date

Your Name
Address
City, State Zip


Debt Collector’s Name
Address
City, State Zip

Re: Account Number

Dear Debt Collector:

Pursuant to my rights under federal debt collection laws, I am requesting that you cease and desist communication with me, as well as my family and friends, in relation to this and all other alleged debts you claim I owe.

You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General’s office. Civil and criminal claims will be pursued.

Sincerely,

Your Name

3. Don't answer the phone - I am sure with all the technology today we ALL (99.999%) have caller ID. So why not just block the number or don't answer. Nothing is actually going to happen, other than them calling you back. I wouldn't advise this at work but it works fantastic at home.

4. Sound a bull horn in their ear - I just think this would be absolutely funny to do......

Bill collectors can threaten as much as they would like, most of them don't get around to actually suing on a bad debt until months sometimes years after the delinquency has taken place. If you are struggling with debt I urge you to first take care of what we call the 4 walls FIRST

1. FOOD
2. SHELTER
3. LIGHTS
4. TRANSPORTATION

Yes this means your house payment has to come before you pay ANY CREDIT CARDS!! I know this may not be what some people are used to but this is honestly the best way and it works every time. If you don't have any money to pay creditors after these 4 things are done then oh well we will try again next month after the emergency fund is fully funded (which you don't use to pay them either).

If you are unsure if your wages are going to be garnished or you are having threats of being sued, call your local court house they can check if you have pending law suits against you. Usually a sheriff delivers summons papers for you to sign if you are actually going to be sued.

So now you have the tools to fight back, if you have additional questions or need a little pep talk just let me know!