How To Start Digging Your Way Out

I can't imagine anyone who is not in some kind of financial crises doing a Google web search see how to be financially free and responsible ending up at this page.  So I am going to believe that there is a problem in your life with making ends meet.  The reason doesn't matter, but the cause is that the lifestyle you have been living and the expenses you have incurred are out of balance with each other.  Now you are trying to get yourself out of the situation you have have found yourself in  - as quickly as possible. 

I would be full of something you don't want to step in if I told you there was a quick way to clean up this mess.  It took a long time dig yourself into this,  and it is going to take time to make things right.  But - it is going to be OK,  as long as you start the process IMMEDIATELY.  It is not too late, you are going to live through your current crises, and if you stick to the plan you are going to make some necessary life changes to ensure you don't end up in the same situation again.  Are you ready?   

First - know how to deal with collectors for at least 30 days.

• Don't take out a PayDay Loan!  Stay away from these places.  If you think your financial situation is bad now, wait until you find out what you have to come up with in a few short weeks to pay them back.  It doesn't make sense to do this.   You will be deeper in the hole and will come up with another mind numbing excuse to get another Payday loan from that other LoansRus down the street to pay the first loan company back. Stay away from these places.  This includes Tile Loan places as well.  These people who run these places are not your friends and the rates they charge are as close to illegal as they can get.  
• Do not take out more loans to pay off your bills.  This is crazy - you can't afford more payments.
• Do not get a debt consolidation loan.  These will cost you up front, these may lower monthly payments but extend the length of time you owe, and will result in a single interest loan which may very well be higher than the interest you already are paying.
• Do not take a "loan" from your 401(k) unless you will be foreclosed upon and you have no other way to make your mortgage payments.

• If you are getting calls from collection agencies - be aware of the Fair Lending Act. There are a lot of things they can not do or say and you want to be ready for their tactics.  If you are getting calls or think you are going to get call from them arm yourself.
• Do Not Ever give a bank account number to a collector.  Even if they insist, do not allow this.  They can very easily drain your account.  Do not give them electronic access to your money!
• Get a home answering machine that allows you to start recording during a conversation. You can find used machines very reasonably priced at the Goodwill or Salvation Army, or garage sales, etc.  
• If you get called at work, tell them that you can not take these calls at work, and follow up with a certified letter to the physical address of the collection agency stating again that you will not take calls at work.  This is the law, and collectors must abide by it.
• Collectors are not allowed to call your cell phones.  You pay a fee for your cell phone minutes, and if you do not want to waste your minutes speaking with these goons, don't allow them to call you on your cell phone.
• Collectors can not harass you.
• Collectors can not garnish your wages without a court order
• Collectors can not pretend to be someone they are not.
• Collectors can not call you before 8:00 in the morning or after 9:00 in the evening - your time.
• Collectors can not make threats to you.
• Collectors can not tell you what you have to pay them or when you have to pay.
• Collectors can not speak with family, friends, neighbors, acquaintances and let them know anything about a debt.  They call them however, in order to obtain a current phone number or address.
• Collectors will lie to you
• Collectors will try to do anything to find where your breaking point is and will use this same method every time they call.  Be aware of this and do not allow them to intimidate you.
• Do not agree at first to pay them anything.  You have the right to demand written evidence that a debt is owed by you and to receive copies of the signed original agreements with the lenders.  You also have the right to see that the agency is licensed to operate within the state you live in.
• If a collector calls and yells, or swears, or calls you names a sailor would blush about, calmly tell the collector that you will not listen to trash like that and that they can call you back when they can speak more civilly. Then hang up on them.
• Be pleasant but firm when you speak to these collectors.  You need to put yourself in control of the situation and you need to let them know how often they can call you.  If you tell them they can call once every 2 weeks, make note of the date the can call you again.  If  you receive a call before the 2 weeks is up, firmly inform they have not waited the full two weeks and hang up on them.
• Don't pay these guys anything during the next 30 days.  Who cares about how your credit rating is at this time?  You will find out what a sham the whole credit bit is soon enough. 

We will get more into how to handle these goons in a future article.  I just want you to know how to deal with them until you can understand where you stand in your current financial situation.  And this is going to take you a month to get it together. 

Here are the steps for the next 30 days.

• Confide in someone that you are over your head in debt.  You are going to find that the majority of Americans are over their heads.  Don't be too embarrassed to admit this. You will feel a rush of calmness after doing this and that calmness with stay with you.  There!  isn't that better?
• If your significant other is not aware of the debt, come clean.  It is hard to do, but once done it is so much better.  You are supposed to be a team, and you will need each other more now than ever.  It will also bring about a closer and non-strained relation ship that you may have never experienced. 
• Be on time with the following 
• House or Rent Payment
  
• Groceries
  
• Utilities 
  
• Transportation.  
  
• These are the four things to keep you afloat.  You most always pay these.  You can get away with being behind on unsecured loan payments at this time and don't let anyone tell you that you need to pay off  the cards before any of the above. 
• Order a copy of your credit reports from all 3 major companies. You can get one free copy per year from each company.  Don't worry how bad they may look.  You need them to know where you stand.  

1. Experian: 
   1-800-397-3742 
   www.experian.com
2. Equifax: 
   1-800-685-1111 
   www.equifax.com
   
3. TransUnion: 
   1-800-888-4213 
   www.transunion.com
   

• Get a small spiral notebook you can keep in your pocket.  Get one for your significant other as well.  Record every cent you spend for 30 days, and what it was for.  Also keep track of all incoming money.  At the end of the 30 days, we are going to find out how much money comes in and how much goes out.   Only after knowing the detail of your monthly money will you be able to know how to better handle it. 

Anyway that is a good start.  There is so much more that hasn't been brought up yet, but start today, and lets get back together in 30 days when you are ready to start the budget and are prepared to move forward with a new plan, and a new way of life.

Joseph.