How Dig Out Of Debt Safely

DailyFinance:

William Caniano used to work with a debt-settlement company and discusses the practice, among other topics, in his forthcoming book, The Art of Bullspit and The Casino Economy. "Many of the people I worked with were at best disingenuous. They painted a rosy picture for the client that really sounded doable. The consultant only wanted to get the client into the program long enough to collect their commission, which is paid from the first one to three months' installments. After that, neither the company or the consultant gave a damn whether or not the client stays with the program," says Caniano.

Read the whole story: DailyFinance

Comments

[drkazmd65]

03:37 PM on 09/23/2010

The trick to getting out of debt - as trite as it sounds - is having the money coming in > the money going out on a consistent basis.

We all (myself included) get really used to not having the income inequality running that direction. Credit was easy, we wanted 'stuff' and tomorrow was another day in the future we didn't need to worry about because credit was easy.

We are now (for almost 2 years running) managing to have income > outgo with enough left over to pay off old debt every month. It isn't easy. I still want to buy 'stuff'. I just don't do it unless I have to, and unless I can figure out a way to pay for it without adding to debt to do it. I figure barring an unexpected windfall - the wife & I are 2+ years from being debt free other than a fixed-rate mortgage and a relatively low interest rate student loan.

Its not easy. It takes perserverance once you have dug that hole to get out of it. But the end result will be worth it.

[paintitblack]

11:54 AM on 09/24/2010

THANK YOU. The first line says it all. I am lucky enough to have a job, but even at the end of the month I'm still left with ~$200 in the bank before the next check. Through in a major expense every few months (car, illness, family member needs to borrow money, car registration, etc) and it ends up taking months to balance it all out. It is really frustrating.

[paintitblack]

11:55 AM on 09/24/2010

Whoops- through=throw.

[Lisa Shields]

01:59 PM on 09/23/2010

I have lived without a credit card for four years.
I saw how "minimum payments" were eating us alive, but we took steps to correct it.

Painful? You BET.
We killed an IRA, paid the penalty, and used the cash to pay off everything we had except our house. Most Money People would tell you that was crazy. No...crazy was preserving an IRA that was returning under one percent interest, and NOT paying off credit cards that were at 29 percent, plus fees.

In the time since, we've gotten our finances stable. Cash ONLY is the rule. We can still travel (after we save for it) pay all our bills, and amazing enough, we're in far better shape than ever before. Paying interest on a debt that never does away is the slow road to the poor house. And no...we didn't take a bankruptcy.

Debt is something you should not take on lightly. Even if something is a "great sale", add 40 percent to the cost before you buy it. Still a great price? Too many people are drowning that don't need to. Cash is King...

[switchrat666]

12:42 PM on 09/23/2010

If you were to follow the artical you would be against OBAMA CARE...you ain't paying for it you can't have it...So...wee does the defualted money come from.??? Them darn rich CEO's..maybe they bake that into the cost of doing business..na..me me me give it to me

[DebtNavigation]

10:59 AM on 09/23/2010

The article has plenty of misinformation. There are situations where "settling" a debt is not preferable to allowing the case to go to court, particularly if the debt's putative owner is a junk debt buyer, whose claim may either be too old (statute of limitations) or too difficult to prove (failing to come within the business records exception to the rule that denies hearsay any evidentiary value). In short, "informal bankruptcy" (a more sophisticated version of "being a deadbeat") may be the best strategy unless and until formal (filed in federal BK court) is unquestionably necessary. Some Americans are even doing this as a form of protest.

In Mexico in the mid-'90s Wall Street engineered a currency coup that tripled the debt owed by small businesses and family farms and also allowed for them to be massively ratejacked on top of it. Mexicans consequently formed the "el Barzon" movement and pushed back Wall Street and deposed their ruling party of 60+ years. In this country YouTube phenom Ann Minch has already declared the debtors' revolt and begun going after them http://www.revoltstartsnow.com

If you've been pushed under, you can read every other page of my book for free: http://www.scribd.com/doc/25443175/Debt-Hope-Down-and-Dirty-Survival-Strategies-Evaluation-Version-Complete

[gerald4]

10:51 AM on 09/23/2010

Maybe my wife & I could get a divorce with her awarded all of our assets.

Then she and I could quit working, travel around the world living the high life, buy some new cars, pay for a bigger house in a more expensive neighborhood, quit my second job, stop saving anything, always hire someone to fix things that break, never work to fix anything myself, and take up heavy drinking with my credit cards until my credit cards were "maxed out", and then I could file bankruptcy and not pay for our good times.

We could then get re-married and live happily hereafter.

But what if she wants a newer, better-looking and younger man instead of me. Maybe I had better not suggest that to her.

Why should anyone work if they can live off of a continuous stream of borrowed US dollars? This is the new American Way. It cannot ever end! Financial Freedom Forever! This is how the US government pays their expenses!