As Dave Ramsey would say, “Debt is dumb and cash is king!” And… we’ve all done dumb! 13 years ago my husband and I woke up. We found ourselves in lots of debt and no plan. Dumb! Creating a plan for your money and being an advocate for your freedom is what I call “Staying in the driver’s seat”. We used our budget and debt reduction plan to get free. However, sometimes you need to steer multiple cars in order to win. Here’s what I mean. As I’ve been working with clients lately, I’m noticing that creditors are becoming more aggressive. Many are using unfair and low ball tactics to get their money. They are unpredictable, but you must stay 3 steps ahead of them to keep control of your vehicle.
If you have old or unpaid debt hanging out there, here are some suggestions: 1. Create a budget and know how much money you have to work with on a regular basis. 2. Do your best to get and stay in touch with creditors. Lack of communication can lead to misunderstandings and garnishment. One of my clients paid nothing for years and then tried to settle the debt repeatedly when she had the cash. Because no agreement was made quickly the collector garnished wages. 3. Pay your creditors something. But, when you do ensure this is an agreement they accept. One of my clients faithfully paid what she could afford and the company still seized her assets because they had not agreed to the amount she was paying. It is important to get any agreements in writing. 4. Keep some cash at home. You want to always have money that no one can touch. In the event of an emergency you have something to catch your fall. 5. Do your best to keep any debts from going to an attorney. Work out payment arrangements prior to it going that far. At least that way no attorney fees are involved.
There are no guarantees in outcomes when dealing with creditors and old debts because each company handles these issues differently. But with a plan you are at least ahead of the game. When you stay in the driver’s seat you are rational enough to make good decisions and follow through. If you need help getting your plan together and sticking to it give me a call.