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Saturday, June 20, 2015

Debt settlement is sometimes the only way to turn.

This article is from personal experience of hitting a financial wall and coming to a sudden stop. I was 40 years old and my whole life stopped. I was financially devastated and did not know where to turn. I had been making a good income and my wife at the time was working full time and making very good money. But then I walked into work one day and my job had come to an end. I had no clue that this was going to happen. We had been living high on the hog and had not been putting away any funds for times like this, we had no nest egg or financial cushion to fall back onto. I was devastated, I felt like my world was crashing in around me and I had no clue of where to turn or what to do. 

My credit cards were close to being maxed out and I had other bills that were closing in on me. I had reached out to credit counseling agencies to try and help me get my bills in order. They worked except they took every red cent I had and put it all towards my debt, which is fine but it leaves you with nothing which hurts when you have unexpected car repairs or home repairs or a medical emergency. You cannot just pick up the phone and call your credit counselor  and say I am skipping this months payment to fix my car, the credit counseling agents do not want to hear this from you and they will not help when you have these situation's. So unfortunately I had to take out other credit cards to help when these issues came about.

I had also looked into a consolidation loans to wrap all my debt into one account and one payment with a much lower interest rate and a payment that I could afford. This would have been great but with no job and only my wife's income I could not qualify for loan, I was what is called “upside down”, my debt to income ratio was backwards or upside down, I owed more monthly than what I had coming in as income. A consolidation loan was out of the question, it would have been great but there was no bank or loan company out there that would give me the time of day.

Unfortunately a lot of these types of programs do not work for people and they did not work for me either. One thing that I did do that worked for me was to go and find a professional debt settlement representative that could talk to the collection agencies, credit card companies, and other people I was in debt to and come up with a debt settlement that we all agreed too. A lot of people frown on debt settlement because it does hurt your credit report and credit score, but when you are in a position like I was my credit score sucked anyways. I opted to take a hit on my credit and pay off my debt at an agreed upon settlement instead of filing bankruptcy. The process can take two to three years of work but I was able to get my bills paid off and in the process I had found a new job and I took that income and applied it to my overall debt.

The whole situation was a wake up call for me. I knew from this that I needed to start storing away some funds on a weekly basis to cover me for three to six months just in case one of us loses our job again or we get sick and cannot go to work and we have to live on one income again. Everybody needs to make sure that they have at least six months of income stored away in case of emergencies.

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