Best Strategies: Get Rid of Debt
85Debt Relief Strategies
If you believe in duty you were taught to pay your bills. In normal times this teaching would apply. But these are not normal times. You are fighting a losing battle in many cases because of credit fees that should be illegal. There are a lot of businesses online or in your community that can give you tips on how to pay your mountain of debt. Some of these tips may be helpful but many are not. But really, the congress of the United States fostered this excess debt and government policy encouraged you to maximize your debt. Big banks also wanted you to maximize your debt.
You folks with personal finance problems need to adopt strategies for dealing with debt, understanding that you have been victimized by the powers that be. The strategies include walking away (strategic default), settling with the credit card company for less than the full amount of the debt, bankruptcy, consolidation (which keeps the balance intact), etc.
The aim of this resource, which you should bookmark, is to offer my solutions from my websites as well as the many ideas that have been put forward by my fellow hubbers. I look forward to having comments at the bottom of the page and feedback as to the effectiveness of any of the ideas put forward here. We have a deleveraging that must happen if people are to take part in the economy and spend money again, hopefully with fewer credit cards driving that spending.
Table of Contents:
- Debt Relief Strategies
- Rules for Debt Solution and Strategy
- My Website Debt Protest and Consolidation Solutions
- Helpful Hubber Debt Solutions
- A Word About Private Money Lending for Real Estate and Small Business
As a diversion you can always check out the entertainment sites I will list at the very bottom of the page below the comments. Enjoy and find a solution to your credit debt that you can sleep with!
From my site: dontpaycreditcards.com/creditcrisis.html comes my statement about our financial institutions:
"Most of the links at Dontpaycreditcards.com are directed to articles written by me in response to the greedy and unprecedented behavior by the too-big-to-fail banks. I offer on these pages insight into how the credit crisis started, who started it, and why people can change their behavior in such a way as to make sure banks never do the evil things they have done to us again. In addition I have added this Amazon store which offers more in depth resources regarding personal finance and the credit crisis. I recommend the book, Web of Debt. There are a few other links on the store to popular items needed for business and everyday life."
You must remember that Morgan Stanley executed a strategic default on buildings that were current on payments. While the lender got the buildings back in that case, and while I advocate walking away from mortgage debt strategically or otherwise, credit card companies have violated their relationships of trust with debtors by the enormous fees and interest they charge. Their borrowing costs are next to nothing, so they cannot in any way justify the interest that they are charging credit card holders. That is why in this time of extreme bad bank abuse, walking away from credit cards is not wrong.
Strategic default is on the rise, and what it does is to give households a fighting chance to survive in an environment of declining wages and inflated commodities including housing.
Breathe the Fresh Ocean Air of Financial Freedom
Web of Debt. Essential Insight Into the Credit Crisis and Theft By International Bankers of Your Taxpayer Money.
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Rules for Debt Solution and Strategy
If you decide to negotiate your debt then these are the rules:
1. Get everything in writing.
2. Don't use secured debt or 401k plans to pay off creditors, ever! Avoid consolidation loans.
3. Don't pay debt solution companies upfront if you decide to let them handle your situation.
4. Realize that the immoral credit card finance charges are a fault of the system, a broken and greedy system, and that they are not your fault. You do not have a moral responsibility to pay those committing what amounts to legal usury against you. This is not like in the old days when loan terms were fair and reasonable. That is no longer the reality of the system our politicians let get completely out of hand. Banks borrow at 1/2 percent and lend at rates that can only be described as being totally immoral and shameful.
5. Avoid consumer credit organizations even if they are legitimate unless you need a squeaky clean credit report because they won't reduce your principle.
6. Realize that your credit report will suffer if you negotiate a settlement or walk away. It isn't the end of the world however!
7. If you are harassed, change your phone and unlist the number.
8. If you choose to walk away from a real estate loan, consider paying the second mortgage as that is a non recourse loan and the loan holders, assuming that they can find the note, could go after you with a lawsuit. This does not concern some people, however. Some people pay the heloc in order to keep the credit line open. For many, this seems to work!
Disclaimer: I am not an investment advisor nor am I an attorney. Each individual case is different and it is the responsibility of each person wrestling with these problems to understand the negatives of any actions taken regarding your credit rating, mortgage recourse vulnerability, vulnerability to lawsuit, statute of limitations in your state, etc.
The Morality of Breaking a Contract with Credit Card Companies
My Website Debt Protest and Consolidation Solutions
- Warning From Paul Miller Who Covers Fannie and Freddie That 30 Year Mortgages May Go Away
Paul Miller, an analyst who follows Fannie Mae and Freddie Mac said on 6/16/2010 that the 30 year mortgage will go away without the two GSE's continuing to guarantee loans. This interview with Mr. Miller was... - Meredith Whitney Watching Wall Street
Meredith Whitney gained fame as a Wall Street watcher by predicting that Citibank would have to cut their dividend as the credit crisis began. She was almost laughed out of New York City. But she was so... - The Fascist Government Will Continue to Screw the Middle Class
Find Debt Solution strategies As I wrote for Seeking Alpha awhile back, the Federal Reserve private bank wants to sell bonds off their balance sheet in the form of a reverse repo, while also trying to sell... - Don't Buy A House Where There Are Multiple Offers-A Real Bank Scam
I live in Reno, NV. I have delved into the underbelly of the real estate market here. This real estate market was the victim of the massive ponzi lending bubble that ended with the credit crisis crash in late... - The American Public Is Incredibly Stupid About Walking Away from Debt and Underwater Mortgages
There is no hope of financial literacy for the American public if one is to believe the astounding poll taken by Fannie Mae. The poll found that a majority Americans believe that it was the borrowers fault,... - Tea Party Republicans: I Wish I Could Believe You When You Say You Want to Cut the Lifeline to the B
Sarah Palin is supporting the Tea Party Express. Come to find out, the Tea Party Express is a con. It is not the tea party grass roots movement but is rather a PAC, using Russo Marsh, a PR firm, as a way to... - Dont-pay-credit-cards.com
This is the sister site of http://www.dontpaycreditcards.com which I urge you to bookmark as well. We must fight bank usury and loan sharking.
Debt Solutions
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Helpful Hubber Debt Solutions. See If Any Work for Your Credit Card Debt
- Foreclosures Are The Solution
Update: Jim Cramer must be in on this as he predicted a housing bottom in June 2009. The banks are withholding inventory and foreclosures will show slight declines, but ONLY TEMPORARILY. The banks are... - Debt Settlement vs. Debt Consolidation, Which is Better?
This question is not easily answered by a mere yes or no. A lot of aspects need to be considered before a debtor is able to declare which one is the better choice for him. Basically, debt settlement and... - Bill Collectors Harassing You? Action Can Be Taken
Note from BGAMALL: Debt solution companies could not reduce debt by 60 percent in 2006, but it is possible that this has changed since the credit crisis and 1 out of 10 are defaulting on credit cards. Proceed with caution with debt solution agencies. - Are Debt Solutions Possible?
Yes, life is fun! And a fact of life is that many of us get a little carried away and can very quickly find ourselves with a pile of debt. Everyone has heard the enticing statement, "90 Days Same as... - Say No To Recourse Loans
Update: Short sellers are being required, in some instances, to sign a promisory note in order to be liable for the difference between the short sale price and the money owed on the loan. Bankers will stop at... - Get rid of credit card debt - Hot Hubs
Get rid of credit card debt - Listing of Hot Hubs - Unsecured Debt Consolidation Loans
With rampant credit crunch being experienced all around due to some bad lending and foreclosure on mortgages rising each day, it's easy to guess what a debt ridden man with no assets would be seeking -... - Debt Busters Debt Solution
Debt Busters, one of the best debt solutions for getting out of debt. - Finding the Right Debt Solution
Debt management solution is the biggest tool you can use at the time when your credit card debt goes out of hand. You will be able to manage and negotiate a great deal better if you are using the debt...
A Word About Private Money Lending for Real Estate
Private Lender Loans are not consumer loans. Or at least they should not be used for that purpose. Otherwise known as hard money loans, these loans do not require credit checks, but are useful for small business and rehab of real estate. So these loans are for people who have a plan to make money and get out of debt or some hardship with a business plan.Hard money loans are a debt solution strategy if you have business savvy.
Payday loans are a scam and a fraud, but hard money lenders do serve a useful purpose if you have, as I have said, a plan for action. These loans require a lot of thought, an understanding of your markets, and a willingness to take on reasonable risk. These loans are not for the feignt of heart, and require decisive action and hard work to bring success. The interest rates are high and the loans are of short duration. So, if you have a plan, go for it. Otherwise, proceed with extreme caution.
My Seeking Alpha Debt and Finance Comments
- What Is Predatory Lending Anyway? Payday Lending and Ponzi Mortgage Loans Come From the Same Sources!
You are welcome, Lisa. - 4 days ago
- Risk Models Built On Sand
Sorry, to clarify, "the assumption that all the mortgages could not go south" was what I meant to say. - 5 days ago
- Risk Models Built On Sand
Hi Yasmine, interesting article. The premise in writing my ebooks and on BI is that the banks knew they could not nail down risk in the housing bubble and fraudulently adopted false assumptions. In other words, it wasn't a mistake, an error, bankers not knowing what they were doing. They knew exactly what they were doing which is why in Feb, 2004, Greenspan said you could get a "better deal" by taking out an adjustable mortgage. The assumption that all the mortgages could go south ignored the Japanese meltdown, and later ignored risk models gone bad at Enron, Parmalot and Worldcom. These bankers, including Henry Paulson, the bankers at Basel 2 in 1998, and regulators Greenspan and Geithner should all be in jail. Yesterday. - 5 days ago
- The Derivatives Myth
Much of the market is a fraud, since governments bought insurance swaps protecting them against interest rate rises, only to see that the Fed had the banks' backs and lowered interest rates, thereby screwing the governments, including your county and state governments. Just another sophisticated banker scam. I hope they all go to hell. Did these banks disclose that they knew the Fed would push down interest rates when selling these interest swaps? - 2 months ago
- America's Big Bank $244 Trillion Derivatives Market Exposed
I would like to see US, and state governments default on all these interest swaps because it was a scam for these banks to sell interest derivatives as a hedge against inflation when the banks knew the Fed would push interest rates down. This is a massive scam against main street. - 2 months ago
- People Still Defend the TBTF banks and the Fed. So Let's Boycott Mortgages
I don't think we should physically fight the financial cabal, either. We just need to educate ourselves to be careful with borrowing, and we should boycott that which could hurt us. It is hard to trust the banks nowadays, and it is the behavior of the major banks that has brought us to this point. They have themselves to blame. - 2 months ago
- Land Of The Rising Debt-To-GDP Ratio
I think the difference between Greece and Japan is that CDS's have gone wild betting on Greek default. And if Greece defaults, the banks could be out a lot. However, I doubt if the banks will let it happen or even pay up if it happens. The Swaps regulator is owned by the banks. Bass should have known that before he bought the Swaps betting on default. Hahahahahaha. - 3 months ago
- Wrangling Over Income Inequality: A Comprehensive Review And Critique Of Robert Reich's Book 'Aftershock'
That is false, Bill. Even Barry Ritholtz agrees that the CRA was a small portion of the housing bubble, about 26 percent of subprime according to the Fed, and zero percent for jumbo and prime toxic loans. Did the CRA give the housing bubble a kickstart? Perhaps. But without the shadow banks being involved it would not have been a serious bubble.By far the most loans that juiced the bubble were made after 2003, and those were made by shadow banks, not the CRA who had pretty much pulled out by them. No, this was a basel 2 inspired scam, that used shadow banks like Ameriquest and Countrywide and laundered the bad loans through investment bank falsely rated CDO's. - 4 months ago
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Awesome advice Big Country!
Gary,
We all to be more like our parents and grandparents. Try saving up and buy things when you have saved enough to pay cash. Our cult of consumerism must come to an end NOW!!!!!!!!!
Bgamall I, honestly, in my present mood, thought this would be too boring too read. This is so cool. I refuse to over-spend and manage to urinate someone off by not over-spending. I have to maintain "me". I use a debit card but still I like your advice and can pass it on.
Bgmail, let there be no doubt that the credit card companies have deliberately ramped up their interest rates, changed their terms on a whim and viciously penalized those who fall behind on payments.
The greed doesn't stop there however. We have been our own worst enemies. Even as we've seen the antics of credit card companies we've continued to SPEND ourselves into oblivion. The solution? Just as others here are advocatings: Stop being an overconsumer. Most worship material wealth and possessions. Until that changes most will continue along the path of financial sefl-destruction.
Sadly all too many people will need this advice after Christmas.
Thanks to all of you for stopping by. Yes, consumerism must diminish. That will be a challenge to the entire world, as the US spendthrift consumer was the golden goose of world prosperity. And I tried not to make this boring, lol.
HXProf, that is a very eloquent summation by you of the state of the consumer and the credit card companies. The tension, of course, is that the world depends on the US consumer to spend. So, until prices for most goods and commodities decline, we will be buying overpriced goods, ie., cars, houses, food, gasoline, etc. It is amazing to me that the government wants to pump up prices while at the same time hoping that we will spend, spend, spend.
See also: http://hubpages.com/hub/The-Real-Revolution-is-Fig
Yes Ethel, I am curious how many ran their cards up one final time and will have to walk away.
My great concern is what happens when unemployment benefits finally stop and some jobs will have been lost forever.
Slow but steady regular saving will solve all problems.
Good advice. Thanks for stopping by H P.
Well written and insightful hub and comments. I agree that some credit card interest rates border on usury. People need to educate themselves on getting the best rates possible. Shop around to different banks and credit card companies. Tell the bank what you are willing to pay. Without some investigation and self-help the fees can be outrageous.
Thanks Mrs Moneypants. I appreciate the encouragement.
Sound advice BGA. My wife has a huge credit card debt, I'm afraid we won't break or negotiate out of the contract because we're trying to buy a house this summer and can't bear the credit loss. We might go to our credit union and get a lower interest loan...
Thanks for the encouragement though...
Interesting position on credit card debt that I really can't argue with! I have bookmarked your websites for future reference.
My student loans are in default. The company holding the loan is demanding pay off in full which is impossible because my credit is in the toilet and I cant get a loan that high to pay it off. Or they want, in addition to the wage garnishment every paycheck, another $551 a month for nine months as voluntary payments then they will realease from default and sell to another lender for repayment. I can't pay $1000 a month for nine months. I'm barely getting by with the wage garnishment. How do I get this taken care of? Can you help? Do you know something I don't?
I guess one thing that you should wind into any debt reduction equation is that you should never believe fully waht any government says. By this, I mean if a governement says that a recession is 'over' do not believe it - anymore than when they say there is 'no' problem. In other words, get rid of your debt as fast as possible regardless of what else you may hear.
Hopefully the house isn't overpriced like most things are now, Ben. :)
Soxy,here is a link that may help about private student loan collections. Seems like they can't garnish your left testicle if you don't pay, lol: http://www.studentloanborrowerassistance.org/colle
Really good advice Nick. In fact I believe the spending numbers are cooked: http://hubpages.com/hub/retail-store-closing-list
Any debt I have, I created myself - part of being a mature (and sometimes foolish) adult. So while I do not feel it would be morally right for me to not pay them for the goods I bought - I was also not happy with the way things were. While mortgages and auto loans and some credit card debt has hampered my cash flow We are now in line to be 100% debt free in 6.2 years without making any additional payments. We will just be banking like the banks do!
That is great Steve, but keep in mind that the banks are gouging you. In other times, banks had to be restrained in their charging of interest. This made it reasonable and right to pay back debt. Banks have decided to forsake all reason and ethics and that is why I say that those who can should consider walking away from the debt, because family comes first.
Great information on how to get rid of debt. This is one of the best hubs offering so much. I wish I know about some of the links you have posted.
George
Thanks for the kind words. Welcome to Hubpages. But I know you have written a hub extolling debt consolidation. I think that usually entails substituting an unsecured debt, credit cards, for secured debt at dreadfully high interest rates. I am against those kind of consolidation loans entirely.
Nice hub, good rules for debt solution. Will read your other hubs on personal finance topics. Thanks for sharing.
Hi Karina, remember, these are suggestions only. I am not a financial counselor or attorney, so check your state laws and get advice.
A CREDIT CARD DEBT RESPONSE
One of the five requisites to a legally binding contract is something called consideration. It basically means that both parties must bring something to the bargain, usually money. And, in the case of a mortgage for example, it is about the money. Here’s the catch. Due to fractional reserve lending, the bank is not actually lending any money to the potential homebuyer! The bank only has a fraction of the reserves it claims to have and therefore is really lending NOTHING! It’s all accounting columns and electronic digits that are involved in the mortgage. Once signed, the mortgage actually gives the bank permission to print more money. Your signature is what creates the money, so the bank has no consideration in the contract which renders the contract null and void! But believe me, no judge would rule in your favor. It’s just important to know from a moral standpoint. The entire banking system IS immoral!
The same applies to credit card debt. Of course you can walk away from that stuff. It’s unsubstantiated debt, not like a mortgage with a house involved. You see, you are not walking away from YOUR debt. You’re walking away from the banks’ debt. It’s YOUR credit and THE BANKS debt. The bank is merely lending you YOUR credit! It’s your credit, so you can do what ever you want with it; cash it out for dollars if you want. Once you sign a credit card receipt, you have given the bank permission to create that amount of money for you. The bank then incurs a debt and expects you to pay their debt! Again, no consideration and even no full disclosure (also required in a legally binding contract). You are not contractually obligated to pay the banks debit! (Besides, they’ve already sold that debt ten times over the amount. So don’t worry about the bank not making any money!) They have lost nothing in the exchange because they brought nothing to the table to begin with (except YOUR credit). Without your signature, the banks can create no money. But you’ve been duped into thinking that YOU owe THEM! If you actually owed the bank anything, they would be obligated to send you a bill or invoice for what you owe. You’ve never received a bill or invoice (although you probably erroneously call what they send you a bill). They send you a STATEMENT! You’re not contractually obligated to pay a statement! If you have a checking or savings account, you receive a monthly bank statement, right? Well, do you PAY that statement? NO, of course not! So, why, oh why do you pay a credit card statement? Ask your credit card company for a bill or invoice showing services rendered or monies lost and you’ll be digging up a hornets nest with them, because they can’t produce it.
Unfortunately, this is not a defense you can use in court. Perhaps you could use a defense that they don't have proof they gave you the card, or some such defense, however.
Protesting the debt means possible garnishment, however it would mean keeping very little money in the bank.
Why are credit card companies and banks allowed to charge so much interest? They are milking us for as much money as they possibly can and our corrupt government allows it. What a shame. I have credit card debt and I see how hard it is to pay the cards off with the high interest rates they place on them. Good article. Makes me want to fight back. Teresa
Thanks for the encouragement Teresa. Check out this article as well: http://hubpages.com/hub/Strategic-Default-Is-Growi
KCC Big Country Level 2 Commenter 2 years ago
The biggest thing for people to remember is that YOU are in charge and EVERYTHING is negotiable. Don't let anyone tell you otherwise.