And The Meltdown Continues …

The news headlines from the past few days include:

And on and on. 

I think for a while now most of us have felt that things were not quite as rosy (financially, anyway) as people in the government and media wanted us to believe. You just had that uneasy feeling in your gut that our financial system was weezing and gasping, and it was just a matter of time before the system finally gave out and started to implode.

I think we’re there right now, quite frankly, and I believe this downward spiral is going to continue on for a while. And things might get even worse before they get better. But if you look at this honestly and objectively you understand that this financial meltdown was absolutely necessary to bring things back to a state of balance and sanity. There simply was no way that we could have sustained the previous pace.

So while we’re going through this period of instability and uncertainty, I believe that it will be wise to …

  1. Be conservative. Don’t be making stupid, frivolous purchases. Don’t worry about keeping up with the Jones’. You don’t need to follow them off the cliff like a lemming.
  2. Reduce your debt burden. If you lose your job or your hours at work get cut back, you don’t want to be a nervous wreck trying to figure out how you’re going to manage. Once you rid yourself of excessive debt you’ll find that you can live just fine with a reduced income.
  3. Remain calm and patient. I think we’ll be fine in the end, it’s just going to take some time (perhaps even a few years) to get through this. As financial problems intensify it might look as if the world has gone completely crazy. That’s when you just need to pull back from the madness, shut off the TV, take a deep breath and remind yourself that you’re going to be ok.

Why It’s A Bad Idea To Use “Cease And Desist” Letters

If you’d like to increase the odds of getting sued by one or more of your creditors, I can help you. Go ahead and send them a “cease and desist” letter. That’ll get the job done. They’re readily available at say, oh about a thousand different websites.

I was recently speaking with my good friend, Charles Phelan (of zipdebt.com), and he and I were rolling our eyes at how many so-called experts and pundits still are advocating the use of “cease and desist” letters to get creditors to stop calling you.

Newsflash: It’s well-known in the collection industry that the use of a “cease and desist” letter will usually trigger a lawsuit. Bill collectors despise cease and desist letters.

This was further confirmed during a recent conversation I had with a friend of mine that’s a paralegal at a large collection law firm. She jokingly made reference to the anti-collection “militia” on the Internet whose goal is to help consumers “do battle” with the evil bill collector.

 ”What people don’t realize”, she said, “is that we’re out here just trying to do our jobs like everybody else, and in most cases we’re willing to work with debtors as long as they conduct themselves professionally and what they’re proposing is reasonable. But when they start using all these petty little tactics promoted by the anti-collection militia we usually just fast-track those people for litigation.”

So there you have it. The moral to the story? Think. Be smart and use your head, and don’t do foolish things that are going to make matters even worse for yourself.

The # 1 Reason Why People Wish To Avoid Bankruptcy … The Answer Might Surprise You

Since 1995 I’ve done several thousand one-on-one phone consultations with people in all stages of financial distress, many of whom were desperately attempting to resolve their financial challenges without resorting to bankruptcy.

What do you think is the # 1 reason why people wish to avoid filing bankruptcy? Do you think it’s because bankruptcy would …

If you guessed any of these you would be wrong. Without a doubt, the # 1 reason why people wish to avoid filing bankruptcy is because they acknowledge that they owe the money and they want to (attempt to) pay it back.

Whether it’s because of their religious beliefs or just their personal moral convictions, the vast majority of people that I’ve spoken with over the years acknowledge that they owe the money and feel very badly about their inability to pay it back as originally intended. In other words, even though they now find themselves in a difficult financial predicament they still want to do the right thing and pay back what they can, even it’s for less than full balance.

I mentioned this to my wife the other day, and even she was genuinely surprised that this was the # 1 reason. But it’s the God’s honest truth.

Sure, there are the so-called “professional deadbeats” and scam artists that don’t pay their bills, but these people are the small minority. My experience has been that the overwhelming majority of people in difficult financial situations are good, honest people that acknowledge their financial obligations. But because of certain events that have transpired in their lives it might be extremely difficult, if not mathematically impossible, for them to repay their debts.

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