- Education and Science
How to Deal with Bill Collectors when You have No Means to Pay
How to deal with creditor when you have no money is very easy. You can't give what you don't have. Now that said, very few people have no money, they simple don't have enough money to meet the necessities of life, and pay their creditors at the same time.
What I am going to say here will not be what your used to hearing on this subject, as I consider myself a bit of a guerrilla when it comes to the predatory nature of the lending business. I am of the opinion that it is morally wrong to lend money in order to profit. Particularly to the class of people who are most likely to borrow to begin with. Enough of my political views.
Here is how I have done things in the past and the results, and how I believe this should be handled by anyone facing this situation. You will find that many of our nations most prestigious families and personages have handled it this very way as well. (Look up Neil Bush the Presidents brother) That is why they are wealthy, and 95 percent of everyone else is not.
First, take care of your health, nutrition, and well being. Without your health you have nothing period. Therefore, there is no point in stressing as if you starve you will be dead and that is that. Your children are more important than your debts, you should not ever sacrifice them for a blood sucker. Really this should be a no brain-er.
With what money you have, take care of your nutritional needs, then health (Proper clothing for the environment) and medical, followed by shelter. In that order, you have to have food to live, shelter is a nicety. Everything after that is a luxury.
Now once you have had your dinner, and the kiddo's are fat and happy, and a roof over your head, you have a few extra dollars left over what do you do next. Good question, the money changers who control the media and most of our popular thinking will promptly tell you to start paying your debs, no matter how little you have to pay.
That is a great way to remain a slave and never get anywhere. The funny thing is people who have never been in this situation will give you the party line and tell you to work with them and do whatever and bend over funny how they become programmed to assist the well to do at the expense of someone else.
No you are the customer of the creditor not the other way around and guess what the customer is always right. People's collective attitude about debt repayment is so ingrained it reminds me of the story of the gorilla's in the cage.
It goes something like this, there are five Gorillas in a cage and a bundle of banana's are lowered into the center and as soon as a Gorilla goes for the bananas they are all promptly sprayed by cold water. This scenario is repeated until the gorillas no longer go for the bananas. Now over time one of the gorillas is replaced with a new gorilla. When the new guy goes for the bananas the other gorillas attack him until he no longer goes for the the bananas, this process is repeated until none of the original gorillas are left. At which point no gorilla is left that knows why you don't eat the bananas but they all know not to touch the bananas.
So back to what to do with your disposable income. First and foremost you must pay yourself. That means you pay yourself before you pay any creditor. You owe the fruits of your labor to yourself before you owe it to anyone else.
So simply put give yourself the first 200 dollars or 10% of your gross pay if you make more than minimum wage, of your disposable income before anyone else gets paid.
This is necessary for many reasons here are a few: You need to have an emergency fund to buy food and other necessities if you find yourself with no income again. This will take the stress out of the next lean period, there will be another one, there always is. Second you have to make a choice to be a slave and give over your fruits to a master or be your own person and to do that you have to pay yourself first. It was your work not theirs.
So, you say, "MoneyGuy what do I do about my debts what about my credit rating what about the debt collectors", well let's take this in order.
First the last thing you should care about is your credit rating, if you are in debt the last thing you need is more debt. Very simple, think of it as insurance to help prevent you from getting into debt in the future. Little hint, they only make money if money is loaned so don't worry the blood suckers will be back with plenty of credit offers after a couple of years and your assets are built back up.
Second, the debt collectors, IGNORE them. That is correct, throw the letters in the trash and don't answer the phone. They have only one mission in life and that is to get what ever they can, however small or large that amount may be. Don't believe a damn thing they say (They aren't going to take any legal action or whatever crapola they say, it will cost them way more than the debt itself and they have an obligation to the bottom line). Check out this Hub to see how debt collections work to learn more.
Third, about the debts, This is simple since you have defaulted the bank or credit institution that loaned you money has two recourse's, if the loan is secured they repossess the property that secured the loan and that settles the bill.
Again consider this a blessing as you obviously have something you cannot afford and most assuredly don't need. Change your paradigm if you must in order to accept that.
If the loan is unsecured, they can pester the hell out of you if you let them by calling and letter writing and whatever. Other than that after 6 months they write it off. Sure they will pile on some late fees and what not but who cares at the six month point it is done it will be whatever it is.
You still will not pay that amount. They will turn it over to a collection agency who will try to collect whatever they can and split that amount with the original debt owner. Here is where your savings comes in. Once you have a full six months of living money saved up(Your emergency stash not to be spent unless an emergency).
Your savings now goes to clearing your debt. Once you have about 50% of one of your debts saved up write the collector that owns that debt offer a settlement of about 25% of the amount.
They will do one of two things they will accept your offer or they will counter offer, anything at 50% or less take the offer, get it in writing and settle the debt.
Don't I repeat don't give in for anything more than 50%. Build up your savings again and repeat process until all debts are settled. I Repeat do not use an agency or any other scammer service to help you. They wouldn't be doing it if there wasn't profit to be made.
Upon settling of your debts continue your debt free life. Continue sticking 10% back for your future, stick another 10% back for future purchases (Cars and Homes) pay cash. Lastly stick 10% back for gotchas like tires and appliances. This will prevent you from being forced into not having the cash when these little realities crop up.
Some people may be skeptical or critical of this advice as they are deeply programmed to assist the system extract the max profit from the working class. To those people allow me to give a little lesson on Banking in this Hub. I hoped this helps those in need out.