Tips for Paying Off Debts

Let's just say it out loud and be done with it: You owe money to people. Period. Nothing more than that.

Now that we have that out of the way, take a deep breath and stop panicking. It's only a big deal if you avoid it or let it overwhelm you. You've probably already done both with negative results, so let's do something new to turn things around, okay?

I know things are tight. I know that the stress is hurting you and your loved ones. I know what it's like to be "in the hole" financially-speaking and the horrid feel that people are shoveling dirt on top of you.

Shame? Pfft - been there. Depression? Fear and doubt?

Oh, yes. Every moment of every day.

See, my Ex wasn't very good with money ... or keeping a job. When he had employment, he blew our money on CD's, computer games, expensive toys, etc. usually on his way home from cashing his paycheque. We were homeless several times during our marriage and had to rely on local food banks. I worked when I could, but was extremely ill for years. The simply fact is, it wasn't long before we ended up owing a lot of people a lot of money.

For years, we had creditors calling. Some of the would actually scream at me over the phone! We received threatening letters, law suits, and even our extended family members were getting harassing calls and letters from people we owed money to.

Waiting until you "have enough" to pay someone back doesn't work. Silence eats away at whatever is left of the relationship, trust, and respect. Avoidance only burns bridges.

I tried to find repayment solutions, but the Ex insisted we wait until he had a really big payday and then just hand over all (or most) of it to make the creditors go away. Talk about being unrealistic!

It was a ridiculous mind-set to have, especially considering the fact that large chunks of cash rarely just falls into a person's lap to magically made the "bad men" go away. When we did get money, we needed it to pay rent and buy food.

The situation became so bad that I stopped answering the phone and refused to open the mail. We moved and didn't leave a forwarding address or phone number ... not even with family, simply so creditors couldn't track us. Things were so horrible! My life was a nightmare.

Any of that sound familiar? If so, I want you to take a deep breath and let it out slowly. I'm going to share some tips with you that, if you follow them, will make your life better. It will require a little bit of courage and a little bit of action, but little-by-little, you will find yourself in a better and healthier place financially.

One step at a time, okay? Now, take another deep breath and let's take the first step together ...

Some people (especially those you owe money to) will try to make you feel ashamed, embarrassed, or even immoral for your debt.

DON'T LET THEM.

Everyone Owes Money at One Time or Another

Western economy is set up for us to live in debt. It encourages debt to "build credit". It's a common part of everyone's life. It's also a fact that no one teaches us how to deal with this debt in a manner that keeps us in control, instead of the other way around. The fact is:

Millions of people are in the same boat as you.

When creditors try to make you feel bad about these simple facts, it is because it is their job to do so. It is their job to get money out of you any way they can. So, if that means humiliating and berating you into giving them your last dollar - that's what they'll do. Your job is to not let them do hurt you mentally, emotionally or financially.

One day, someone gave me advice that went something along the lines of:

Communication is the most important tool we have. The people you owe money to generally don't mind waiting so long as you remain in communication with them. Let them know that you do plan on paying them back, set up a payment schedule (even if it's just $5 a month), keep them up-to-date on your efforts in regards to getting money for them, tell them if something changes, send "thank you for being so patient" notes. Treat them the way you'd like to be treated; pleasantly and honestly.

He said that when you stop communicating with the people you owe money to, they become frightened that they won't be repaid. They worry that you'll just disappear without paying them back. That's when they become nasty and harassing.

I called everyone we owed money to and explained to them frankly what our situation was, thanked them for having been so patient (even if they'd been screaming psychos) and offered to start making payments. Yup, $5 a month was okay with most of them.

Some of them simply forgave the debt or said:

"We can wait until you have the other bills paid off. Just keep in touch and let us know how things are going."

I stopped consulting with the Ex; I just sent the money before he could spend it. Sometimes, I had to stuff cash in an envelope to make sure the people we owed got it, otherwise the Ex would empty the bank account before a cheque could be cashed.

Every week or two, I would get in touch with the people I owed to let them know payment would be made on schedule, or that we were expecting a bigger paycheque that usual and could give a little more than expected that month, etc. I made sure the payments were small enough that I rarely ever had to call and let them know we were going to be late or give less than agreed upon. When it did happen, I let them know right away, so they weren't surprised and knew that I was still being accountable to them.

It was like a really awesome magic spell had been cast. The people we owed suddenly became friendly and reasonable. Some of them were still jerks, but they weren't harassing us anymore. Some of them started treating me with respect, referring me to people for odd jobs, coming by with "extra" groceries or clothes, and doing other kind acts to make my life easier.

Our building manager even gave me a job; for every hour I worked around the building, he deducted $15 off our back-rent owing. He even let me keep track of my hours without asking what I was doing, when, or for how long. I just submitted my hours to him at the end of each month and he knocked the amount off the debt, no questions asked. I wanted to earn trust, so I never took advantage of the situation. I worked every hour I claimed, even if it was polishing stair railings for an hour. After a bit, he started to increase my responsibilities and began grooming me to be the new superintendent because he felt I was trustworthy.

Setting up payments with your creditors may not be pleasant, but it's a whole lot stressful than your current situation. It will not only rebuild your good name, but it will help restore your self-respect and confidence.