Debt is a vampire
Everyone knows that being in debt can suck the happiness out of your life. Debt will destroy your attitude, your relationships, and your personality.
The kind of debt I’m talking about is “stupid debt.” Stupid debt sneaks up on you when “easy credit” slips around the corner and enters your life. Student loan debt, mortgage debt, second mortgage debt, new car debt, credit card debt are a few we’re all familiar with, but don’t forget “Let’s go out to eat” debt, vacation debt, and “It’ll only add another $30 to our monthly credit card payment” debt.
The answer is to live below your means. What a concept! There was a time when those who loaned money were limited by usury laws — not anymore. Lenders can pretty much charge what the traffic will bear. Interest rates as high or higher than 30 percent APR (Annual Percentage Rate) are common. This means if you owe $100 and don’t make any payments, at the end of one year you’ll owe $130 — without making any further purchases.
Unfortunately, an entire dark industry has evolved to “help” consumers “eliminate” their debt or magically improve their credit rating so they can borrow more money and go further into debt. Here’s a big hint — most of the companies offering this service want their money upfront, without any promise of solving your debt or credit problem.
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A common tactic among these companies is to have you sign a complicated, one-sided legal agreement requiring you to send the company ALL your monthly income. The company then “negotiates” with your creditors and attempts to reach agreements with those you owe money. These agreements are designed to stretch out the term of your payback and reduce the APR (interest) you pay the company. (By the way, the company “helping” you usually takes a hefty monthly fee from your monthly payment before passing the remainder on to the people you owe money to. A very important side note: By “negotiating” with your creditors (by not making the required payments as originally agreed), the company you owe money to reports your slow pay or no pay to the credit reporting agencies and ruins your credit.
BOTTOM LINE: Don’t spend what you don’t have! There are no easy outs once the Debt Vampires get hold of you. The imaginary monsters of Halloween are pussycats compared to what these real-life ghouls will do to you, every day and every night while you lie awake worrying about making your next payments.
There are a number of legitimate self-help guided programs designed to help consumers with debt. Many are associated with local churches or county governments. One program that I personally recommend is the Dave Ramsey Program. You can find details at https://www.daveramsey.com/. There, you can buy a very good book, “Total Money Makeover,” for about $16. It’s all you really need to get back on track if you follow his advice.
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MY GIFT TO YOU: I know the above might seem a little dry and tedious but just close your eyes and imagine a holiday season with the crushing worry of bills and credit card statements to come. You and your family will have a much happier and merrier holiday. START PLANNING NOW. Only 67 days until Christmas!
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HARASSMENT BY DEBT COLLECTORS: Can you prevent debt collectors from contacting you? The answer is a big YES! Next time you’re called by a debt collector, politely ask them for their name, or employee number, and the name and address of their company. Tell the person on the phone not to call you regarding this debt anymore, and here’s the important part: Write them a letter with your full name, the last four numbers of your Social Security number, address and the details of the debt they say you owe and tell them not to contact you again regarding this debt. If you want to add a little oomph to it, send it by certified mail with a return receipt green card back to you that they have to sign. You’ll probably never get another harassing call from them. (Remember though — if it’s a legitimate debt, it won’t go away.)
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PAYDAY LOANS SUCK: If you have a bank account with a local bank, go in and talk to your banker about setting up a small open line of credit — before you need it. Some banks will offer this service; some won’t. Do your homework and check around. Talk to the branch manager, not a counter clerk. Because of the widespread abuse by payday lenders, the federal government is just about to lower the boom on these bottom feeders by implementing some pretty stringent regulations.
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DEAD IN THEIR TRACKS: We’ve really been stopping many scammers and crooks dead in their tracks. I get at least 15 calls every day from consumers reporting new scams and cons. It used to be, “How could I be so stupid to fall for that?” Now it’s changed to “Caught another one!”
I’m certainly not ready to claim any kind of victory but I can tell you that the progress is significant. Between educating ourselves, being careful about giving out private information, AND living by the old adage “If it sounds too good to be true, it is,” we’ve made it pretty hard for the bad guys to get one over on us!
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PHONES — DIRECT LINES TO YOUR $$$$: Remember, your phone, cellular or landline is still the easiest way for crooks to steal your money. They know it and you’d better realize it. If anyone calls you and wants personal information, don’t give it to them. HANG UP!
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CROOKS LOVE HOLIDAY SEASONS: This time of year brings out crooks and scammers like a summer picnic brings out flies and ants. Don’t fall victim to holiday charity scams and cons. When in doubt call me. Save your money for your family and worthy local charities that you know. Money and elaborate gifts are not the measure of love — love is.
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Remember: I’m in your corner.
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I have many more tips and interesting cases that I’m working on as The CDA Press Consumer Guy. Call me at 208-699-0506, or email me at BillBrooksRealEstate@gmail.com or fax me at 866-362-9266. Please include your name and a phone number. I am available to speak about consumerism to schools, and local and civic groups.
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Bill Brooks is the CDA Press Consumer Guy and the Broker and Owner of Bill Brooks Real Estate in Coeur d’Alene.