See today’s offer: Debt Relief – Loan?
Peggy was desperately seeking a guaranteed credit card consolidation for $20000. She is a native of Honolulu Hawaii and lives with her boyfriend Ben in the Waikiki area. This file is now ten years old but we have to include it because it’s HUGE success story.
She maxed out all of her credit cards (total of $20000) to the point where she couldn’t keep up with the monthly payments – even the bare minimum payments were getting missed as she was spiraling down emotionally with the stress of insolvency dragging her down every day.
She was now actively seeking an online solution to her money woes.
She searched using all of the main search engines in an effort to find a guaranteed approval on her $20000 dollar consolidation loan request, but because of those missed payments her FICO score hit the 500 mark which was bad enough she couldn’t find a bank or lender anywhere in her area (or all of Hawaii) that would consolidate her debt.
Dreaming of a Guaranteed Loan Approval
Like EVERYONE Peggy wanted a guaranteed approval on her credit card consolidation, and in a perfect world that would be how it all goes down. She was adamant about this because she felt like she was at the end her rope at that stage of her financial plight.
The truth is there is no such thing as a guaranteed loan to pay off credit cards yet there are plenty of websites you can find online that claim to provide it.
Peggy was at the stage where she was begging for a loan to consolidate her cards and was willing to accept almost any interest rate. Luckily Ben was there to get her back to a more common sense approach because there is no sense in consolidating your credit cards if the loan has the same interest.
This happens and some consumers will actually agree to a consolidation like this because they feel some relief in knowing all their cards are paid off and the debt collectors stop calling. The problem is with some folks is deep down inside they just want the card balances zeroed so they can start charging/spending again – BAD IDEA!!
You need to have a better plan than that.
We were happy that Peggy read our post on the realities of loan sharks and so-called guaranteed consolidations because then we knew she wasn’t going to get fleeced by any shady companies – whether those shady companies are online or right next door to her in Waikiki.
The Only Guarantee Is Your Plan
Peggy now understood that there wasn’t going to be any guaranteed consolidation and she also knew that the only way out of debtor hell was to make a plan.
At Debtfiles.com we suggest that people who have high interest debt and a bad credit rating first make a plan. Whether or not you choose to keeping looking for a debt consolidation loan, or go with a debt relief program, it’s doesn’t really matter – what matters is you make realistic plan and stick to it.
Basic Debt Freedom Plan
- get rid of all your highest interest credit cards and keep the best card wit the best rate
- get rid of all non essential monthly costs like cell phones and subscriptions
- sell anything you don’t NEED (as long as it has some value) even your car
- make a realistic budget (I know it sucks, but just DO IT)
- stick that budget!
- find a way to earn more money
- replace hobbies that cost money with hobbies that make money
- find entertainment that costs ZERO $$$ (walk in the park, etc.)
- get real because your entire emotional state depends on it!
And in image form
The Debt Collection Hyenas
And then came the collection calls on her phone night and day (which is illegal by the way). They can only call you between 8 AM and 9 PM your local time.
On one of those ugly calls she told the agent that she can’t really find time to get a second job to pay the credit card companies if she’s busy talking to him on the phone all the time.
Her boyfriend Ben in a moment of frustration yelled,
“These debt collection agents are like hyenas!!!”
Yep…….and unfortunately that is their job.
They will use almost any verbal tactic to apply pressure on the defaulted debtor until their life is almost unbearable. There are laws in the State of Hawaii regarding debt collection tactics and there are some Federal Laws you should be aware of, for instance they can’t threaten you with jail time or seizure of your property.
Since Ben worked at home and dealt with the collection agents he researched the law and pretty much neutered them – but Peggy was still on the hook for her debt and she was trying her best to find a solution.
The reason we included this small bit on the collection agents is so that we could fully convey what Ben and Peggy were going through. The stress and shame can get really bad if you are a normal person. No problem at all if you’re a true sociopath and sometimes I wonder if some of the folks working for collection agencies are just that.
“And for what? For a little bit of money.”
Peggy’s Guaranteed Plan For Debt Freedom
Now THIS we CAN guarantee – if you stick to the plan above you will definitely start to rise from your debtor hell and be on your way to financial security and then wealth – if you want.
I know most people say, “WELL OF COURSE I WANT!”
But the truth is most people don’t really want to be rich and have no debt – because if they TRULY wanted that they would either already be there or they would be well on their way there. The truth is most folks want freedom and making money almost always means you will be giving up a lot of freedom to WORK really hard on a dream.
Most people are happy in their community living a lifestyle they were passed down by their family – they talk about being debt free and being rich but they don’t take action to get to that level.
Frankly….great wealth isn’t the answer to freedom anyway. The trick is having enough wealth you don’t ever have to worry about paying your bills or affording a holiday, new car, home renovation, education, etc., etc. Once you have that much cash flow all you need is a peace of mind which you find for free when you learn how to shut off your mind and “live in the now enjoying every moment and every breath” (but that is for another discussion).
Peggy’s Steps Toward A Debt Free Life
So as per the above steps in our debt freedom plan, Peggy went forward;
Step 1.) Get rid of all your highest rate credit cards: She kept her Visa card which had the lowest rate of 18% and chopped up all her other cards – including 2 American Express cards, 1 Visa card, 2 Discover cards, 1 Walmart card, 1 Target card, and her Home Depot card.
Step 2.) Get rid of all non essential bills: She cancelled her cell phone, cable TV, car insurance, and online subscriptions for membership websites and apps. It was painful but she got over it quickly.
Step 3.) Sell anything you don’t need: She sold her small car and all clothing she rarely wore. Then she sold her jewelry and a really expensive chess set worth $1500. Ben sold his new tools and box because it wasn’t something they needed. He also sold his new truck and bought an old Toyota Camry – that put a good chunk of money against her debt.
Step 4.) Make a budget: She made a thorough (detailed) budget that took into EVERY SINGLE monthly cost and she even took yearly costs (like property tax) and divided it by 12 to get a FULL accounting of all her costs. Almost all of these costs were essential costs like food, clothing, medication, etc. Seeing her first budget on the screen of computer made her realize how much money she was spending without even looking at the WANT expenditures. She could now plainly see HOW she got into debt in the first place. It was crystal clear and that’s when the light bulb first started glowing above her head.
Step 5.) Find a way to earn more money: Peggy started taking overtime shifts at work, and working extra hours for other employees at her job (Costco) and she found a second job in the evening 3 times a week working in restaurant. Because she was working more she didn’t have as much time to spend on leisure spending. She also started, “surfing for money” (see Step #6)
Step 6.) The hobby reversal: She loves going to concerts and loves online gambling. She mostly lost money when playing poker, and concerts cost a lot because of the travel involved. She stopped both of these activates. Instead of doing things that cost money she thought of a way to earn that’s fun. She’s an excellent surfer so she decided to give surfing lessons to tourists – she was learning to surf with her father and grandmother from the time she was 4 years old so she had no problem making money charging tourists from the main land United States (and all over the world actually). She found out that not only did she make good money, she was doing what she loves and the feeling of satisfaction watching the faces of her clients was extremely fulfilling. A year from when she started this she had quit her day job and her extra restaurant job and was self-employed full time. TALK ABOUT A REVERSAL of fortune. No longer was she wasting money gambling online and going to endless concerts. Not to mention the feeling of freedom and pride when you’re self employed. She even got a contract with the Outrigger hotel chain so now she has fellow surfers working for her company!
Step 7.) Cheap entertainment: Peggy doesn’t chase entertainment as much now because she’s entertained with her rewarding work – she still gets out for the odd concert but it’s different now. She flies anywhere in the world to see her favorite artists playing in their hometown venues! She can afford this now because she has no debt anymore and has a $700,000 dollar home paid for, no mortgage, and no personal debt. She does have a revolving line of credit for her business but she never uses much of it and it’s all paid off again in a couple of months.
It’s a lot of fun telling Peggy’s story because she turned things around in a major way. She went from the pits of despair and anxiety to living an amazing life with no debt and very little bad stress – just a little good stress in her work.
Of course the early years when she had bad credit were brutal and in fact her relationship with Ben became strained at one point. They got through it together and luckily Ben had a fairly good credit rating when hers was in the burning dumpster fire. But even though he had some credit they lived poor for three years while she built up her small business.
A few years after she was in the throes of high interest credit card debt she was making over $10000 a month and had two employees (tourists like spending money). So there she was – riding high with cash flow but yet she had a credit score of 520.
She wouldn’t be able to get a loan with any legitimate lender (not that she tried) at the time but yet she could easily service some credit card debt.
Now she has three personal credit cards – MasterCard, Visa, and Amex. All have balances that get paid off at the end of each month and the limit on each card is around $30000. Quite a change! She also has two business credit cards which have between $70000 and $100000 limits and they get paid off in full fairly soon after they’ve been used.
To some people this kind of wealth is nothing to write home about – and for some people it’s like a dream come true.
The strange thing about wealth as a bi-product of passion is you don’t have a great desire to spend money on non-essential items and/or activities. You are fulfilled in your work and you relish in the ability to set your own schedule and have very little financial restrictions.
So if you are like Peggy was and feel defeated because of your debt try not to worry that much. It’s just a small window of time in your life and you can reverse it all. You CAN escape from debtor’s jail and make your life amazing. Just draft out a plan, stick it on your fridge and never let the dream go.
You don’t need to be looking for a guaranteed credit card consolidation – you just need a plan.
If you need a debt consolidation or debt relief your best bet is with NDR.