Why it is imperative that you speak to debt collectors about settling your debt..

photo credit: bloggcoast (wordpress)

Receiving phone calls from a debt collector can make you sick to your stomach. It's an incessant reminder of how deep you are into debt. These debt collectors call multiple times per day, leave messages, and are sometimes rude to you. It is enough to make you want to put that debt collector's number on a call block app and just be done with it.

Problem is, you will not be done with it, and you will be making the problem exponentially worse. Sweeping your debt under the rug does not help you. It puts you, and your future, at risk. Nowadays, when you go to look for certain jobs, employers look at your credit rating. If you have a poor credit rating, you will not get hired. If you go to lease an apartment or a car, if you have poor credit, you will not be approved. If you are severely defaulting on your student loans, and are desperately wanting to go back to school, you will not be able to. Federal Student Loans are not given out to folks who are severely defaulted on their previous loans. So, if you are looking to finish that degree, you are out of luck.
One other thing I would like to add, if you are defaulting on your student loans, your interest rate goes up, and they are able to garnish your wages. You don't have to owe money to the IRS to have your wages taken away from you. Student loans can do that to you too!

My Story:
I made A TON of financial mistakes when I was in my 20s. I was extremely careless with credit cards. In my late 20s, I was doing pretty well with paying back that debt. When I hurt my back and could not work anymore, I defaulted on my credit card payments and student loans. I was in a pretty bad spot. I was getting hounded by several debt collectors, and I ended up getting a call block app so I didn't have to deal with the incessant calls and abuse from the "blood-sucking" debt collectors.
I hit rock bottom when I received a phone call from a debt collector working with my student loans. They told me that I am in a position where I cannot qualify for student loans. I was thinking about going back to school and finishing my degree. I figured, while I was recuperating from surgery, I could finish my psychology degree online and then go to grad school. Those plans quickly went out the window.
I decided that I needed to face the mess that I was in. I called this debt collector back and the gentleman was very nice and he was more than willing to work with me. I enrolled into a program where I can make minimum payments. As long as I make 9 consecutive payments, my student loans will get back into good standing and the student loan blemish on my credit rating will disappear. Not only that, I will be able to enroll in school and finish my degree. I just have to wait 9 months and pay small minimum payments first.
As far as my other debts are concerned, I am paying minimum payments to them as well. I worked out deals with half of them and am currently working out deals with the other half. I cannot tell you what a relief it is to know that these debt collectors are willing to work with me. I did half the work by answering the phone call and telling them that I want to work with them.

Moral of the story:
Folks, I know that some of you are in debt. These are scary times and many of us are in holes that are too big to dig out of. I know that these debt collectors are relentless. They are not the enemy. They don't want to spend their day calling the same number, only to be cursed out and hung up on. Also, they know what you're going through. They want you to make a change that will save your financial future.

While it may take me many years to be debt free, I know that I am on the right path. If you are in debt, work it out with your debt collector. If they are rude to you, speak to their supervisor. Explain to these people your situation, and they will be happy to work something out with you. I will never apply for a credit card again, even after I am debt free. Credit cards are trouble. You should never spend more than you have, which is why I love debit cards. They keep you in check.

If you're young, do not do what I did. Make good choices about money. My advice to you is, DO NOT GET CREDIT CARDS! If you do get a credit card, get one with a small credit line, like $300. Save it for emergencies (a death in the family, a family member becomes ill or injured and you need to book a last-minute flight, etc). Also, if you're going to school, make sure you pay your loans when you graduate. You will be saving yourself so much grief in the long run.