Often, I advise my clients to cease making payments to credit card companies in preparation for a bankruptcy filing. After all, if the debt will be discharged anyways, that last $29 minimum payment isn’t going to break Wells Fargo.
I often get looked at like I just asked them to shoot a puppy.
They’re scared and bumfuzzled. What on earth?
“If I don’t make my payment, won’t they send me to collections?”
To many of my clients, being in “collections” is the worst thing ever. Almost like a prison even, complete with the dank, dingy cells and the rattling bars.
Chances are, as long as you file within a reasonable time, there’s no need to be scared. You’ll probably never even hear from a bill collector.
The weapons they deploy
Most of the tools at the disposal of a debt collector are psychological.
They call and harass (alot) to try to get you to pay up. If you don’t there isn’t much else they can do without deploying their next weapon.
This is where things get hairy. In the State of Georgia, a lawsuit can (and often does) result in a garnishment. They can take 25% of your pre-tax income.
I don’t know about you, but if I lost 25% of my pre-tax income, I’d be up a creek.
The good news is, bankruptcy stops garnishments dead in their tracks, but that’s not the point of this blog.
What really matters
The problem with debt collectors is that they have you focused on the wrong thing and they often have you scared for no reason.
They want you to worry about their problem. Namely, the debt you (supposedly) owe them.
They are concerned about getting their money, but often, paying this one bill isn’t going to solve all your problems. In fact, it may make them worse.
You need to be focused on solving the bigger problem: What does the totality of your financial life look like?
First, don’t let debt collectors distort your priorities. There are bills that absolutely need to be paid first. Mortgages, child support, rent, car payments, taxes. Without a roof over your head or a car under your bottom, you can’t get to work.
Additionally, the government is way more aggressive than any collection agency could ever dream of and the government doesn’t give up.
I try to impart upon my clients this important lesson. Don’t worry about one debt collector. Worry about the whole health of your finances.
In the end, you need to be able to sort out your finances and find a way to live in financial peace and comfort.
You need to be able to sleep at night, make ends meet and retire one day.
That’s why you need to call me.