Collection Debt Elimination, Credit Restoration and Wealth Creation

How does a consumer “arrive” in collection debt mess?

In most cases, 20 years ago, the (single) consumer had a job earning a living to pay for staples - food, clothing, shelter. The bills were paid. It sure would be nice to own a house instead of renting an apartment. One day somehow some way home ownership could happen. Your credit score was fair. No debt. Work more, save little. Costs of living were going up, gas was rising, but the income was stagnant.

The credit card offers come in the mail to consumers regardless of your credit score. We thought you had to have excellent credit to get a credit card. Credit cards were a status symbol and they were difficult to obtain. Yes they WERE for consumers with excellent score and that was few and far between. Now in the 2000’s, there are “fee-harvest” cards for consumers with scores of 660 and below. Fees all over the place. Big profit for them. The offers are in the mail and on tv and NOW on the internet in your email. Why do we bite and take the offer? What compels us to get the card?

There is enticement by media, tv, radio, internet, mail, to have a little bit of this and a little bit of that. A dinner out, clothes, entertainment, environment improvement (home accessories and toys), a vacation, why should you be deprived? We are not saying to deprive oneself, but why should you pay 10x over the actual amount.

What if you use a credit card to pay tuition or to start a business? What if you cannot qualify for a student loan or a business loan? Should you get a card to fund the future when you WILL be making more money? Isn’t that a great plan?

John Maxwell quote “my actions brought me here”. Very true. Every action has a reaction or a consequence. Danny Schechter quote “we are a nation of consumption, not production”. Very true.

We are going to change your mindset. You have to. If you do not understand how you got to the place of collection debt, or any debt other than mortgage and car, then how can you ever rid yourself of it, have debt freedom and become wealthy?

Fast forward to present day, now the (single) consumer gets married and there are more credit cards, mortgage (yeah) and car payment. Two incomes, bills are being paid (barely). Although it is a six figure income living in middle class America…the debt to income ratio WITH the credit cards makes it difficult to pay more on the cards and get rid of them. The FICO scores are great. At this point, you are overextended. Are you saving for a rainy day?

This is not to depress you but to show that this is at least 80% of what America is facing right now and there is hope and a solution for change.

Crisis comes. Unforeseen circumstance. You cannot predict nor can you control it. Loss of shelter, illness, death, divorce, job loss(es). It is life.

Credit cards no longer matter? Six months pass and you are dealing with your hardship. The collection agencies start calling and sending letters. Most consumers do not know what rights they have regarding debt collectors. The collectors are preying on your ignorance. What do you do now? Educate yourself. Learn QUICKLY how to fight back. It will not go away, and it could get worse.

When you have collection debt, it is nothing to be ashamed of because we cannot control unforeseen circumstances. Also, the credit card industry has set up the consumer to fail. However, it takes willpower to resist having credit cards. Understanding how this trillion dollar industry operates is imperative to changing your mindset which then changes your financial future. Spread the word!

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