Probably nothing gets to people as much as credit card debt. And here's why.

Many of us refuse to accept the fact that we have limited incomes at the moment. So we continually spend a little more than we have each month. We do not "do without" as my mom would say. We instead spend now and almost painlessly accumulate more and more credit card debt.

I think there is need, and there is want. Need is struggling to get by on $3000 per month when we only make $2500 per month. That causes us to accumulate more, and more, and more credit card debt. That's how people end up with $70,000 in credit card debt when their income is only $3000 per month.

But there is another reason many of us get into really bad credit card debt.

We humans are social creatures. We are continually looking to others for direction. We look at other people's cars and we look at other people's houses.

When we compare what we see, what they have, with what we have, we feel bad. And often, the result is whipping out the plastic and buying clothing we cannot pay for now, or buying gadgets we cannot pay for now.

Sometimes it's like you wake up and look around and wonder what you were doing when you spent the money that you now can't pay. It's like you were in a trance and you can't figure for the life of you what happened. It's like you were possessed.

I for instance have an enormous collection of Nepalese khukuris, which are hand made and that I bought to support the poor struggling Nepalese blacksmiths who have nothing but a dirt floor to work on high in the Himalayas.

Why did I buy so many? I must have 60. Because I got into the spell of ordering these amazing, unique one of a kind authentic pieces. They are quite amazing. Hand cured buffalo hide sheaths. Spring steel that comes from old Mercedes suspensions, lovingly tempered and hammered and fashioned by artists who have learned their craft from their fathers, who learned the craft in turn from their fathers, in time stretching back centuries.

But the fact is, why did I spend so much and why did I do so on credit?

I don't know. But I am a collector and a hoarder by nature so it is familiar behavior to me if I really examine it.

Okay, so what to do about it?

You can go to a credit counselor. They will use their computers that connect to the banks. They will get you interest rate reductions and a payment plan. You pay them one payment each month and they distribute that payment to your credit cards. They keep a bit for themselves.

Trouble with credit counselors is that they don't negotiate principal reductions. Too often they just want to stretch out your payments. Someone owing $70,000 on a $3000 per month income needs to get their debt reduced, not just the interest rate lowered.

You can file for bankruptcy. Many times people file and end up with a Chapter 13. Chapter 13 is great for the lawyers and not bad for the creditors but really bad for you, in most cases. Understand that I don' t offer legal advice and I'm not a lawyer and I do suggest you consult with a bankruptcy lawyer so you know your options. Maybe bankruptcy is good for your situation. And also, maybe you can get a Chapter 7 discharge.

If you go to a bankruptcy lawyer, ask how many chapter 13s they do in comparison to chapter 7s? And if you make more than the average income, ask them what they can do to see to it that you are put into a Chapter 7? A good lawyer in this area will use some of the honest and legitimate tricks of the trade to shoehorn you into a Chapter 7 if at all possible. Then you get the whole thing behind you and can move on.

Another alternative is debt settlement. It's very easy to do. You don't pay for awhile and after a bit, you make offers to settle with your creditors. The offers involve two things. One, is a reduction in how much you will pay back. The other is a "pay for delete", or a promise on their part to delete the bad things they said about you to the credit bureaus.

They get some of your debt paid back. And you get to rebuild your life and your credit rating. It's pretty easy and it's covered in my Mortgage Relief Formula home study course. As a Mortgage Relief Formula subscriber you also get to participate in conference calls by experts that can help you with your credit card debt settlement questions.

Turn tragedy into opportunity. There is so much in my home study course about settling debts both for yourself and for clients if you want to get into the loss mitigation business (or are already in it.)

Please watch this video on short sales and foreclosures. This is a screen shot — just type in your email and I'll get you to the real video. It's geared to homeowners and Realtors who want to know everything they can about short sales. And it is the tip the iceberg…

 

 

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