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taking action in terms of the stress of being a debtor

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    Today has been stressful in the world of not having enough money to pay bills land.
    When I deposited my paycheck, they had charged me for 5 overdrafts – total $150.00.
    I “thought” I had money in there -so I bought a pound of coffee at Starbucks, for $8; a hairdryer at Walgreens, on sale for $12.99;some dinner at Trader Joe’s for $18.31; and two ATM withdrawals for $20 each.
    Total expenditure for the items would have been $80 – cost for me being an idiot tripled that.
    I think I am posting this as I am solvent.
    Then a collection agency called.I denied being myself (it was at work and I ansewered.) On the Caller ID I saw that it was Provider Recovery.
    I googled them and found out they are one of the worst collection agencies of all time.
    To feel better, I wrote a letter requesting that they not call me at work, which I will take to the post office at lunch and mail certifed with return receipt requested.
    At least that makes me feel like I am doing something.
    Then my payday loan is due today, and I can never seem to get out of that hole.
    I just don’t ever seem to be able to pay back that $300.More money out the door and not to the big black hole I created.
    Good news, the debt settlement company said that I didn’t get a judgement; it was only a summons.
    It stated that a debt arbritration judge had affirmed my debt.
    So it isn’t as bad as a judgement, yet, and the debt settlement company got right back to me when I called, so that is better .(Thanks Ben G.
    for being so clear, your email made me contact them, and also the woman who told me to take some action before it got worst, sorry, forgot your name) I guess I am putting y bad financial habits out there like a public confessions – because although I work two jobs and my son has that illness and the credit card companies gouge us and collection agencies can be abusive – the fault for this situation is mine and I have to start taking control of it.
    Thanks for listening, Jane



    Jane, I think most of us have paid a stupid tax.
    Or we wouldn’t be in this forum. ;) The key is to recognize where your problems are then begin to remedy them.
    Do you use the envelope system? It sounds like that might be helpful to you.
    It’s made an amazing difference in my financial life..and in my marriage! Denise — In the beginning the Universe was created.
    This has made a lot of people very angry and has been widely regarded as a bad move.
    – Douglas Adams



    It is your responsibility to response to the summons not the debt settlement company’s and without seeing the papers I don’t know what the legal value of the arbitrator’s ruling is.
    In any case you need to ask whomever sent the summons to reopen the case and try and work out an agreement with them.



    I want to know if anyone has ideas for me for the next step.
    I offered to settle with a creditor for 10% on the dollar in writing and I was orally told that they counter-offered at 82%.
    They also “warned” me that the debt would be going to a collection agency soon.
    Any suggestions on what to do next?



    Ben, They can go to collections all they want.
    It still isn’t going to change the situation if you don’t have the money.
    That always kills me when your trying to work something out and they still threaten you in some way.
    Don’t let it get to you.
    How much do you owe and can you pay it off soon? What about your percentage rate? Mike



    Could someone please direct me to a site or library book that defines the “envelope” system? I want to try it.
    Thanks Jane (thanks Denise for the suggestion) Mod Note: [MOD EDIT: URL removed]



    Meet them again with a counter offer of 30-40%.
    I doubt they’d get that much from the collector they’d sell the debt to.
    Ask for any of their statements :Orally” for it in WRITING.



    Jane, the URL the moderator sent you is a good one.
    DH and I use the envelope system for the expenses for his business (eyeglass repair) and for some of our personal expenses, including savings, food, vehicle expenses, entertainment, and laundry/clothing.
    It keeps us from over spending in those areas.
    The stress relief is amazing! Denise



    [MOD EDIT: URL removed]



    See if your state has usury regulations ,for example in NJ the maximum allowed % is 30% on credit cards.
    ( I am not sure what type of creditor you have to deal with) State banking laws will not usually help you with credit card companies especially that end with the letters NA.
    However filing a complaint with the FTC (Federal Trade Commission) over their practices may cause them to deal responsibly with you.
    I had a problem with Discover and their % issues, I just told them flat out I wasn’t paying it.
    I battled with supervisor after supervisor then told them put it in the hands of a collection agency.
    They buy debt at 50% ,the company writes it off .
    Then negotiate with the collection agency telling them what you can pay them.
    Figure if they make 20% more than what they paid for the debt they’ll make a profit and you will be able to feed yourself and pay bills.If you REALLY are concerned about a credit rating this may not be the way to go but if your credit is trashed its going to take two years to repair it anyway as long as you are paying your debts.
    When you owe money you are kind of in the drivers seat …why? Because you have their money! Put your spare change into retirement funds….nobody can seize that.



    I am interested in the Dave Ramsay method, but can’t afford to pay for it right now.
    I will go to the library and get the books I think – BUT in the meantime could someone just tell me in a paragraph or so what the envelope system entails? Is it just, for example, it costs me $90 a week for transportation(public)……I would just put that in an envelope each payday, right?Or, you have a budget for $100 a week for food, that goes in the envelope…correct? My trouble is I am so far behind on all bills.
    like my rent is $1400, today is the first, and I was $400 shy, so I wrote the landlord a note (its a person, not a corporation)that I would have the rest in two weeks, then I push bills back for the two weeks, and round and round like a hamster in a cage, never getting ahead.
    I have this intense fear in my heart that he will kick me and my kids out, and I could cry just thinking about letting the kids down that way.
    But I have to start somewhere doing something, so I was thinking of the envelope system.
    ALso, a few messages back some folks had good advice about expaniding your food money–could I get some of that advice again? I don’t eat red meat, and want to be healthy in terms of eating lots of fruits and vegetables – some people were very helpful, for example eggs and potatoes could be inexpensive and satisfying and not unhealthy.
    For vegetables, carrots in the stick (not those washed and peeled ones) seem cheap- thanks in advance for any help.adivce you can give me.



    Jane, I use the envelope system and it works for me.
    For the spending categories that are the most flexible like food, gas, entertainment, and clothing you get an envelope and mark it with that category name.
    Then, as money comes in you put money in the envelopes.
    Some people fill the envelopes weekly or monthly.
    We use two sets – one set has our business expenses and money goes into them daily from the cash DH’s business brings in.
    The other set is our personal expenses and money goes into them every two weeks when I get paid.
    Let’s say you decide $300 a month is for groceries and you get paid every other week.
    In that case, you put $150 in the food envelope every time you get paid.
    Do that with each category/envelope.
    When the money is gone from a particular envelope, that’s it – no more is spent on that category until you fund the envelope again.
    If there’s money left in an envelope at the end of the period (right before you’re about to fund it again) you can move that money to savings, keep it in the envelope and just put less in to make the difference, etc.
    It might take a little while to get the system working just right for you but if you use it, it DOES work.
    The key is to not spend money on a category after the envelope for that category is empty.
    Personally, I think this works best in conjunction with a monthly spend it all on paper before you get it budget.
    Do you have a budget set up? — Denise I eat my peas with honey, I’ve done it all my life.
    It makes them taste so funny, But it keeps them on the knife.



    That was my problem with getting started too…..
    The budget is great when you are caught up and going forward……
    For me, I had to cash out my emergency fund (1000) as well as hubby’s bonus (350) and work some overtime and somehow, miraculously, I had enough in the kitty to get started…..
    Anyone else have tips regarding how to get started? That IRS money might help somehow….



    OH – and you can get a 30 day free trial for Mvelopes – that is the high-tech envelopes method.
    The basics is it ties you to “don’t spend more than you take it.” It is literally impossible to spend more than you earn on that method.



    this is directly from the Wallet Doctor’s site…hope this will help a little.
    [MOD EDIT: URL removed]

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