Creditors can take your self respect, and leave you holding a financial catastrophe. What creditors can take should be up to you, not to them. But it rarely works out that way. Consumers dealing with a bill collector usually feel powerless and helpless.
Receiving a phone call from a bill collector is not pleasant. But, it isn’t supposed to be. For one thing, it is intimidating. People see the bill collector as an authority figure. The collector knows their call makes you feel small, and powerless. What is behind this fear reflex we feel when a collector calls us?
You fear bill collectors because creditors can take your assets.
The fear reflex we feel is because we know that the debt collector has enormous power. Creditors can take assets away from you. If you won’t pay up, creditors may take you to court. After obtaining a court judgment against you, the debt collector can rely on the power of the court to take your money and property. There are some restraints. For example, in California, a judgment creditor normally can garnish only 25% of you pay. So, you keep 75%. But if you are like millions of American living paycheck to paycheck, losing 25% of your pay will be catastrophic. It might mean you will be unable to pay rent, or a car payment. It could put you in a downward spiral heading to homelessness.
A judgment creditor can put a lien on your real estate, and levy your bank account. In other words, it isn’t going to be pleasant.
Doing a debt settlement at this stage is fine. But it does not restore your ruined credit. In fact, you might even have to pay some income tax on the phantom income credted by the amount of any debt forgiveness that you receive in a debt settlement.
Cancel your fears. Save your dignity. Get out of debt.
Send your favorite debt collector a little Valentine from the bankruptcy court. When you are in the midst of debt collection, your credit is probably long gone. You probably have nothing to lose. Talk to an experienced bankruptcy lawyer.
If you need a referral, you can call us.
