ArticlesBlog

The #1 Mistake People Make in Dealing with Debt

The #1 Mistake People Make in Dealing with Debt


(electronic music) – Hey everybody. Welcome back to the Consumer Warrior podcast. The podcast is dedicated to helping you with your big debt problems. If you’re just dabbling in debt, this isn’t the podcast for you. We deal with the big problems
here, like repossession, debt collection law suits,
foreclosure, bankruptcy, and all those other
horrible financial problems that are out there. We help you to help yourself. Welcome back to the podcast. I am your host, John Skiba. And today’s episode of
the podcast is brought to you by the Consumer Warrior Project. And what the Consume Warrior
Project is is something that I developed. It’s a platform that helps
you with your debt problems. I provide you with the tools
and resources that you need to be able to navigate difficult things like debt collection law
suits, how to settle debts, maybe if you’re thinking of bankruptcy. There’s tools and forms and
online tutorials that I have over at legal.coach. That’s the actual website. Go over to www.legal.coach
and you’ll be able to find all these resources,
downloads, templates, tutorials, everything you need to help you to get out of debt once and for all. And in today’s episode of
the podcast, I want to share with you … This is
what I’m going to call the number one thing to help you to deal with your debt problem. And what this is, before
I jump into giving you exactly what this number
one thing is, I want to share with you a
story as far as someone that I met with in my law
practice not long ago. Now this woman, she called
me for a consultation in my practice because her
wages were being garnished. And they’d been garnished
for quite some time and it was really making
it difficult for her to be able to support her family. And my heart goes out to people. I know how this can be. In Arizona here where I practice law, if you get a wage
garnishment, they can take 25% of your check. Now I know that some people
don’t live paycheck to paycheck. A lot of people do, but if
you don’t, even if you don’t, getting 25% of every single
paycheck taken’s going to be a big hardship on your family. And so she called me trying to talk about what are the different
options that she had to deal with this wage garnish and to get out of debt for once and for all. And as I talked to her and went
through the entire process, as far as how the judgment came about, what the debt’s related
to, I unfortunately at the end of our meeting,
I told her there wasn’t a whole lot I could do for her
unless she was really ready to file for bankruptcy. And here’s why. What this was was an old
credit card that she fell into some difficult times
and she couldn’t make the payments on it anymore. And so the card went into collections. And the collectors started
calling as they do a lot. A lot of phone calls, letters,
different things like that. And she wasn’t inclined to settle cause she wasn’t able to settle. She wasn’t able to make payments on it. So this debt got older and older and in about six months it got charged off. Still some collection
calls, collection agencies were contacting and she wasn’t able to do anything with it. Eventually it was sold
to a debt buying entity who then filed the lawsuit. They filed the lawsuit and
the process server came by her house and served her
with a copy of this lawsuit. I asked her, “Okay, so
once you got the lawsuit, what did you do with it at that point?” She said, “I didn’t do anything with it. I wasn’t sure what I should do. I didn’t know if I should
actually file a response. I didn’t know if I needed
to get an attorney. I didn’t do anything at that point.” And because she didn’t do
anything, a default judgment got entered against her. And once the creditors get the judgment, that’s what they want. That’s what gives them all the power. Once they had that judgment, they started the wage garnishment. And I asked her, “Okay so
the wage garnishment started how long ago?” Started several months ago. And I said, “Well, what did you do once you got that wage garnishment?” And she said, “I didn’t do
anything at that point.” And now, here we are, fast
forward several months later, and it’s a true crisis situation. It’s a situation where she can not afford to buy the basics, groceries, gas for the car, things like that. Not only that, it’s
just demoralizing to go to work everyday all day only to have 25% of every paycheck taken. So here’s the lesson you can learn from this person’s
experience because I run into this a lot with clients. And that is they do nothing. They do nothing when it
comes to their debt problems until it reaches a crisis situation. And the problem with
that is once it reaches that crisis situation
like this person here, there’s very little we can do. And the reason is is
because, what I like to say, is now the creditor has all the hammers. They have all the leverage. They have an active wage garnishment. So if we want to go in and
try to settle the account, offer some kind of amount
less than what’s owed, they’re going to want
pretty much the full amount. And the reason is because now they’ve gone to the expense of getting a judgment and they have an active wage garnishment. They can tell us to pound sand and they’re going to get the
exact same amount every two weeks unless you quit your job
or file for bankruptcy. So because this person
did not take action, because this person ignored the problem, and trust me, I understand
the temptation to ignore. You either don’t know what to do, you don’t have any money
to do anything even if you wanted to do it, it
becomes very, very difficult. I understand that. The problem is that along the way here, those various points whether it was just in the beginning with
debt collection calls, whether it was the initial law suit, whether it was the wage garnishment, if action was taken at any of
those points along the way, this person would have been
in a much better situation to try to settle the debt or even go back to the court and try to unwind
some of what had been done. But if you wait until it
reaches a crisis situation, until you can not pay for
your basic living expenses, the chances of settling
that debt for anything reasonable at all are slim to none. And that’s what I told her. I said, “I would love
to be able to help you. I feel for your situation,
but there’s just not a whole lot I can do at this point.” And so, really what they were left with is just toughing it out and
sticking with the garnishment and getting it paid or
filing for bankruptcy, which I understand, those
aren’t attractive options. So, the point of this brief
episode of the podcast is if you’re dealing with
serious debt problems and I’m assuming that you
are if you’re listening to this podcast, is to take action. You may not know what to do and that’s what this podcast is for. That’s what the Consumer
Warrior Project is for. That’s why I put together legal.coach because you can go there
and you can get educated on what it is you can do
to deal with the problems. If you see something pop
up on your credit report, if you see something show up in the mail, if you have a process server
come by like this person did. Any of those things,
you need to take action. Make this year, make this
year of 2018 the year of action, the time when you learn. We talked about in the
last episode finding out what your debt issues are,
really getting a grasp of what kind of debts you’re dealing with and then looking at
different options you can do to resolve them. Because the sooner you
deal with the problem, the earlier on you get
involved and take action, you have a lot more options. You have court options, you
have settlement options, you still have bankruptcy options. You have a lot of things
which, if you wait until, again it’s a crisis, then
your options are very limited and you have the sad conversation
I had with this person which is there maybe not be really much I can do to help you. I’m sorry and you have to deal with it or pull the trigger on a bankruptcy. So that’s a cautionary
tale in today’s episode of the podcast is to take action. Again, part of the problem
why a lot of people don’t take action is because
they don’t know what to do. They don’t know what their options are. Tune into the podcast. Share this podcast with people who are going through those problems. Head on over to legal.coach. Learn about what some of the resources and the tools and the tutorials are over at that same web site. You’re going to see blog
posts and other videos. Go to my YouTube channel. Get the information there. That reminds me. I should bring up here in the podcast that if you go over to YouTube
and search my name, John Skiba, S-K-I-B-A, or
Consumer Warrior Project, you’re going to find my YouTube channel. Everyone of these episodes of the podcast, I have a video portion of as well. Kind of a little behind the
scenes of what we’re doing here. So, that’s going to do it for this episode of the Consumer Warrior podcast. I appreciate you taking the
time to listen in today. And again, appreciate
the sponsor of this show, the Consumer Warrior Project. Head on over there to legal.coach. Check that out and all the resources that are available there. (electronic music) And I will catch you next time.

Comments (2)

  1. time to job hop. Find a job that let's you earn tips. make it hell on the pond scum collectors

  2. Buy Coin and tell to Go Fuck Themselves

Comment here