Asian Journal- The Filipino-American Community Newspaper

THE very first step you need to take if you seriously want to get out of credit card debt is to admit to yourself that you have a problem. In many cases that I see, people are simply in denial about their problem. They think that as long as they are able to make minimum payments every month, they are OK. And then I find out as I continue to talk to them that the only way they are able to make those payments is by borrowing from other credit cards. Well, it’s about time you face the reality that it is impossible to borrow your way out of debt! Yes, you heard me right! The more you borrow every month, you are just digging yourself a bigger hole and one of these days, you will be buried. It’s as simple as that.

A lot of people try to avoid dealing with their credit card debt problems until it’s too late and bankruptcy is their only option. If you ask these people how much they owe, it’s interesting to see their reaction because the truth is that they don’t even know. They have lost track a long time ago so they don’t even know where their money is going every month. No wonder they are broke before payday and they don’t even see their paycheck. Their bank balance is always negative and they are always behind on their rent and their mortgage payments because they just don’t have the money to keep up with their bills and their debt payments every month. Does this sound familiar? Could this be your situation or maybe someone that you know?

If you don’t even know how much you owe, I want you to get a pen and a piece of paper and start listing all your debts. Then figure out how much you are required to pay on each one every month. After doing this, get a calculator and add up your total debt amounts and your total monthly payments. By doing this simple exercise and seeing these numbers on paper in black and white, you have just taken the first step in seeing the reality of your situation. The worst thing you can do when you are in debt is to pretend that your problems don’t exist. Trust me. Your problems are not going to go away until you face up to the real facts and figure out a solution.

If you put off dealing with your debt problems until your situation becomes a financial emergency, you may find that your options later will be very limited. So the time to act is now, not later. If bankruptcy is an option for you, find out how it may be able to help you get a fresh financial start if that is what you really need. Sometimes, bankruptcy can be avoided by using some of your savings or by selling assets that can be converted to cash so that you can settle with creditors directly without having to file bankruptcy.

These days, I see a lot of debt settlement companies advertising on TV and the internet who promise to help people avoid bankruptcy by negotiating with creditors for "pennies on the dollar". Beware. I have seen a lot of people get scammed by unscrupulous companies who don’t fully explain what their services are about and the effect on your credit. You need to know that in most cases where the debt settlement program they are offering you goes on for a few years (usually 3-5 years), your creditors will simply not wait that long to get paid. They will often sue you and you will end up filing for bankruptcy anyway in order to avoid a wage garnishment. And the money that you paid the debt settlement company will not be refunded to you. So before you sign up for any debt settlement program, make sure you understand what you are getting into or you could just be wasting your time and money or just making your situation worse.

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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.