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This is why consumers should be made literate in financial laws. Those bills don't need to crush your life. They come in the mail, toss them in the trash. There

by joonix 14y ago

This is why consumers should be made literate in financial laws. Those bills don't need to crush your life. They come in the mail, toss them in the trash. There's nothing they can do. When you're that broke, why do you care about your credit rating (they often don't end up on your credit anyways, because collection agencies lose all their leverage once it does)? In many states, even if you own your home, they can't take it to pay the bill. You don't even need to declare bankruptcy because you have no assets to divide up amongst creditors -- there's no point. Not paying debts it not a crime! It just doesn't make sense to worry about those bills when it's a choice between eating and starving. And, student loans are available from the government. Use them!

vidarh 14y ago
> They come in the mail, toss them in the trash. That's some of the worst advice I've seen. Toss them in the trash and the debt will keep growing, whether through interest or collection fees etc., and you will keep garnering ill will to a point where resolving the problem later will become substantially harder. On the other hand, most creditors will be prepared to cut your bills substantially if you demonstrate to them that you genuinely can't pay. Generally you can negotiate frozen interests, substantial cuts in the bills and payment plans very easily. This applies both to your personal circumstances, and your business. You have substantial leverage because they know they risk getting peanuts in a bankruptcy. My first company had a really tough period due in part to changing market circumstances, and in part due to our lack of financial control in the beginning (none of us had business experience when we started... Hard learning curve). When I started cleaning house, one of the first things I did was to establish a list of all our debts, and call each and every creditor to describe the exact situation - how much we owed in total, our current revenues and projections and expenses, and made them an offer: They'd cut their debt to 25% of the original claim, and freeze interest, and we'd resume payments. In some cases we'd convert assets we'd bought into leases with the same company, but at similar rates. Some argued. Some were angry - for good reason (some had been subjected to the "toss them in the trash" idea by guy who looked after the finances before I took that task on too, on top of managing our servers, and were furious they'd heard nothing). Some tried to get preferential treatment. But in the end every single one accepted, because they could see from the numbers that it was the most we could afford and because they knew we were treating them fairly from our insistence on , and they also all knew that a customer in a tough spot that cleans house and makes a best effort offer like that will be damn grateful, and if they make it through, will keep bringing them business. (We did make it through, and most of those creditors made a good chunk of money on us in the long run.)
- joonix 14y ago
  I find the "negotiate with collectors, they'll take anything" advice all over the internet, but in reality I've never been able to negotiate with collection agencies. They will do payment plans of a couple of months, but they will never accept less than the full principal, which is ridiculous. I always offer, they say no, call ends. Or I pay the full balance. Dealing with commercial lenders and banks is different. But consumer debt is another animal.

by joonix 14y ago

vidarh 14y ago

> They come in the mail, toss them in the trash. That's some of the worst advice I've seen. Toss them in the trash and the debt will keep growing, whether through interest or collection fees etc., and you will keep garnering ill will to a point where resolving the problem later will become substantially harder. On the other hand, most creditors will be prepared to cut your bills substantially if you demonstrate to them that you genuinely can't pay. Generally you can negotiate frozen interests, substantial cuts in the bills and payment plans very easily. This applies both to your personal circumstances, and your business. You have substantial leverage because they know they risk getting peanuts in a bankruptcy. My first company had a really tough period due in part to changing market circumstances, and in part due to our lack of financial control in the beginning (none of us had business experience when we started... Hard learning curve). When I started cleaning house, one of the first things I did was to establish a list of all our debts, and call each and every creditor to describe the exact situation - how much we owed in total, our current revenues and projections and expenses, and made them an offer: They'd cut their debt to 25% of the original claim, and freeze interest, and we'd resume payments. In some cases we'd convert assets we'd bought into leases with the same company, but at similar rates. Some argued. Some were angry - for good reason (some had been subjected to the "toss them in the trash" idea by guy who looked after the finances before I took that task on too, on top of managing our servers, and were furious they'd heard nothing). Some tried to get preferential treatment. But in the end every single one accepted, because they could see from the numbers that it was the most we could afford and because they knew we were treating them fairly from our insistence on , and they also all knew that a customer in a tough spot that cleans house and makes a best effort offer like that will be damn grateful, and if they make it through, will keep bringing them business. (We did make it through, and most of those creditors made a good chunk of money on us in the long run.)

joonix 14y ago
I find the "negotiate with collectors, they'll take anything" advice all over the internet, but in reality I've never been able to negotiate with collection agencies. They will do payment plans of a couple of months, but they will never accept less than the full principal, which is ridiculous. I always offer, they say no, call ends. Or I pay the full balance. Dealing with commercial lenders and banks is different. But consumer debt is another animal.