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Tuesday, May 18, 2021   
 

So Far In Debt; Can't Seem To Breathe
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
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Scott Bilker

Scott, Help please! I heard you on the radio and what you had to say made sense to me. I am so far in debt and can't seem to breathe. I have 6 credit cards and I am $25,000 in debt.

I know you hear this all the time, I have been paying for over 2 years not charging anything and still cant get anywhere. I cut them 2 years ago, and called the companies to ask for a lower rate. They gave me like a year with low interest, and lower payments so my credit reports would not be hurt.

Bottom line, my credit report looks so bad, we can't even refinance our home. I am in so deep that if I had a pill I'd take it! When I called a company to help me all they wanted to do was charge me more money that I don't have. I am not sleeping, and just don't want to leave my home. I own my own business, and I am just asking for your personal help. Please, please help me. 
Thank you, 
Stephanie

Stephanie,

Thanks for writing (and listening)!

Sorry to hear how much your debt burden is affecting your health. I can certainly understand how you feel. Knowing that you owe money, expensive money (at high rates), can certainly stress-out anyone who wants to make good on their financial commitments.

As you're probably aware, getting out from under this debt will not be an easy one-step solution. It's going to be an ongoing process that will take years of focus, attention, planning, and work.

The broad picture to getting out of debt is three-fold:
1) Get organized financially.
2) Manage your current debts efficiently. 
3) Get more money!

Since you own a small business, I have a feeling you're fairly organized. Briefly stated; files, worksheets, list of all the debts and bills.

It's number #2 that's the killer (no pun intended).

You already mentioned that you've tried to call the banks and get them to reduce your rate. You may want to call back and give them one last chance. If the first rep cannot help you, then ask to speak to a supervisor. There's much more about this topic in my next book, Talk Your Way Out of Credit Card Debt which is available for pre-order at Amazon.com (shameless plug).

If they don't lower the rate then you need to punish them! You need to spank their bottoms, well, bottom lines.

Apply for new credit. Do it now. Someone will give you a chance. Even if the rate isn't that great, meaning that it's not better than your current cards, get the card anyway and transfer your balance to teach your current banks a lesson. After that it won't be long before the banks start competing for your business.

You can read my article, Getting better, cheaper credit--right now! and apply for new credit.

Next, correct any errors that exist on your credit report. You can get a copy of your credit report from Equifax or TransUnion. Dispute anything that you think is not accurate.

The key to all of this is taking action. Start right now! Start calling right now, start applying for new credit right now. It's been my experience that it helps to have the same amount of credit as debt in order to get the banks to offer you good deals.

The best deals, and I mean lowest rate offers, will originate from your existing credit accounts, so get more of them. Don't cut up your cards, because when you do that you're cutting out your options.

You'll need $25,000 of available credit so you can transfer all your existing debt to new cards. Believe me, when those banks that just got paid off realize that they're not making any money from you they'll send a low rate offer pronto!

Just be sure to pay on time! There is no greater sin in the world of credit than being late. As long as you don't pay late and are active in seeking new credit deals, you'll be able to reduce your rates in time.

The last step is getting more money. You have a small business. What do you need to do to make it run better? What do you need to do to sell more?

I love reading books about marketing and motivation. The correct marketing can make all the difference in the world.

Here are a few of my favorites. You can get them by clicking on their titles:

There's a Customer Born Every Minute: P.T. Barnum's Secrets to Business Success, by Joe Vitale
Ama Complete Guide to Small Business Advertising by Joe Vitale
Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life, by Spencer Johnson
Notes from a Friend, by Anthony Robbins

Lastly, in the scheme of what's important, your debt shouldn't make you feel unhealthy. Try to get back to sleeping. Relax. It will all work out. "Everything for the best," as Jhoon Rhee would say.

One last book recommendation to help you feel a little better while you're working on your plan is Don't Sweat the Small Stuff... and It's All Small Stuff: Simple Ways to Keep the Little Things from Taking over Your Life, by Richard Carlson.

Good luck! I really hope that helps!

Please keep in touch!

Regards, 
Scott

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