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Today on the show we tackle the subject of debt collectors and bill collectors. I want to focus on giving you some tactics and some techniques that I think will help you and will serve you as you fight your way from deeply in debt to financially free. Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now while building and fighting for your plan for financial freedom in 10 years or less.

My name is Joshua, I am your friendly financial philosopher and fellow financial freedom fighter. And today I want to share with you some tactics and techniques that I hope may help you in this difficult time of your life. I have a real desire to help people who are struggling with money.

And I'll tell you what, if you want to talk about one of the most difficult times in somebody's life, just go to the time when they're deeply in debt and trying to figure out how to work their way out. And for the context of today's show, I want you to go beyond just somebody who owes a lot of money to – and focus on somebody who is deeply in debt and can't even make payments, is weeks behind, months behind, in some cases even years behind on their bills.

One of the most difficult places to be financially. There's a weight of all kinds of practical problems. Obviously somebody who's deeply in debt and behind on their bills is experiencing brokenness, the state of not having any money, not having enough money coming in. There is intense stress that faces a person in this situation from all angles, getting phone calls from angry, nasty bill collectors, getting threatening letters from legal offices and from debt collections companies.

There's an intense embarrassment from being in this situation that somebody may face where my friends find out I'm behind on my debts and how do I deal with these things. There's just intense stress on all sides. If you want to make a bad situation worse, just throw in a bunch of unpaid debts.

For example, if you want to make a bad marriage worse, just go through financial stress and turmoil and have a bunch of unpaid debts and it will make a bad marriage worse. You want to make a bad business arrangement worse, just go ahead and have the phones light up with creditors calling all the time.

You want to make a bad job worse, just walk into Human Resources and find out that your wages are being garnished because you lost a court case wherein you were ordered to pay debts and now your boss has to send your wages to your creditor. You want to make a bad car worse, a bad car decision worse, just look out the front window and see the repo man coming and hooking it up and dragging it away.

You want to make a bad day worse, just try swiping your debit card and all of a sudden finding out that it won't go through because your creditors have just wiped out the entire balance of money that's in your bank. This is the reality that a lot of people face.

What I find really frustrating about this is that I really hate when people are bullies. I really hate bullying. So I want to help you if you're in this situation to protect yourself so that you can stand up against the debt collection bullies or if you're helping somebody else in this situation, I want to help you because paying bills and paying money is important.

But sometimes there are things that are more important and I want to help give you some tools and ideas that will help you to stand up to the bullies because people who owe money, a lot of money, have been bullied right into suicide. They just felt that there was nothing else they could do and they put the – as the country song says, they put the bottle to their head and pulled the trigger.

I want to help you avoid that and I think I can help you avoid that by telling you how to take on some of these bullies and buy yourself a little bit of stress. I also want to help you because for me, one of the biggest things I hate to see is marriages and families ripped apart by facing financial stress.

As far as I'm concerned, a marriage and a family is much more important than paying bills on time. So if I can do something to help lower the stress that your family may be experiencing right now, I want to do that because I want to help you fight against the bullies.

Many of the most aggressive credit collectors, especially credit card collections companies and debt collectors, many of these people are downright bullies and I find their behavior completely and utterly offensive. Now the great challenge that I face of course is to recognize that sometimes there are many bill collectors and credit collectors who are not bullies, that are fair and who are in a situation where they're owed money and somebody has stolen their property.

That's effectively what it means when you don't pay your bills on time, when you don't pay your bills as agreed. Effectively you're a thief and so I don't want to help somebody. I don't want to enable somebody who's a thief. I don't want to enable somebody who is fighting against their creditors and not paying their bills as they should.

I don't want to enable that behavior. I want to stand against it. So I find this a challenging subject to just talk about because of course I could go through and lay out some of these ideas and techniques and I could teach you very elegantly how to walk through the legal code, how to borrow a bunch of money from your creditors and how to structure your circumstances in a way that your creditors can't find you and that they don't know where you are and they don't know where your property is and I could teach you how to walk right through the bankruptcy court.

As long as you never admitted to what you're doing, I think we could figure out some schemes that would allow you to walk out and not have to pay the money back. There are ways to do that. And so I don't want to enable bad behavior but I want to protect people who are in a difficult circumstance so that you can stand up for yourself and so that you can effectively pay back your debts.

And I think most normal people will be able to identify the difference between these two things. There's a respect that we can see and we can usually see the difference between somebody who's struggling, who's got their back up against the wall for whatever reason versus somebody who's scamming and is trying to take advantage of the situation.

So if you are struggling, I want you to know that I want to share with you some ideas here that I think will help you as you work to stand good for your word and to work your way back. And I consider this to be very, very important. I consider it a personal obligation to do anything I can to help the poor and the needy and the destitute in any circumstance that I can find.

And especially in the area of debt collection, I believe that's something that is very important. In the Bible, in the book of Deuteronomy, as part of the law that's being given through Moses, there's some instructions about debt collectors and the rules that were placed on creditors and debt collectors in order to protect the poor.

Deuteronomy 24, verse 10, we find these instructions. If you lend anything to your neighbor, do not enter his house to pick up the item he is giving as security. You must wait outside while he goes in and brings it out to you. And here, of course, we see the foundation of some of the respect for private property.

The modern concept that we have of the respect for private property is built upon this idea of not stealing and protection. So of course, thankfully, in the modern US-American context, we enjoy some level of Fourth Amendment privilege. It's built upon this concept here of there being certain rights and certain parts of your life and your house that are sacred and that are protected.

And so if somebody is trying to come and invade your house and you owe them money, there's a level of respect that needs to be afforded there. And then the next – very next verse says this, "If your neighbor is poor and gives you his cloak as security for a loan, do not keep the cloak overnight.

Return the cloak to its owner by sunset so he can stay warm through the night and bless you and the Lord your God will count you as righteous." And I find this just to be a good principle to see that when somebody is very poor, we want to make sure that they're protected and that the basic needs are protected.

Poverty in this day – where I draw this inspiration from, poverty in this day was somebody who was giving their coat, their cloak, their coat as security for a loan. They were so poor that the only thing of value they could offer was their coat and it would be wrong and immoral to keep somebody's last possessions, their coat, as security and force them to be cold overnight just so that you can have a debt being paid back.

So if you're poor and you're in a situation, I want to give you some ideas to help you protect yourself. And thankfully, of course, you have a lot of protections in the US-American context. The legal system gives you a lot of protections and I want to share some of those with you so that you'll feel confident in them.

On the flip side, if you're a scammer and you're trying to just scam the system, I want to really challenge you on that as well. Before I get to any tactics and principles that you can apply here, I just want to recognize the gravity of the situation. So often I feel like we minimize – and I'm going to take just a brief excursus into just a discussion of this just for a moment here.

Because I feel like we minimize the important things in our modern era. We have a tendency to trivialize and collectivize things that are very, very serious. For example, we often do this with say warfare. If the particular nation state that we're a part of decides to go off to war, we absolve ourselves of personal responsibility in that decision or in that involvement because of a sense of collectivism.

Whether we're participating in a military context and we say, "Well, this is what our orders were," or we're just saying, "Well, I support such and such that the country is doing," or "I'm not going to get involved with it." Great injustices are committed because of the collectivization of the action.

When in reality, we need to take personal responsibility for those things. We must stand and take personal responsibility. We have a similar approach when it comes to money. We'll often say, "Well, so-and-so, these big companies or these big banks did such and such a thing and yes, it was wrong of them but we can't hold the individuals responsible." Or we look and say, "Well, it's OK" – and here's where I want to get to individuals.

We say, "It's OK for me to stand against the – this big company and I wouldn't go to my neighbor and take their money away from them. But because it's a big credit card company, because it's Chase or Capital One or Bank of America, well, they've got all the money and so I can just go ahead and take the money from them." No, it's not OK.

It's not OK. I feel like this is important to start out with, to get us on the right foundation because if you get the big things right, then the little tactics and the techniques are relatively simple. Oftentimes in analysis, I look at analysis in almost three levels. There's the practical which is just the day-to-day practical.

There's the legal and then often there's the moral or the ethics involved, the moral discussion. It's nice when all three of these things line up. Thankfully, much of the time, the legal considerations line up with what's moral and the practical considerations can line up with the legal. Sometimes though all three of these are at odds and that makes circumstances very, very difficult.

There are many circumstances that aren't neat, that aren't neatly tied up. But please, I beg you, if you're in a situation where you owe somebody money and you've fallen behind in your payments, face it for what it is. I personally believe that it's – if you're not paying your debts as agreed, that is a form of theft and you need to take responsibility for that, full responsibility for that.

Now, why do I say that? Well, consider the situation. If you come to me and you borrow $100 from me and you say, "Josh, I'd like to borrow $100 from you," and I say, "OK, here's $100. When can you pay it back?" And you say, "I'll pay it back to you next Friday." I give you $100 and you go and you do whatever you need to do with it.

Maybe you wanted to go out to dinner and just waited for your next paycheck or maybe you needed to do some – whatever. It doesn't matter. But next Friday, you come back and you give me the $100. We're all OK. I might charge you an interest payment. You might agree to pay for that.

Everything is good and that's fine. It's fine for us to engage in these transactions and that's what we do every day when we use the financial system. We engage in a contract and both people go into that contract freely and they engage and they buy and they sell and we're good to go.

But now let's say that you come to me and you ask me for $100 and I lend it to you with the agreement that you'll pay it back to me on Friday. Then on Friday, you come back and you say, "I don't have your $100." You say, "Well," and I say, "Where is it?" You say, "Well, it's gone." Well, here's the question that I'd like to ask you.

Whose $100 was it if you're in that situation? See the $100 didn't belong to you. The $100 belonged to me. Now you've taken the $100 and you've sent it somewhere else. In an effect, you've stolen my property. That's the situation and the circumstance that we find up in when we're in this.

I think it's important to get clear on it because if you get clear on the fact that you have a moral duty and an obligation to pay your bills, then all of the actions that will come from that will be – they'll flow easily. But if you're not clear on the fact that you have a moral obligation to pay your bills, I think you'll wind up oftentimes pursuing the wrong thing and your life will be very, very difficult and you'll wind up in the legal system and your life will be very, very difficult as I'll describe to you in the course of the show.

Most of the show is going to be dedicated to the tactics and the techniques and the legal discussion. We've got to build it on the right foundation which is you standing good for what you owe and you not being a thief. Of course, we would acknowledge that there are different levels of theft.

Thankfully, our legal code would acknowledge this as well. There are circumstances that are different than others. It's one thing for you to go and to intentionally steal my property and never planning to pay it back. It's another thing if you take my property and you plan to pay it back but something happens.

But there's still an obligation here and I think that we need to talk more about this because we often don't – we're not clear on this. Because we're not clear on it, we justify a lot of things on different levels in our society that really bring on dramatic harm.

Theft can take many forms and each form is wrong. It is immoral and wrong for you to go and to steal your neighbor's car from their driveway by hot wiring the ignition in the middle of the night. It's also immoral and wrong for you to steal the car that your bank owns that you stopped making payments on because you fell behind and for you to hide it in your neighbor's garage because they're looking for their property.

Both of those are wrong. Yes, the intentionality of your actions matters, but they're both wrong. It's wrong and immoral for you to steal cash out of your company's petty cash strongbox that's behind the desk while the secretary is out to lunch. But it's also wrong for you to steal cash from a credit card issuer by using their money to go out and buy things that you use to fill up your house and then not pay the credit card company back as you originally agreed on the schedule of payments that you agreed in the credit card agreement.

Yes, it's wrong for you to break into somebody's apartment while they're away on vacation and eat their food and sleep in their bed and then to load all their furniture up in a truck when you leave and they're on their way home. But it's also wrong for you to live in your landlord's apartment while not making the agreed upon rent payments with them.

It's wrong for you to walk into your local pharmacy with a gun in your hand and clean the safe out of the pills in order for you to support your drug addiction. But it's also wrong for you to go down to the local hospital for medical treatment where they patch you up and drug you up and send you out the door healthy and healed and then never go bother to go back and try to settle your bill and pay for the goods and services that made you well.

Now there are differences in intention, yes, but take responsibility for these things. It's wrong to steal. It's wrong to steal. Thou shalt not steal. The book of Psalms in the Bible says the wicked borrows but does not pay back. If you're one who borrowing and not paying back, that is a wicked thing to do.

But the solution is to pay back the things that you owe. And if you have that intention, if you have that clear intention, if you have that firm conviction, then we can go back and start to arrange these things so that you can start to pay back your creditors.

And that's what I want to help you do. I want to help you protect you along the way. I want to protect your family. But we want to make these situations right. How do you make the situation right? Well, the answer for theft, the right thing to do in case of theft is to make restitution and to pay back the things that you've stolen.

If my son goes into a local grocery store and steals something, let's just say he steals a toy. When I was a kid, I stole magazines from the grocery store. I would go and I would read truck magazines and I would slide them in my pants and I would steal them and walk out.

And I think I was caught at some point. I think the details are hazy at this point. But I just – I know I did that when I was a kid. So if my son does that, he follows in my footsteps and he goes into the grocery store and he's reading magazines and he steals a truck magazine from the grocery store, then what do I – as a good parent, what do I need to do for him?

1. I need to help him to face his action square on and to take responsibility for his sin. There needs to be a reckoning and an exposure of that behavior. So the way that you make a wrong situation right is you face it squarely and you confess it. So of course confession of course is first to God and then to others around you, to somebody that's involved, a trusted friend.

But sin needs to be acknowledged. And then there's a confession back to the person that's been wronged in the situation. So if my son were to follow in what I did and I believe this is what my parents did but I don't remember it at this point. But I remember one time I stole money out of my mom's purse a lot and that was a very – that one I do remember the painful circumstances of getting that situation right.

But the first thing we do is we confront with the wrongness which is what I'm doing to you today. If you're in a situation where you're not paying your debts, this is what I'm doing. I'm confronting you and I'm bringing your actions and saying you need to acknowledge what you've done.

So if my son stole magazines from the grocery store, then it's my responsibility to confront him with that and to get him to confess to his theft. Then we would confess that sin on our knees together before the Lord, ask for forgiveness. Then we would take that, it would be a confession in this case to a responsible party which would be us or his parents.

And then we would go back and I would take him to the grocery store and he would go and he would confess his sin to the managers or the people involved in that grocery store. That would be the important action to go and make that confession to the person that's been wronged.

And then he needs to take responsibility for that crime. Now in some circumstances, that's going to involve taking legal responsibility. Of course, it's different if my son steals a $5 magazine. You wouldn't necessarily expect him to send a six-year-old to jail. But in some circumstances, that does involve getting involved with the legal system and taking legal responsibility.

But there's the taking of responsibility and then he would need to make restitution. He would need to pay back the thing that was stolen and make the situation right. Usually this would involve paying back what was stolen with extra, with some amount of extra. And then however long that takes, however much he has to work, whatever has to be done, there is – that's how he takes responsibility.

And so with you, let me challenge you. If you're in a situation here where you're behind on your bills and you're not paying your creditors as agreed, I humbly ask you to consider why have you stolen from your creditors? And then I humbly ask you to consider how you can make things right with them.

And the way to make things right is to acknowledge the wrong and to make confession for it and then to go back and to write the situation and make restitution for your error, for your sin, for your behavior. Now there are a few errors that we commit when assessing the subject.

The first thing is we always look and try to justify motive first and foremost. And I think this is probably the biggest thing when it comes to debt. You say, "Well, it's simple if my son steals a magazine because that's just pleasure. It's not a matter of life or death.

But what about if he steals a loaf of bread to feed his dying sibling?" Well, yes, motive matters to an extent but we still got to deal with the rightness and wrongness of the situation. So don't start with justifying yourself. Rather, take responsibility and take responsibility and take it quickly.

I think this for most of us is our biggest challenge. This is my personal Achilles heel. My instinct is usually to run from problems but that makes them worse. It always does. And I often don't want to take responsibility but that always makes it worse. And so I seek to continue to encourage myself and I encourage you.

Take responsibility as quickly as you can in these circumstances. And if you haven't taken responsibility thus far, I'm going to share with you some things here to do so. So what do we start with? Well, let's start by figuring out where you are. Let me give you an action plan.

You got to start by figuring out where you are. We want to face the circumstances clearly. So that begins with making a listing of your debts. As far as the tools that you need, let's start with a notebook. The fundamental tool that you need to work your way out of this mess is a notebook.

You need a physical paper notebook and I recommend that you use an attached pen to that notebook. What I do when I'm using a notebook like this is I get a pen, I take a string, a piece of duct tape, I wrap duct tape with a string at one end of the pen and I duct tape the other end of the string to the back of the notebook.

That way I always have a pen. I got a pen and a notebook to organize my information. This organization, if you pursue it, will start to build a habit in you that will help you throughout all of your financial life. Most people who get deeply into financial problems usually get there from a lack of organization and a lack of forethought.

There are many circumstances with regard to financial distress and somebody who's behind on their bills. We need to look at the actual circumstances. Unfortunately, I can't do that but I want to acknowledge there's a big difference between you owe nobody any money and all of a sudden you wind up with a million-dollar bill at the local hospital for cancer treatment.

There's a big difference between that versus somebody who has 40 credit cards that are all behind and are five years behind. But much of the time, it comes down to lack of disorganization. I'm tending here towards the things that are – I'm tending in this analysis towards somebody who's in a circumstance where they have a lot of credit cards, car payments, student loans, behind on bills just through disorganization.

Usually this happens because you get overwhelmed with life. You get overwhelmed with not knowing how to run your money. It's hard to get connected to it. Don't pay much attention to what's in the checking account. Don't have a monthly budget. Don't know how much money is coming in and how much money is going out.

Well, if that's what caused the financial distress in the first place, you got to solve that problem. And so you're going to have to develop new skills. One of those skills is organization. So you begin with a notebook with an attached pen so you have a place to record all your information in one place.

And in a moment, we'll talk about communication. You start by making a list of everything that you owe to anybody that you owe. So ways to do this, start with pulling a copy of your credit report. Go to annualcreditreport.com. Again annualcreditreport.com, that's the official website that you can use to download a current copy of your credit report.

You can do that for free once every 12 months. Start with that. Download your credit report. Do the same for your spouse or have them do it. And then make a listing of everything that's listed there, all of the debts that are listed on your credit report. For most people, this will be a pretty good list.

You may have some debts that are outside of it. But for most of us who are involved in the modern financial system, this will be a pretty good starting point. It will be a long list of credit cards, of student loans, et cetera, mortgages, car payments, et cetera. Now you may have things that are outside of it.

Maybe you have a private loan with a friend or family member. Maybe you had a business loan that wasn't reflected on your credit report. Also add those things down. And rank a complete list of those on a piece of paper. Find out who you owe, collect all the bills and find out how much you owe.

And then search your memory to make sure that everything is reflected on that paper. Don't forget any of it. Then face that list square on. Of course, here's where we have to deal with things as they are. Start with facing the list and taking responsibility for your actions. If there's a place of confession for your actions, do that.

If there's a place of reaching out and acknowledging to somebody that you've borrowed money from, do that. This is much easier done, of course, when there's a person. For example, if you have a landlord, it might be a good idea to call – you're two months behind on your rent or you walked out on a previous agreement and you owed your landlord back rent.

That would be the type of person that you can personally contact. And if you take responsibility with these types of things, you'll find I think your whole situation changes. Taking responsibility for your actions is the opposite of what most people do. Contact any landlord, someone who owns a handful of rental houses or apartments and start asking about the stories people give them when they don't want to pay their rent.

If you'll just take responsibility, you'll magically find yourself in a new relationship with them. So I would try something like this. If I had a landlord, I would call them and I would say, "Dear landlord, I know you're surprised to hear from me. I haven't been very communicative recently and I'm sorry.

I was really overwhelmed by my circumstances. I lost my job. My wife was sick. We just didn't know what to do and I've fallen behind on my rent. And I'm sorry. But I'm ready to try again and I want you to know that I take full responsibility for the money that I owe you.

I don't know yet how I'm going to pay you back, but I'm working on it. And I want to let you know that I won't be avoiding your phone calls anymore. I won't be avoiding you, but I'll be available and communicating with you frequently as we figure out a plan.

And I'm sorry. I'm going to make things right." That's a very freeing conversation. And your relationship with the landlord will change night and day because they don't hear that. So if they're personal creditors, that would be a good place to start. Little harder to do that with a big faceless entity of a bill collection agency with a debt that's been sold five times over and you're dealing with a debt collector that bought the debt, again, five times – five layers deep.

But still, do what you can to take responsibility with those. So make a list of what you owe. Now additionally in this notebook, you need to log your communication with your creditors. What I would do is I would devote a page in the notebook, a separate page or a section depending on how many creditors, the type of creditor and the layout of your notebook.

But I would devote a page of that notebook to each of my creditors and I would start a log, a record of each and every one of my communications with them, each and every one of my phone calls with them. I would record all letters, all interaction, emails, texts, anything.

I would start to record those things very, very carefully to make sure that I'm not forgetting anybody and also to make sure that I'm communicating with them. One of the principles that you want to apply in this process of getting out of debt is good consistent communication. Again, most people run from their debts.

Most people run from their responsibilities and this is very frustrating when you're owed money. If you've ever been in a situation where you've lent somebody money, you know how frustrating this is. Oftentimes as a lender, you know you're taking a risk. You know that the person might face hard times and they may not be able to pay you in a certain way.

You know they're facing hard times. But all you want is a conversation and an honest discussion so you can make a plan. Frequently as a lender, you may be willing to work with somebody. You may be willing to – landlords are often willing to lower the rent for a period of time or to help in some way if they can.

But they can't do those things if there's no communication. So you want to firmly place yourself in the world of communicating frequently with my creditors. Now even if you're dealing with people like credit card collectors, debt collectors, if you'll simply communicate, communicate honestly and forthrightly with people, you'll find that you can stay out of the legal system.

And in debt collection, you want to stay out of the legal system. It's very painful when you wind up in court losing your lawsuit, which you will because you owe the money. And now all of a sudden, your creditor has a judgment taken out against you and they're able to come and to wipe out your bank account.

It's a problem. So you want to stay out of that situation. But the way you stay out of that situation is by taking responsibility, communicating frequently with your creditors and then working on making plans that will make things right. Your creditors don't actually want to sue you because it costs them a lot of money and they're going to wind up with less money and they know you probably don't have a lot of money anyway.

So they don't want to sue you. But if you don't communicate, you're going to force them to sue you quicker than they might otherwise do it. So you want to log your communication with your creditors in your notebook and you want to make sure that you're frequently speaking with your creditors.

The next tool you need to be prepared for this process of getting out of debt, paying all your creditors back is a filing system. You need a simple filing system. And this is often hard for people who are in debt. Again, you're going to have to learn new skills.

If you were organized with your money, you probably wouldn't be in this situation. But you're in the situation because you're not organized with your money. So let me explain it just a very simple filing system what I would implement if I woke up deeply in debt, owing a lot of money.

I would go to the local office supply store or Walmart or wherever and I would buy what's called an expanding file pocket. There's one of these cardboard, I would say other than pockets, but they have a number of pockets in them and they kind of expand and contract depending on how much paper is in them.

And I would buy one that has enough room for the number of creditors that I have. If I owe five credit cards, then I would buy one like that. If I owe 30, I might have to get one that has more pockets or maybe a couple of them. And then I would label those and devote one file pocket to each creditor.

So I have a very simple place to keep all of my papers that I'm going to have. And I'm going to be a lot of papers. When you're dealing with debt collectors, one of the things that's very important that you do now and that you continue to do forever is to communicate with them on paper.

Paper is proof of what you're doing. So you want to consistently communicate on paper. You never take phone conversations as gold. You only deal with things in written paper and you save all of those so that you're prepared to show what you're doing with regard to your personal circumstances and correspondence.

As you put these papers in place, you're going to organize them by date. So again, they're organized by creditor in each pocket and then just simply keep things in order of date. Put the oldest communication on the bottom of the stack and the newest communication on the top and organize things by date.

What I frequently do when I'm organizing lots of legal papers is I'll just highlight the date on the paper. Frequently with legal documents, things like that, it's hard to find the date in all of the clutter. So when I receive a piece of communication or I'm organizing things, just take a little highlighter and highlight the date.

That allows me to quickly and easily collate them and stack them by date. And all of your correspondence is going to be filed and kept in this one place. So you're building a record, a file of your communication with this particular creditor. Now final tool, this is not mandatory, but for many people this would be helpful, is in the coming months, you're going to have a lot of communication.

And so you need to have a printer, if at all possible, and a copy machine, if at all possible as well. If you are very poor and you have a transient living situation, this may be out of your reach. But today you can buy, $50 or $60 can get you a small, cheap copier, scanner, and printer online on Amazon.

I checked it out. $50, $60 can get you a small, cheap copier, scanner, printer. You just need black and white. But you're going to be doing a lot of copies. You need copies of everything. Copies of canceled checks, copies of payment, copies of letters that you're sending. And you're going to be doing some printing as well.

You can write these things physically if you don't have a printer. So if you don't have a printer, that's fine. If you don't have a computer, you can write letters by hand, but still you need copies of them. And so it would be worth considering getting a copy machine.

If not, you may be able to use one at work or you may be able to rent one at the local library or at an office supply store like a FedEx Kinko or something like that. But a copy machine would be a helpful piece of tool for you to have if you don't have one.

Now in a moment, we'll continue with the tools and I'll give you some strategies. But first, let me share with you about HelloFresh. HelloFresh, I've been doing these ads for what, four or five months now? HelloFresh is awesome. They're a meal delivery service where they will send you, you sign up and they send you, you choose what kind of recipes you want.

You choose what type of food you like and how big your family is. And then they send you a box and you choose what day works best for you to receive the box. And they send you a box of groceries. All of the groceries come with ingredients. They're pre-measured and coordinated, organized meal kits.

So you know which ingredients go with which recipe. It's delivered right to your door. It's insulated for the things that are cold. They're insulated. You take them out, run them right in the fridge and you're ready to go. When they send you the box and then it comes to dinner time, all you do is you look through the recipe cards and say, "Well, which of these recipes do I want to make?" You grab that recipe, you grab that box out of the fridge and in, for me, 20, 30 minutes, 20 meals, 20 minutes or so, you're in there and you've got that thing put together and you've got fresh, delicious food.

At this time of year where it just seems so busy with the holidays and all of us, I think, have more demands put on us during the holiday season, that convenience is really, really valuable. Where somebody else is doing all the shopping and the recipe planning and they're delivering it right to you and all you do is just put it together and make it.

HelloFresh is really great, great food. It's not as cheap as doing everything yourself. Of course not. You could do the planning. You could do all the shopping as well. But it's cheaper than going out to eat by a good margin and it's fun. It's fun and it's better quality food.

If you've never tried HelloFresh, give it a shot. Go to HelloFresh.com, sign up, use coupon code RPF30. HelloFresh.com, use coupon code RPF30. That coupon code saves you 30 bucks off your first week of deliveries and use it as a way even to learn to cook. When all the recipes are there, most of them they have careful instructions and they have detailed listings of how to do it.

You can use it as a pretty great way to learn how to cook food from scratch as well. So visit HelloFresh.com, use a coupon code RPF30. Now back to the tools. Next three tools we're going to talk about, phone, email and mail. I'm going to give you a couple of ideas that I've never really heard anyone else talk about but I think will be helpful to you.

If at all possible, what I would recommend is that you separate your phone system so that you have a separate phone number on which to take all of your creditor discussions. Most people just have one phone number, a cell phone number that they use, but this is really stressful.

One of the things that people face when they're behind on their bills is constant calls from debt collectors and they want to reach you at all times. Most people just get to the point where they run from the phone and they only pick up – they use the phone completely to screen with caller ID and they only pick up the phone when it's a known contact, which okay, that's fine.

But I think there are better ways. What I want to do is I want to make sure that in my communication strategy, I'm setting aside time consistently, probably weekly, biweekly to communicate with my creditors but I'm not going to let them run my life. After all, the way that I'm going to get out of debt is to increase my income, which means do a good job at work.

If I have a job, build a good business. If I need to build a business, I need to control my expenses. I've got things to do other than talking to bill collectors all the time and I don't need that stress. So I would want to separate my phone number and just have all creditors in one place.

I think probably the simplest way and the best way to do this technologically for most people would be for you to move your phone number that you use. Move your existing phone number to Google Voice and then go ahead and get yourself a new phone number for your personal contacts and your personal discussions.

Google Voice, I of course hate to recommend any Google product but in this case, you're broke so we'll take advantage of what they've got and when you're rich, we'll work on better solutions that are going to be a little bit better than doing business with Google. But you can port your number from your phone to Google Voice.

Google Voice charges you 20 bucks one time for you to do that, to establish a phone number with them. And then from then on, there's no additional charge for that. Now what do you get with Google Voice? Google Voice is basically a phone and text management system but it allows you to place calls from your number, from your Google Voice number and it allows you to receive and to organize all of your voicemails, your text messages as well.

And you can forward your number from Google Voice to other phones for you to pick up in time. So as an example, if I moved my phone number to Google Voice, now all my creditors are going to have that number. And I would then get a new number and forward that number from Google Voice to my other number so they're going to answer.

Google Voice allows you to do things like forward calls during a certain time. So as an example, your creditors, you're allowed to under the Fair Debt Collections Practices Act, you're allowed to instruct your creditors about when they can call you and when they can't call you. You can forbid your creditors from calling you at work.

But what I would do is I would set it up and I would say to them, "Listen, I'll speak to you on these days between these hours from 7 o'clock to 9 o'clock at night, Monday through Friday. But the rest of the time, I can set that Google Voice number up so the calls don't even go through.

So they don't even get passed through to my telephone." And that's really, really helpful. Other things that are helpful about Google Voice is you'll have an easy record of all of your voicemails. And that record is on the computer where you can save those voicemails. You are not allowed to be abused by a debt collector.

And so in order for you to keep yourself from being abused, it's valuable for you to collect the information and to keep your debt collectors on edge so they know they're on the record. So voicemails that are being recorded is helpful. So they can't, for example, a debt collector is not allowed to swear at you.

They're not allowed to leave you angry voicemails swearing at you in a voicemail. So having those in Google Voice is very, very helpful to you. Additionally, by using Google Voice, you'll have a record of all of the calls, all of the any text messages because you can use Google to communicate with that as well.

And it's all in one place. Additional benefits to Google Voice, you can use Google Voice to record phone calls easily. For an incoming call, you can use Google Voice just by you press 4 on your keypad and it'll automatically start call recording. And I would when negotiating with creditors, I would record every single call.

So check out Google Voice and see if that might be a good solution for you. And go ahead and get a new phone number and make sure that you don't ever give that phone number out to anybody except personal friends. So that way you're only communicating with people. You don't have to be scared of your phone.

When you're in war mode to deal with your bill collectors, then you get yourself in that mode and you go into that war room, that Google Voice identity or whatever it is, and you deal with it there. And if you're not in war mode, you don't need to worry about them invading your life.

That's one simple thing that I would do. Now, if you don't want to go the Google Voice route, I would consider going ahead and getting a new phone and then either just taking my number if the current number is what all the bill collectors have. I would port that to just a separate burner phone, just to get a get a self a move it to a simple, cheap prepaid number somehow.

But I would keep a separate cell phone. If I didn't want to do Google Voice route, I'd keep a separate cell phone. So that way that phone can be off all of the time unless I'm in work mode. I'm in war mode, in which case I turn the phone on, I listen to the voice messages and I start making calls to my creditors and I tell them, "Here's what I'm doing.

Here's what I can send you. Here's when I can send it to you." And then I power that thing off and it's not allowed to interrupt my life. I'm not going to have my date night with my wife ruined by a bill collector calling. Other options as well you can use, of course, if you have an iPhone, there's a really useful calling app called Sudo, S-U-D-O.

Very useful. Allows you to keep 10 different phone numbers and integrated identities with telephone, texting and email all on your iPhone in a separate app. Also with Android, probably the best app I've found on Android devices would be the Burner app but it's a little easier on iPhone. Someday Sudo is going to come to Android so maybe that'll happen soon as well.

But you want to have these phone calls logged in one specific place. You want to have a record of them as well. And then again, finally, with calls, you want to record your calls. So again, I talked about Google Voice. If you're using a smartphone to record your calls, you can use an app like Tape-a-Call.

Tape-a-Call Pro. It costs you $10 a year and allows you to record all of your phone calls. I would do that. Or another easy option is to use a simple and cheap voice recorder and then to take all of your calls on a speakerphone so that way you can record both sides.

Easiest way, you probably have an old cell phone, an old smartphone sitting around that's old, maybe an old iPhone 4 or things like that that you can't sell. It's not worth anything. But it'll work great as a voice recorder. And so you just use the voice memo and record that thing and put it on speakerphone and do that.

That works really well. That's a great voice recorder. Anytime you're in a potentially contentious situation, I think it's a good idea to protect yourself by recording things. Sometimes video, you can do that. But oftentimes, at least audio is very, very helpful. I've done this in the past when I've been in contentious situations with somebody that I made sure I made – I need a record.

I need a record of it. There are various state laws on recording circumstances. In general, it has to do with where you are in public. Everybody has no expectation of privacy in a public place. On the phone, some states require just simply one person to know that they are being recorded.

In some states, they're supposed to – both parties are supposed to know that they're being recorded. What I would do is I would go ahead and play it safe and make sure that both parties know that they're being recorded. This will also help to make sure the other person, the bill collector, is going to follow the rules.

Again, remember, in these circumstances, so I started, take responsibility. I'm going to stand good for my debt. I'm not going to be abused. So I want to help you. You're going to stand good for your debt. I don't want you to be abused. So one thing you do is at the beginning of every call, "Hey, just a moment before we get started, I just want to let you know that I'm recording the call for quality and – what do they call it?

For quality assurance purposes, right? Just going to make sure I want to let you know that up front." Now let's get to it. Here's what's going on. Make those records and keep them carefully. That's just a phone system. Quickly on email, email is not used heavily with regard to bill collection.

Necessarily it's not – it's sometimes used but it's not used heavily. But what I would also do is I would establish new email addresses. If my personal email address, my standard email address is filled with my bill collectors, I want out. I'm going to cancel that address and I'm not going to use it.

I'm going to set up a new one for my actual personal communication. It is really frustrating when you're having a good day at work, you're working hard and all of a sudden at lunchtime, you pull out your phone and you're looking at your email and there's 10 emails from a bunch of bill collectors and it comes and ruins your mood and reminds you how much stress you're under.

Or you're out on date night with your wife and go to the bathroom and you look at your email and all of a sudden you're reminded about the fact that you're fighting your way out of debt and it wrecks your evening. So I would have email segregated away from my normal interaction.

So a couple of ways to do that, number one is of course if they already have one address, you may consider just starting a new address for your personal work. But I would also just consider establishing a new address for the purpose of working my way out of debt.

So establish a new email address because – especially because we're dealing with sensitive personal information. I would use proton mail so that my emails are stored in an encrypted format. It would be superior to Gmail. So at least we get – it's free. You can set up an account, use proton mail so that your emails are being stored encrypted and then use that for communication with your creditors if you need to.

But keep that separate and only limited communication via email. Mailing address, one thing I don't know why more people don't do is think about setting up a separate mailing address to use to communicate with your creditors. If I were in this situation, I would go ahead and pay a little bit of extra money to establish a post office box and use that for communication with my creditors.

Here's why. PO boxes are cheap to use and for most of us, they're pretty convenient. There are many post offices near us. PO boxes are – they range depending on where you live. But we're talking $100 to $200 a year. They're pretty cheap. They allow you to communicate reliably via the mail without having your actual physical location necessarily be known.

This is really important. One of the things that people who are the most abused often face is they miss mail. Of course, people ignore their mail. But when you get to people who are really struggling, what one author affectionately calls clueless people, when clueless people move a lot, they lose mail and they lose important communication and you cannot miss your mail.

If you miss important communication in a debt collection scenario, you could actually wind up in jail in an extreme circumstance. Now, most of the time, of course, you're not. But you need that communication so that you can receive the letters, you can receive the offers, you can communicate properly with your debtors.

But how you would end up in jail, as you work your way through, let's say that you didn't pay your debts and you ignored all of your summons, you ignored the credit card, you just moved and they didn't have any way to get a hold of you. One of the things that can actually happen, and some debt collectors will use this, if they don't hear from you, they will sue you in court.

Now, you don't actually have to show up in court. They will sue you. If you don't show up to defend yourself, they'll win the lawsuit and they'll take out a judgment against you, which means you owe them $10,000. The court authorizes them to collect the $10,000 that you owe.

That's a legal judgment that they have attained against you. And once they've obtained that judgment in court, they can now use that and a judgment creditor can get the court to go ahead and issue a wage garnishment order or they can get the court to issue an order to attach your bank account.

But what do they do if they can't find you? Well, if an aggressive creditor can't find your income or they can't find your assets for them to take to pay your bills, they can file papers with the court that require you to appear for a debtors examination. And then the way it works, if you show up at the debtors examination, then they have the right to ask you and you have to answer under oath their questions about your finances.

You have to explain why you're not paying your bills. You have to explain to them how much money that you have and where it is and what assets you have. And this is a real problem because you're under oath. So if you lie, you will now be found guilty of perjury, which is a real legal problem.

Now if you don't show up for that debtors examination, even if it's just because you didn't receive the notice or maybe you decided you didn't want to go, then the court can find you in civil contempt for disobeying its order to appear. And so now you're found in contempt of court where if they know where you are, that could eventually wind up putting you in jail because you're found in contempt of court.

Or it makes it very inconvenient when you get pulled over for a simple infraction. All of a sudden, now your car is left on the side of the road and you're going away in the back of the police car because you didn't get your mail. So you didn't know that a judgment was taken out against you and you had a debtors examination ordered and you didn't show up in court.

And depending on who you owe money to and depending on how nasty they are, they can use this as a tool to try to collect debts from you, especially somebody you owe money to that's an unsecured debt that doesn't really have any other authority and leverage over you. They'll use these debtors exams as a way to try to get you in there and try to get you to slip up and not appear.

So you need to receive mail. Your problem is not going to get better because you ignore it. If you have creditors and they don't know where you are, you need to give them a mailing address where they can communicate with you. Ignoring these things causes problems. So you do it with a post office box.

What I would do is if I were receiving mail at my house, even if I'm not planning on moving, I would put a move order in with the local post office and I would forward all of my mail from my house to the post office. And that gives you the ability to even just to protect your family.

It's really obnoxious to go to the mailbox and go out there and you're looking for a card from grandma and you're looking for a catalog from something that you like and a magazine subscription that you enjoy and have to face every single time five – you know, five deficiency – five letters from lawyers because you're not paying your bills.

If it were me, I wouldn't want to do that to my family. I wouldn't want to do that to my wife. I would make sure that I would use a post office box and I would go when I'm in a good frame of mind, I'm going to go in, I'm going to sort the mail.

I'm just not going to show up at the house and mess with my family. This would also give you more flexibility in terms of moving without also exposing all of your mail. Once you have your mail forwarded to a post office box, it gives you the ability to move and still receive your mail.

But it allows you to change your living circumstances. As you work your way out of debt, you may need to move in with friends or family for a temporary amount of time in order to eliminate your rent payment. You may need to rent a cheap apartment in order to cut your expenses.

So while you're making these things – making these life changes in order to pay your bills, this will allow you to do that without being connected to your mail, without your creditors knowing where you physically are all the time. Finally, also, you're going to be sending and receiving a good amount of certified mail.

The post office will make this much more convenient for you. When your creditors are serving you, they're going to be sending certified mail which has to be signed for. Again, I would – if I were in a mess, I'd sure hate to – my wife is a mother. I'd sure hate to have her at 2 o'clock in the afternoon have to go and get another certified mail from the mailman that – just about how deeply in debt we are.

I'd a whole lot rather deal with that. I'll get off of work. I'll swing by the post office and I'll sign for it there. And then also you'll be sending it. And then in a moment, we'll talk about financial interaction. You're going to be sending a lot of things like money orders.

And the post office makes this a convenient place for you. Post office sells money orders very inexpensively. They're good to use in these circumstances and so I would be at the post office quite a bit in this situation. So once I've adjusted these things, I would update my creditors with my new information.

I would go through all of my credit cards, all of my bank relations, all of the people that I owe money to and I would change my phone number, my mailing address, my email address, my mailing address with them. By the way, the post office now allows – they didn't up until a few years ago but the post office now allows what's called street addressing.

So it used to be that if you were going to use a P.O. Box, you had to say P.O. Box 1234. But now just like UPS store and other places, now you can go ahead and say 123 Main Street is my address, 123 Main Street number 1234. And that's really helpful as well because it allows you to use your P.O.

Box with some of your financial relationships without having to necessarily – where they often wouldn't accept a P.O. Box number. And then I would refuse to take correspondence anywhere else from those creditors to make sure it's coming where I say it was going to go and work with it.

Why is this important? Why all these little things? Because this is going to take a long-term process. For most of us who are getting these deep situations, there's going to be months and years, maybe even decades of work and possibly of harassment. If you have many accounts and are very late, your accounts are going to be sold.

They're to a debt collection agency. Then they can't collect. They're going to resell it. They're going to resell it. And that's why your records are so important because it will be very hard for you to know what's valid and what's not if you don't have good records. For example, under the Fair Debt Collection Practices Act, a creditor has – a debt collector has the right to notify you of a debt.

But if they – if you don't actually – if you think the debt is not actually true, maybe it's something you paid off and there was an administrative problem, the debt was sold. They think it's valid but you've already paid it off. Or maybe it's just a fraudulent – it doesn't happen much.

Maybe somebody just thinks it's a fraudulent scenario and they're trying to collect something from you. You have the right to challenge them and say to them that – wait a second. I don't know any money. Prove to me what I owe, why I owe it and give me proof.

The problem is that if you don't do that within 30 days of receiving the initial notice, then the debt collector can move on and assume that it is valid. So if you don't contest a debt within that time period, right within five days after you – sorry, within – yeah, is it five or 30?

If you don't receive it and you don't contest it and they don't prove it to you, you may wind up being responsible for a debt that you don't actually owe and it would really be a shame to have to pay extra money back that you didn't borrow, that you don't morally owe but you legally owe.

Again, that's why I distinct it moral, legal and practical. You're not morally responsible for a debt that you didn't incur but yet legally you wind yourself paying something double because of your bad bookkeeping. Don't let that happen to you. Next, if you don't have them already – in fact, if you listen to this, you're going to – just make it simple.

You need new bank accounts. When you are in a contentious situation and you're facing legal problems, finding new bank accounts, I think you need to work very hard to keep your footprint in the public banking system as minimal as possible. There's some caveats to that. It doesn't mean you want to take away all your money.

For example, you don't want to all of a sudden start cashing out your 401(k). You need to understand your 401(k) as an example is protected from the legal claims of your creditors but your bank account is not. And so if I were facing an extremely contentious situation like this, I would try to make my money as minimally visible as possible and I would try to minimize my footprint in the banking system.

I want to make sure that I have full control of my finances. And so I would close my old bank account and I would do my very best to live on cash as much as is possible. Now, this will help you – let's talk about cash in a moment.

But it will help you get out of debt. But just an example of why this is so important. If – legally, here's how things work. If you have an account, you've had a longstanding account for the last decade with Bank A and you have creditor number one that you have – were in good standing with five years ago but you haven't paid them in a couple of years.

But you used to pay creditor number one by means of a check, whether that was out of your check or maybe you made an automatic payment from your bank account. So you fall behind with creditor number one. They sue you in time. They sue you and they win the lawsuit because they will.

Creditor lawsuits, if you owe somebody money, you'll never win because guess what? You owe them money and they have the right to collect. So they sue you in court and they gain a legal judgment against you. That legal judgment entitles them to collect on your assets. They go from being a creditor to being a judgment creditor, which gives them additional legal rights.

Well, in this circumstance, they have the legal authority to get your money. All they need to do is look back in their records and they look and say, "Oh, look. Joshua paid us with Bank A. Let's go ahead and just send our bank representative over to Bank A with our legal judgment and our right to attach and collect his assets." They just walk right over to Bank A, they enter the appropriate paperwork and they clear out your bank account.

Simple and easy. And you made it simple and easy for them because you've used Bank A to pay creditor number one. Now, if you didn't still have Bank A, they go over to Bank A and they say, "Well, we're here to collect the money from Joshua's accounts," and they say, "Well, Joshua doesn't have any accounts here.

He closed them a few years ago and wiped them out." Now they have to go and they have to find Joshua's accounts, which means additional cost. They have to hire a private investigator or they have to figure out some other way of figuring out where does Joshua bank. They probably just go on Facebook and see what Joshua's Facebook profile says and, "Look, there's a picture of Joshua at the local bank." We'll talk about social media, I think, more in a minute.

But you've made it easy for them by having Bank Account A. So you need to shut down your bank accounts and live on cash as much as is possible and you want to then go ahead and make sure that you at least open a new bank account. So that will give you some level of protection.

The next reason you need to do this is just for your own – well, one more legal thing – sorry, I got out of order. Make sure that you don't open a bank account with a financial institution to whom you owe money. You better think about this and go through your creditors because a lot of the big banks that many people do business with are also big creditors.

In some circumstances, you may wind up facing a situation known as a bank setoff. So if you, for example, just have a simple – you have a checking account at your local credit card – credit union and you have a line of credit at your local credit union and you start missing payments.

A bank setoff is where your financial institution, your bank, your credit union, whatever, takes the money from a deposit account that you have, a checking, savings, CD or money market account in order to cover a payment on a loan that you missed. Now there are some restrictions. They can't take certain kinds of money.

Some kinds of money are exempt such as social security benefits or disability benefits, things like that. But – and they can't take them out to cover credit card payments unless you've previously authorized them to cover credit card payments. But this could be very inconvenient for you. So just a good simple rule of thumb is don't have a bank account with money in it at the same place that you owe money.

Otherwise you might wind up facing a bank setoff. That's a problem. So now there are other lenders as well and all of these kind of steps will depend on what kind of debt you're facing and how far down the road you are. For example, owe money to the IRS.

That's bad news because they can get right into your bank account without a court order. When you give them that information, either by writing a check to pay a tax payment or them sending you a refund, now they'll suddenly know right where to go to find your money without any problem.

Certain types of debts, if you're behind on child support, there are much lower legal liabilities for those debts to be collected than other things. And so you've got to be proactive about this and protect yourself now because the only advance notice you're going to receive, you're going to receive court orders, et cetera, by one day you just go and try to use your debit card and find out that it doesn't work and all of a sudden you wind up and realize that your bank account has been wiped out.

So what I recommend for you is that you live, while you're in the situation, live on cash. This is good for you and it's good for your budgeting ability. It's also good – it's good for you. Frequently it's been – I can't name many good things that have come with all of our money being digitized.

Now there are some of us who thrive in a digital environment. We live on spreadsheets and for us, the digital economy has been great, buying and selling everything digitally, doing everything on cards and automatic payments, et cetera. But for people who don't live in front of a computer and for people who aren't all that numbers savvy, my observation that the digital economy has not been kind because it doesn't impose the same restrictions that other things – that cash has imposed in the past.

Many people, the way that they figure out how much money they have to spend is they look at their bank account and try to think if there's any money in it. If there is, they swipe the debit card or they look at the credit card and see what's the balance available and if there's a balance available, they swipe their money.

This is not good. So for most of us, living and working on cash will be very, very helpful. And so it's good for you and good for your budgeting ability. It's good for you in terms of saving you money. One of the things that I have observed with people who are strapped and who owe lots of money is frequently they will authorize all kinds of automatic payments.

When you authorize these payments, they come in at the most inconvenient time. You need to make a $1,000 mortgage payment. You have $1,100 in the account. So you go ahead and you write that $1,000 mortgage payment. Then all of a sudden you forgot that you had a power bill due and that was automatically taken out of your account.

And then you had authorized that $40 a month payment to the local furniture store and that $40 a month payment to the local furniture store put you in a position and it wiped out your account – sorry, wiped some money out of your account. And now instead of having $1,000 to cover the check to the mortgage company, you only have $970.

And so your check to the mortgage company bounces. Well now your check to the mortgage company bounces and the mortgage companies don't accept partial payments. And you don't ever get that $1,000 together again and it gets wiped out. Well guess what? If I can't pay all my bills, I'm never going to pay a furniture payment before I'm going to pay a mortgage payment.

That would be dumb. Even if I had signed a collateralized obligation wherein I was saying that the furniture I'm buying from the furniture store on credit is going to be secured by the furniture, even if that – and that's not necessarily common. Most of the time those loans are just an unsecured loan.

Even if I were in that situation, the furniture is in my house and the furniture company has no ability and authority to come and invade my house to take the furniture back. But if I don't pay my mortgage, the whole house will be gone and the mortgage company does have the right to sell my house at foreclosure and to foreclose on me.

So it's way more important for me to pay that mortgage payment. And I've seen this again and again and again with people who are struggling where you wind up with a stupid automatic payment messing everything up. Don't do it. Live on cash while you're in the situation. Keep minimal money in the checking account.

If you need to use a checking account, which by the way you don't, you can today. I'm convinced. I thought about doing this. I'm going to live without a checking account just to prove it can still be done. There are a whole lot of people in the United States of America and around the world who live exclusively on cash.

Yes, you buy money orders for things you need physical payment for, but you can pay your power bill at an in-person location. You can pay all these things in person and you can live still without a bank account. But if you do need to use a bank account, at least do – keep one account for your mortgage and you only put money in there that's going to be sent to the mortgage payment and you write one check out of that and that's it, nothing else.

So living on cash is good for you. It protects you and we want to – it's good for you in case you lose in court. You may wind up in court when your creditors win. It's good for you to have the money out and it's also good for you in terms of your privacy from your potential collectors.

You want to keep your income as private as possible, especially if you're in a contentious situation. You should immediately cancel any direct deposit that you have that you're earning from a paycheck. Immediately cancel any direct deposit because you cannot afford to have a creditor decide what happens with your money because they have a judgment and they take money out of your account.

In fact, I wouldn't even want – if at all possible, I don't want my creditors to know where I work. So if you have had the same job for 10 years, well, they're going to know that. But if you're in a job that has changed since you stopped paying the money, make sure that you're minimizing the records of where you work.

So don't deposit your paychecks in the bank account. Cash them. You can – the way that you deal in this world, you can go and cash your checks for free or very cheaply at the bank on which they're drawn. If you're paid from a local bank, take your check in there and just cash it right at the bank.

Many banks, it's cheap. It's free. Some banks, it's just cheap. They charge you a few dollars. Or cash them somewhere else. But I'd rather pay $5 or $10 to cash a check than run the risk of my wages being garnished and 50 percent of my income being taken in a wage garnishment order.

You've got to protect yourself and protect your family. Again, I put – this is in the situation – when people are in a situation, they don't eat. I'm sorry, but it's more important that you eat and that your children eat and that your lights are on than that your creditor get paid now.

As long as you're taking responsibility for your debt and you're going to pay it when you can, I'm OK with that. But I put some of this stuff in the world of taking somebody's coat and making them be cold at night because you're taking their coat for security, that we must not take advantage of people who are poor and destitute.

We've got to make sure that – especially when someone is struggling – that the basic needs are cared for. Now there are exceptions to what I'm saying and that advice would be important for you to pay attention to depending on what your source of funds are. There's a difference between what are called protected funds and unprotected funds.

Generally money that you earn from wages working at a job are unprotected funds. Those funds are available for the claims of your creditors. But funds – income that you receive under some form of government assistance program such as Social Security or veterans' benefits or unemployment compensation, those funds are protected funds and they are not legally attachable.

They cannot be taken by your creditors. And so what you should do with those types of funds is make sure that those funds actually are put in via direct deposit. Because if a bank receives an attachment order or a garnishment order from the court, it has to look – the bank is required to look at the account and try to find out what is the source of the direct deposits that are there.

So if the source of the direct deposits are coming from the Social Security Administration, then they look down and they know that that's protected funds. If the source of the direct deposit is coming from wages, they know that's not protected funds. So you want to make sure that something like Social Security funds are direct deposited into your account because that is protected.

If you received your Social Security funds physically by a check and then you went and deposited that at check, now we have a problem because the bank can't see automatically that that is – that that check was Social Security. So they're going to freeze the account and you have to claim and you will have to proactively prove your right to having those funds released and then ultimately they can be released.

So the bottom line is if you're receiving some form of government assistance income, Social Security, veterans' benefits, unemployment, make sure that those funds are deposited via direct deposit. Do not mix those funds with other money. If you're using bank accounts, set up a new bank account or use a bank account exclusively for your Social Security income and your protected funds because when the money is commingled, now we've got a problem.

Now Social Security funds will keep their protection even if they were commingled but now we wind up in a situation where the burden of proof is on you. So you should keep Social Security income in a separate account and do not mix it with any other income that you have in order that it retains its ongoing protection.

Same advice applies to retirement accounts. Retirement accounts – quick clarification. There are certain retirement accounts that are covered by what's known as the ERISA regulation, ERISA, E-R-I-S-A, Employee Retirement Income Security Act I think. So this would include your big accounts, just 401(k)s, 403(b)s, et cetera. Any tax-qualified account that's governed by ERISA.

But ERISA does not govern individual retirement accounts, Roth IRAs, et cetera. Those are governed by state law. ERISA accounts have essentially ironclad protection from the claims of creditors. So money that's in your 401(k) or 403(b) is very, very safe from the claims of creditors and you should be very careful with those funds.

One of the things that frustrates me to no end is when people take money who are in a problem situation, they take money that is in a 401(k) and use it to pay off their creditors while also recognizing that that may put them in a situation where they can never get free of the debt and they can never have that money back.

Money that's in your 401(k) will stay with you right through bankruptcy court. Again this is where I'm getting clear. I want you to pay your creditors but we got to make sure that you're also protected and that you're not left destitute by doing so. And so individual circumstances here are very important.

In general, if you are in a financially contentious situation, you want to keep your money to the greatest extent possible in ERISA-governed accounts. I would keep money out of 401(k) and not roll it over into an IRA. Now most US states have established their own legislation for protection for IRAs.

But sometimes they have certain dollar amounts. Some states have stronger protection than others but they have certain dollar amounts. So you want to be very careful. But the same thing applies to distributions from retirement accounts. As long as your money is in the retirement account, it's protected from the claims of creditors.

But if it starts to be distributed from retirement accounts, be very careful. Now it should be protected. The income flow from an account, in my understanding, should be protected but it won't be protected if it's commingled with other funds. So separate your funds, separate your accounts and keep those things separate so that you can have – the proof is available for you.

And some of those things will be governed by state law as well. So be very, very careful. By the way, there are times where I believe that you should take money from retirement accounts to pay your creditors. But in extreme situations, especially if somebody is going to wind up in bankruptcy court, then that may not be advisable at all and we need to be very, very careful.

So these are just some tactics and let me try to give you a few more discussions on wages. Keep the source, protect your wages. Keep your wages as quiet as possible. Don't announce the source publicly. Some of this, when you get into a contentious situation, you're hiding from a private investigator.

When a court judgment is taken out against you, you're hiding from a private investigator. So for most people, it's pretty easy. You owe money. You don't have the money to pay right now. I'm assuming you don't have the money to pay. You've just got enough money that you're putting together.

But if you go and update your LinkedIn status to say that now I work at company ABC, an investigator finds it very easy to go to company ABC and deliver the wage garnishment order. But if you very quietly took a job at company XYZ and nobody knew you were there at company XYZ, now you have the possibility to start to accumulate some money so that you can use it to pay your bills, to keep your family housed and fed and clothed, and then you can go ahead and start making payments.

And you need to protect your money and fight like crazy to make good settlements. One of the things that you want to do is you want to be in as much control as possible of the process. And you may need to accumulate funds in order to settle with creditors.

Let's say that you owe $10,000 on a bill and you have five people that you owe $10,000 to. You owe $50,000. Well, you need to start accumulating money and start making offers to try to settle with your creditors. Settling is an entirely reasonable thing to do. Remember, your creditor has the choice to always settle or not settle with you.

And so it's morally upright and morally fine for you to forgive any debt that you want and your creditor can do that as well. So a debt can be forgiven. That's fine. And that can also be settled. And so if you're in a situation where you're offering money, you may need to accumulate this money.

It can be dangerous for you to accumulate that $5,000, $7,000, $8,000, $10,000 in the bank, which you're going to use to settle with creditor number three because they'll give you the best offer right now. You can't afford to have this other creditor come in and invade your bank account.

And you can't afford to have your wages garnished by this low-priority creditor, which puts you in a situation where you're not making your mortgage payment. Let me give you – tell you practically why this is so important. Your only debts – pretend for a moment. Your only debt is a mortgage payment and an unsecured credit card.

Your family lives in the house that you're in and you don't have the opportunity to sell the house and move somewhere else and have that be an ideal living situation. You don't – it doesn't make sense for you to sell the house and try to use proceeds to pay off the debt.

And so you're stuck in a situation. Maybe you got hurt. Maybe you're underemployed. You can't find a job. You're stuck in a situation where you can barely make your mortgage payments, but you can't pay the credit card. The priority here is staying in the house and protecting the living needs of your family.

Now fast forward. The credit card is unpaid. They're unpaid for a couple of years. They sue you. They've got a judgment against you. Now they have the right to come and to invade your house – sorry, and to invade your assets and to try to collect any valuable personal property.

They have the right to send the sheriff to try to pick up your boat, sell the boat at auction. Hopefully you've done that by now to get rid of the boat and pay the bills. But this is the legal situation which you find yourself. You can't afford to have your wages garnished and then not be able to pay your mortgage payments so that you lose your house.

You've got to figure out another plan. The best plan is get an extra job. If you send the credit card company, stay out of court. Send the credit card company little bits of money and accumulate money and make a settlement with them and get them paid off. That's the best plan.

But you've got to make sure that you're protected. Or if you're working with someone else, make sure that you're helping them understand how to prioritize and protect themselves. So keep the source of your wages quiet. Don't publish it on LinkedIn. Cash your checks. Don't put them in the bank.

And protect your business and your side income. Understand how wage attachments work. This is a big, big deal. So again, you have a creditor. They sue you. They gain a judgment against you and they now become a judgment creditor. The first thing most judgment creditors are going to go after is your paycheck through a wage garnishment.

Now this is a very effective technique if you receive a regular paycheck from an employer because they're the very first person to be paid. Your employer takes a certain amount out of your paycheck and they send it off to your creditor and you never have a chance to say anything about it.

Now federal law allows a judgment creditor to take up to 25% of your net earnings, up to 25% of your net earnings, or the amount by which your weekly net earnings exceed 30 times the federal minimum wage. So at a $7.25 an hour wage, 7.25 times 30 is $216.50.

So they can take any amount that exceeds $217.50 per week, whichever of those is less. So either 25% or any amount – 25% of your earnings or any amount that exceeds 217.50 per week, whichever is less. That's the federal law. There are some states that have a little bit more protection as well, but that's the federal law.

That's a huge amount of money that somebody could take, 25% of your net earnings. And then for some kinds of debts, it can actually be more. Child support for example allows – if you're behind on child support and you haven't paid your child support, up to 50% of your wages may be taken to pay your child support.

That's a significant scenario. Income taxes as well. If you don't pay your income taxes and you ignore your communication with the IRS to collect the taxes that you owe, they can take basically all of your wages. There's a formula that they can use but it can wind up with you getting as little pay as 180 bucks a week and there's a real problem with that.

So wage attachments and garnishments are no joke. This is a huge deal and you want to make sure that you avoid that. The judgment creditor sends the sheriff. The sheriff notifies your employer. The employer lets you know and unless you have some legal course of fighting it, from now on your employer is going to send that money out.

Now you're going to have to pay the money. I'm just encouraging you. Try to do everything you can to avoid this circumstance and there's no reason why you need to make it easy on them. You need to protect your wages and in these circumstances probably your best source of income is to have some sort of side income or business income that is not easily found so you can have extra money.

But you don't want to have your wages garnished. Protect your wages. Keep it private. Work like crazy and save money so that you can pay your debts. You need to protect your property when you're in this situation. And so your first course of action is for you to probably seriously consider selling any personal property yourself in order to pay your debts.

As quickly as you can deal with things, the better. The problem that people face is when they don't pay their debts and then it gets worse and worse and worse. But at every stage of this process, you're better off if you move fast and if you pay your debts quickly.

So if you start to go behind and you start to know you're going to be behind, let's use a car as the best example because car repossession is something that happens to a lot of people. If you're missing one payment on a car, don't hang out, not worry about it.

Freak out and get busy. If you find yourself missing one car payment, the immediate question is why and is this going to change? If you're going to be late on your car payment, if you're going to be late on a mortgage payment, you should freak out and start the analysis of what's going on.

Now it may be that you're late on your car payment and you can't pay the car payment right this second because there was an unexpected one-time bill that showed up unexpectedly or a bank error or something like that. Well, in that situation, you want to analyze it but it may not be the best to sell the car right off the bat.

But if you're one payment late or you just lost your job and you think you're going to be one payment late, freak out and start selling your property yourself. You don't want to dilly-dally around and wait a few months and all of a sudden wind up in a situation where you're hiding your car from the repo man.

You want to avoid repossession if at all possible because you're going to be better off selling things on your own. So if you think you may not be able to make your car payment or if you missed a car payment, put that car on the market and start looking like crazy to figure out how to sell it and make sure that you retain control of it.

Now if it's been a few months, for example, and you still can't sell it, then I would hide it from the repo man. If you buy – you got to figure out how to do it in terms of how people find things like cars depending on where you're doing.

They just come to your house. They come to your job. They figure out where you're driving. If you're shopping at buy here, pay here places, a lot of times a lender will have a GPS unit on the car. So you got to figure out how to do it. But you want to sell the car privately.

If you allow your personal property to be repossessed, then your creditor is going to take it and they're going to sell it themselves and they're not going to hold out for the best price. But often if you go into the private market, you may be able to sell it for more and it's always going to be in your best interest to sell it at the highest price that you can buy.

So make sure that you're doing everything you can to make sure that your property is not taken from you and sold without your control. So that means move fast and you sell it quickly in order to pay off the debt. If you owe more – you're probably going to owe more on the car than it's worth or owe more than you can sell it for.

You may have to borrow the difference, but it's a whole lot easier to borrow – you own a $15,000 car that you sell for $13,000. It's a whole lot easier to go to your friend or family member and say, "Can I borrow $2,000 from you and get rid of the $13,000 debt than it is to wind up having the car company repossess the car?" They sell it at auction for $9,000 and now they sue you for $6,000.

If you're in a situation, do your best to protect your property. And if a creditor has gone all the way to the point where they're now a judgment creditor, they can do a lot of stuff to find and to take your property. Most of the time this is pretty easy.

They just come by your house and look to see what you have. And they can – if you have a home and you're facing a judgment creditor, they can record a lien on your home. They can take the money out of your bank account. They can come by and they can find out that you have a boat sitting in the front yard and they can go ahead and say, "Listen, you got to sell that boat." And they have all kinds of ways that they can do it.

Once they become a judgment creditor, they can go and they can take out – they can find information from the DMV, the Department of Motor Vehicles. They can find out information about what things are registered to you. They can go and they can look through all of the paperwork that you've given to them for the original loan application.

They can look at your credit reports of assets owned or liabilities owned. They can look at what you had when you told them where you live, the name and address of your employer, all of the information about everything that you own. They can – they have tremendous opportunities. And then again, at the end of the day, if they can't find any property, they can force you to show up in court for a debtor's examination where they require you to show up and testify about what you own, the assets that you have.

They can take advantage of social media. You're on the social media posting about all the fancy stuff that you have and there are pictures of you on your Facebook profile. All of that can be used as evidence by your creditors to find your stuff and force the sale of your stuff.

They can force you to bring them your tax returns, your bank statements, all of the information on your business activities. You want to make sure that you protect your property and stay out of this by you selling stuff quickly and paying your debts. You want to make sure that you protect your property by keeping it clear of liens as much as possible.

When you have a judgment creditor that wins a lawsuit against you, they can start to put liens on your property and that's a real problem. So do everything you can to fight and make sure that you avoid the liens. The simplest way to get out of this mess is pay your debts.

Pay your debts as quickly as you can and pay your debts as much as you can. This process is very, very difficult and expensive for creditors to do. Think about what it would take to send a private investigator. If you owe somebody $1,000 on a credit card and that's your only debt, they're not going to send a private investigator to your house to take pictures of your boat and try to force the court to sell your boat.

It's not going to happen. It costs too much in manpower and it's just not worth it. They'll sell that debt to a bill collector for $500. They'll write off the loss and the bill collector will harass you on the phone until you send them a couple hundred bucks. But all through the process, the fastest way out of this mess is pay your debts.

And most of your creditors, if you will communicate with them, will be willing to work with you. Remember, you're dealing with a person and the person just wants their money. And if they think that there's a chance that they're going to get their money, they'll work with you. Now they've got certain tools and techniques that they know are going to allow them to have more strength in the negotiation process.

And depending on how strong their position is, the more or less likely they will be to work with you. Your landlord, if they're a good landlord, is probably going to start eviction proceedings immediately as soon as is allowed by state law so that they have that legal pressure against you.

Your mortgage company has no incentive to take partial payments on your mortgage payments because they know they can take the house and they've got an ironclad ability to foreclose on you if you don't take it. But if you'll communicate with people, they don't want to take the house. The mortgage company doesn't want to take the house.

They just want their money. Your landlord doesn't want to kick you out. They just want their money. So communicate and make payments as possible. People are real human beings. And if you just simply pay as much as you can oftentimes and negotiate with people and do the best you can and demonstrate your fidelity, demonstrate your character, the fact that you're going to stand good for your debt, they'll probably be willing to work with you.

And then if you pay quickly and you make small payments and you work out a new payment plan and you negotiate, you can forestall a lot of this stuff. So pay your debts as quickly as you can, as you're able. Increase your income, cut your expenses and pay your debts.

Don't borrow any more money, but pay your debts. Just pay your debts. I don't have anything smarter to say than that. There are times where if you'll think strategically, you can make adjustments. For example, sometimes you can just pay your debts by returning the collateral. If you're dealing with a small thing, return the property that was used as security.

Sometimes you can negotiate your debts and saddle them with somebody. But pay your debts. And then finally, a couple of quick things. Protect your family while you're working your way through the process and do the best you can to keep the financial stress out of your family as much as you're able.

I think it's wise that everyone in your family knows that you're under financial stress so that everyone can tighten their belts. Family members may need to get extra jobs. That's going to require hardship. Kids may need to go to work. Spouses who stay at home may need to go to work.

They may need to work extra jobs. But try to keep the financial stress from breaking apart your marriage. Financial stress is a huge component in breaking up marriages. And protect your family from that. That's why for me it's a big deal. Keep the bill collectors out of the house and away.

And keep those fights shielded with them. I can fight really, really well with people. I'm good at it. I can stand up and I can yell and I can argue and I can write nasty letters and I can fight. But I don't want that to happen in my living room and that stress to be pushed onto my wife and to my children.

They need to know we're in stress. But I'm going to keep those fights as insulated as possible and help to protect the peace of my house. Prioritize your spending to focus on the important things first. Make sure that if at all possible you pay your rent. Don't get kicked out on the street.

You think it's bad to fight with a bill collector. It's a whole lot worse when you're living in your car with kids and dogs. So fight. But take care of things first. And do everything you can to stay out of court as quickly as possible. I always – that was funny.

I think of this frequently when it comes to financial counseling. When Jesus was preaching in the book of Luke, Luke chapter 12, he said this. He said, "When you're on your way to court with your accuser, try to settle the matter before you get there. Otherwise your accuser may drag you before the judge who will hand you over to an officer who will throw you into prison.

And if that happens, you won't be free again until you've paid the very last penny." That's from Luke chapter 12. There is no place that that statement is more accurate than dealing with debt and paying your debts. So when you're on your way to court with your accuser, try to settle the matter and come to your own agreement quickly before you get there.

Otherwise your accuser may drag you before the judge who will hand you over to an officer who will throw you into prison. And if that happens, you won't be free again until you've paid the very last penny. Now we need to talk in closing here about bankruptcy and about keeping financial records.

It's very important that you do good research about bankruptcy. And if you're in a hardcore situation, bankruptcy is very important for you to understand and for you to get good advice on. Being knowledgeable about the bankruptcy code is important and it is wise. And I hate seeing people abused who cause major problems when if they were knowledgeable about bankruptcy planning, they would be well-served.

The clearest example I can give you is if you're in extreme financial duress, do not pay debts that can be cleared in bankruptcy with assets that will survive bankruptcy, i.e. don't take money out of your 401(k) to pay your credit cards. When your credit cards can be discharged in bankruptcy and your 401(k), you won't lose it.

Now what about your moral obligation? That's why I spent so much time on that. You need to pay your debts. And so if you have $100,000 in your 401(k) and you owe $5,000 on your credit cards, then I'm going to tell you every single time, take a distribution from your 401(k) and pay the stupid credit cards.

But if you have $5,000 in your 401(k) and you owe $100,000 in credit cards, do not take $5,000 out of the 401(k) to pay the $100,000 in credit cards. You need that protection because you're going to need that money to establish yourself and to be able to pay a first last in security on the next apartment that you rent.

Bankruptcy can be very important. Bankruptcy especially, it's important that you understand that bankruptcy may be a way for you to do something like stop your foreclosure. With bankruptcy, I'm not going to do in detail on today's show, just no time. But with bankruptcy, there are two types of bankruptcy that are appropriate for individual borrowers.

There's what's called chapter 7 bankruptcy and there's what's called chapter 13 bankruptcy. In essence, chapter 7 bankruptcy is a complete wiping of your debts. That's where your creditors receive nothing. Chapter 13 bankruptcy is a payment plan system where certain creditors receive certain things and certain creditors don't. But the bankruptcy court protection is very, very important, especially for people who are very vulnerable.

It's important that you understand if you're facing difficult circumstances, talk to somebody knowledgeable about bankruptcy. Chapter 13 bankruptcy can be a way of stopping a foreclosure and of reworking out a payment program. Bankruptcy is not just as simple as saying, "Well, I'm not going to pay my money. I'm not going to pay my debts.

I'm just going to declare bankruptcy and walk away." Yes, there are those circumstances in which it's so impossible that that's exactly what happens. And there are debts that we can accumulate that simply can never be paid. And that's why bankruptcy court is so important. When somebody lends you money, they are taking a risk.

They're taking a risk and they're going into it with their eyes wide open. And they should take that risk. And one of those risks is that you may not pay and bankruptcy court is there. I don't want you to walk away from your debts, but I want you to pay your debts.

But frankly, there are many situations in which we can never pay the debts that we owe. And that's why bankruptcy court is so important. Bankruptcy court is important because it gives you the opportunity to stop certain actions. If you're facing a difficult circumstance, you're facing foreclosure, for example, you seriously need to understand how chapter 13 bankruptcy works and consider a consultation with a bankruptcy attorney.

A chapter 13 bankruptcy is a very valuable tool for you to stop a foreclosure proceedings and for you to put yourself in a situation where you can renegotiate and come up with a new payment plan. And a chapter 13 bankruptcy is one where it puts you in a situation where you can make payments under – with a bankruptcy – what's the name for it?

The steward, the supervisor. I'm blanking on the name, but the court-appointed person who will make sure that you can pay a certain amount and they'll work with you and they'll help you to put yourself in a situation where you can pay a reasonable amount of your income. If you're making $50,000 per year and you're supporting a family and you have a whole lot of debt, you can never put yourself in a situation where you're going to put 75 percent of your income to pay creditors and you may need the bankruptcy court protection in order for you to pay those bills.

And they'll rework it, they'll negotiate, you'll negotiate the amount down and you'll work out a payment plan that puts you in a situation where you can work your way out. Chapter 7 bankruptcy is also very, very valuable for you to understand and there are circumstances in which it's important for you to know that.

Today's show is not about bankruptcy, but I want to emphasize to you that you must understand and research this stuff. And my heart hurts so much because frankly the people that get abused every day by the financial system are people who are clueless. And you wind up in a mess because you're clueless.

You didn't, nobody sat down and taught you how to balance a checkbook. And so you did 10 years of stupid stuff and never balanced your checkbook and you wound up with a long list of debts. And because you're never in the habit of going and seeking out financial advice, you never thought to ask somebody for advice.

And because you never got good advice, you didn't know what you could do when you first fell behind on your first month and you didn't know what you could do in month six and you didn't know what you could do in months 12 and your life is being destroyed by people who actually know how to understand the law.

So stop being clueless and ask for help. That's my point. Ask for help. If you're listening to this show and you're not clueless, I beg you, extend help to people who are clueless and try to help them because when somebody is facing an overwhelming circumstance and they're facing bill collectors calling all the time, it can be a very lonely place to be.

And I'm sick and tired of people being abused because they don't know their rights and they're not being fought for and the bullies are destroying their life. So please help them. Go and pay for a consultation with a bankruptcy attorney. Help them to sit down and understand what's available to them.

Cruelty is not an unforgivable sin. It's not the end of your, even your financial life. There are all kinds of things that you can do. Now none of us want to enable people who are abusers of the system, but frankly, most people are not. Most people are wanting to do the best that they can with what they've got.

Finally, I just, if you're in the situation, when you get this thing cleaned up, and I promise you, you can do it. May take years, but you will feel better once you get on track and you start to get these things done. May take years, but you will be in good shape when you're on the other end and you'll feel proud of what you've done.

You'll feel proud of the fact that you stood good for what you owed and that you made restitution for your debts and that you fixed what you could. You'll be very, very proud of that. That protects your integrity. And when this mess is cleaned up, you'll come out the other side with a set of habits that will put you on the path to long-term wealth.

I don't know how to cite the statistic, but I hear over and over and I see over and over, the average millionaire has been broke or bankrupt one or two or three times on their way to it. It's not uncommon to find somebody who's been in a situation where they went broke, went completely bankrupt, and they're in a situation where they rebuilt it all.

So this is not the end of the road. Don't roll over and die. Stand up and fight and clear your name and clear your debts and live with integrity. Now when this mess is cleaned up, make sure you know this, you would better keep your records for life and you better understand the law.

It's very important that you get very good at keeping these records and you understand how they can be used against you. When somebody's deeply in a mess, the records can be sold and resold so many times that it becomes very confusing. And you may have some debt that's a long time ago that was sold, they call it zombie debt.

It was sold against you and now all of a sudden you receive another claim from somebody and you need to be able to go back and show, "No, look, this claim was paid in full and it's done, paid in full." You need to dispute those debts quickly. You must, under the Fair Debt Collection Practices Act, you have the legal right to require the debt collector to verify the amount and the validity of the debt, but you have to act quickly because when they contact you and you don't respond, that debt can become a valid debt because you don't respond.

So you better respond within that 30-day deadline and dispute the validity of the debt and check your records and you got to keep those records from now on. If you don't, you'll wind up with problems. In closing today, let me give you just a couple of final suggestions. This subject is – I hope I've conveyed to you there's a lot of specific knowledge that is very circumstantially dependent.

Big difference if you have a social security income or wage income. I've given you enough I think specific examples that you can understand. My only hope in today's show is to give you kind of an overview, give you some useful tactics that I don't often hear discussed on this.

But I want to encourage you to look for help in your situation. Try not to bear this alone because these topics are so specialized and so – there's a lot of particular information and there are huge differences in circumstances. Every type of debt is different. The structure of the debt is different.

The amount of the debt is different and you need discussion with advisors who can analyze your situation and try to present some circumstances. I hate to see people declare bankruptcy who with a couple of years of hard work can avoid it by just paying off their debt and settling with their creditors.

I hate to see people work for years when the obvious example is bankruptcy and they need the bankruptcy protection. There are big differences in the scale of the debt. Some debt can be solved by a little bit of extra work and a little bit of penny-pinching. Other debt can never be solved by that and it's only going to be solved by building an entirely new business that increases hugely.

So you need specific indication – sorry, specific help. Self-help opportunities. The very best self-help opportunity I would start you with is Nolo has a book called Solve Your Money Troubles, Strategies to Get Out of Debt and Stay That Way. It's a very good book. Again, it's called Solve Your Money Troubles, Strategies to Get Out of Debt and Stay That Way.

Nolo is wonderful in terms of the books that they produce. It's a publishing outfit that produces all kinds of self-help books and they are fantastic. I've never been disappointed with a Nolo title. Solve Your Money Troubles, Strategies to Get Out of Debt and Stay That Way. Number two, you should seriously look and consider engaging with a consumer credit counseling company.

Sometimes this will gain you benefits but the best place to start with is the Consumer Credit Counseling Service or an organization that is affiliated with the National Foundation for Credit Counseling. There are a lot of scams in the world of credit counseling and a lot of people will sell you things that simply aren't true.

But there are a lot of legitimate helpful people that can help you to figure out a good solution in certain things. So there are people that can help you with the IRS. There are people that can help you negotiate with your creditors. But look and consider working with a debt and credit counseling agency.

There is a 12-step program for – what's it called? Debtors Anonymous, I think. There's a 12-step program for people who are significant debtors. If you have a spending problem, then that would be very well worth your looking into. If you are prone to overspending and your debt is the result not of a medical expense or a business failure but it's due to you just like to buy new tennis shoes at the mall every weekend, that's a problem.

So consider joining a 12-step program like Debtors Anonymous. And finally, get legal help. You definitely – if you have significant amounts of debt that you owe, you owe thousands of dollars, then it's probably well worth your consideration to consider getting legal help and to consider bringing in a lawyer.

At the very least, try to find a consultation. You may be able to find a consultation with a lawyer through a local legal aid society if you have low income. Then you may be able to get help through a local legal aid office. Sometimes there are legal clinics available that can work with you, whether that's through affiliate, through university, et cetera.

Sometimes you may have legal protection offered through your company or through some kind of prepaid legal program or you may just go ahead and contact a lawyer. But a consultation with a lawyer can be very, very helpful. Now consultation with a lawyer can be very, very helpful. I'll just stop that.

I don't have to give caveats. The majority of lawyers that I've interacted with are very good at their work and they're very good at understanding the particulars of your situation and they're good at giving advice. So get counsel from as many people as possible. And most of all, I encourage you, open up.

Open up about your problems to somebody else. You're not the only one. You're not alone. It's not like everyone else has a perfect financial history and if you just keep up the facade, then everyone else will think that you're smart. It's not the case. Talk and get help. And it's a whole lot easier to humble yourself and to talk and to get help.

And then a number of years from now, two years from now, you may be able to go into a new year celebrating being totally debt free and having paid off all your debts and cleaned everything up and your financial life can be totally different. But get help. Open up and ask for help.

I think that covers most of what I wanted to accomplish. Kind of a bear of a show, a big one. I hope this was useful to you and I beg you, for those of you who are not in this situation, take the time to get involved in other people's lives and help them.

The person who is the least likely to look for help is the person who is struggling the most. It seems counterintuitive, but for whatever reason, that's where we face it. Wouldn't you experience it? It's funny, oftentimes the unhealthiest person is the one who is least likely to go for medical advice.

It's the healthy person who is always getting medical advice. We face the same thing in this world. So I hope I've given you some tools and some ideas that may help you lower the stress as you work your way through this to pay off your debt. Remember to go to HelloFresh.com, use the coupon code RPF30.

There will be a few new shows here in December. I'm trying to line up mainly for January, but I'll release a couple new shows and then I'll probably do some reruns here in December as I try to work on some stuff behind the scenes. It was pretty sick last week.

My children were all sick last week, so our Thanksgiving vacation wound up being a little bit longer than we intended. But thank you all so much for listening and I'll be back with you soon. This show is part of the Radical Life Media network of podcasts and resources. Find out more at RadicalLifeMedia.com.