Debt Reduction – Should debt settlement be part of my plan?
In a recent article (today), by Darren Hatfield, he suggested carrying over $10,000 dollars in consumer debt as a good thing. The argument he makes in his article is that the legal limit for debt settlement consideration is $10,000. Great. Good. That’s fine Mr. Hatfield.
What our country needs is more ways to throw out our integrity and ‘escape’ our responsibilities. If you don’t know what a debt settlement company does, they essentially ‘help’ consumers reduce the amount of debt they owe through negotiations with creditors. It works like this.
- Consumer signs up and agrees to hire the debt settlement company.
- Consumer stops paying their creditors & sends their agreed monthly payment amount to the debt settlement company.
- The debt settlement company holds the money until they collect enough to start negotiating with each creditor.
- The creditors no longer receive monthly payments which affect the consumer’s credit rating.
- The debts are each settled for less than what is owed, usually somewhere around half of the balance or less.
What these companies don’t share with the consumers is that while they are in this program, their credit falls apart. It usually takes the debt settlement companies several years to settle the accounts. It takes consumers several years to rebuild their credit.
The other thing they don’t share with consumers is the integrity lost. Our country has become notorious for being untrustworthy when it comes to credit risk. In my opinion, debt settlement companies should be shut down. It is time for consumers to take responsibility and show integrity in their financial lives.
In no way does God say it is ok to make an agreement with someone to borrow and not pay it back unless the debt is forgiven by the creditors. In some extreme cases, debts are forgiven through bankruptcy courts in which creditors agree to forgive the debts of the petitioner who are under extreme circumstances.
When it comes to handling your money with integrity and under God’s provision, handle it the way he would handle it. After all, as a Steward of God’s belongings, you are handling his money. God never breaks his promises. A credit obligation is a promise to repay at the set terms of the agreement.
Yesterday, I was talking with a friend who is working with a bank to do a mortgage modification. She told me that several of her friends encouraged her to stop making payments, live in the house for 1 to 2 years and save the monthly payments so she can buy something else later after the foreclosure is seasoned in her credit.
What? Common people! It is time to wake up to the horrendous financial advice that is common place among us. I’ve heard Christians giving advice like this. It is terrible and not of Christ. This is NOT ok. It falls under selfish ambition, deceit, debauchery, and greed if you’re looking for a sin label.
So, what is the solution? If you have lived a life of compulsion and lack of financial discipline to gain your little pleasures in life, then it’s time to take responsibility and pay the price. Taking the easy road will put you right back where you are today, in debt. Unfortunately, it will be worse in the future.
The solution is to work and pay the debts off one by one as you can. It will be difficult and slow at first. However, when they are paid off, you will have a reason to never get yourself back in that place again. You will be in a place where Financial Freedom was earned with integrity and much grace. Use a time like this to ease your financial pain and build financial character.
In order to pay things down faster, learn ways to increase your income streams. In my quest to pay off debt, I pulled weeds, delivered pizza, did landscaping, did some handyman work, took part time jobs, and studied to learn how to invest in real estate. Today, I own three companies, one of which is a real estate investing company.
You might be asking how I could start a real estate investing company with no money if I had debt. I’ll tell you my credit was shot, but I knew enough about finding deals that I found a partner with the money to invest. Together, we make a great team. I find the deals and run numbers, while he provides the capital to invest. Together we refurbish the homes and sell them for a profit.
Getting out of debt like this not only provides me with integrity to my creditors, but more so to God. It also taught me the power of creativity that God provided within me. Now, we are moving into a position of wealth accumulation so we can be the blessing to others.
You have everything you need for life and Godliness. You are created in God’s very image and carry with you his very Spirit of power and strength. You are courageous and bold. In Christ, you are an over comer. IN Christ, you can do all things through His strength! In faith, you can move mountains, which debt is a BIG one. You are a child of God made in absolute purity for things far greater than a little money. You have the ability to create great wealth, because God placed that within you from birth!
It’s time to take a stand against schemes that provide the easy way out of our own sins and careless financial management. It’s time to take on the powers and forces that work to keep you in financial bondage. It is time to walk in financial freedom. It is time to suffer for a little while in order to be glorified for eternity!
It is for FREEDOM that Christ has set us free. Stand firm, then, and do not let yourselves be burdened again by a yoke of slavery. Gal 5:1
- Do It Yourself Debt Settlement (cardhub.com)
- A Quick Summary of Debt Settlement (cardhub.com)
- Beware of debt settlement scams (business.financialpost.com)
- Compare bankruptcy to debt settlement with Golden Financial Services (usdebtsettlementaffiliates.com)
- Debt Settlement Companies that want to stay in business longer and increase profit (usdebtsettlementaffiliates.com)