know your rights
Debt collectors can't harass, oppress, or abuse you or anyone else they contact such as repetitious phone calls that are intended to annoy, abuse, or harass you or any person answering the phone.
We were young and in love when we got married. We met in college and were full of hope that we’d live the rest of our lives together.
But, as often happens, we matured and found that we wanted different things out of life. We grew apart and realized divorce was the only answer to finding the happiness we both sought. The problem was, like many young couples with similar dreams, we racked up a lot of debt together: a mortgaged home, several cars and high credit card debt.
The good news was that the divorce was amicable. The judge assigned each of us a portion of the marital debt based on our income levels. One of the things the judge assigned to my ex-husband was the balance of one of our automobile leases. The problem was: the lease happened to be in my name.
I moved on and found a great guy. We decided to get married and buy a new home together. As the primary source of income, it was critical for my credit to be in good condition in order to qualify for the mortgage.
About a year after the divorce was finalized, I was surprised to hear from the bank that held the lease my ex was supposed to pay. They told me he had not paid it and that it was my responsibility, despite the fact that the judge assigned that debt to my ex husband.
I was nervous, scared and angry with my ex for failing to live up to his obligation. I knew he didn’t have the money to pay the debt and I was worried about having debt collectors contact me and disrupt plans with my new fiancé. I tried to find a way out, but I kept hearing the same thing: this debt obligation was mine and there wasn’t anything I could do about that.
Once I reconciled myself to the fact that I needed to pay the debt, I started to take action. I contacted the bank to see if we could work out a payment plan or a settlement. Fortunately, they were reasonable and agreed to reduce the outstanding amount by 20% and allowed me to settle the account for $4,000. I made sure to have that settlement offer sent in writing and for the communication to include the account number of the loan. I paid the settlement and received a “paid in full” letter from the bank for my records.
This was a valuable lesson for me. I assumed that the judge’s word was final, and that I was free and clear. I now know differently. Divorce does not get you out of your personal obligations when it comes to debt. This is a lesson that will stick with me for a long time.
But hopefully, I won’t have to worry about it. I am happy to report that my 2nd husband and I have been married for more than a decade. And the good news is, we have both been responsible about our finances, especially keeping our debt obligations manageable.
I have always fortunate when it came to making money. I had been successful in my career and moved up the corporate ladder fairly easily. At a fairly young age, I was making a six-figure salary along with all of the material benefits that came with that type of income.
The problem was, as good as I was at making money, I was equally talented at squandering it. I was never a good saver because when you’re young and making good money you think you are invincible and that the money will always be coming in. I was terrible at investments. Or, maybe to put it another way, I was a sucker when it came to giving my money to people who guaranteed that it would grow in multiples and make me a rich person.
Things started to unravel when I divorced my first wife who took half of what little we had saved. I re-married soon after to a woman who had been single most of her life and was very independent, especially when it came to money. So, I was, in effect, supporting two households, while at the same time, maintaining my unconscious lifestyle.
When I lost a job for the first time in my career, it was a real blow to my ego as well as my already depleted bank account. While I was able to get another job, the pay was significantly less, which only increased the financial strain because my expenses had not changed. That’s when credit cards came into the picture and started to play an important role in my financial story. I did what many others do: used credit cards to maintain my lifestyle without any concern for how much debt I was accumulating.
In 2010, I lost another job and decided to try freelancing as a career. While I was lucky to get some work, my income was a fraction of what it had been. Then, a job opportunity came my way and I talked my way into it, even though I was terribly under-qualified for the position. But it paid more money than I had ever made and I took the job with the idea that, even if I might not last that long, I could use a couple of years of income to pay off my debts and life would be good. The problem was: I liked to spend money more than I liked being responsible.
It came as no surprise that I lost my job in two years and faced an uphill climb that seemed impossible.
That’s when someone introduced my wife and I to Dave Ramsey’s Financial Peace University. I knew about Dave from listening to his show on our local radio station. At first, I was reluctant. My wife pushed me to participate. We had actually separated at the time as a result of the strain from our financial situation. So, I agreed to go as I figured that nothing else had worked.
What I can say now is that that course turned my life around. In two months, we cut our non-mortgage debt completely. We were able to save money. And I did all of this while working as a freelancer for a fraction of my previous salary. But because we were now conscious of incoming and outgoing money, we never felt like we were making less. Dave’s course provided an amazing process to help cut debt and start putting money away.
Let me be clear: this was not easy! It took a lit of discipline and sacrifice. My wife and I decided to get back together and re-focus our energy on getting our lives in order. One of the things Dave covers in the first session of the course is that most marriages fail because of financial reasons. I was able to see that first hand. On the flip side, I was able to see how collaboration on getting our finances in order brought us closer together.
Today, we still use the budgeting system we learned through Financial Peace University. We have zero non-mortgage debt and do not use credit cards. We are aware of what goes out and what is coming in, so there are no surprises at the end of the month. As it turns out, my financial meltdown was the best thing that every happened to me.
I’m a single parent with a full time job who also attends school on a full time basis. I live modestly and have always been pretty good with my finances. Every once in awhile I fell behind, but nothing more than 30 days past due.
When my son was about four, he became ill and the medical bills started to pile up. I was forced to make decisions on what would and would not get paid, resulting in late fees and interest that I could not afford…not to mention the original amount of the debt.
With each passing week, I felt the pressure of falling further and further behind-the debt collectors were contacting me by letter and phone at home and at my job. I tried to explain how my child’s health crisis had really put a wrench into my budget I promised to do whatever I could to get back on track.
He straw the broke the camel’s back was when my 10 year old car broke down and needed more than $500 to get fixed. I felt like a ‘black cloud’ was following me around because I couldn’t get a break that would let me get past being behind on absolutely every bill.
Asked to borrow money from friends and family, but they had limited means and could really only help me out by watching my son and also helping with some grocery money here and there.
One day I was talking to a friend about my financial situation. She mentioned all the other avenues that I had already thought of except for one: bankruptcy. was opposed to bankruptcy for a variety of reasons. Most importantly, I knew that I owed my creditors and shouldn’t and couldn’t just walk away from my obligations because it just wasn’t the way I was raised.
Friend understood and mentioned chapter 13 which would allow me to repay the creditors at possibly a reduced rate and stop the collection and letters. So, I made an appointment with an attorney for the next week. They gathered a list of all of my creditors. I was really surprised to see that with medical bills from my child’s illness, credit card debt, student loan and miscellaneous other bills, I owed more than $30,000 to various companies.
I worked with my attorney and bankruptcy trustee to determine that I could only afford to pay about $400 per month for 36 months so I could get back on my feet. While I felt it was a steep monthly payment, I decided it was the correct path forward for me to get out of debt. Plus, I would be paying back far less than I currently owed and filing bankruptcy would stop interest, fees, and penalties to continue to accrue on these debts.
This was really difficult for me, but with budgeting, picking up an extra part time job and holding off on graduating from college, I was able to keep the payment schedule and was granted discharge after making payments totaling over $15,000. I was proud of the fact that I didn’t just walk out on my debts. I gained the confidence to move forward in the future with a clear financial plan built around a budget that including monthly savings.
Several years later, I was able to purchase a new car and a small modest home for my son and I. I’m grateful that I was afforded bankruptcy protection that gave me peace of mind, a realistic payment plan, and a path towards future financial success.
know your rights
Debt collectors cannot call you before 8 a.m. or after 9 p.m. or at times they know are inconvenient unless you specifically agree to it.
know your rights
You have the right to tell a debt collector to stop communicating with you.
know your rights
A debt collector may not use threats of violence or harm, use obscene or profane language
know your rights
A debt collector who says you owe money is required by law to tell you the name of the creditor, the amount you owe and how you can dispute or seek verification of the debt.
know your rights
Debt collectors are prohibited from deceiving you while trying to collect a debt...such as pretending to be an attorney or government official.