We have had the opportunity to sit down with many consumers over the last 15+ years and we have found one of several things to be constant, everyone has debt. For some, the debt is very manageable, Items such as a car or house payment or even that emergency credit card. For others, the debt is out of control. Multiple payments on depreciating assets, furniture payments, several credit cards and who knows what else. Without standing on a soapbox, it is fair to say that America has a debt problem.

 So let’s talk about those of us who spend roughly $1.10 for every $1.00 earned. Yes, this statistic applies to the average American! How is that even possible? It is very possible, look at our Banking and Monetary system and as a prime example of how to balance, more outflow that inflow. Most Americans just do it on a smaller level-

 Ok, so know that we have reviewed the obvious problems (again), what is there to do? It is not bad to have debt as long as you have a system for managing it. In fact, much like most world economies, this country was built (and still survives) on debt. The challenge to most people is what happens after your past the stage of successfully managing your debt? In other words, when a job loss, disability, divorce or some other life changing issue gets in the way of you making timely payments on your debt, how do you handle it?

Not surprisingly, most of us operate on the same principle. When hard times hit, we take care of the absolute essentials and the rest will work itself out in the order of importance. When I first experienced a challenge as a Real Estate Investor, I had to make a similar choice. After home base was secured, then I could move towards addressing other debt. With almost every person that we have talked to over the years, the consensus is almost always the same.

So what are we suggesting? Ignore your debt until it is comfortable to pay it? Put your creditors on the back burner at their expenses? Push off you financial problems on the credit card and finance companies? Not! We are simply suggesting that there has to be a reasonable approach to solving (managing) this issue under control. In order to do that, knowledge and a plan are critical.

Surprisingly to must people, your creditor actually want to work with you when you run into trouble. They do not want you to default on your credit cards, automobile, house payments, student loans, etc. After the repeated phone calls and threatening letters, there is a solution period. This may seem counter-intuitive, but the longer you let the debt default, the better negotiations that can be had! HOWEVER, before you get to that point, there is action that can and should be taken.

The key to debt negotiations is understanding the rules of the game. Every lender has guideline that they can negotiate by and you simply have to be aware of them. In our seminars and webinars, we help people to understand the actual advantage that they possess when dealing with creditors. These rules apply to all; not just those with more money or a higher education. In fact, dealing with a creditor to negotiate down consumer debt is easier that you think...

In the next entry, we will discuss some easy and effective techniques for working with creditors and finance companies to reduce car payments and credit card balances