Facing Your Debt

By: Jennifer Lawson-Zepeda

Most people in the United States are facing increasing debt.  However, it seems as if people make their own problems by ignoring things to the point they become monstrous, when addressing things usually renders a solution.

Debt Ratios and Fear

I know what it’s like to be in debt and not have the means to pay your bills. I was doing fine before I went to El Salvador.

My life hit a crisis when I was there that made me feel like an outsider when I returned. Suddenly, I was facing debt that I had no intention of escaping; and I was so broke that I couldn’t pay it. I’m not ashamed to say that this made me feel like less than a human being. I’m not ashamed to say this happened to me.  Obviously, a person who ends up homeless most likely has debt! That goes without saying, or should!

It’s one of the reasons I’m such a proponent of approaching your finances in what I call, “The Immigrant Way,” instead of the American way…with credit. This means going without things until you can afford to pay cash for them, even if you save very little each month. If you look at most first generation immigrants, you will notice they don’t tend to take out loans or buy things on credit. They get things the old fashioned way, they save.

After living in a few countries where the interest rates on borrowing were up to 51%, I understand why. The reason why most people pay cash for their homes in many third world countries, or begin their businesses with cash is because, unless they are wealthy, they simply cannot afford loans.

Beginning from the Bottom

When the State Department returned me to the U.S. I was thinking that I had a place to live. They told me that was the plan. Having that ripped out from under me by the agency who promised the State Department I would be okay, was a huge blow.

You see, the State Department will not return a U.S. citizen to live in the streets; so the agency who misrepresnted themselves left me in a whirlwind.

But, I stuck by my my plans and overcame that until months later, I rented my own place.

Because of this, I got behind on some debts, like many other struggling Americans.

But I always had a plan to recover my life and that included fixing my credit too. Not because I ever wanted to use my credit again, neither due to some capitalistic need to enter the world of consumerism. It was simply for my sanity and financial security as I grow older.

I have a very different belief regarding finances. I think each of us is responsible to try to keep ourselves safe and healthy: mentally, physically and financially. I think it crucial to keep ourselves from ever being forced to stomach the dependence on others who don’t have our best interests at heart…like our own government and some of the elite bankers of the world.

• I wanted all of my bills paid off.
• I wanted to cash out my own place to live.
• I wanted to secure a place where any expenses were      below 30% of my income.
• I wanted my vehicle paid for.
• I wanted to ensure that no bank could ever make me      homeless again!

Why Would I Care?

It feels good to be headed in the direction of financial freedom. Especially, with the Euro in crisis and the impact it may have on our U.S. dollar and economy.

The Euro crisis is not just a Greek or an Italian crisis, or now even a French crisis. It is an American crisis, too. A crisis that may thrust the U.S. economy back into recession in 2012.

If the Euro cracks up, many European banks who hold Euro-denominated bonds will discover that their bonds have lost value. The bonds won’t fall to zero but they will lose enough value to play havoc with the bondholders’ capital. The banks will then either have to seek government help or stop their lending to businesses and consumers or both

The bank crisis will translate into a severe Europe-wide recession, just as the U.S. financial crisis of 2008 created a severe recession in 2009. Recessions that originate in the financial system cause more suffering and last longer than other kinds of recessions, a record documented by Ken Rogoff and Carmen Reinhart in their now-classic study, “This Time It’s Different.”

The European Union represents a bigger economy even than the United States. If the euro cracks and euro-holding banks fails, the pain will cross the Atlantic, as the pain of the U.S. crash of 2008 crossed the Atlantic in the opposite direction. (Source: Why the euro crisis is an American problem)

Call me a pessimist, but I have learned through everything I’ve been through to plan for the worst and hope for the best. That way, I’m safe.

Who Gives a Rat’s Ass?

But the one thing I know is that those who have been in this country when I was still struggling to get out of El Salvador alive, have had an infinite number of opportunities to observe what I see and make efforts to create their safe nest.  If you haven’t taken advantage of the numerous programs set up to get your finances in order, then you should be doing the research now. It IS do-able! Even working from the ground up. You may feel so drowned in debt that you don’t even realize you can fix things for yourself, little by little.

How to Reduce Some Debt

I’m confident the Republicans will hate me for this. I’m about to show people of small means how they can reduce their debt. I’m shocked nobody ever talks about this, but it’s all very available

For instance, if you have student loans and you are disabled, you can call or write to the Department of Education and have your loans dismissed. They will ask for a letter from your doctor verifying that you have a disability, but they will dismiss your loans if you meet the conditions of a permanent disability.

Here are the details to call or find out how to do this:

1 (888) 303 – 7818
US Dept. of Education
Disability Discharge Loan Servicing Center
P. O. Box 5200,
Greenville, TX 75403-5200
www.federalstudentaid.ed.gov
You can reduce your cell phone bill if you are beneath a certain income level?

Here is a site that guides you through that process:

Free Cell Phone Service for Low Income

HUD offers help to buy a home if a person meets the criteria of having a low income?

(Buying a Home; U.S. Department of Housing)
These are a few examples of how a person of small means can reduce their debt and possibly buy their own home with the help of HUD.

If a person like myself can go from homeless to paying cash for a home, in a year and a half; then, you should be able to find solutions for your problems too. But first, you need to find out where you stand.


Where to Start

Maybe you had your home foreclosed upon. Maybe your car was repossessed. Maybe your entire financial world collapsed! But that doesn’t mean your world is over…even if you feel like the cockroach hiding in the dark corners.

Why not find out what your credit score is right now, for free. Here’s a site to give you an idea of where you stand:

Credit Karma for Free Credit Scores

It won’t offer you a report, but it will tell you what your score is so you can go further. You can then request a free annual credit report, so you can begin working on fixing your problems.

Annual Credit Report

This site provides you with free access to your credit report each year. It is always better to know what your credit score is so you know what you are working with.
Then, why not write letters to add to your credit report to give some explanations, like:

• I lost my job in a bad economy and couldn’t make the      house payments.
• I had medical bills that stripped me of the ability to      make my car payments.
• I lost my wife, husband, mother, father and went into      deep depression.

Some sort of explanation is better than no explanation; even if you still can’t pay.

It’s not fun. When you try to pay things off, it’s damned hard work. But, some of these programs may help when you think you are beyond help. Take it one step at a time.