How did Lynnette Khalfani-Cox erase $100,000 in debt in 3 years?

Posts Tagged ‘negotiating’

How did Lynnette Khalfani-Cox erase $100,000 in debt in 3 years?

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In my book, Zero Debt, I explain how I got into debt (mainly via overspending), and also what it took to get me out of debt. To pay off my credit card bills, I used the exact same strategies I outlined in my book – getting a budget together, cutting back on frivolous spending (like vacations & dinners out), refinancing my auto loan, negotiating with my creditors for lower interest rates, doubling and tripling up on the minimum payments I was making, and using “windfalls” or “extra” money, like income tax checks and year-end bonuses from my job to pay off debt, etc.

Making Tough Choices

I also made some tough choices, like taking my two older kids out of private school and putting them in a less expensive private school. (They’re actually now in public school, and doing just great). After nearly 3 years of all this, I’d paid off $70,000 in credit card debt. Then in early 2004, my ex-husband and I sold some land we owned and used $30,000 to pay off the last $30,000 of credit card debt we owed.

In your question, you mentioned joining a debt management plan and taking on a second job. I know those were tough steps for you to take. But congratulations for doing so, because they will definitely help you become debt free faster. Lastly, I don’t know if you have a copy of Zero Debt. (The original version came out in late 2004; the updated, second edition of the book came out in 2009). In any event, in Day 25/Chapter 25 of Zero Debt, I also explained three different debt pay-off strategies that you can use to knock out credit card debt. (In my case, I used Strategy #2). Good luck in eliminating those credit card bills!

How Can I Get Rid of My PayDay Loans

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Author: The Money Coach

Q: What advice do you give to tackle payday loans? I Have Two at the Moment and I Can Not Afford to Pay Them Both at the Same Time. What Do You Suggest?

A: Unfortunately, millions of people get caught up in the cycle of payday loans each year — not realizing that many of these loans, when rolled over, carry annual interest rates of about 400%, making them nearly impossible to pay off. I’ve written extensively about the dangers of getting payday loans and alternatives to them. Read this post for some of my tips for raising cash when you’re in a financial pinch.

I also recommend taking a look at an excellent five-part series on payday loans, written in 2010 by a terrific financial reporter, Pallavi Gogoi, for DailyFinance.com, an Aol Money and Finance site. Gogoi examines the growth of payday loans, she explains why even federal regulators haven’t been able to protect the public from payday lenders, and offers some good advice for help and alternatives for people with payday loans. Read that series on payday loans, and it’s sure to be an eye-opener, as well as helpful to your specific predicament.

A Credit Card Company is Suing Me for a Delinquent Debt. What Options Do I Have?

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Author: The Money Coach

Q: I Received a Notice From a Lawyer Representing a Credit Card Company, who is Suing Me for a Delinquent Debt. I Took Your Advice and Paid Off All My Delinquent Debts. Unfortunately, This is my Final Bill and They Do Not Want to Provide Me with a Decent Settlement Offer. I Offered to Settle my Debt for $1,200 and Pay It In Full Several Times. The Debt Has Accrued Interest and Late Fees. As a Result, the Debt is Now $1,978. I Offered to Pay 60% of the Debt But They Will Not Settle. The Lowest Offer They Provided me With at First Was $1,800. Then they Said They Could Reduce it To $1,500 to Settle. I Can Not Afford This. Should I Get a Lawyer? Should I Speak to a Supervisor at the Law Firm? If Know If I Go to Court I Will Probably Lose. Then the Judgment Will Be on My Credit Report. What Options Do I Have?

A: You should definitely attempt to continue negotiations with this law firm. I also think it would be a good idea to speak to a supervisor at the law firm. You may have to be persistent to go up the food chain and reach the supervisor. But it may prove very valuable to talk to a boss, instead of the phone representatives you’ve been dealing with. If you honestly can’t afford the $1,500 settlement they’re proposing, hold firm to your numbers ($1,200). Let them know that you’ve exhausted all other financial resources and that $1,200 is the most you can come up with in a lump sum payment. Also point out what the original loan/debt was. Sometimes, debt collectors will reduce or waive all those extra penalties, fees and interest charges that get added to a debt if you will only agree to pay the full amount of what was owed (minus those extra fees). It wouldn’t hurt to also get some free or low-cost legal assistance. I don’t know the laws in your state, but a qualified consumer attorney can explain your legal options and advice your of various alternatives.

Get online or consult a local phone book for a legal aid clinic in your area; that should help since you said you can’t afford to hire a lawyer. Finally, if you do wind up having to go to court, don’t neglect to go. Too often, people get scared and they simply don’t show up in court. Don’t make that mistake. If you fail to appear, a judgment will automatically be entered against you – in the full amount the attorneys seek. At least if you show up in court, you have a chance to present your side to a judge and to explain your financial circumstances.

Limiting Psychological Damage From Debt Collections (blogs.wsj.com)
The year’s top 10 personal finance stories (askamoneyexpert.com)
How to handle harassment by a collection agency (askthemoneycoach.com)

I owe Amex $12K but I think the statute of limitations has expired. What should I do?

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Author: The Money Coach

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Posts Tagged ‘negotiating’