The steps I took to get out of credit card debt

Getting my credit card debt resolved was very difficult until I found a program that helped me to get my situation organized

Five and a half years ago I had a problem. A very big problem that needed immediate action on my part. It was the beginning of the summer and I had just been dumped by my ex-wife. She left me rather suddenly in order to return to her home state and pursue her career in an environment that was more familiar to her. This not only left me with problems such as how to pay the rest of the rent and figuring out how to move, it also left me with no choice but to tackle a credit card issue that had been crippling my lifestyle and wallet for a number of years. I didn’t necessarily get there because I was careless with my spending. I got there due to financing college expenses and moving to a new area for my first professional job. The bills added up during an era where I didn’t have the finances to pay down the balances beyond the minimum monthly payments. The fact that the cycle kept repeating itself without any real action lead me to where I was. I then found myself in a real financial bind without anything to fall back on. The situation required a leap of faith and immediate action in order to get the issue resolved. Here is what I did:
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Researched debt consolidation companies

I’ve never been one to trust everything I see and hear. This is a good rule of thumb to live by when shopping around for a credit debt consolidation company to work with. Many Google searches will tell you the steps you need to take on your own in order to accomplish your debt relief goals. It’s not necessarily bad advice to take the highest credit card balance and pay that down, ask for lower interest rates, get a personal load, or transfer balances. However, I am willing to bet that a lot of us who have up to $20,000 in credit card debt, which is right around where I was, can’t do any of that. You also see so many debt consolidation company advertisements on tv and the internet that it can be difficult to figure out who you can trust. Luckily, either due to what I read on their website or due to the fact that I needed to take a leap of faith on something at that moment, I decided to place my trust in Freedom Debt Relief. They were the only company I spoke to who made me feel like they had a real plan in place that could not only keep me disciplined with the goal in mind, but would also have my back and help me get the job done.

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Freedom Debt Relief worked out great for me, but you may want to do some research and make sure you pick the right consolidation company for you.

Giving up control

So I found a company who gave me a pitch that I felt comfortable with. I took a leap of faith and signed on with them. What did this program require me to do? It basically required me to give up control. I more or less had to stop payments on all of my credit cards. I called the 1-800 number and went through the account sign up process through a customer service representative. I then proceeded to give Freedom all of my credit card numbers which was extremely scary to me at the time. I was already in a very bad situation personally. I could barely afford to feed myself for a few months. Even giving up control of maxed out credit cards was a very scary proposition. However, considering the circumstances, I had no choice. I had to do it. There is something about being thrown into a bad situation like the one I had that gives you the courage to try options you wouldn’t have tried if your life didn’t just get flipped upside-down. Thankfully this turned out to be a great risk on my part.

Staying on course with the program goals

The next requirement was for me to make payments to a “savings” account with Freedom Debt Relief. This account was used as a tool to help their team to go back to my credit card companies and negotiate deals in order to get the debts paid off faster. You will often see bloggers and financial experts advise you to speak with the credit card companies themselves in order to negotiate a pay off amount. A colleague of mine suggested that same tactic to me many years ago. However, while I do think I am a very good communicator, I am not what you would call a good negotiator. I simply don’t have the tools or knowledge to successfully negotiate with these companies. I even tried to call the 1-800 numbers of these companies on multiple occasions in order to negotiate on my own terms, but was less than successful. The fact that they had trained professionals on their end who were aggressively trying to go to bat for me and get the best deal was a no-brainer for me. It certainly factored into why I signed up for the program. I paid approximately $330 dollars a month with the option to pay more if I chose to in order to feed the pay off account. As the money built up, they were able to use that amount in order to negotiate deals and get the accounts closed out one by one.

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You may need to use a lot of cash for awhile until you can get your credit cards paid off, but it is worth it in the long run.

Consolidation Plus Loan

Much like a lot of things in life, trust needs to be earned over the course of time. The same thing can be said for the Freedom Debt Relief program. I would be the first to say that giving up all of your credit card information to a credit consolidation company requires a lot of trust on your end. However, it also requires trust on their end that you will follow through on the payment process. Thankfully, if you make payments on time and stay on top of the negotiation deals that the team offers to you, their Consolidation Plus group may reach out and offer you a loan. If you get approved, the loan will cover the remaining credit card debt you have registered with them. You will then see a number of negotiation settlements come to your inbox in a short amount of time as this loan will give the negotiators the opportunity to work with a lot more money. Once all debts have been negotiated and finalized, you will receive the terms and payback information for the loan. Although you will have to pay this loan back over the course of a few years, your credit card debts will be all back to 0.

After the debts have been paid off

Once you reach the loan repayment step, You may start to see 1099 Cancellation of Debt Forms in your inbox. This means that a creditor decided to report one of your negotiated deals to the IRS as a loss to them, but a gain to you. If you receive multiple forms like this from Freedom Debt Relief, it is in your best interest to go to a company like H & R Block and have them do your taxes for you. Because some of my debts were resolved before and after I received the loan from Freedom, I had to go in to H & R Block for a few years in order to make sure my taxes were done correctly. I would also wait until close to the end of tax season to file with them as I had to learn the hard way that one of these forms could pop up late in the season. I then had to reopen and amend my taxes for that year. This is not something I would suggest taking care of on your own. Get professional help!

If you start to see these forms in the mail, save them until the end of tax season and then head into a company like H&R Block in order to have your taxes done properly.

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When all is said and done

When I started the program, my credit score was in the low 600’s. I had one credit card with a $500 balance on it. I was barely able to move out of my expensive apartment with the ex-wife and move to a more modest area. I literally lived month to month by budgeting my cash and other utilities and expenses for quite some time. However, by the spring of 2014, I had been in a loan repayment phase with Freedom Debt Relief for a few months and had kept all of my finances in good shape otherwise. That is when I started receiving credit card offers from Capital One. They offer me modest $1000 balances to start off with. I used these cards strictly to pay for gas with the idea of paying it back immediately the next month. As I’ve done this and kept my credit record clean, I have slowly been able to build myself up by getting approved here and there for credit to buy a bed, a new computer, and ultimately buying a new car. I kept my credit options at a small limit and have made sure to keep balances down as low as possible. After a year of funneling cash into an account and two and a half years of loan repayment, i found myself debt free. As of today, my credit score is well above 700 and I appear to be in really good shape. It doesn’t happen overnight, but if you follow the plan setup by Freedom Debt Relief, it can set you on a path to financial recovery.

My final advice

If you have the amount of credit debt I had or worse, you need to go into the process knowing that it fixing the problem will take time. Especially if you don’t have the resources to follow the type of steps you often see on the internet. I am a true example of how you really can accomplish a lot with very little. I feel like I took a big risk by signing up for this program. I didn’t know what I to expect. However, I think Freedom Debt Relief really took care of me. There were small issues along the way. I also view the tax process to be a little daunting, but it does truly pay off. If you stick with their plan, it won’t be long before you are able to start building up your credit again. After a few years, if you do it the right way, you will be able to buy that new car or house that you are dreaming about. It’s been five years since I started this process so it is very possible that there are other companies out there now who are just as trustworthy as Freedom Debt Relief. However, when I do searches for them on google today, the customer ratings are still very high as it looks like they are still very highly regarded by those that they help. I too can’t say enough good things about their program. It definitely works and it will help put you in a program that will resolve your debts. My happy ending is a great example of this.

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6 Responses

  1. tiffyday says:

    This is so informative. My husband and I just did a personal loan for Bill consolidation before it got to bad. Best decision ever.

    • Marc Schmidt says:

      That’s awesome! Congratulations: A lot of times it’s just a matter of buckling down and getting organized in order to get back on track.

  2. The Not Fake DC says:

    Congrats man. Well worth the read.

  3. What a great informative post Marc!

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