Debt elimination begins by smarter spending habits and better overall management of your money. However, many people saddled with large financial obligations simply don't know how to start. Why is it that so many Americans are crippled with debt, and what can be done to alleviate the suffering of the hundreds of thousands who are at or near consumer bankruptcy?

I believe that bad spending habits develop even before you ever grab hold of a credit card. We learn so much from our parents and from those around us. If your parents were poor money managers, chances are that you're one, too. So what can you do to break this endless cycle of debt and repayment throughout the generations?

First of all, keep in mind that, while the mistakes of parents are often visited upon the children, you do live in a free country. By sheer dint and perseverance, you can generate the income you need to climb out of the hole. Of course, letting go of your parents' legacy of financial mismanagement means more than earning a lot of money yourself.

In fact, debt afflicts people of all income strata. The real key to solving your financial stresses is to avoid spending beyond your means. It doesn't take a rocket scientist to realize that money can't come from nowhere. If you don't have the income to keep up with your expenses, you either need to boost your income stream by taking a second job or getting a raise, or you need to save on your expenses.

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It is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. The likelihood of being sued or having your wages garnished depends largely on the creditor that is owed money. It has been my experience that certain creditors are more prone to legal action than others.

Traditionally, creditors seek legal action only if there is a considerable lack of contact with regard to the account or if they feel that a consumer could simply be trying to escape their financial obligations. If the debtor currently earns a respectable salary, owns a home that has a sizable amount of equity, or can most likely afford to repay your current debts without the use of credit counseling, debt settlement, or bankruptcy, then there is a possibility that a judgment may be filed against you if begin to miss your monthly payments.

Additionally, for legal action to proceed, third-party creditors and collection agencies must retain the services of an attorney that is LICENSED in the state in which you live.
Even if legal action is pursued, a wage garnishment can take a considerable amount of time and depends upon your current employment. Many states have laws that stop creditors from being able to use wage garnishment as a means to collect debts.

Further, it is illegal for Debt Collectors to do any of the following:

Suggest that failure to pay your debts could result in arrest, jailtime, or wage garnishment
Contact consumers at their place of employment if they know the consumers employers prohibited such calls

Talk with third parties, including family, neighbors, children, and employers, for purposes other than acquiring location information about consumers, without consumers consent

Engaged a person in telephone conversations, repeatedly or continuously, with the intent to annoy, abuse, or harass a the person

Threaten to take action with regard to filing a lawsuit when they do not intend to do so

Call consumers at times or places that they know or should have known were not appropriate

Fail to inform consumers of their legal right to dispute and obtain validation of their debts, and to obtain the name of the original creditor

Continue to try to collect debts after consumers have formally disputed them in writing, and before verifying the debts

Use obscene or profane language with the intent to offend

If you wish to stop creditor harassment, you must also send a Cease and Desist letter to stop the communication.

Make sure you send it via certified mail with a return receipt request.

Alan Barnes IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret
http://www.debtregret.com

Find out more about a career as a Professional Debt Arbitrator
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