It starts off simple, instead of paying in cash or using your debit card you figured “let me just keep the cash in my pocket OR I have that other bill coming up so will just put this on the credit card and pay it off when the bill comes due”.

And there is of course the out of nowhere expense that pops up like a blown tire or something with the kids. Then when the bill is due another issue pops up and you say “you know I will just pay the minimum payment or a little more than the minimum this month”.


As with all my blogs here is the 15 second bio on me so you know the information you are reading is coming from someone who knows what they are talking about

*** NOTE: if this is your first time reading one of my blogs please know I am very blunt and direct but always polite. I do not have the time or energy to tip toe around things.

So I have been in the Credit Industry for over 17 years, analyzed over 22,000 reports, wrote a book, been interviewed on local and national TV and an educational educator for my home State of Texas for their Real Estate Division (T.R.E,C) and have been one for over 10 years now.


It was innocent, there was no plan to have this much debt, we call it the snowball/domino effect. This happens with one credit card, then another and another and another.

There is a part of learning in personal development called “put it on paper” your goals are just a dream until you put it on paper, once on paper it becomes real.

That also has the opposite effect with debt, you DON’T want to write it down as then it becomes all too real.

You get used to paying the minimum payment and feel good when you pay a little more than the minimum thinking the banks will see your trying to pay the debt off (they don’t care).

You don’t really look at the statement that comes in the mail anymore and if you switched to e-statements then you most likely NEVER go through all of the statement papers that show that approximately 55% of your minimum payment is the finance charge that doesn’t touch the actual money you owe.

Like everything in life it’s typically not addressed until it is too late. It’s the fight or flight response and since schools NEVER taught us financial literacy we just push it to the side and “deal with it later”.

ALL OF A SUDEN the total amount of the monthly minimum payments are out of control and life still throws out life challenges where a bill will pop up out of nowhere forcing you to possible “put it on the credit card” again.

I have a friend that her credit card companies would increase her limit by $100-$200 every 2 months or so and then she needed it/ used it just putting her further and further into the hole.

You try calling the credit card company for a break to lower the interest rate to help since after all you have been a great customer (short time or for years). BUT you get shocked when they flat out say no they can’t do that.

Now what do you do? If you look at the statement in detail there is a small section that if you pay the minimum payment it will take 17-27 years to pay off! So paying that extra bit will not have much of a dent in that timeline.

Panic sets in, this is really bad since it makes you extremely susceptible to sales pitches by the people you “call for help”.

UNDERSTAND that titles are made up, if you speak to a  “credit counselors” or “debt specialist or Senior debt specialist”  or whatever title/name they come up with to tell you they are. They are SALES PEOPLE who GET PAID to get you to sign up for their program. They are trained to make you think you heard what you want to hear BUT the paperwork will be totally different.

PERFECT EXAMPLE which is what made me write this is an old friend reached out to me on Facebook, Single mom got caught in what I mentioned above did some googling and reached out to 2 companies to see if they could help her.

She said she doesn’t want to ruin her credit, she was told they would get her a consolidation loan where she would pay much less than she is paying now, they would call the banks and get late fees and interest waived But her cards would be closed down.

She said she didn’t want her cards to be closed down.

NOW….. UNDERRSTAND that when you get into this position, it really doesn’t matter what you want, it’s not your card it is the banks card. I’m sorry but that is just the way it is. (I will elaborate later ).

She said they started off nice and sweet but then slowly turned rather nasty saying you just don’t understand this your credit is already ruined (she only had 2 or 3 late payments on all of her cards).

They began talking over her saying things such as your credit is already ruined you really have no choice it’s not going to fix itself it’s either this or filing bankruptcy IF you could qualify.

These are all psychology sales tricks. The reason my friend “didn’t understand was due to them explaining it poorly to her or explaining it in a way to her so she goes “well I guess I will sign up since I don’t really have any other options for help”.

The part of mentioning their fee which is on average in that industry is going to be approximately 25% of her total debt doesn’t really get mentioned when I asked her if they mentioned that.

This Debt industry reminds me a lot of the used car sales industry (I was never in that) but I am referring to it just being plain sleazy, double talk, not explaining everything, not presenting other options as those options do not make them (the company) any money.

There are SO MANY companies out there and they use companies that specialize in S.E.O (Search Engine Optimization) which means when you type in what your looking for it tries to steer you to them.

And when you read articles you NEED TO UNDERSTAND that all articles are paid for and “sponsored” or “partners”. Which means the article is not published useless the company paying for it is happy it gets the message they want across.

Even the “ the best companies of____________ “

I know it stinks but that is why experience is huge in this business

So when you see the big ones advertise like National debt Relief, Freedom Debt relief, Credit Associates and especially the ones that present themselves to make you think an attorney will be doing the work for you.

Don’t believe me? Read all of this and call them….

BUT, here are some hard facts to consider, if you are in this predicament YOU NEED TO UNDERSTAND your options are actually limited, so here they are:

See if you qualify for chapter 7 bankruptcy:

You can no longer “choose” to file bankruptcy if you want you have to qualify and if you can’t qualify for chapter 7, then chapter 13 is not worth it. Many people typically do not want this option; this is considered the dead last option.

Continue paying off the minimum payment every month

Based off the credit card statements this will probably take anywhere from 10-35 years to pay off (BUT, your credit score will slowly increase once it gets below 80% of the limit IF there are no late payments). 

Hire a Debt Settlement Company

This will destroy your credit BUT it is TEMPORARY… if you have someone who knows what they are doing you can recover 70% of the damage done in a year.

** NOTE:  On average they will get you a 40% discount NOT COUNTING their 25% so you save 15%, REALLY???

                                 (It’s in the fine print)

HEAD in the Sand technique

You do nothing, you avoid the phone calls and throw out all mail received.

** ISSUE: After 6 months of non-payment the account gets charged off, THEN it stays on your credit for 7 years.

The original creditor can sue you OR sell the debt to a debt buyer and then a NEW COLLECTION pops up on your credit report further damaging it.


They can now sue you as the new owners.

EVERY state has a different timeline for lawsuits, they range from 3 to 10 years. Most of the states are 4 years and too many to list but below is a link to see your state but here is the bad news for the 10 year states:

  • Illinois                                                      – Iowa
  • Kentucky                                              – Louisiana
  • Missouri                                               – Rhode island
  • West Virginia                                        – Wyoming

If you live in one of the above states I feel bad for you as you have that lawsuit cloud hanging over your head for 10 years.


HAVE a QUESTION on your specific situation and want to chat with someone who is not going to sell you?

Contact me below and we can talk about your situation and I will tell you my personal opinion on your situation if I was in your shoes to help give you some clarity.

Wayne @ Wayne TheCreditGuy .com

( NO Spaces, doing it to prevent spam)

The Disclaimer:

Of course this is not financial advice and only my opinion based on my experience and you should seek out the services of a certified financial professional who specializes in this