Thanks for looking into Prosperous Life Newsletter today. We've prayed that this article will edify you with the TRUTH of God's Word and cause your FAITH to grow stronger (Romans 10:17).

By now you know more than probably 75% of the American public about debt repayment so congratulations for getting this far. You only have a short way to go to get to the finish line so keep on pushing forward because the end is in sight!

Becoming DEBT FREE is not the same process for everybody. We're all at different places in life with unique circumstances and situations. How we each got to the point of indebtedness we're personally experiencing as we review this MiniCourse is different than everyone else. Our ability to tolerate the bondage of indebtedness varies widely. And we're all at different levels of faith and spiritual development. So it follows that the exact process of escaping indebtedness will be unique for each person.

For some people there are methods of debt repayment that should be considered because they're available and because their appropriate use will speed up the process and make DEBT FREEDOM a reality even sooner than the base case approach we've laid out for you so far. Following is a brief discussion of these alternatives so that you will be fully informed.

Debt Consolidations - This approach is also called in the credit counseling industry a Debt Management Program (DMP). It's available from certain non-profit agencies around the country that have been individually approved by the tens of thousands of creditors who are willing to make use of it. The agency makes a payment arrangement with each of the consumer's unsecured creditors and the consumer sends usually one payment per month to the agency which disburses the agreed upon amounts to all the creditors according to the arrangements that have been worked out. This program is for consumers who're in the early stages of having problems making all their monthly payments on time because of high interest rates. Properly timed Debt Consolidations usually BEFORE the debts have reached Collection status can lower monthly payments and accelerate the process. Keep in mind that a lot of the creditors WILL report the program to the credit bureaus which will be reflected on your credit reports. But adding your SURPLUS to the monthly payments called for in the Debt Consolidation program will definitely speed up your repayment program if you already have high interest rates. A non-profit agency will be happy to run your creditors through their software for free to make a quote. Keep in mind that many agencies charge a set-up fee for this service and also a monthly maintenance which vary widely around the industry. Also some agencies are way more reputable than others. So do some research and choose wisely. Non-profit Christian agencies such as ours would be a good choice. 

Temporary Negotiated Repayment Terms - Many consumers can obtain temporary reductions of say up to six months in interest rates by calling each creditor and explaining their economic hardships. The adjustments typically don't last very long but they can be helpful and will accelerate your program if you can get them. Sometimes they can be extended for an additional temporary period; it doesn't hurt to ask. The potentially unpleasant part of it is the necessity of speaking directly to your creditor reps because many of them are not so easy to talk to. Try not to be intimidated because you are on a mission to be set free from indebtedness and the end result outweighs the unpleasantness. Don't be surprised though if some of your creditors turn you down and you shouldn't share your economic hardship story with them unless your interest rate is more than 21% because it might actually trigger an interest rate INCREASE if they perceive that you're not as credit worthy as you used to be. You may also want to consider purchasing one of our e-publications called How to Work With Creditors Yourself When You're Facing a Payment Problem. The cost is $57.00 and is well worth it. Look for it on our web sites.

Permanent Debt Settlements - A Debt Settlement is a creditor sanctioned way to pay off an old debt. To be eligible for a meaningful discount of say 50% or more below the outstanding balance a debt has to be in Collection or Charge Off. If you have a debt in that condition the correct procedure is for the consumer to call the Collection Agent and make a settlement offer. Or sometimes the creditor will contact the consumer with a settlement offer that has an expiration date. Either way you can win IF you have enough cash to pay off the offered settlement usually in no more than 3 or 4 monthly payments. Before you settle you should request a "Settlement Confirmation Letter" from the Creditor confirming that the amount you will be paying will be for a FULL SETTLEMENT of the account with a zero balance following the settlement. Keep in mind that the discount off the outstanding balance is likely to turn up at the end of the year as "imputed" taxable income and that a Form 1099 has been sent by the Creditor to the Internal Revenue Service.

We do NOT recommend this alternative to folks whose debts are current or only a month or two behind. Since the debt has to be in Collection or Charge Off before this option is available, you will have to default the account for 6 to 8 months without making any payments which will destroy your credit rating. Also, there's no guarantee that creditors won't go ahead and sue you for collection while you're waiting for an acceptable settlement offer to become available. This approach is for old debts and is a possible way to accelerate your program and save some money in the process. 

Bankruptcy - Finally, bankruptcy is a last resort for consumers who are facing a Court case imposed by one or more creditors. The creditor's objective is to obtain a Summary Judgment from the Court which will give them the empowerment to make use of the debt collection legislation in the debtor's home state. Under a Judgment the term of the Collection process can be extended for many years and make the debtor subject to never-ending collection harassment. If the Creditor insists on taking food off your table to satisfy a debt you are unable to pay, Bankruptcy is a logical last resort to protect yourself and your family. There are two kinds of personal bankruptcy to consider: Chapter 7 which is a final and total separation from all your creditors and Chapter 13 which is a 5-year Court-supervised financial reorganization. A bankruptcy attorney can advise you on which option is best for your situation but Chapter 7 would be the preferred course of action since YOUR objective is to get out of debt as soon as possible. Keep in mind though that not everyone can QUALIFY for Chapter 7 because there is a "means test" which says in sum that if your income exceeds the median income for your state you may not be eligible for Chapter 7. You can find out where you stand on the Internet and then consult a bankruptcy attorney. In any event, you should NOT be considering a declaration of bankruptcy without an attorney; you need to just bite the bullet and spend the money for a specialized attorney.

It's certainly true that a bankruptcy will stay on your credit reports for up to 10 years. But it's also true that an unpaid Civil Judgment can extend the statute of limitations on debt collection enforcement up to 25 years or more depending on the state you live in. Bankruptcy is therefore a defense against the World financial system and tends to even out what are otherwise almost insurmountable odds against the debtor. If you don't need to defend yourself then don't resort to it. It's not worth it. It would be much more rewarding anyway to watch God get you out of debt than using the same system that got you into trouble in the first place.

Of course we know also that a lot of Christians are against bankruptcy on moral grounds and will do whatever they can to avoid it. If that's your position, stick by it. But keep in mind there aren't any scriptures in the Bible against bankruptcy even though our local churches have talked about it for generations as being a terrible sin. In fact, the basic idea for bankruptcy actually comes from the Word of God where it's referred to as Jubilee. Look it up for yourself. It was never God's intention for people to be in bondage to an opportunistic world financial system that will take food away from your children if you don't use what's available to RESIST it.   

For more information on the subject of bankruptcy, you can consider purchasing the following e-publication from this ministry: Facts You Should Know About Bankruptcy. The cost is only $25.00 and the publication is available from any of our web sites. This e-publication is especially suitable for people who want to get organized before they go to the bankruptcy attorney which will save time and perhaps even money once the attorney finds out you are already organized.

Key Points to Remember

Keep in mind that the base case for permanent debt elimination is the Accelerated Debt Repayment approach discussed in Part Four. Nevertheless there may be certain cases for which the Alternative Debt Repayment Strategies discussed here in Step Five could make a significant contribution to your program and serve go get you out of debt sooner than might otherwise be possible. You're going to always use the Accelerated approach so go ahead and set it up. The question is: will one of the alternative strategies from this chapter produce quicker progress for the Accelerated approach. Consult the Lord about it and only go with one of the alternative strategies if you have a peace about it. Most people will probably find anyway that the Base Case is sufficient and works just fine.