Stop Paying Your Credit Cards!

By: Anthony E. Dietz, Esq.,MBA

“Focus on Making Your Mortgage Payment(s) First and Affordable-Stop Paying your Credit Cards!”
 
In the national best selling book “First Things First,” business management guru, Stephen Covey teaches his readers how important it is to budget their time on the things that matter most.  Homeowners who are in foreclosure or heading towards it would generally fall into quadrant 1 if they are concerned about saving their home.  Covey describes this as an urgent / crisis mode. 

The key, Covey would say, is to move out of this mode as quick as possible so that you can get back to a state of effectiveness in the other areas of one’s life that matter most such as work and family.
 
In Michigan, where many of our client’s jobs and personal financial situations have been deeply affected by the collapse and recent bankruptcy of Chrysler as well as the well documented struggles of rival General Motors which is on the verge of bankruptcy, we are looking closely at their whole financial picture to prioritize what will get paid. First we attack their mortgage(s) to get them the best interest rate and principal balance reductions they can qualify for to survive this Great Recession.  We want to get our clients out of Stephen Covey’s quadrant 1 urgent / crisis mode and restore normalcy as quick as possible to their daily lives.

Accordingly, we start by analyzing what obligations are jeopardizing our client’s ability to pay their mortgage.  I feel very strongly that until a client’s mortgage(s) are pulled out of foreclosure and/or become affordable through a meaningful loan modification they should not put any money towards credit card debt.  If a person cannot afford their current mortgage payment, they certainly cannot afford to pay their credit cards.

We want to get them out from underneath the outrageous interest and penalty rates they are experiencing that add further unneeded pressure to their pocketbook.  Often it is the credit card companies that drive our clients closer to foreclosure as they try and keep up with their rising monthly credit card payments instead of putting all this money towards their mortgage.  Recently, the Obama administration has made the credit card companies a focus of reform. 

Obama Calls for Credit-Card Industry Reform

“Mr. Obama put his weight behind some of the toughest language possible: Restrictions on rate increases and late fees, simpler language on credit-card rules in mandatory disclosure documents, limits on the availability of credit cards for college students and stronger monitoring and penalties for abusers.

“We have been complicit in these problems,” he conceded. “But these practices, they have only grown worst in this recession, when hardworking Americans could afford them least.”

In many instances, we are able to settle our clients existing credit card debt for cents on the dollar or get them into a hardship program that reduces there interest rate down between 0 and 2%.  This allows them to get back on their feet and take care of as Covey would say, “First Things First-” their mortgage obligation(s).  Debt settlement or credit counseling are viable options as opposed to bankruptcy which can have some permanent negative consequences and should only be used as a tool of last resort.  See recent article below from The New York Times that highlights some of the options available to consumers for dealing with credit cards. 

NY Times Your Money and Credit Cards

If you would like to discuss your personal situation or hardship,  please call us at 248-789-5551 or email us at adietz@shayalawfirm.com and we will be happy to see if our office can help provide some mortgage and debt relief.

Regards,
Anthony E. Dietz, Esq., MBA

32600 Stephenson Highway, Suite B Madison Heights, MI 48071Phone: 248.789.5551

Tagged as: Anthony E. Dietz, credit cards, creditcards, general motors, home, homeowner, MBABankruptcy, mortgages, personal financial