Overcoming Adversity & Crisis Management
Most people experience setbacks at some point in their life. Have you ever had a setback that you’ve had a hard time recovering from? Listen to our show about Overcoming Adversity & Crisis Management.
Overcoming Adversity – Job loss, divorce, custody fights, illness, massive debt
- Human Muscles
- Tear down muscles to rebuild/repair stronger than before
- Use Adversity to your advantage
- “A cat that sits on a hot stove won’t sit on any stove in the future – cold or hot”
- Act in the face of fear – Get real with your current situation, don’t bury your head in the sand.
Start with your Belief System
Limiting Beliefs – 3 Types
- Hopelessness – It won’t happen for me. No use trying. This is for other people.
- Helplessness – I can’t do it
- Worthlessness – I’m not good enough
Ever wonder why you have…
- Irrational Doubts
- Inhibitions to obviously harmless activities?
- Once beliefs are installed you can only see the world through this prism
- Ex: After divorce I didn’t want to make any money because it would go to my ex.
- The Belief System of Success
- Belief – Choices – Behavior – Habits – Compound/Time – Goal
Rules for Financial Recovery:
- Remember that it is just a game.
- Be friends with What Is.
- Focus on what you want.
- Represent you and your family first. Your creditors will take care of themselves.
- Find the shortest distance from where you are to where you want to be. The goal is to put a stake in the ground and you start over.
- Use the chance to reset your expenses. Keep them low.
- Release your attachment from your material goods
- Option 1 – Bankruptcy
- Evaluate the income limits to see if you qualify for a Chapter 7
- Chapter 13 payment plan – 3 or 5 year payment plan. Avoid this option in many cases
- Evaluate assets that will survive the bankruptcy
- Optimal Credit Strategy – file bankruptcy before you are ever 30 days late.
- Most common statement made by bankruptcy filers – “I wish I would have done it sooner”.
- Option 2 – Negotiate down your debt
- Use your remaining assets to payoff debt
- The lower your credit score, the lower you can negotiate settlements.
- Your credit cards will be running soft pulls on your credit, which will guide them on taking low settlements. Shoot for 10 cents on the dollar, settle for an average of 20 cents on the dollar.
- Settle all debt already on your credit first
- Make payment plans with all debt not reporting to credit yet.
- Option 3 – Continue to make monthly payments and try to make progress on paying off the debt.
- Create a budget with a debt snowball to make progress.
- This option may take the longest.
- Recovery Process:
- Reestablish credit
- Make sure all debt is zeroed out on credit report
- Go to creditcards.com – start with a secured credit card if necessary
- Auto loans are easy to get after bankruptcy
- Start to challenge derogatory items on credit
- Keep your expense low
- Reestablish credit
Listen to the show!