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Are you drowning in debt, dreading every phone call for fear it's another relentless collector? Do you feel trapped in a financial nightmare with no way out? If so, you're not alone. Debt in collections can cast a dark shadow over your life, leaving you stressed, overwhelmed, and questioning your financial future. This episode of the Ask Ralph Podcast with Ralph Estep Jr. will help you break free from this cycle and start rebuilding your credit—all while staying true to your faith. Are You Ready to Break the Chains of Debt? A Christian's Guide to Handling Debt in Collections With Ralph Estep, Jr.
In Episode 188 of the Ask Ralph Podcast, host Ralph Estep Jr. tackles the sensitive yet all-too-common issue of dealing with debt collectors. He offers practical, Bible-based strategies for managing overwhelming debt, handling collection calls with integrity, and taking the first steps toward financial freedom. Tune in to discover how making small, faithful steps can set you on the path to becoming debt-free and financially empowered.
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Ralph Estep Jr.:
Have you ever felt overwhelmed by debt collectors constantly calling you about those past due accounts? Do you dread answering the phone, worried it's yet another debt collector calling? If so, let me tell you, you're not alone. Debt in collections can feel like a dark cloud hanging over your finances. But there is hope.
Ralph Estep Jr.:
On today's Ask Ralph Show, we'll explore practical strategies for handling debt and collections in a way that still honors God. We'll also talk about how to start rebuilding your credit even while you're paying off those collectors. Stay tuned to learn how making small faithful steps with God's help can set you up on the path to financial freedom. The peace and joy you'll feel as you become debt-free is worth the temporary struggle.
Ralph Estep Jr.:
I'm your host, Ralph, and I'm so glad you chose to join me. Thank you for giving me a part of your day. As Christians, God calls us to be wise stewards of the resources he's given us. For some of us, that means overcoming debt that feels overwhelming. But nothing is impossible with God, and He can equip us to handle even debt collectors with integrity, with compassion, and with wisdom. So get ready to be encouraged and empowered. By taking it one day at a time and leaning on God's strength, you can become debt-free and rebuild your credit. So let's get this party started.
Ralph Estep Jr.:
Yesterday, we had a great discussion about whether precious metal IRAs are a wise investment for Christians hoping to save for retirement. We looked at the pros and cons of those and some biblical financial principles to keep in mind. The biggest takeaway was being very wary of get rich quick schemes that promise a big returns with little effort. As the Bible reminds us in Proverbs 13:11, "Wealth gained hastily will dwindle." Investing should be based on slow, steady growth over decades.
Ralph Estep Jr.:
Let's get into today's topic. Today, we'll be tackling the sensitive but common issue of debt collectors calling about overdue accounts. Maybe you lost a job and fell behind on your bills. Or uncontrolled spending got the best of you. Or medical issues buried you in debt. Whatever happened, collectors harassing you is no fun.
Ralph Estep Jr.:
I've been there. I've been through this. The good news is, with God's help, you can handle the stressful situation and even come out on the other side with improved credit. It starts with facing the reality of where you are, then taking small steps forward. Let's begin by getting you some immediate relief.
Ralph Estep Jr.:
First and foremost, if the constant calls and collectors feel overwhelming, you can stop them in their tracks. Under the Fair Debt Collection Practices Act, I know that's a lot to say, you have the right to send a cease-and-desist letter insisting calls stop immediately. Be sure to send this letter certified mail with return receipt, so you have proof it was received.
Ralph Estep Jr.:
You can easily find sample cease and desist letters online. This is a time to politely but firmly state you're invoking your right under the FDCPA. That's that fair debt collection act for all calls to cease effective immediately until you initiate further contact. Keep a copy for your records. If they continue calling, report them to the Consumer Financial Protection Bureau. This relief from harassment is vital to get the space to create a repayment plan.
Ralph Estep Jr.:
Now, let's talk about the best way to start repaying debt and collections. This will boost your credit score over time. The first step is facing the reality of exactly how much you owe across all your accounts and collections. Pull your credit reports, make a list of debts, and tally the total. I know this might get a little ugly and might feel discouraging, but remember first John 1:9, it says, if we confess our sins, God is faithful to forgive us and cleanse us. Admitting where we are is the beginning of healing. It's the starting point of solving this problem.
Ralph Estep Jr.:
Next, you're going to set your budget to see what you can afford to pay each month total across all collections accounts. You've got to be realistic. If you agree to payments you can't consistently make, you'll just fall further behind. So be realistic. It's better to start small, but steady. Here's the thing. Prioritize paying back the most recent delinquent accounts first, since these affect your score the most, but attempt to make at least a minimum monthly payment for all of the accounts that you have outstanding.
Ralph Estep Jr.:
You call the collectors directly to arrange new terms but be cautious. Anything agreed to verbally should be followed up in a written letter you keep copies of. Collectors often quote "lose" records of verbal agreements. Your letter should clearly state the monthly payment amount you'll pay on each account, the date payments begin, and that upon receipt of these one-time payments or these on time payments, could be either one, all negative reporting to credit bureaus will cease.
Ralph Estep Jr.:
Send this agreement, again, certified mail, return receipt requested so you have it for your records. If paying all your accounts simultaneously would spread you too thin, focus on two or three of the most recent ones. Keep the others updated with letters saying you intend to address them when possible, and request they refrain from further damaging your credit. Now you're going to ask them to do that, what they do is another thing, and then follow up once the first debts are paid.
Ralph Estep Jr.:
Here's the thing I'm going to tell you. Avoid debt consolidation loans that roll everything into one payment, as this can backfire and worsen your credit utilization ratio. I've done a few shows on that. I would encourage you to go listen to them. Paying off collections accounts directly and closing them one by one is smarter in the long term. Now, a critical question, "Ralph, in addition to paying collectors, should I save up lump sums and try to negotiate lower payoffs?" I got to tell you, this is somewhat controversial.
Ralph Estep Jr.:
Some advisors say threatening one-time settlements forces collectors to compromise. Others warn of the risk of resetting the statute of limitations and reawaken to dormant collections. Prayerfully consider your specific situation. The overarching focus should be repaying what you owe without allowing endless high interest.
Ralph Estep Jr.:
If a reasonable settlement opportunity arises, take it. Personally done that myself when I got behind on some bills many years ago, but chasing settlement deals can become an obsessive rabbit hole. The simple, steady path of consistent monthly payments shows good faith effort to make right what went wrong.
Ralph Estep Jr.:
Finally, a vital tip. No matter how the collector responds to your repayment efforts, be unfailingly polite and Christ-like. Never lose your temper or sin with unkind words. As Jesus said in Luke 6:28, "Bless those who curse you, pray for those who mistreat you." The truth is our character matters more than debt. Building credit alongside debt repayment requires patience, but it's doable. Here's some steps to make it happen.
Ralph Estep Jr.:
Get secured credit cards and use only a moderately paying promptly monthly. Become an authorized user on a relative's account in good standing. Limit new credit applications until all the old accounts reflect positive patterns. Maintain low balances on all opening revolving accounts. Set up automatic payments on all bills to avoid new issues. If you stay vigilant with collectors and continue making on-time payments, you should see your credit steadily improve. It's going to take about 18 months.
Ralph Estep Jr.:
And here's the thing. Expect setbacks and frustration at times, but God promises His strength and hope. As Paul says in Philippians 4:13, "I can do all things through Christ who strengthens me." You got this. I bet you thought I forgot about the Bible verse today. Nope. I just thought it was best to discuss it here. This is from the book of Isaiah chapter 58, verse 9. "Then you will call and the Lord will answer; you will cry for help, and He will say: Here I am."
Ralph Estep Jr.:
When collectors call relentlessly, it can feel like we have no recourse, no one to rescue us. But God promises to hear our cry for help and respond with His presence. As we make efforts to fix our finances, He walks step by step with us, filling us with peace beyond all understanding.
Ralph Estep Jr.:
Let's do a quick recap. Debt collectors calling constantly creates a major stress. I know, it did in my life. But following steps we covered today can stop the calls and start restoring your credit. Send a cease-and-desist letter to stop those calls. Face your debts and a total owed and create a realistic budget. Pay recent accounts first and make a minimums on all the rest. Get repayment terms in writing. Consider settlements judiciously. Stay polite despite collector tactics.
Ralph Estep Jr.:
With God's strength, paying off debt and collections one day at a time is truly possible. He wants to redeem your finances. He wants to free you from stress and give you hope. Don't give up. Little by little progress will come.
Ralph Estep Jr.:
I encourage you to visit askralphpodcast.com for show notes, or to submit your questions. I love getting your questions and I love to answer them. Join our email list for free resources, including a copy of my book, Mastering Your Finances. You'll get that absolutely free. That saves you $10 compared to the Amazon price and be sure to tell a friend who needs to hear this message of hope. Together, we can overcome debt and thrive financially. Well, stay tuned for tomorrow's episode on discerning God's will in your work. So stay financially savvy and may God bless you richly today.
