Debt Settlement - You don't have to pay your debts??!!

Just going through youtube looking interesting things that people say..

This guy starts off by saying... "you don't have to pay your bills"

This makes me crazy. This guy is suggesting that you shouldn't pay your bills/debts especially if you owe $25-$100,000 on credit cards.

He mentions that you should be using the interest that you're paying the credit card companies to save up for retirement.

This is LUDICROUS
The following is what this guy is explaining on the video
He starts off by explaining you should just not pay your bills for six months.. This will start the collection process. You can then negotiate with the collection agency at 10% on the dollar.

Part of the negotiation is that the credit bureau wipes any negative debt notation off of the credit bureau.

So... after 6 months, you'll have a nice squeeky clean credit report, and no debt.!! Wow... this is fantastic!! Or is it?

There are so many assumptions in his discussion that they need to be addressed.

Also it's important that this type of service is for U.S.A. (Americans) only. This system isn't going to work the same in Canada.

I complete disagree with not paying your bills for the sake of getting out of them. That's the cowardly way to do this. This type of logic will erode the social fabric of our society.

IF YOU CAN, PAY YOUR DEBTS
If you've got alot of debt, and can afford to make payments, then you should pay for your debts as agreed. After all, you made all of the purchases that incurred the debt!

The only exception in my opinion is if you've got health issues, and your debt is making your health worse. Then it's time to seek debt settlement or bankruptcy help.

THE CREDITORS MAY SUE YOU
If you owe $25,000 -$100,000 then the creditors may sue you in Canada. This is worth going after in the courts. Don't assume that you can automatically settle you debts after not paying them for six months.

THE CREDITOR DOESN'T HAVE TO REMOVE BAD MARKS FROM YOUR CREDIT REPORT
This fellows assumption is that you can have the creditor or collection agent remove negative items and comments from your credit bureau, as part of the payment negotiation.. While some may do this, some may not do this.

It all depends.

CREDIT REPORT ITEMS MUST BE ACCURATE, COMPLETE AND VERIFIABLE.
Are you going to walk away with no debt and squeeky clean credit after the creditors and collection agencies write off your debt? More than likely not.

Why would the banks want to remove negative items. This sends a false message to other creditors that you've got good credit.

Again, you could ask to have negative items removed from your credit bureau, however, there is no law / motivation for the creditor to do so.

In my opinion, this is a shifty way to deal with your creditors.
If you've had a high consumption lifestyle, then you should pay for it, as agreed to when you took on the credit facilities.

If it takes you 10 years to pay off your credit cards, then so be it. After 10 years, you'll have learned your lesson about the effects of spending too much on your credit cards.

There are always exceptions to the rules, but in the case of North American consumers.. I think we're all guilty of over consumption.