As a former member of the BC club (bad credit) I speak with too much experience. During the younger years of my being, with children and debts growing hand in hand, I was up to my eyebrows in financial problems. It culminated when I sold our house to buy another one that had more room for the children and my nerves, and we couldn't get a loan until three weeks after the old house had sold and closed (I wasn't in the business at that time). Have you ever spent three weeks in a hotel with three teenagers? Something had to give, and it was my resistance to cleaning up the mess that had started with the Savings and Loan debacle in the mid 80’s, which shut down my development business. I had lived with the thought that things will turn and all would be better. It didn't happen until I took massive action to make it happen.

When I tell you that your credit problems can disappear, I am speaking with experience and not reading you a line from a book. When I say that you can start answering the phone at night, I am speaking with the knowledge that all the threats in the world didn't turn me around – three normal teenagers and a fierce determination to end the nightmare did.

When I speak about sacrifices, I am not talking about giving up eating; I am talking about giving up the old ways and going in a different direction.

If you own a house the solution is much easier. If you don't, then start thinking about getting one and making your life easier. Lease a house with an option to buy it. After one year of lease payments made on time, you can get a loan using the equity that was created, if any, during the time you were leasing as your down payment. This will make the purchase easier. You should be able to create some equity just based on the fact that the seller doesn't have to pay a real estate commission and can give you that savings.

Why is it important to own a house? In this country, housing generally goes higher year after year based on higher building costs, limited land availability and inflation. Some areas obviously are better than others, but in the long run they are all good. The increase in the equity in your house means your balance sheet will become more balanced. Your asset side, which includes the equity in your house, will grow to meet the liability side and help you get even quicker. You can use the equity in your house at any time to start getting out of debt, and although many will write and say how foolish that is, they obviously haven't lived with credit problems.

A friend of mine who had been single for many years after a divorce had run up almost $100,000 in credit card debt and wondered what he should do. He asked for my advice and I told him that he probably couldn't pay the debt off with his income during his lifetime. I believed at that time, about 15 years ago, the only choice was bankruptcy or buying a house and letting the equity build-up (appreciation) work for him. He remarried and bought a house and seems to be without the black cloud that accompanied him at all times.

Another client of mine didn't do as well. He called me one day and said he couldn't go on with his credit card nightmare ($120,000) and so we talked about a refinance, pulling cash out of the house and paying off the debt. He had the equity to do this and his credit hadn't deteriorated at that moment. He knew it was going to, because he couldn't make the payments any longer. He resisted my advice for about three weeks after we had met and then, after exhausting every other avenue, went forward. He was delighted as he told me that he had already discounted some of the debts pending their payoff from the refinance.

Three years later he called to refinance into a better loan, as his prepayment penalty was up. I ran his credit and was horrified: He never paid off one of the debts and they were all either charged off or in collection! I called him and told him that I couldn't help him.

For a long time after that incident, I felt responsible for his actions. I wasn't, but I still felt that maybe I had done something wrong. I didn't, and finally realized that even if I had forced him to pay the debts off through escrow, he most likely would have run them up again.

Yes, I realize that some people are like that, but that will never stop me from helping the majority who aren't. I cannot live my life with the thought that people aren't inherently responsible. Continued...