Get the upper hand on your creditors
In general, creditors have the upper hand on consumers - they hold all the cards. They know the law and just how to work it to their advantage in seemingly every situation. In fact, they have teams of lawyers dedicated to doing just that. In addition, they can threaten to charge fees, raise your interest rates to exorbitant levels, send your file to collection agencies, damage your credit rating, and even file a lawsuit against you. And they not only have the knowledge, but they also have the seemingly endless resources to impose their will upon you. It can be, to say the least, distressing.
White you might not know is that, as a consumer, you too have the law on your side. However, the odds are, you have no idea what your legal rights are. That is about to change, as you learn more about your rights under the law. And by gaining knowledge of the laws on your side, you will rapidly gain the upper hand on the credit card companies and their associates, the collection agencies and law firms. The truth of the matter is, they rely on your ignorance of the law and of your rights.
One example of this is a phenomenon that has reportedly been occurring lately, since the passage of the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005". In fact, this new law does limit some people's access to Chapter 7 bankruptcy, in which all your debts can be erased. However, collection agencies have reportedly told consumers that under the new law, they will no longer be able to declare bankruptcy altogether. This is patently untrue. In fact, bankruptcy has always been and still is a key weapon in the indebted consumer's arsenal.
The true power for the consumer, however, lies in the threat of bankruptcy more so than in the actual act of filing. Bankruptcy is the "nuclear" weapon in your arsenal - the fear that you might file for bankruptcy, thus wiping away your debts, serves to motivate your creditors to instead reach a settlement. This was true before the passage of the new federal bankruptcy law, and it is true AFTER the passage of the law as well.