http://www.destroydebt.com/ Destroy Debt is an online community which provides regular articles showing practical ways to eliminate debt. www.destroydebt.com Mon, 08 Feb 2010 05:25:54 GMT webmaster@destroydebt.com webmaster@destroydebt.com http://www.destroydebt.com/articles/debtors-calling-at-work.html http://www.destroydebt.com/articles/debtors-calling-at-work.html Wed, 03 Feb 2010 06:00:00 GMT Efforts to collect debts by creditors are often relentless.  The horror stories about the various Tactics and methods used by debt collection agencies for the purposes of collecting a debt are countless.  Those that have been subjected to these calls know that they can be both embarrassing and often times almost unavoidable.
The FDCPA or Fair Debt Collection Practices Act is the federal agency that governs the practices of debt collectors.  There are basic rules and regulations that guide their practice however these do not often prevent collectors from pushing the boundaries of these laws to get their money.  It is legal for them to call people at work for the purposes of collecting an outstanding debt.  There are also ways to get this to stop.  Knowing the guidelines and your rights is the best defense when dealing with debt collectors.

If you are receiving calls from debtors at your place of employment there are some things you can do to put a stop to this.  

• When you receive the first call from a debt collector you should first request that they give you some verification that the debt they are referring to is yours.  They will need to provide proof of this to you.  If they cannot do so request that they stop calling you immediately. 
• Even if the debt is yours and the collector can verify that via phone you can still ask them to stop calling.  Verbally request that they stop calling you at your work number. 
• Write down the time and date that you made this request. If possible get the name of the person that you spoke to and the number that they called from.  Debt collectors are prohibited from talking with anyone other than you about your debt. Additionally they are not allowed to make harassing or repeated attempts at contacting you. 
• If the calls still continue they are in violation with the FDCPA regulations.  You can request that they communicate with you only in writing and again verbally request that the calls stop. 
• If the calls do continue you may choose to send a formal letter in writing.  This is sometimes called a cease and desist letter. This formality will provide you with necessary documentation in writing should you need to obtain an attorney. 

It is not a bad idea if the calls do not stop after the first request, to notify your supervisor that you have received a call from a debt collector and that you have requested that this be stopped.  Notifying your supervisor will avoid issues at work should the debt collectors not stop after the first time.   ]]> http://www.destroydebt.com/articles/debt-solutions-company-review.html http://www.destroydebt.com/articles/debt-solutions-company-review.html Wed, 03 Feb 2010 06:00:00 GMT Debt Solutions is an online management resource company that assists consumers in finding local debt consolidation companies, debt settlement companies, credit counseling and attorneys to help them get out of debt.  Debt Solutions is based in Columbus, Ohio but assists consumers in all 50 states with their online information.  Debt Solutions has an extensive network of debt reduction service providers. www.debtsolutions.com  and fill out an information form that asks contact information, amount of debt, and amount of time behind on the debt.  The consumer will then be contacted by a Debt Solutions specialist to discuss the consumer’s situation and put them in contact with the appropriate service provider.

Understand Debt and Credit

Debt Solutions has several articles on their website that help their clients understand why they are in debt and how to resolve the debt.  They offer advice and direction in the area of debt settlement, debt consolidation, and other debt management services.  They also help the consumers evaluate their current credit profile so they can determine what services will help them.

Credit Counseling

Debt Solutions helps clients’  evaluate which local credit counseling agency will best meet their financial needs. They offer a guide to consumer protections laws, and show clients how to deal with a poor credit history.

Tax Help

Debt Solutions connects consumers with tax professionals that can help them deal with their tax issues.  The consumer needing tax help fills out an informational form on the website with contact information, type of tax (personal, business or payroll), whether the tax problem is federal, state or both and how much the tax debt is.  The website also provides solutions for property tax relief, college tax deduction help and how to lower tax debt.

Bankruptcy Solutions

Debt Solutions has access to several attorneys who specialize in helping clients decide if chapter 7 or chapter 13 is the best option for them.  There are informative articles on the website detailing what happens after bankruptcy and how to refinance after bankruptcy.

A Clearing House of Services

When it comes to getting out of debt, it can be confusing to know which direction to turn.  Consumers have the options of credit counseling, debt consolidation, debt settlement, or bankruptcy.  Debt Solutions is an online company that acts a comprehensive guide with article resources and access to hundreds of local service providers to help consumers with all levels of debt to find the financial relief]]> http://www.destroydebt.com/articles/lowering-credit-card-balances.html http://www.destroydebt.com/articles/lowering-credit-card-balances.html Tue, 26 Jan 2010 06:00:00 GMT Significantly lowering your credit card balance can be like coming from behind to win the Super Bowl.  If you are thousands of dollars in credit card debt you may look at the score board and think there is no way out.  But think about some of the greatest comeback football games you’ve seen and you’ll know there is always hope.
Play Good Defense

Football players know you can’t win if you are behind in the game until you stop the other team from scoring. The same idea applies with lowering your credit card balance.  You have to stop the damage by going on an all out blitz and refuse to use your credit cards unless it is an emergency.  Set a budget and use cash to pay for food, clothing, and miscellaneous items.  Not adding to your debt is the first step in reducing it.  In the words of Will Rogers: “When you find yourself in a hole, stop digging.”  

Play Good Offense

To win a football game your offense must score more than the other team’s offense, they must stay ahead to win in the end.  In terms of lowering your debt you want to stay ahead by controlling your impulse spending so you don’t have to constantly play catch up.  Watch for mindless spending on things like trendy clothes, weekly pedicures, going out to eat and electronic gadgets. Track your spending and be aware of where every penny goes.  You may be surprised at where that $50 went this week.  A good strategy is to play hurry up offense to gain as much yardage on reducing your debt in the shortest amount of time.  Use the money saved to pay down your credit card debt fast.

Forward Progress

To make really good progress in paying down your debt, contact your bank or card company and negotiate a reduced interest rate.   Reducing your interest rate from 20% to 18% can save you hundreds of dollars.  If the bank does not agree to this, you may look at transferring a credit card balance from a high interest card to a lower interest card.  There are still some 0% cards out there, but read the fine print for any hidden charges.

Reduce Penalties

Avoid these mistakes to stay on the field and continue to lower your credit card balance:

• Paying off low interest credit cards before high interest ones.  You’ll make better progress if you knock out the higher interest ones first.
• Skipping payments- this can ruin your credit history and start collection calls. Better to pay something than let the debt go unpaid.
• Getting back into debt once you are out-learn why you are in debt and don’t repeat the same mistakes.

Score!

Getting out of debt takes time. Set and budget, watch your impulsive spending and work with your bank to lower your interest payments.  Before you know it you will have scored the winning touchdown and be out of debt.]]> http://www.destroydebt.com/articles/debt-relief-noprofit-organization.html http://www.destroydebt.com/articles/debt-relief-noprofit-organization.html Tue, 26 Jan 2010 06:00:00 GMT Many Americans are struggling with a high level of debt.  Credit card debt, mortgage loans and car payments are consuming the incomes of many families.  This can quickly get out of control resulting in people struggling to make ends meet.  When this happens  it becomes natural to look for help in the form of debt relief companies.  Before doing so you should understand the difference between "for profit" and non-profit organizations.
Non Profit Organizations 

Credit counseling is a popular form of debt relief.  This is also one of the only non-profit options out there.  People who are deep in debt yet able to make payments should consider this option as it reduces your interest rates while allowing you to repay your debt without filing for bankruptcy.  Legitimate credit counselors can be an immense help to those who need a little guidance and help getting their finances back on track.   

The National Foundation for Credit Counseling offers free and low-cost help from  trained, certified counselors. These counselors assist your individual needs for managing money at the same time offering solutions for current financial problems.  They will develop a personalized plan to help you prevent any future difficulties. Call 1-800-388-2227 to speak to a counselor near you. 

The Association of Independent Consumer Credit Counseling Agencies is a member supported national association that represents non-profit credit counseling companies that provide debt management and financial education services. Call their help line at 1-866-703-8787 for more information. 

Before you call one of these services, gather all of your most recent statements from bills and your banks along with your pay-stubs from work. This will help them help you faster by getting a more precise look at your situation. 

Once you start getting help from one of these organizations, commit to the process and stop using your credit cards or it will take even longer to get out of debt. Instead, only use cash for purchases. This will make you rethink those impulse purchases and save money for other financial goals. ]]> http://www.destroydebt.com/articles/american-debt-negotiators-inc.html http://www.destroydebt.com/articles/american-debt-negotiators-inc.html Mon, 11 Jan 2010 06:00:00 GMT According to the Better Business Bureau (BBB), American Debt Negotiators, Inc. is listed as a credit counseling and management services corporation.  They are located at 11555 Heron Bay Blvd., Ste.200, Coral Springs, FL  33076.  Their contact phone number is (561) 483-7337, and their website is http://www.adnnow.com.  Dave Barnea is the president of the corporation, Rick Post is the manager, and Daniel Post is listed as the Secretary/Treasurer.  American Debt Negotiators began operation on January 1, 2004. This company is not accredited by the BBB. http://www.adnnow.com.  Dave Barnea is the president of the corporation, Rick Post is the manager, and Daniel Post is listed as the Secretary/Treasurer.  American Debt Negotiators began operation on January 1, 2004. This company is not accredited by the BBB. 

The Better Business Bureau rates businesses from A+ - F, and they have given American Debt Negotiators, Inc an F rating.  The BBB shows that this company received the following complaints: 

3 complaints for making a partial refund

13 complaints for agreeing to perform according to their contract

1 refused to adjust, relying on terms of agreement

1 unanswered complaint

4 unassigned complaints 

A total of 22 complaints were filed against American Debt Negotiators, Inc.  The Better Business Bureau states that the company is active and has had no government action taken against them.  

The Fair Debt Collection Practices Act (FDCPA) was established by the Federal Trade Commission (FTC) in order to prevent debt collection and debt negotiation agencies from improper practices such as alleging to be someone or some company that they are not, from making false statements, or removing money from the debtor’s checking account without permission.  A basic Internet search yields several complaints about American Debt Negotiators, Inc.  Per the complaints this business claims to be a company that can assist people who are overwhelmed with debt to reduce and negotiate their credit debt, but instead of helping the people who contacted them, they took money out of their checking account without permission and before any papers giving permission were signed. Another site had several complaints that American Debt Negotiators pretended to be Bank of America and attempted to obtain credit card numbers, as well as personal information, and there were several other complaints of frequent calls from an unidentified caller, later determined to be American Debt Negotiators, claiming to be a credit card company and requesting account information. 

The BBB’s review states American Debt Negotiators’ advertising is extremely misleading, and that they are in compliance with licensing or registration requirements.  Finally, the Better Business Bureau states that some complaints that have been filed contain very serious allegations against American Debt Negotiators, and the Better Business Bureau “strongly questions the company’s reliability based on their failure to adequately respond to these complaints.”]]> http://www.destroydebt.com/articles/avoid-bankruptcy-for-credit-cards.html http://www.destroydebt.com/articles/avoid-bankruptcy-for-credit-cards.html Mon, 11 Jan 2010 06:00:00 GMT Consumers who have gotten in over their heads from credit card debt feel that bankruptcy is the only solution. Bankruptcy can damage your financial future and should be a last option to eliminate debt.   The steps to avoiding bankruptcy usually boil down to a change in spending behaviors.  Start today by taking control of your finances.
Change your spending behaviors.  Credit cards although helpful and necessary on many occasions often give us the impression that we have the ability to spend limitlessly.  The line between need and want becomes crossed, so we spend and face expensive consequences 30 or 60 days later when the bill arrives. Staying out of debt for the long term requires a shift in behavior and spending habits.  Life will always have unavoidable circumstances that may cause us to spend money that we hadn’t planned to spend. Constantly living one step ahead of debt for the wants may put you in a bad position when the needs arise.  Always anticipate the unplanned. Changing spending behaviors now will help you to avoid bankruptcy in the future. 

Cut up the cards. Learning to spend within our means is one thing that credit cards do not help us do. Actually it’s quite the opposite. Credit cards allow us to spend beyond our means and sometimes even beyond our credit limits. The consequences come later.  If you find yourself using your card too regularly purchase items that you don’t need or can’t afford chances are you are heading towards a pile of debt.  If you have a tendency to impulse spend, just having a credit card is a license to spend.  Cutting up that credit card can be the first step towards avoiding debt or bankruptcy. 

Maintain one emergency credit card.  Identify what is considered an emergency and then vow only to use the card in certain situations.  An emergency may be an uncovered medical expense, a vehicle that needs immediate repair, purchasing a last minute plane ticket to see a relative who is ill.  You should define for yourself ahead of time what constitutes an emergency and limit the emergency card use to only those things that fit that definition.    

Financial planning or consumer credit counseling can be beneficial.  These types of financial programs are typically offered, some even free of charge, by your employer or your financial institution.  Taking advantage of these benefits can help you to change behaviors that lead to debt. These services can assist you in developing good spending behaviors and a sound action plan to keep you out of debt. 

Consolidation is an option.  If you have more than two credit cards consolidating is often a beneficial step towards managing debt.  Every credit card carries a balance, a finance charge and an annual fee.   Eliminating the fees on all but one credit card can be the difference between keeping your head above water and sliding head first into debt.  Consolidation provides credit card consumers with an option to combine all of their payments into one. This means one payment, one fee and one annual charge.   Do your homework and decide which card gives the best benefit and consolidate the others under the card that has the lowest overall fees and payment.  A simple step such as consolidation is often the advantage some need to avoid bankruptcy due to credit card debt. ]]> http://www.destroydebt.com/articles/debt-professionals-of-america.html http://www.destroydebt.com/articles/debt-professionals-of-america.html Mon, 04 Jan 2010 06:00:00 GMT Debt Professionals of America (DPA) is a Texas-based debt settlement company, in business for 10 years, and claiming settlements of over $26m in unsecured debt for approximately $11m, an average saving of 43%.  DPA has a very professional-looking web presence. It is immediately apparent when viewing their web page, that credibility and transparency were important objectives in establishing their on-line interface with the consumer.
DPA has a very professional-looking web presence. It is immediately apparent when viewing their web page, that credibility and transparency were important objectives in establishing their on-line interface with the consumer. 

In a couple of mouse clicks the following information was readily available: 

Contact Information 

• A toll free phone and fax number as well as a local fax
• Street address (adds credibility)
• Hours of operation
• Online chat facility and feedback mechanism

   

Company details 

• Mission statement, code of ethics and core values
• Operational highlights
• Memberships of professional organizations
• Profiles and photos of the management team

   

Client Services and Program details 

• Options available to clients including a debt comparison calculator
• Benefits of their program
• Client Assurance Program including a guarantee that clients will receive C.A.R.E. (Clients Always Receive Excellence)

   

As could be expected, there were several testimonials from clients who were obviously satisfied with the service they had received. 

Under the FAQ tab were detailed answers to questions which would allay most concerns, but under the same tab, the page headed “BBB” made interesting reading. As if to pre-empt any search for information at the Better Business Bureau, the web page asks the question “Why doesn’t the BBB recognize the debt settlement industry”? It then goes on to say that the BBB “has not implemented a rating system for the industry based on consumer feedback.” 

This whole page is interesting, particularly since a search of the Better Business Bureau for information on Debt Professionals of America gives the company an F on a scale from A+ to F. 

Reasons for Rating given by BBB 

• Concerns with the debt settlement industry
• Length of time the business has been operating
• 10 complaints on file against the business.

   

These 10 complaints were processed in the last 3 years, with all 10 of them being resolved, 8 of them in the last year. 

To give DPA an F rating seems harsh, given that the BBB does not recognize the debt settlement industry. Because the BBB rating system does not review debt settlement companies on their own merits, any debt settlement company that has implemented industry best practice, as DPA claims, cannot be differentiated from one that does not. 

DPA has been operating for 10 years, according to their web site. This is a reasonable amount of time for a company to develop some positive history that would give it a better rating than an F. Regarding the complaints, without knowing the number of transactions the company undertook in the last 3 years, it’s impossible to gauge if 10 complaints are a little or a lot. 

If only half the information on the DPA web page is true, it still seems like a company that could be given the benefit of the doubt by the consumer.]]> http://www.destroydebt.com/articles/lower-monthly-credit-card-payments.html http://www.destroydebt.com/articles/lower-monthly-credit-card-payments.html Mon, 04 Jan 2010 06:00:00 GMT The credit card industry has seen a lot of changes in the past several months.  Many cardholders have been struck by subtle minimum balance payment hikes, while others a more drastic increase from 2% of the principal outstanding to 4%. If you were struggling to keep up with payments before the increase, you might find yourself unable to meet the new minimum payment requirements.  On the other hand, if you can manage to meet the new payment, the credit card company might be doing you a favor. Without this nudge, it would have taken longer to repay your debt therefore increasing the amount of money repaid in the long run.
Many cardholders have been struck by subtle minimum balance payment hikes, while others a more drastic increase from 2% of the principal outstanding to 4%. If you were struggling to keep up with payments before the increase, you might find yourself unable to meet the new minimum payment requirements.  On the other hand, if you can manage to meet the new payment, the credit card company might be doing you a favor. Without this nudge, it would have taken longer to repay your debt therefore increasing the amount of money repaid in the long run. 

Why the Minimum Balance Increases?

Lenders and borrowers have been through a period of turmoil.  For many years credit card companies have wooed everyone from college students to seniors with offers of easy credit.  Allowing card holders to rack up a large balance and pay only a small amount each month was a great strategy to make more money off of interest rates and fees.  With more people facing financial hardships as a result of the recession, banks are trying to recoup as much of their money as possible or risk losing it all to bankruptcy or debt settlements.  Thus the sudden interest in receiving a monthly payment that actually reduces your debt. 

How Can You Lower Monthly Credit Card Payments?

There are a few things you can do if you really can’t manage the increased payments.  

• Shop Around for Different Cards:  While more credit card companies are upping the minimum payment it has not yet become the norm.  Research and compare different credit cards to find a card that still accepts 2% of the balance as the minimum payment.  If approved you can transfer your balance to the new card.

 

• Negotiate Directly with the Credit Card Company:  Everything is negotiable. Make a call to your card company letting them know that you are not able to meet the new minimum payment.  Find out what options are available to keep your payments affordable.  You might be surprised at how much they are willing to concede if you approach them with respect and convince them that you are earnest about paying but you simply cannot meet the new requirements. When all else fails let it slip that you have been exploring your options with other companies and if you are backed against a wall you may have to transfer your account.

 

• Consider Credit Counseling:  Credit counseling agencies negotiate with credit card companies on a daily basis. If you have tried working with your credit card company on your own without success it might be time to call in the professionals.

  The best approach to lower monthly payments is to stop incurring new debt while aggressively attacking your current balance. Instead of bemoaning the higher monthly minimum balances you can look at it as a sign that your debt situation is out of control and take steps to rein it in. Trying to secure lower monthly minimum payment balances can be the motivation you need to get your finances in order.]]> http://www.destroydebt.com/articles/bankruptcy-debt-discharge.html http://www.destroydebt.com/articles/bankruptcy-debt-discharge.html Wed, 16 Dec 2009 06:00:00 GMT The most common form of bankruptcy is Chapter 7. Bankruptcy debt discharge is essentially when the court officially releases a debtor of being held personally liable to repay debts incurred prior to filing bankruptcy. This occurs within a certain time frame following bankruptcy proceedings.  Not all debts will be discharged so it is wise to know in advance which types of debts you the debtor are still held personally and legally accountable for. Whether or not your bankruptcy debts are discharged also depends on if you’ve been through bankruptcy previously.
The process of bankruptcy debt discharge normally takes place 60 – 90 days after the creditors involved in a bankruptcy hearing have met together regarding their relevant debtor. Although legally relieved of personal responsibility for a debt, a debtor may still voluntarily repay their creditors once they are financially able.  

Debtors need to be aware that not all debts are dischargeable. Liens placed on property by a court are not dischargeable so they can still be enforced by the creditor. Some liens are avoidable, such as judgment and garnishment liens. Liens may be partially avoided such as mortgage liens, when a home is worth less than the amount owed, that percentage of decreased value is avoided.

A lien on property prior to bankruptcy does not affect a debtor when acquiring property in the future.  

Other non-dischargeable bankruptcy debts include, but are not limited to; student loans, Alimony and child support, taxes and tax liens, Government-related fines or penalties, or in cases of fraud or embezzlement.  Be aware of the fact that if you have received a bankruptcy debt discharge within the last nine years, then your current debt discharge may be denied.  

Dischargeable bankruptcy debts mainly include unsecured debts. Some of these are medical bills, leases, negligence claims, business debts, vehicular accident claims, credit card debts, personal loans, or home improvement loans. As mentioned before, just because a debtor has been legally released of personal accountability, they can still certainly repay these debts voluntarily, over time, as it is the right thing to do to pay what you knowingly owe.  

Other bankruptcy chapters include Chapter 12 and Chapter 13. Chapter 12 covers farmers and fisherman; Chapter 13 is for sole proprietors or individuals who still have income but are now protected by bankruptcy from creditors legally pursuing them. In Chapter 13, there is also a repayment plan legally documented. Yet, some of the dischargeable debts can still apply in these cases of bankruptcy. ]]> http://www.destroydebt.com/articles/collections-agency-credit-report.html http://www.destroydebt.com/articles/collections-agency-credit-report.html Wed, 16 Dec 2009 06:00:00 GMT Incurring debts you can’t handle will eventually catch up to you. By not satisfying debt obligations and making timely payments, your credit score will begin to suffer, making it harder to stay on financial track down the road.
Credit reports are affected by a number of things in your financial life but what a collection agency is reporting to the credit bureaus each month could be detrimental to your financial future. When you have debts that enter into collections, the reporting of these actions can have a big impact. 

Collection agencies have long been branded as being difficult to work with to settle debts. While not all agencies act inappropriately, there are many that mislead people into thinking immediate action is required and can spare their credit reports and score. However, sometimes when you are in debt, trying to rectify outstanding accounts can do more harm than good.  

Collection agencies want to get their money, which normally stems from the total amount they are able to collect from a debtor. The more money they get from you, the more profit they make so many will work to ‘make a deal’ that ultimately can hurt your credit score.  

Here is a list of ways paying debts in collection can hurt a credit report: 

• If you make a deal with a collection agency to settle an account for less money that you originally owned the creditor, your score can drop.

   

• Collection agents ‘promise’  to report back to the credit bureaus a better status than you actually have in exchange for an immediate payment. However, many take the money and do no such reporting.

   

• Those that do report to the credit bureaus after receiving payment can do the opposite of their promise and provide information that is not accurate, further hurting your score.

   

• If you contact a creditor or a collection agent about an old debts in attempts to improve your credit score, you can re-trigger the statute of limitations debt, making it legal to pursue you for the amount due and leaving yourself open to being sued for an old debt.

   

• If you offer to make a payment on an old debt, again you can create a situation where you may be sued, or at least harassed for the remaining total of money due.

   

A debt in collections can wreak havoc on your FICO score but keep in mind that it comes down to what the original creditor reports back to the credit bureaus. If you are looking to boost your score, you may find that negotiating with the original creditor to pay off the balance owed if they would agree to report back a balance of zero on the debt rather than a charge off.  A debt collection agency may not have the power to or be as willing to work with you, since they are working towards a commission based on the total amount collected.  

Cleaning up your credit score is a great financial move but one that should be made carefully, especially when dealing with old debts and aggressive collection agents.  ]]>