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Do Not Fall For Internet Debt Relief Scams

The economy is at an all time low, and the amount of debt that American consumers owe is at an all time high. Maybe you’ve been getting a few calls from the debt collector, or some angry letters from your creditor telling you that you better pay up, and maybe you have turned to the internet and have seen ads claiming to offer you debt relief as a quick fix. These offers may sure seem enticing, but it is important to remember that, as real as you may want the claim to be, it is still the internet, and it is crucial to be on the lookout for the truth behind the claim. For example, some “debt relief” businesses are simply offering a second mortgage. Of course, in this situation, you are going to want to use caution. These loans will need your house to use as collateral.

A large amount of these debt relief “businesses” are simply charging you to “help” you file for bankruptcy. While it is true that bankruptcy is one way to tackle your financial woes, in most cases it should be seen as a last resort. Claiming bankruptcy is like taking a big red stamp that says “DON’T GIVE ME MONEY” and stamping it on your credit report for the next ten years. Also, your chances of getting employment, a place to live, or insurance are significantly decreased.

Before making the choice to file for bankruptcy, it is always a good idea to consider other options. Get on the phone with your creditors. Many times a re-payment plan can be hashed out. These re-payment plans can be modified or paid in installments. Valid, nonprofit credit counseling services are also available to work with you and your creditors to make debt repayment plans.

It is true that bankruptcy can stop foreclosures, debt collection activities and rid you of unsecured debts, and exemptions can be provided that allow you to hold on to particular things. But personal bankruptcy won’t usually absolve you of your fines, taxes, child support, alimony, and student loans.

In addition, a recent change in bankruptcy laws sets up certain hurdles to overcome before you can file for bankruptcy nowadays, no matter what type. Credit counseling from an organization approved by the government is required within six months before filing for bankruptcy. Additionally, in certain circumstances, you may have to pass a test that requires you to prove that your income doesn’t exceed a set amount.

Mallory Megan works for Rapid Recovery Solution and writes articles about commercial collection agencies.

Debt Collectors

July 16, 2010 · Business, Collection Agencies, Credit, Credit Cards, Credit Score, Debt, Debt Management · (No comments)

The Do-It-Yourself Bailout

Debt collection is a booming business in tight times. Millions of Americans are just weeks away from bankruptcy, trying to make ends meet. Now, debt collectors have new tactics to try to get what they’re owed. And some of those tactics are skeptical.

Beth Givens, a privacy expert with Privacy Rights Clearinghouse, said she sees it as a growing problem. Debt collectors have begun telephoning other family members, friends, even neighbors, trying to locate debtors. Expect mail, emails, even voice mails and texts.

Givens wants people to know they do have rights, and that some of the new tactics may be illegal. “If you are in debt, know that there is a federal law that puts limits on the kinds of communications that debt collectors can have and it pays to really be informed,” Givens advised.

Debt collectors can use references on credit applications and other paperwork to find people you know. You may have used them as references to secure loans or credit. Collectors can ask them where YOU are. But they don’t have to give that information up. And they should know, collectors are not allowed to ask your friends to pay the debt for you.”A collection situation is never easy for a consumer to deal with,” advised Ken Paterson, who is with the Credit Advisory Service.

Paterson said people should also know their own loan companies may act as collectors. That certainly was a shock for Laura Wynn, whose car loan company called her sister.”My sister called me very upset and said that somebody had called and wanted to know if she knew what kind of person I was and the lack of integrity that I held,” she said.

If you do feel harassed, you can file a complaint with the Federal Trade Commission. Beth Givens said she expects collections to boom. “In this time of economic downturn, debt collection is a growth industry, so I think that we’re going to be hearing more complaints about debt collectors.” Your best bet– don’t dodge the debt collector’s call. If they can reach you, they’re less likely to start calling family and friends.

Mallory Megan works for Rapid Recovery Solution and writes articles on third party collection agencies.

The Do-It-Yourself Bailout

When A Bill Collector Is On The Phone, A Methodical Approach Is Best

July 16, 2010 · Collection Agencies, Credit, Credit Cards, Credit Score, Debit Cards, Debt, Debt Management, Debt Negotiation · (No comments)

Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation

If a collections agent is on the line, your immediate reaction might be to ignore the phone calls. Seems easier to do things that way right? But if you owe debt to a creditor, collection agencies are allowed to contact credit bureaus and report the debt, file lawsuits against you, and should be taken very seriously. Rather than ignore the phone calls, take them head on with a methodical approach. Your first step is to determine why you are being called. Find out where the debt comes from and exactly how much you owe.

While you have your collections agent on the phone, ask for their name, the name of the agency, the name of the creditor, the agency’s address, and their fax number. Keep in mind that you have the right to tell a debt collector that you want all future contact to be in writing over the phone, but follow up all requests you make with a written request.

One important thing to remember is that if you request that the collection agent doesn’t contact you at all, the debt collection agency has the right to contact you one more time to let you know how it plans to take further action. If you have issues with personal privacy, you can also request that you be the only person who can be contacted. A good idea is to start a file with details and dates of phone conversations and records of when you mail out letters.

If you do mail any letters or checks to the debt collection company do this by Certified Mail, Return Receipt Requested. This way you will be certain that the letter reached the collector because you will receive a signed receipt as proof. If you are able to negotiate a re-payment plan over the phone, request the terms of the plan be sent to you in writing. Any offer that a debt collector makes to remove or adjust credit history should also be documented.

Be certain that you are paying the right people. Payments are usually made to the agency, not the creditor, unless you are otherwise instructed to do so. Glance over the amount that they are asking you to pay carefully, and get an assessment of any interest, fees or charges that have been added on. By taking this methodical approach, you will feel more empowered and ready to tackle your financial issues.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies.