3rd Party Credit Helpers
Debt management companies and settlement companies can prove to be helpful in negotiating payments for you. However it seems rather ridiculous to pay someone to set up arrangements for you especially when you are already in debt. Many of the companies attempt to set up arrangements you can do yourself. If you want to save some money here are some tips in negotiating payments and settlements.
DEFINTION:
A debt management company is hired on the behalf of the consumer/debtor in an attempt to set up payment arrangmetns.
A debt settlement company is hired on behalf of the consumer/debtor in an attempt to achieve a settlement amount that is agreeable by both the consumer/debtor and the creditor
A settlement is a agreement that both the creditor/agency agrees to accept in order to satisfy the debt.
FOR SETTLEMENTS
1. Find out the best settlement available.
2. Find out deadline date
3. Find out wheter or not it can be split into payments
FOR PAYMENTS
1. Find out if there is any interest that is currently accumulating.
2. Determine the amount you can pay
3. Contact the agency or creditor and ask for payment plan options
4. Find out the ramifications of noncompliance
5. Determine whether or not you can meet their demands
6. If not then counter offer until a reasonable amount is agreed upon.
MISCONCEPTIONS:
Debt settlement/management companies sheild/protect their clients from further collection attempst. This is not correct. The company only sends a power of attorney prohibiting the agency or creditor from contacting you.
While enrolled do not pay your creditors until a specific timeframe has passed, instead pay the settlement/managment company you hired
This is wrong. Your credit report is still being dingged. It doesnt matter that the agency and company has accepted terms or not. Your credit will most likely be negatively hit. And if this is not an issue to you, then there really isnt any need for you to have a settlement/mangment company.
While enrolled you cant be sued or garnished.
The legal binding contract is between you and the creditor or now debt holder. There is no law that protects you from this unless you opt to file for bankruptcy. Then you have to consult your attorney for that.
Everyting is fine. You have turned it over to the co and there is no need to keep in contact wiht the original creditor or collection agency or law firm.
Incorrect. Many people find that when they contact the agency, that the agency has not been notified by the debt management company or settlement company. Often times the collection agency cant contact you due to the Power of Attorney in place to let you know that the managment company refuses to return their calls.
Wednesday, February 25, 2009
READING & UNDERSTANDING YOUR CREDIT REPORT
You need to obtain a copy of your credit report from the real credit reporting agencies. I have found that some of the companies that provide online credit report information may miss all the information that appears on your credit report.
You are intitled to free credit report annually and if you are denied credit based upon a decision made by looking at information from your specific credit report. Go to these websites for more information:
EXPERIAN, EQUIFAX, TRANSUNION
www.experian.com
www.equifax.com
www.transunion.com
ERRORS:
Any descrepancy or error on your credit report needs to be addressed. Contact the entity that is reporting on your credit report to get clarification. It may be a agency that has purchased the debt and you acutally owe the account. In the event this happens you have to take responsibility. In the long run, running from the debt makes a long drawn out situation worse. Be honest, and take accountablilty
If the account is reporting in error. Dispute with the company that is reporting negativley, and the credit bureaus that are reporting it.
INSTALLMENT LOANS
Auto, mortgage
You are intitled to free credit report annually and if you are denied credit based upon a decision made by looking at information from your specific credit report. Go to these websites for more information:
EXPERIAN, EQUIFAX, TRANSUNION
www.experian.com
www.equifax.com
www.transunion.com
ERRORS:
Any descrepancy or error on your credit report needs to be addressed. Contact the entity that is reporting on your credit report to get clarification. It may be a agency that has purchased the debt and you acutally owe the account. In the event this happens you have to take responsibility. In the long run, running from the debt makes a long drawn out situation worse. Be honest, and take accountablilty
If the account is reporting in error. Dispute with the company that is reporting negativley, and the credit bureaus that are reporting it.
INSTALLMENT LOANS
Auto, mortgage
DEBT & CREDIT EDUCATION
Debt is not the Death of Financial Security.
There are two types of debt in my book.
GOOD DEBT and BAD DEBT
Good Debt is debt that helps build your credit portfolio. It it was a good credit report is made of. Purchasing everything with cash doesnt provide potenial creditors an idea of how responsible you are with your finances. If you never plan to obtain credit then this blog isnt for you. But for the rest of us that realize the importance of obtaining and having a healthy debt profile let us know.
Bad Debt is inherited when the consumer fails to pay as agreed and this information is reported to the credit bureau. It is much easier to ruin your credit that it is to build or rebuild credit. It takes time. Look at your credit like a lifetime relationship you have with yourself. If you mistreat it, it will leave you high and dry. If you take care of it , when you need it , it will take care of you.
CREDIT:
Credit is reported on the major credit bureau's, Equifax, Experian and Transunion. See previous blogs about obtaining credit report. You need to get a credit report and make sure you are taking care of your financial responsiblities and make sure there arent anything that is on your credit report that is damaging. You can do only three things to you credit score
BUILD
You build by obtaining credit through a entity that will report your payments to the credit bureau. Start of small, you may not get the best interest rate but its a start. Many try to get department store credit cards, high interest cards and or secured credit cards. It may be costly intially but the rewards will be great. That will allow other creditors to see you have a consistent payment history. If you are timely with your payments ofcourse.
DESTROY
This part is simple. Just dont pay on time or better yet dont pay at all.
REBUILD
You have to re evaluate your credit report. Obtain a copy, and start prioritizing which ones will get paid off first.
YOUR CREDIT SCORE CAN BE LOW EVEN IF YOU NEVER MISSED ANY PAYMENTS IF:
1. Your available credit is very low.
2. Your debt to income ration is low
3. You have many inquiries in a short period of time usually 6-12 months
4. You have filed bankruptcy recently
5. If you are establishing your credit.
6. If you have late payments
7. If you have missed payments
8. If you have a judgement reported
9. If you go over your credit limit
There are two types of debt in my book.
GOOD DEBT and BAD DEBT
Good Debt is debt that helps build your credit portfolio. It it was a good credit report is made of. Purchasing everything with cash doesnt provide potenial creditors an idea of how responsible you are with your finances. If you never plan to obtain credit then this blog isnt for you. But for the rest of us that realize the importance of obtaining and having a healthy debt profile let us know.
Bad Debt is inherited when the consumer fails to pay as agreed and this information is reported to the credit bureau. It is much easier to ruin your credit that it is to build or rebuild credit. It takes time. Look at your credit like a lifetime relationship you have with yourself. If you mistreat it, it will leave you high and dry. If you take care of it , when you need it , it will take care of you.
CREDIT:
Credit is reported on the major credit bureau's, Equifax, Experian and Transunion. See previous blogs about obtaining credit report. You need to get a credit report and make sure you are taking care of your financial responsiblities and make sure there arent anything that is on your credit report that is damaging. You can do only three things to you credit score
BUILD
You build by obtaining credit through a entity that will report your payments to the credit bureau. Start of small, you may not get the best interest rate but its a start. Many try to get department store credit cards, high interest cards and or secured credit cards. It may be costly intially but the rewards will be great. That will allow other creditors to see you have a consistent payment history. If you are timely with your payments ofcourse.
DESTROY
This part is simple. Just dont pay on time or better yet dont pay at all.
REBUILD
You have to re evaluate your credit report. Obtain a copy, and start prioritizing which ones will get paid off first.
YOUR CREDIT SCORE CAN BE LOW EVEN IF YOU NEVER MISSED ANY PAYMENTS IF:
1. Your available credit is very low.
2. Your debt to income ration is low
3. You have many inquiries in a short period of time usually 6-12 months
4. You have filed bankruptcy recently
5. If you are establishing your credit.
6. If you have late payments
7. If you have missed payments
8. If you have a judgement reported
9. If you go over your credit limit
Legal 3rd Party Collections
LEGAL COLLECTION AGENCIES
These are collection agencies that are owned and operated by law firm. They are able to file law suits and obtain judgments.
TERMS:
A lawsuit is a case in a court of law involving a claim, complaint, from one party against another.
A judgement is a judicial decision affirming an obligation, such as a debt.
A garnishment is a court order for an employer/bank to withhold all or a portion of wages/deposits.
SUMMARY:
Usually if an account isnt resolve with the original creditor, it is sent to a third party agency or a lawfirm. In most cases, the law firm is the last resort. In many cases, a third party agency that purchase the debt may send it to a law firm for collection. Law firms have more legal authority to get the funds paid. It is always in your best interest to contact the law firm in order to work out option to get this repaid asap.
TIMELINE:
1. law firm will locate you, or party that knows you
2. process paperwork for law suit against you in the county in which you reside
3. hire a process server to serve papers on you or a party that knows you
4. if you fail to respond, appear the suit will be filed
5. the next step is for them to obtain a judgement against you
6. after judgement is granted, they can persue your assets
TIPS:
1.Once you recieve letter from law firm contact them.
Its too late to be afraid about the ramifications of your noncompliance.
2. Try to find out what paperwork has been filed against you at the present time
3. Find out about the balance and if interest is being accumulated.
4. Try to work out a way to get this paid
5. Be honest about your financial situation.
DONT'S
1. IGNORANCE:
Do not argue with them it will get you no where. Remember, they can garnish you without ever speaking with you. So don't allow your emotions to get into the way of taking care of business.
2. BE ACTIVELY INVOLVED:
Do not believe what any 3rd party agency would tell you about the legalities. Research your state laws in order to find out what you are up against.
3. KEEP IN COMMUNICATION:
Never cut off communication with the law firm. Regardless if you have hired a 3rd party agency such as cccs, debt management company or settlement company. The law firm has the law on their side.
4. GET ALL THE DETAILS:
If eligible for repayment plan, do not assume that legal actions will cease. Many will still obtain a judgement against you in order to secure the payment in the event you default. This is totally legal.
MISCONCEPTIONS:
If I never received the petition and summons, I am not responsible for the debt; The suit/judgement is null and void. FALSE
Anyone that resides at your last know address, that is over the age of 16 can accept a summons and petition on your behalf if they acknowledge they know you. Even though they may forget to tell you.
If your pay check/bank account is garnished the law firm is in violation for not advising you of their actions prior to the garnishment.
If the judgment is granted and the funds are not exempt you have no claim to the funds.
They are not obligated by any measure to advise you that they intend to garnish your wages or account.
They already garnished my account for a portion of the funds, the will not retry to garnish again.
Currently there is no limit that I am aware of to the number of times the garnishment can be issued. If the balance is still owed, then with the judgement in place, they can continue until pif has been accomplished.
They have to accept any settlement, arrangement in lieu of garnishment.
This is false. A settlement is merely a benefit to you, the consumer. It benefits the creditor in no way at all. No one is obligated to give the consumer a settlement.
Being enrolled in a Consumer Credit Conseling Program, Debt Settlement Program, Debt Managment Program will cease all legal collection activites.
No agency can protect you from the legal ramifications that are associated with the collection of a debt if the debt is legitimate and the agency is following legal protocol. Many people across America are fooled into paying these agencies, and some of these are free, however, they are placing their faith that these companies stops every thing. They don't.
These are collection agencies that are owned and operated by law firm. They are able to file law suits and obtain judgments.
TERMS:
A lawsuit is a case in a court of law involving a claim, complaint, from one party against another.
A judgement is a judicial decision affirming an obligation, such as a debt.
A garnishment is a court order for an employer/bank to withhold all or a portion of wages/deposits.
SUMMARY:
Usually if an account isnt resolve with the original creditor, it is sent to a third party agency or a lawfirm. In most cases, the law firm is the last resort. In many cases, a third party agency that purchase the debt may send it to a law firm for collection. Law firms have more legal authority to get the funds paid. It is always in your best interest to contact the law firm in order to work out option to get this repaid asap.
TIMELINE:
1. law firm will locate you, or party that knows you
2. process paperwork for law suit against you in the county in which you reside
3. hire a process server to serve papers on you or a party that knows you
4. if you fail to respond, appear the suit will be filed
5. the next step is for them to obtain a judgement against you
6. after judgement is granted, they can persue your assets
TIPS:
1.Once you recieve letter from law firm contact them.
Its too late to be afraid about the ramifications of your noncompliance.
2. Try to find out what paperwork has been filed against you at the present time
3. Find out about the balance and if interest is being accumulated.
4. Try to work out a way to get this paid
5. Be honest about your financial situation.
DONT'S
1. IGNORANCE:
Do not argue with them it will get you no where. Remember, they can garnish you without ever speaking with you. So don't allow your emotions to get into the way of taking care of business.
2. BE ACTIVELY INVOLVED:
Do not believe what any 3rd party agency would tell you about the legalities. Research your state laws in order to find out what you are up against.
3. KEEP IN COMMUNICATION:
Never cut off communication with the law firm. Regardless if you have hired a 3rd party agency such as cccs, debt management company or settlement company. The law firm has the law on their side.
4. GET ALL THE DETAILS:
If eligible for repayment plan, do not assume that legal actions will cease. Many will still obtain a judgement against you in order to secure the payment in the event you default. This is totally legal.
MISCONCEPTIONS:
If I never received the petition and summons, I am not responsible for the debt; The suit/judgement is null and void. FALSE
Anyone that resides at your last know address, that is over the age of 16 can accept a summons and petition on your behalf if they acknowledge they know you. Even though they may forget to tell you.
If your pay check/bank account is garnished the law firm is in violation for not advising you of their actions prior to the garnishment.
If the judgment is granted and the funds are not exempt you have no claim to the funds.
They are not obligated by any measure to advise you that they intend to garnish your wages or account.
They already garnished my account for a portion of the funds, the will not retry to garnish again.
Currently there is no limit that I am aware of to the number of times the garnishment can be issued. If the balance is still owed, then with the judgement in place, they can continue until pif has been accomplished.
They have to accept any settlement, arrangement in lieu of garnishment.
This is false. A settlement is merely a benefit to you, the consumer. It benefits the creditor in no way at all. No one is obligated to give the consumer a settlement.
Being enrolled in a Consumer Credit Conseling Program, Debt Settlement Program, Debt Managment Program will cease all legal collection activites.
No agency can protect you from the legal ramifications that are associated with the collection of a debt if the debt is legitimate and the agency is following legal protocol. Many people across America are fooled into paying these agencies, and some of these are free, however, they are placing their faith that these companies stops every thing. They don't.
Tuesday, February 24, 2009
COLLECTORS -3rd party-
Thrid Party Collections
If you are being contacted by a 3rd party agency or law firm in the connection of a debt you should familiarize yourself with the Fair Debt Collection Practices Act, commonly called the
F.D.C.P.A. It is designed to outline which actions are appropriate for "third party" debt collection activities.
This by no way is a law used to help consumers avoid paying the account.
NOTE: Mostly all collectors are familiar with the FDCPA and have been thoroughly trained.
Misconceptions:
Contacting a consumer regarding the debt, is considered harassment. FALSE
Contacting any other person other than the consumer in an attempt to locate the consumer is
against the law. FALSE
Contacting the consumer at work is against the law. FALSE-however there are certain stipulation s in different states regarding this also, there are certain stipulations regarding if the consumer expresses or the collector knows it isn't permissible to contact consumer at work
Representing checks is against the law. FALSE, FDCPA has no mention regarding re-presentment of bounced checks
Check by phones are illegal according to the FDCPA. FALSE
Collection agency has to accept proposal offered in order to reduce or repay the debt FALSE
Collector must accept any payment as a sufficient payment arrangement in order to cease collection activity if necessary. FALSE
Collection agency must report all payment to the credit bureau as they are being paid. FALSE
PAYMENT ARRANGMENT
1) Confirm the name of the original creditor
2) Get the ballance
3) Ask if interest is accruing
4) Ask if there are any payment options
5) Document who you spoke with
6) Review your finances
7) Propose payment plan
IF accepted, find out their method of verification and keep all records
If Rejected follow 8-13
8) Ask for the consequences
9) Ask for the reason why the proposal isnt sufficent, is it a time table, a minimum, or the collectors desgression
10) Ask to call back
11) Check your finances to See if this is feasable
12) Attempt to see if you can come up with a closer conter offer to the collection agency
13) Deal with the consequences if unable to work it out
If you are being contacted by a 3rd party agency or law firm in the connection of a debt you should familiarize yourself with the Fair Debt Collection Practices Act, commonly called the
F.D.C.P.A. It is designed to outline which actions are appropriate for "third party" debt collection activities.
This by no way is a law used to help consumers avoid paying the account.
NOTE: Mostly all collectors are familiar with the FDCPA and have been thoroughly trained.
Misconceptions:
Contacting a consumer regarding the debt, is considered harassment. FALSE
Contacting any other person other than the consumer in an attempt to locate the consumer is
against the law. FALSE
Contacting the consumer at work is against the law. FALSE-however there are certain stipulation s in different states regarding this also, there are certain stipulations regarding if the consumer expresses or the collector knows it isn't permissible to contact consumer at work
Representing checks is against the law. FALSE, FDCPA has no mention regarding re-presentment of bounced checks
Check by phones are illegal according to the FDCPA. FALSE
Collection agency has to accept proposal offered in order to reduce or repay the debt FALSE
Collector must accept any payment as a sufficient payment arrangement in order to cease collection activity if necessary. FALSE
Collection agency must report all payment to the credit bureau as they are being paid. FALSE
PAYMENT ARRANGMENT
1) Confirm the name of the original creditor
2) Get the ballance
3) Ask if interest is accruing
4) Ask if there are any payment options
5) Document who you spoke with
6) Review your finances
7) Propose payment plan
IF accepted, find out their method of verification and keep all records
If Rejected follow 8-13
8) Ask for the consequences
9) Ask for the reason why the proposal isnt sufficent, is it a time table, a minimum, or the collectors desgression
10) Ask to call back
11) Check your finances to See if this is feasable
12) Attempt to see if you can come up with a closer conter offer to the collection agency
13) Deal with the consequences if unable to work it out
HANDLING COLLECTORS -1st Party-
******This section is for those who acutally want a resolution to get the debt resolved.******
********You will not find tips, tricks or tactics for avoidance or entrappment. ********
DEALING WITH THE ORIGINAL CREDITOR
DEFINED: Original creditor is the entity that intially gave you the line of credit, for the merchandise or service (1st party collections).
Realize, this is your best way to work out a resolution in order to aviod any further collection
activity. Usually, once it leaves the original creditor and goes to a third party, you find yourself
paying additional fees that you are legally responsible as per your contract. Also, most third party agencies or law firms are not as leineint as the original creditor. Another thing to consider, is that most of the time, if the original creditor sends you out, you may have permanetnly ruined your chance of ever being able to purchase anything on credit basis.
TIPS:
1)Research and find out the terms of your contract.
2)Honestly search out the best alternative to get this debt resolved
3)Don't bogg them down with your life story, they just want to get paid. So find out the best
arrangment you can get and match it with your finances
4)Do not over extend yourself. If they allow you to make an arrangment, especially the fact you are in default, make sure you can make the payment as agreed.
5)If you are dealing with someone you find to be unusally hostile or unreasonable, don't mimic thier behavior, ask to speak with a supervisor
6) Document all arrangmetns made
7) Keep copy of reciepts, bankstatments and letters confirming the arrangment.
8) Ask about all the consequences associated with the account while you are agreeing to pay this off. Why? Because, many people assume things like, they will not report negatively, or they will not send the account out or pursue you while you pay.
MYTHS:
"They" have to accept any payment I make.
Though they will have to post any payment you make. Dont be tricked into believing your
small payments will stop any collection activity, such as law suits, garnshiments, derogatory
credit reproting, i.e.
Something is better than nothing.
Don't be fooled into thinking you have done your deed for the day because you paid
$100.00 on a 15K debt. Make wise decisions regarding payments on your account.
They will get their money when I am ready to pay
Depending on the legalities, you may just pay unexpectantly with your tax refund,
or your next paycheck or even worse the funds that are in your banking account.
I will not be responsible for the interest and late fees
Mostly all creditors, have in the contract the accumullation of interest and fees
as well as the responsibilty the consumer(you)
I will not be responsible for the fees associated with the selling or placing of my account w/a 3rd party.
You are respnsible for any fees associated with collection of the debt including when
or if the account transfers hands.
Rule of thumb, if you want to pay the original creditor and not the third party agency or law firm, you should do it now, prior to it being released sold or reasigined. In doing so, it can save you money and headache.
********You will not find tips, tricks or tactics for avoidance or entrappment. ********
DEALING WITH THE ORIGINAL CREDITOR
DEFINED: Original creditor is the entity that intially gave you the line of credit, for the merchandise or service (1st party collections).
Realize, this is your best way to work out a resolution in order to aviod any further collection
activity. Usually, once it leaves the original creditor and goes to a third party, you find yourself
paying additional fees that you are legally responsible as per your contract. Also, most third party agencies or law firms are not as leineint as the original creditor. Another thing to consider, is that most of the time, if the original creditor sends you out, you may have permanetnly ruined your chance of ever being able to purchase anything on credit basis.
TIPS:
1)Research and find out the terms of your contract.
2)Honestly search out the best alternative to get this debt resolved
3)Don't bogg them down with your life story, they just want to get paid. So find out the best
arrangment you can get and match it with your finances
4)Do not over extend yourself. If they allow you to make an arrangment, especially the fact you are in default, make sure you can make the payment as agreed.
5)If you are dealing with someone you find to be unusally hostile or unreasonable, don't mimic thier behavior, ask to speak with a supervisor
6) Document all arrangmetns made
7) Keep copy of reciepts, bankstatments and letters confirming the arrangment.
8) Ask about all the consequences associated with the account while you are agreeing to pay this off. Why? Because, many people assume things like, they will not report negatively, or they will not send the account out or pursue you while you pay.
MYTHS:
"They" have to accept any payment I make.
Though they will have to post any payment you make. Dont be tricked into believing your
small payments will stop any collection activity, such as law suits, garnshiments, derogatory
credit reproting, i.e.
Something is better than nothing.
Don't be fooled into thinking you have done your deed for the day because you paid
$100.00 on a 15K debt. Make wise decisions regarding payments on your account.
They will get their money when I am ready to pay
Depending on the legalities, you may just pay unexpectantly with your tax refund,
or your next paycheck or even worse the funds that are in your banking account.
I will not be responsible for the interest and late fees
Mostly all creditors, have in the contract the accumullation of interest and fees
as well as the responsibilty the consumer(you)
I will not be responsible for the fees associated with the selling or placing of my account w/a 3rd party.
You are respnsible for any fees associated with collection of the debt including when
or if the account transfers hands.
Rule of thumb, if you want to pay the original creditor and not the third party agency or law firm, you should do it now, prior to it being released sold or reasigined. In doing so, it can save you money and headache.
PROTECT YOUR CREDIT
There are 3 major credit reporting bureau's Experian, Equifax and Transunion.
It is important that everyone obtain a copy of their credit report at least on an annual basis. There are several websites that can provide you with a free credit report or you can contact
theses agencies and follow their guidelines.
http://www.experian.com/, http://www.equifax.com/, http://www.transunion.com/
The federal government requires allows any one that has been denied credit based of off information obtain on that particular credit report within the past 30-60days of to obtain the report free of charge.
If you find that your credit report has discrepancies contact the creditor that is currently reporting on the report as well as the original creditor to advise of such error.
Keep record of all transactions, interactions you may have with the creditor regarding any dispute, conversation or payment.
The Federal Trade Commission is available for further details regarding properly disputing
information listed on the credit report. http://www.ftc.gov/
**Don't ever dispute any information that is on your credit report that is accurate.***
It is important that everyone obtain a copy of their credit report at least on an annual basis. There are several websites that can provide you with a free credit report or you can contact
theses agencies and follow their guidelines.
http://www.experian.com/, http://www.equifax.com/, http://www.transunion.com/
The federal government requires allows any one that has been denied credit based of off information obtain on that particular credit report within the past 30-60days of to obtain the report free of charge.
If you find that your credit report has discrepancies contact the creditor that is currently reporting on the report as well as the original creditor to advise of such error.
Keep record of all transactions, interactions you may have with the creditor regarding any dispute, conversation or payment.
The Federal Trade Commission is available for further details regarding properly disputing
information listed on the credit report. http://www.ftc.gov/
**Don't ever dispute any information that is on your credit report that is accurate.***
INTRODUCTION
The purpose of this blog is to inform those of you that are uneducated in the area of financial responsibility, opportunity and decisions making.
Take the suggestions listed here as a basis for you to explore and learn further. The more knowledge you obtain the the better equip you will become at making decisions. The decisions you make now will continue to to propel you into financial security or will leave you in financial ruins.
Take the suggestions listed here as a basis for you to explore and learn further. The more knowledge you obtain the the better equip you will become at making decisions. The decisions you make now will continue to to propel you into financial security or will leave you in financial ruins.
If there is any topic you would like to see here please email me.
Subscribe to:
Posts (Atom)