All Posts Tagged With: "debt relief"
40 States want the government to crack down on Debt Relief Agencies
Jennifer McClelland | RSS | Wed, Oct 28 2009 | 0 Comments
The attorneys general of Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wyoming have all asked the Federal Trade Commission to increase the regulation of companies that have been offering debt relief to individuals and families in the United States.
One of the things that the FTC is currently considering imposing on the debt relief companies is to include them in the Telemarketing Sales Rule.
One wrong step from the Credit Solutions of America company led to the actions being filed. The company has been falsely claiming that it could reduce credit card debt by 50%. This angered Illinois Attorney General Lisa Madigan enough to sue the company and its CEO. In the lawsuit, Madigan states that Credit Solutions of America never go through with their end of the bargain and never actually negotiate with the creditors of their clients even though the clients stop paying their creditors directly and are actually making payments to Credit Solutions of America. Of course, because the creditors aren’t getting their money, they are suing the consumer to get their money; and winning.
Madigan has also said that her office has received over 12,000 complaints regarding this issue.
Some of the rules that the FTC is considering imposing on the debt relief companies include:
- Prohibiting the companies from charging the consumer anything until services have been performed. This would also require more disclosure to consumers; including how long it will take to settle the debts and how much it will cost.
- Prohibiting the company from being able to misrepresent things such as fees, success rates, and any other information that alludes to the impact of the debt relief services on the consumer’s credit report and credit history.
Some debt relief agencies actually do what they say they are going to do, but other companies like this one listed in the lawsuit above are awful and need to be regulated. The companies that do what they state they do shouldn’t have an issue with the new regulations that are imposed on them. Because the companies already follow the rules, any new rules will just mean that it’s leveling the playing field for the good companies.
Related posts:What will the credit card companies do?
The number of people who are filing for some kind of debt protection is increasing in the UK
What are the lies that got you into credit card debt?
Tags: debt relief, washington west virginia, illinois attorney general
The Top Five Worst Things to Do When in Debt
Michael Bowler | RSS | Thu, Jun 04 2009 | 7 Comments
When in debt, many people just want to avoid declaring personal bankruptcy at any cost. Unfortunately, that can be a very hefty cost, both financially and socially. So, with that said, here are the top five things people do for debt relief that you should avoid:
Paying the minimum payment on your high credit card balance: Paying the minimum on your credit card bill seems like the right thing to do, but the way your interest, which is likely over 20% right now, is actually calculated, it actually means that your total amount of debt will grow over time. (Plus, think about it: 20% APR on a balance of $500 or more is huge!) If you don’t try to pay that sucker off quickly, you’re making the problem worse.
Seeking a loan from friends or family: Taking a loan from friends or family may sound like a great idea, and in some cases it can be. Some of us do have that relative that is honestly more concerned with your financial wellbeing than getting paid back. Normally speaking, however, using a person, no matter how close, as a bank is the way to severely strain relationships. You may not feel pressure to pay it back and your relationships could easily be damaged if the other person is in a bit more of a hurry to be paid back.
Taking out a high interest loan to “consolidate” debt: Granted, it sounds brilliant to pay off your major obligations and turn them into one monthly payment, you always need to look at the fine print of the loan terms. The new loan may likely have a sky high interest rate, so you will actually rack up more debt long term. It’s just prolonging the agony.
Seeking a credit counselor with high fees: Credit counselors can help get your debt under control, so they should not be ruled out entirely. If a credit counselor asks for a high rate or asks you to pay first, walk away. Some credit counselors scam people who are desperate because of their financial situation, taking money without actually helping. Also try to stay away from the credit card debt counselors you see on the TV ads. Even if they do help, they primarily renegotiate your debt for a lower rate in exchange for an absolutely horrific credit report you will carry around for the better part of a decade.
Bankruptcy in general as debt relief. Bankruptcy is the only thing mentioned here that can be considered a debt relief solution, but it should really be your last resort. I can erase some of your debt, but remember, debt is an obligation, and often obligations tend to stick. You could lose property and it will most likely hurt your credit report, again, for the better part of a decade.
There are a lot of great things to do to help with debt relief. Check back for an article tomorrow by this same author about what those who are in debt should do.
Related posts:What are the lies that got you into credit card debt?
The number of people who are filing for some kind of debt protection is increasing in the UK
Student debt is on the rise
Tags: credit counselors, debt counselors, credit card bill
Debt Relief Orders introduced in the U.K.
Jennifer McClelland | RSS | Fri, May 08 2009 | 1 CommentLast month, Debt Relief Orders were introduced in the United Kingdom. A debt relief order is a form of bankruptcy where the party filing does not have to go to court and pays a small (90 pound) fee to file. The fee to file for a DRO is much less than the fee to file for full bankruptcy.
The requirements for filing for a DRO are from Think Money:
• The person filing can’t pay their debts.
• He/She must owe less than 15,000 pounds.
• He/She must have 50 pounds or less disposable income a month.
• He/She doesn’t own assets worth more than a total of 300 pounds excluding an automobile, under some special circumstances. Homeowners are not eligible.
• He/She isn’t currently involved in another formal insolvency procedure.
• He/She hasn’t been the subject of a DRO in the past 6 years.
In the year that the DRO is active, the person who filed for the order will be protected from enforcement action by the creditors listed in the application, be free from the debts at the end of the DRO, must cooperate with the Official Receiver, and will be expected to make arrangements and repay all creditors once their financial circumstances improve.
There are also certain circumstances, such as fraud when applying for the DRO that can result in prosecution, so if you know someone who is thinking about filing for a DRO, they must not put any fraudulent information on the application or fail to cooperate with the Original Register.
Even with the negatives to this, if someone is qualified to apply for a debt relief order and their income situation isn’t going to be getting better, that they can see, in the short term then it may be the best option for them.
Related posts:40 States want the government to crack down on Debt Relief Agencies
The number of people who are filing for some kind of debt protection is increasing in the UK
Student debt is on the rise
Tags: formal insolvency, official receiver, financial circumstances
