Posts Tagged ‘debt settlement’
Tuesday, February 15th, 2011
The statute of limitations (“SOL”) for debts is the time limit after the debt occurs for the creditor to file a lawsuit to recover the debt. This period starts when the debtor becomes delinquent. When the SOL has passed on a debt the creditor will still be able to file a lawsuit. However, the defendant will be able to have the case
dismissed because the statute was “blown”. The Statute Of Limitations only covers legal action. The expiration of the limitations period does not affect other types of collection action or reporting to credit bureaus.
In collecting a debt, the creditor may theoretically continue with letters and telephone calls forever. Collection agencies can also keep up with the letters and phone calls, although third-party collectors are subject to the “cease and desist” provision of the Fair Debt Collection Practices Act.
Despite this, creditors and collectors rarely put much effort into collecting debts that have passed the statute of limitations. These debts can still be reported to credit bureaus for the time limits specified in the Fair Credit Reporting Act, regardless if they have been disputed legally. Credit cards and other revolving lines are generally considered Open Accounts. Auto loans and other installment agreements are Written Contracts. Promissory notes are usually mortgages, equity lines of credit, and student loans.
For information for reference on the statues of limitation you can check with your local attorney or give us a call. But again, If you actually plan on filing or defending a lawsuit, you should consult your legal counsel.
After a creditor wins a lawsuit against a debtor and is awarded a judgment by the court, there is a time limit for collecting that judgment called the Statute of Limitations (“SOL”). At any time after a lawsuit is won and before the expiration of the SOL, a creditor can collect on an unpaid judgment. However, many states allow judgments to be renewed one or more times, which could substantially extend the enforceability of a judgment, if the creditor is vigilant about the renewals. This can potentially result in a permanent legal obligation until it is paid. Be aware that paying an outstanding judgment can update an account that has long been “written off” by the creditor. Even though the creditor can collect forever, as in Delaware, sometimes it’s best to just let the judgment fall by the wayside, off the creditor’s radar, and eventually…off your credit report. You may want to consult with an attorney or ask us what the statute of limitations, and the allowable interest that can be charged on the judgment for your state is. Even though there is many examples and templates available to you for defending a lawsuit on your own, If you actually plan on filing or defending a lawsuit, you should consult your legal counsel.
Tags: debt settlement, judgment credit card, judgment debt, SOL, Statute of Limitations
Posted in sued credit card | No Comments »
Friday, December 18th, 2009
One card that we recently found out about has a 79.9% interest rate. Now if that is not a legal loan shark what is? To read more about this credit card company scam check out this article. http://www.msnbc.msn.com/id/34468260/ns/business-personal_finance/
Tags: can t pay credit cards, can t pay my credit cards, consumer debt advocate, credit card with your creditors, debt free associates, debt settlement, defending credit card lawsuit, get out of debt, lawsuits with debt settlement, new orleans debt settlement, Summons for Credit Card
Posted in credit cards | No Comments »
Monday, May 11th, 2009
a recent article from “Consumer Reports” is of the same taste as many other articles regarding debt settlement, its a “scam.” It is the usual story, somebody signed up with a settlement company, then quits after feeling like they are not receiving results and finds a “trusted” debt counselor who helps them pay back their creditors for little fee and blah blah. First of all, I agree that the industry is riddled with corruption and I do not like typical debt settlement companies in the least. They are too expensive (as the article says) and often do not achieve the claimed results. In this article though, the lady dropped out after 5 months when the company likely said it would take at least a year or more to achieve anything so that means nothing to me as far as she got “scammed.” As for fees and such, if they were going to save her thousands more than they charged and she’d have to do nothing, how is that a “scam”? Instead she paid a non-profit credit counselor to decrease her interest rate and such, this after saying “you can do what settlement companies do on your own”, same goes for credit counselors!!
Here is where we come in… we are not a settlement company nor a credit counceling agency (as per their traditional definitions). We are a consultancy that helps individuals lower their principal balance on debts like settlement companies attempt to do while giving you the tools and resources to do these things on your own if you so choose. This, however, is not our primary goal (although may be yours as a client). Our goal is to give you control and protection over your financial situation and assets. We consult you on providing the means by which you may save substantially on debts, protect assets and gain the time necessary to “dig yourself out” of the troubling situation that has occured. Many have had us work with them as “risk prevention” before issues truly arise.
I agree with the article in the sense you can do these things yourself. Of course you can! You can also represent yourself in a court of law but people seem to hire attorneys a lot. No one is disputing that, just as you can do what “councelors” do, without paying them! The real question is, do you want to? We have created a “hybrid” solution with our consulting programs and tools to simplify the task while allowing you to “do it yourself” to the degree you choose, allowing us to charge MUCH LESS than any other debt solution out there. On top of that, we see better results!!
In the end, I agree with the article in that debt settlement companies are scams in most cases and I would search for solutions that allow more control (not necessarily credit counceling either as this actually has a lower success rate than settlement! They fail to mention that…). The article is the same boring flavor as many written before and seems more like a counceling ad than decent legitimate information…
Tags: credit counseling, debt settlement
Posted in debt settlement, Debt Solution Options | No Comments »
Friday, January 23rd, 2009
There are some important questions that one must ask in order to properly evaluate your debt solutions. I will not include questions for evaluating the specific companies but the solutions themselves. We will leave the provider evaluation for another day. Below you will find a starter list of comparative points and questions. Start by making a list of your options across the top of a spreadsheet or piece of paper. Down the side, place the different characteristics of evaluation, then begin inputting the information.
How much will I pay in principal?
How much in interest and fees?
How much total?
How long will it take, given my situation?
How will it affect my credit?
How will I recover, financially and credit-wise?
Are lawsuits possible? Is protection provided for this risk?
Can my assets (car, home, etc.) be “lien-ed” by creditors?
Is there any asset protection strategy?
Can I honestly afford the solution?
How much are the solution fees (fees paid to solution provider)?
Do I maintain control or am I at the mercy of a third party?
Do I receive enough service that it will be smoothly accomplished?
What do I have to do? What does the solution provider do?
These are just a few questions that ought to be asked when looking for solutions. An example would be comparing a consolidation loan and debt settlement. Just to point out a few areas: Settlement will be shorter, overall cost will be lower but there is risk of law suit and I may lose some control; Consolidation will be easier, I maintain control (aside from the bank adjusting the loan terms) and am not at risk of lawsuit, etc. Building a spreadsheet can help one understand what it will take. Obviously overall cost or out-of-pocket is a popular one and arguably the most important (as we are likely on a tight budget by this point) but it is good to understand the other points like how long it might take.
Any other suggested questions to evaluation the SOLUTION? (not the companies providing them please…)
Tags: bankruptcy, credit counseling, debt consolidation, debt settlement
Posted in Debt Solution Options | 2 Comments »
Thursday, January 8th, 2009
Debt Settlement Companies dont work. From my experience they do not do what they say they will do. And they charge you a ton of money, often upfront. Debt Settlement is for the least sophisticated consumer who does not know and understand how to win the debt collection game. For many reasons consumers are accustom to paying retail instead of wholesale for their purchases.
The way debt settlement works is they have you stop paying your credit card debts, and start paying them a portion of what you were paying the credit card company. Usually they are paid the first three to four months of your monthly payments as their fee for helping you.
After 90-180 days of non-payment, your credit card banks “charge off” or write-off your account, considering it uncollectable as far as their accounting goes. That doesn’t mean that they will stop trying to collect it. After that, they will typically sell your debt to a debt buyer or refer the debt to a debt collection agency. If those companies can’t collect the debt, it may eventually be referred to an attorney to file suit. If you are being sued the debt settlement company may leave you in the dark and then you will start to stack up the judgments all of which will be public record and listed on your credit file.
Anyway, Debt Settlement Companies will propose to settle your accounts, once they are charged off, for say 50% of the amount owed. Some creditors insist upon more than that, others will take less. Your credit has been seriously damaged by this point. And you must typically pay “lump sum” payments to settle the debt. Not only that, but the amount of the debt that is forgiven can be considered income to you for tax purposes, and the credit card bank may send a 1099 to the IRS upon which you must pay tax (there are exceptions to this).
And unfortunately, there are “less than honest” debt settlement companies that have been known to collect payments from consumers, and then close up shop and skip town. Or file bankruptcy. Either way, you are out all the money that you paid them. And you still owe your debts.
From my take on things as a 12 year consumer credit consultant, you should shy away from these debt settlement companies. You can either settle your debts yourself,(which is what we show you how to do) or hire an attorney to do it for you (which can be very expensive). The materials designed in Freedom From Creditors member resources are prepared by team of attorneys from the debt collection arena and will help you represent yourself at a capacity much more effective then debt settlement and the other options available. After study and much diligence to winning the collection game, you will become the sophisticated consumer who is educated and will be in a position to pay wholesale not retail for your debts while avoiding bankruptcy and avoiding taxes on the deficiency.
Tags: debt settlement
Posted in Uncategorized | 2 Comments »
Monday, December 29th, 2008
Many people look for debt negotiators in the process of settlement feeling they do not have the understanding and ability to negotiate for themselves. This can be partially true but a fuller understanding of possibilities is definitely warranted. Many negotiation companies do little to actually “negotiate” your debts. More often than not, the process they espouse is a matter of just not communicating with the creditor until the debts are long past due where creditors actually begin offering settlements! Now, the actually amounts of these settlements depends on many factors such as your “collectable” rating, or the possibility of them ever being able to collect the full debt, as well as other considerations such as visible assets and their understanding of your financial position. This helps them decide if they will settle or pursue lawsuit. Many banks have strict policies as to how they negotiate and it often results the same regardless of who is working with them (a “professional” negotiator or you). This is not always the case of course. The approach I like the most (and hence our business is built on) is to structure yourself and your communications with creditors in such a way that you are protected and in a position to be offered the best settlements while providing the ability to more easily repair credit and potentially eliminate any tax burden left by the “forgiven” debt. This, of course, is through asset protection (the Asset Guard) and the validation and resolution process. One client recently received the following offer from an original creditor (pdf of letter):
offer-to-settle-10
Of course, every person sees different results but this is not any special exception. This was actually offered to the client, not any special negotiator saving the day. The important thing to realize is that a negotiator may be helpful but they are definitely not the magic solution. This client didn’t make a single payment into some specially escrow account that was fee’d during the process either. They haven’t decided to accept this offer, which is entirely up to them. It can be great to maintain control…
Has anyone seen results by “negotiating” on their own? What about vs a professional negotiator, any difference?
Tags: Asset Guard, debt negotiations, debt settlement
Posted in debt settlement | No Comments »
Wednesday, December 17th, 2008
Many people, following the real estate bubble and burst have found themselves with not only credit card debt but homes and other assets that they are “upside-down” on. Not only that, as with their credit card debts, they cannot afford to maintain the payments on these homes and assets. Most solutions deal exclusively with unsecured debt (including Bankruptcy, your secured debts will still go to foreclosure. You don’t get assets free and clear in bankruptcy). The options that are sought (or not, as they are the eventual automatic result of non-payment) usually include foreclosure (real property) or repossession (vehicles, other mobile assets). This again looks bad on credit(which can be more difficult to clean off) and puts you in a lose-lose situation with your assets. You may be looking for and even finding options for your unsecured debts but feel left high and dry with your secured debts.
The new “rage” and solution is what most call “short sale” which is what we call deficiency negotiation. This is not only a solution for homes and property but has extended to other assets such as vehicles. PlanB has nurtured relationships that allow our clients to work with a highly experienced deficiency negotiation specialist on both homes (or property in general), and vehicles! This provides an all-encompassing solution to the debt troubles of the current economy. Whether you utilize PlanB or others, these options are a great alternative. You are able to live in the home or drive the car until an agreement is reached, all without making payments (as this can hinder negotiations). This does not mean they do not have the right to pursue foreclosure or repossession but are less likely due to your efforts in negotiation. Once the deficiency is negotiated, you will basically be “forgiven” the amount above what the property sells for. This allows you to get out from underneath the secured debts without foreclosure and is reported as a sale, paid-in-full, or “settled for less than owed” (which in our solutions we avoid, preferring the “paid in full” reporting status on your credit. This is negotiated in the settlement). You also do not pay anything extra in these solutions as any fees are negotiated with the banks similar to a real estate agent would normally receive fees from the sale. Since you are upside down on the asset, you cannot “make” money anyway so allowing a specialist to assist you is a win-win situation.
Does anyone have any experience with other companies or know of other companies that offer solutions for secured debts? If so, what is your impression or what has been your experience? Have you been able to do it on your own? How did that go or how has it gone up to now?
Tags: debt negotiations, debt settlement, Secured Debt
Posted in Secured Debt | No Comments »
Wednesday, November 26th, 2008
Debt settlement is one of the most common debt “solutions” advertised today. With promises of decreasing debts by 50% (sometimes more), why not? When compared to consolidation or bankruptcy, it seems like a no brain-er. But there is much to beware of. As with any business decision (whenever you’ll be spending some money), you should investigate both the solution/strategy itself as well as the company with whom you plan on working. I have previously posted about some of the pieces and inner-workings of settlement and will continue to do so from time to time (along with other solutions).
With my new found fascination for Google Trends, here is the current search trend for “Debt Settlement” in the United States according to Google.
As you can see, a clear growth in searches and, hence, growth in the industry. You will also notice the lower curve which represents the amount of “news” relating to “debt settlement” as well.
In a market like this, the debt reduction/management industry explodes and with that growth comes a lot of untrustworthy companies (dare I say… “scam!”). Sometimes they may merely be poorly run but if that results in process failure, it is just as bad as untrustworthy. Overpromise and underdeliver is the tone of the day for most of these companies. One of the biggest dangers i see is Lack of Control! Anytime a company basically says “don’t worry, I’ll take care of you…” be cautious! The only one who is truly interested in taking care of you is YOU. Especially when you are unclear on what they charge and how they charge it even after signing up. “Just make this monthly payment to this escrow account from which we will take some fees but it will be used to pay back creditors, don’t worry.” How much are you really paying? There is nothing wrong with monthly fees but they should be clearly understood as to their purpose, amount, duration, etc. This can be very deceiving as they hide the fee from your awareness by taking it from your “payoff escrow account.” Many of these difficulties are expressed in a recent blog post on a Business Week blog that can be seen here.
Although it sounds good to turn your brain off and hope all things work out, maintain control, understand the method, learn about the company, and make responsible decisions to improve your situation! Even with these shortcomings and big claims, better results are very possible if you understand the laws, take control, receive guidance, and press forward. That is why we do what we do.
Tags: debt settlement, scam
Posted in debt settlement | 3 Comments »
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