Guest Post by Alan Winkler
Getting out of debt can sometimes be a long and arduous process under the best of circumstances. Between the complexities of debt legislation and the various competing demands of debt collectors and consolidation firms, someone working to relieve their debt has several obstacles to overcome. Unfortunately, there are nearly as many shady, untrustworthy, and downright fraudulent collection and consolidation services out there as there are honest firms that genuinely try to help consumers. In order to avoid being taken advantage of, it's important to understand some of the most common debt consolidation scams out there.
Watch Out for Hidden Fees
One of the most common forms of debt consolidation fraud is the time-tested tactic of charging numerous hidden fees. All debt consolidation firms charge a fee of some type or other in order to stay in business, but reputable firms are up front and very open regarding their fee payment structure. If you have started to notice reoccurring charges from debt consolidators that defy explanation, you might be in the grasp of scammers. In order to avoid this, check out a debt consolidation company thoroughly before beginning a business relationship with them. Companies that pressure you to sign contracts right off the bat may be trying to conceal hidden fees or service charges until it's too late for you to back out.
Consider Your Debt Plan Carefully
Debt relief plans are also ripe for exploitation. These plans set the structure for how you'll repay your debt and what the time frame for doing so will look like. Ethical debt consolidation companies provide an excellent way to plan your debt relief and satisfy creditors, but all too often, unscrupulous debt collectors with no concern for customers will offer plans that do not meet creditors' needs, leaving the customer in the lurch. This happens for a variety of reasons: the scammers may be better able to hide an exploitative fee structure in longer-term, slower payments, or they may have lured customers in with false promises of far lower interest rates that the creditors have not actually offered. These scams leave the individual in terrible trouble, as their financial situation worsens and the scammers make a profit.
Know Who to Trust
While it's not a scam, it pays to be aware of the fact that many false debt relief organizations will attempt to portray themselves as something more trustworthy. Common examples include so-called "Christian" debt consolidation firms, which prey on the trust that many feel for their co-religionists; the "non-profit" label is also frequently employed by these charlatans. The FTC has filed suit against several so-called "non-profit" debt collectors in the past few years for advertising their status as non-profits falsely in order to generate trust. Choose a debt consolidation company on their track record and user reviews, not on the basis of their attempts to portray themselves as more honest than the other guys. When it comes to debt consolidation, a little skepticism can go a long way towards keeping you safe!
Remember, the debt consolidation firm is working for you, not the other way around. Avoid companies that are too eager to talk you into a commitment, and if they're too forceful, ignore them. Many other options exist. Likewise, be sure that both you and your creditors understand and approve of the consolidator's plan. Preparations such as these can save hundreds if not thousands of dollars on top of the extreme aggravation that debt scams can cause. Get out of debt today with honest and ethical debt consolidators.
About the Author: Alan Winkler is a professional debt advisor and regular writer for Debt Consolidation Advice, a credit card debt relief blog. He also covers the debt relief industry as a whole and provides money saving tips.
Tuesday
How to Avoid Overspending on Your Credit Card
Guest Post By Andrew Black
Your credit card debt could be piling up by now if you are into overspending. It is becoming a common problem these days as the number of so-called shopaholic people increases. Moreover, modern society has obviously made it very easy to spend much more than you should. It is about time you start aiming to clear your rising credit card debts.
If you want to obtain peace of mind, you should aim to curtail, control, and eliminate overspending. In reality, it could be harder than you think. Most of the time, consumers fail to resist the urge to spend according to their means. Overspending is a problem that leads to more financial problems. Thus, it would be best if you would observe the following tips on how to avoid it.
Prevent impulsive spending
Spending on impulse could be a habit. It is one of the main reasons cited for consumers’ overspending activities. To prevent it, try to reflect prior to buying any item. If you like to buy anything you see in a retail shop, try not to make a purchase right away. Instead, wait for a day before you actually decide to buy it. Doing so would enable you to rethink the proposition to buy and possibly find other items that could be comparatively better.
Do not go to places where there are numerous temptations to buy. Overspending is common to consumers who frequent shopping centres and retail shops. If you go to such places to overcome boredom, try to find other venues to do so. Likewise, try not to spend your lunch break strolling around retail shops. How about hanging out in a garden or a park where there could be less temptation to spend anything?
Live within a strict budget
If overspending is your problem, set a specific budget per week. Intend not to spend beyond this allocation no matter what happens. Furthermore, make sure your weekly budget is in cash, which is much easier to monitor. Keep your credit cards in a secured place and do not bring it whenever you go out so as not to face the urge to spend unnecessarily.
It would also help if you would know how much you spend. Be conscious when you buy small or relatively cheap items. For instance, do not buy coffee as frequently as you do. Review your bank accounts, payables, and credit card bills so you would determine how much you spend within a particular period. Also try to look at different types of items you purchase.
Set objectives when shopping
You could effectively avoid overspending if you would set clear objectives prior to shopping. Buy items because you really need them, not because you want them. Before deciding to purchase anything, think more than twice whether you would go on and complete the purchase. Do not try to look closer at things that do not fall within your shopping objectives.
Lastly, you could curtail overspending by avoiding spending by habit. Review your own habitual spending pattern. This way, you could determine whether you tend to buy things based on necessity or simply based on your habit. Try to find other recreational activities that would take most of your idle time from habitual spending.
Andrew has been working in the finance industry helping people to consolidate credit card debts. Andrew now likes to share advice on how to avoid debt.
Your credit card debt could be piling up by now if you are into overspending. It is becoming a common problem these days as the number of so-called shopaholic people increases. Moreover, modern society has obviously made it very easy to spend much more than you should. It is about time you start aiming to clear your rising credit card debts.
If you want to obtain peace of mind, you should aim to curtail, control, and eliminate overspending. In reality, it could be harder than you think. Most of the time, consumers fail to resist the urge to spend according to their means. Overspending is a problem that leads to more financial problems. Thus, it would be best if you would observe the following tips on how to avoid it.
Prevent impulsive spending
Spending on impulse could be a habit. It is one of the main reasons cited for consumers’ overspending activities. To prevent it, try to reflect prior to buying any item. If you like to buy anything you see in a retail shop, try not to make a purchase right away. Instead, wait for a day before you actually decide to buy it. Doing so would enable you to rethink the proposition to buy and possibly find other items that could be comparatively better.
Do not go to places where there are numerous temptations to buy. Overspending is common to consumers who frequent shopping centres and retail shops. If you go to such places to overcome boredom, try to find other venues to do so. Likewise, try not to spend your lunch break strolling around retail shops. How about hanging out in a garden or a park where there could be less temptation to spend anything?
Live within a strict budget
If overspending is your problem, set a specific budget per week. Intend not to spend beyond this allocation no matter what happens. Furthermore, make sure your weekly budget is in cash, which is much easier to monitor. Keep your credit cards in a secured place and do not bring it whenever you go out so as not to face the urge to spend unnecessarily.
It would also help if you would know how much you spend. Be conscious when you buy small or relatively cheap items. For instance, do not buy coffee as frequently as you do. Review your bank accounts, payables, and credit card bills so you would determine how much you spend within a particular period. Also try to look at different types of items you purchase.
Set objectives when shopping
You could effectively avoid overspending if you would set clear objectives prior to shopping. Buy items because you really need them, not because you want them. Before deciding to purchase anything, think more than twice whether you would go on and complete the purchase. Do not try to look closer at things that do not fall within your shopping objectives.
Lastly, you could curtail overspending by avoiding spending by habit. Review your own habitual spending pattern. This way, you could determine whether you tend to buy things based on necessity or simply based on your habit. Try to find other recreational activities that would take most of your idle time from habitual spending.
Andrew has been working in the finance industry helping people to consolidate credit card debts. Andrew now likes to share advice on how to avoid debt.
No Advance Fees for Debt Relief Companies
Guest Post by Robert Zangrilli
Robert Zangrilli is the CEO of Franklin Debt Relief, a debt settlement company based in Chicago, Illinois but servicing clients nationwide.
Before October 27, 2010, the common practice in the debt reduction industry was to charge to up front fees to consumers who used their services. Prior to this date, my company for example, charged its fee over the first 18 months of our client’s programs, which usually lasted 24 to 36 months. Earlier this year, however, the FTC ruled that charging fees in advance to settling a consumers’ credit card debt as a practice was harmful to consumers. Certainly this was true of many companies, especially those who collected the majority of the fees before providing any services and in fact, probably had no real intention of settling their clients’ debts.
This all changed effective October 27, 2010 when the FTC made effective an up front fee ban for debt relief services. More specifically, the FTC ruled that debt relief companies must now negotiate the term of at least one of a consumer's debts in order to receive compensation for its services. Not only must there be a written agreement of this settlement, but the consumer must agree to it and have made at least one payment to a creditor in order for a debt relief company to receive compensation for its services.
On top of these new rules regarding fees, there are also specific provisions in the new rule regarding the advertising and sales of debt relief services. First off, debt relief companies are now required to make specific disclosures to clients before enrolling them into their programs. Second, debt relief companies are prohibited from making deceptive claims about the success of their programs, including how long it will take to settle a consumer’s debts and how much a client will save. While these two new provisions may seem unimportant, these are perhaps the most significant parts of the new rule because it makes it clear what is a deceptive practice in the debt relief industry, which in turn will be used to justify FTC actions against unscrupulous actors.
I hope this article sheds some light on the protections afforded to consumers seeking debt relief services. As is true in most industries, there are still bad actors out there trying to skirt the law by setting up face-to-face meetings with consumers (the rule only sold over the telephone), so it is important that consumers continue to do their due diligence before enrolling with a company. BBB complaint record, how long a company has been in business, and TASC accreditation (the debt settlement industry’s trade organization) are both good indicators of how reputable a company is.
Robert Zangrilli is the CEO of Franklin Debt Relief, a debt settlement company based in Chicago, Illinois but servicing clients nationwide.
Before October 27, 2010, the common practice in the debt reduction industry was to charge to up front fees to consumers who used their services. Prior to this date, my company for example, charged its fee over the first 18 months of our client’s programs, which usually lasted 24 to 36 months. Earlier this year, however, the FTC ruled that charging fees in advance to settling a consumers’ credit card debt as a practice was harmful to consumers. Certainly this was true of many companies, especially those who collected the majority of the fees before providing any services and in fact, probably had no real intention of settling their clients’ debts.
This all changed effective October 27, 2010 when the FTC made effective an up front fee ban for debt relief services. More specifically, the FTC ruled that debt relief companies must now negotiate the term of at least one of a consumer's debts in order to receive compensation for its services. Not only must there be a written agreement of this settlement, but the consumer must agree to it and have made at least one payment to a creditor in order for a debt relief company to receive compensation for its services.
On top of these new rules regarding fees, there are also specific provisions in the new rule regarding the advertising and sales of debt relief services. First off, debt relief companies are now required to make specific disclosures to clients before enrolling them into their programs. Second, debt relief companies are prohibited from making deceptive claims about the success of their programs, including how long it will take to settle a consumer’s debts and how much a client will save. While these two new provisions may seem unimportant, these are perhaps the most significant parts of the new rule because it makes it clear what is a deceptive practice in the debt relief industry, which in turn will be used to justify FTC actions against unscrupulous actors.
I hope this article sheds some light on the protections afforded to consumers seeking debt relief services. As is true in most industries, there are still bad actors out there trying to skirt the law by setting up face-to-face meetings with consumers (the rule only sold over the telephone), so it is important that consumers continue to do their due diligence before enrolling with a company. BBB complaint record, how long a company has been in business, and TASC accreditation (the debt settlement industry’s trade organization) are both good indicators of how reputable a company is.
Friday
Harassing Creditors and the Way to Defend Yourself
Guest post by Kevin Craig
As a bad debt grows, debt collection agencies seem to exert more and more pressure on the debtors in the form of creditor harassment. Although debt collection is legal, harassment by collection agencies is not! The FDCPA laws are like the cool shades that shelter the consumers’ rights and offers protection to illegal debt collection tactics. There are various types of harassment that the creditors impose on the debtors:
Creditor harassment and consumer rights – (Fair Debt Collection Practices Act)
There are two different types of creditor harassment laws, the federal laws and the state laws; the federal laws are for the entire citizen, while the state laws are only for the citizen of that particular state. If both the laws are taken into account it’s the state law that is more effective. The FDCPA is designed in such a way that it can fight back the abusive creditors and if required can also put a penalty on them which might even count up to $1000.
Utilizing unfair practices in collection of debt
There are situations where the debt collectors may charge more than the original amount.
The debt collectors may ask the consumers to incur certain extra financial charges.
The debt collectors may threaten to damage personal property.
Unfair or outrageous collection activities are practiced by the debt collectors.
Notice Violation
The creditor sends a letter to the debtor addressing him as a “dead beat” which means someone who has no money to pay for his credit cards.
The creditor sends out a collection letter which signifies a court order.
Limitations of FDCPA
Firstly, the debt must be a consumer debt and not a business debt.
FDCPA does not apply to third party collection agency.
It is only the debt attorney who can suggest which law applies and when, so that he can give him the required protection as and where required.
FDCPA to save the consumers from creditor harassment
The FDCPA has been designed in such a way that it can protect human rights against creditor harassment .If the harassment is illegal, the consumers can even sue the debt collectors for any kind of damages done either to their personal property or to them. A local consumer attorney can guide the consumers as to whether the case of violation of FDCPA laws against the debt collectors is legal or not!
You can try out the following to deal with creditors
As a bad debt grows, debt collection agencies seem to exert more and more pressure on the debtors in the form of creditor harassment. Although debt collection is legal, harassment by collection agencies is not! The FDCPA laws are like the cool shades that shelter the consumers’ rights and offers protection to illegal debt collection tactics. There are various types of harassment that the creditors impose on the debtors:
- Debt collectors threaten to hurt.
- They come to damage any personal property.
- They use obscene language over the phone.
- They threat to put the consumer behind the bars.
- They make disturbing calls at your workplace.
Creditor harassment and consumer rights – (Fair Debt Collection Practices Act)
There are two different types of creditor harassment laws, the federal laws and the state laws; the federal laws are for the entire citizen, while the state laws are only for the citizen of that particular state. If both the laws are taken into account it’s the state law that is more effective. The FDCPA is designed in such a way that it can fight back the abusive creditors and if required can also put a penalty on them which might even count up to $1000.
Utilizing unfair practices in collection of debt
There are situations where the debt collectors may charge more than the original amount.
The debt collectors may ask the consumers to incur certain extra financial charges.
The debt collectors may threaten to damage personal property.
Unfair or outrageous collection activities are practiced by the debt collectors.
Notice Violation
The creditor sends a letter to the debtor addressing him as a “dead beat” which means someone who has no money to pay for his credit cards.
The creditor sends out a collection letter which signifies a court order.
Limitations of FDCPA
Firstly, the debt must be a consumer debt and not a business debt.
FDCPA does not apply to third party collection agency.
It is only the debt attorney who can suggest which law applies and when, so that he can give him the required protection as and where required.
FDCPA to save the consumers from creditor harassment
The FDCPA has been designed in such a way that it can protect human rights against creditor harassment .If the harassment is illegal, the consumers can even sue the debt collectors for any kind of damages done either to their personal property or to them. A local consumer attorney can guide the consumers as to whether the case of violation of FDCPA laws against the debt collectors is legal or not!
You can try out the following to deal with creditors
- Police assistance
- Complain to the trading standards
- Doing full and final settlement to clear debts with a help of a debt settlement law firm.
- Take creditor to Small Claims Court.
Thursday
How did Jennifer get rid of her debt?
Guest post by Jennifer Lohan
Getting out of debt requires great effort and when you have dependent family members, nothing can be worse than that. Jennifer faced a similar situation. Her husband passed away long ago. She is the sole breadwinner of the family and her in-laws are also living with her. She has four credit cards that she used on and off whenever she was short of cash. Since her income wasn’t sufficient to keep up with her monthly payments, she soon fell into debt. She did whatever she could to find the best debt consolidation company for her needs and at last found one. She has signed up for their debt consolidation program. For finding the best debt consolidation company, she took help of her friends, family members and useful online resources. She wanted to eliminate her debt burden once and for all. So, how did she get into the debt trap?
Falling into the debt trap
There are mainly two particular reasons that can push you into a vicious debt trap and make your finances go out of control. The first is an unexpected job loss and the second is a health condition. Hence, what would you do in this type of circumstances? Jennifer was regular with her payments till her husband suffered a job loss. The situation became worse when he died of cancer. This was truly a defining moment in her life. She finished up all her savings and also took money from friends and family members in her futile attempt to save her husband.
Jennifer’s monthly income was not sufficient to manage her debts. So she went to some creditors for credit. Furthermore, she began to use her credit cards oftentimes. For the first one or two months, there was no problem and Jennifer was regular with her payments. When the subprime mortgage meltdown took place, a number of credit card companies lowered their credit limits and modified credit card payment plans. Jennifer didn’t have any idea about this. As a result, she lagged behind her payments since she didn’t have the ability to make the minimum monthly payments.
How did Jennifer get rid of debt?
As soon as she started facing credit problems, she acted intelligently and talked to a credit counselor. Jennifer was cautious about the ill effects of filing bankruptcy since a number of her friends had gone for the same option. She didn’t let her balances pile up to a huge amount. Jennifer’s financial condition was thoroughly evaluated and the credit counselor advised that she should go for a debt consolidation program.
As Jennifer was already restructuring her finances, she didn’t wish to spend an excessive amount for a consolidation program. She selected a non profit debt consolidation company. Before signing up, she also confirmed that whether the company is affiliated with the BBB. As soon as she was confident about their trustworthiness, she signed up for the program.
The consolidation agency asked for nominal fees against their services. They carried out negotiations with her creditors and persuaded them to lower her interest rates and monthly payments. All her debts were combined into a single affordable monthly payment. A repayment plan was set up that helped Jennifer keep tabs on her monthly payments. She followed the plan sincerely and became debt free in the end.
Getting out of debt requires great effort and when you have dependent family members, nothing can be worse than that. Jennifer faced a similar situation. Her husband passed away long ago. She is the sole breadwinner of the family and her in-laws are also living with her. She has four credit cards that she used on and off whenever she was short of cash. Since her income wasn’t sufficient to keep up with her monthly payments, she soon fell into debt. She did whatever she could to find the best debt consolidation company for her needs and at last found one. She has signed up for their debt consolidation program. For finding the best debt consolidation company, she took help of her friends, family members and useful online resources. She wanted to eliminate her debt burden once and for all. So, how did she get into the debt trap?
Falling into the debt trap
There are mainly two particular reasons that can push you into a vicious debt trap and make your finances go out of control. The first is an unexpected job loss and the second is a health condition. Hence, what would you do in this type of circumstances? Jennifer was regular with her payments till her husband suffered a job loss. The situation became worse when he died of cancer. This was truly a defining moment in her life. She finished up all her savings and also took money from friends and family members in her futile attempt to save her husband.
Jennifer’s monthly income was not sufficient to manage her debts. So she went to some creditors for credit. Furthermore, she began to use her credit cards oftentimes. For the first one or two months, there was no problem and Jennifer was regular with her payments. When the subprime mortgage meltdown took place, a number of credit card companies lowered their credit limits and modified credit card payment plans. Jennifer didn’t have any idea about this. As a result, she lagged behind her payments since she didn’t have the ability to make the minimum monthly payments.
How did Jennifer get rid of debt?
As soon as she started facing credit problems, she acted intelligently and talked to a credit counselor. Jennifer was cautious about the ill effects of filing bankruptcy since a number of her friends had gone for the same option. She didn’t let her balances pile up to a huge amount. Jennifer’s financial condition was thoroughly evaluated and the credit counselor advised that she should go for a debt consolidation program.
As Jennifer was already restructuring her finances, she didn’t wish to spend an excessive amount for a consolidation program. She selected a non profit debt consolidation company. Before signing up, she also confirmed that whether the company is affiliated with the BBB. As soon as she was confident about their trustworthiness, she signed up for the program.
The consolidation agency asked for nominal fees against their services. They carried out negotiations with her creditors and persuaded them to lower her interest rates and monthly payments. All her debts were combined into a single affordable monthly payment. A repayment plan was set up that helped Jennifer keep tabs on her monthly payments. She followed the plan sincerely and became debt free in the end.
Thank you Jennifer for this post.
The site Jennifer links to Debt Consolidation Care, Internet's first get-out-of-debt community is a fine resource of both information and people. People trained in debt law, professionals with experience in the field, people who have gone through getting out of debt and people in the process of getting out of debt. It is a place where you can ask questions and get help.
I do have a few words of caution though. When seeking help getting out of debt please beware.
- Avoid actual debt consolidation loan programs.
- Avoid programs that require a substantial payment up front. The program should actually cost you very little or nominal fees as stated in the post.
- Avoid companies listed with the Better Business Bureau (BBB) that have substantial complaints against them. Being listed with the Better Business Bureau is not a seal of approval or measure of trustworthiness, but mounting complaints against a company listed with the BBB should be a dis-qualifier. From the BBB site.
BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services.- Use Common Sense. If something a company is telling you seems wrong trust your instincts. Go elsewhere, ask questions, walk away from what seems wrong and get more information. Just because your in debt doesn't mean your stupid. Take a deep breath, take charge of your situation, ask more questions. You may need help, need guidance but you don't need someone trying to profit from your pain.
Subscribe to:
Posts (Atom)
