or Debt Management is NOT THE ANSWER
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Contact Bud for
Consumer Help
PO Box 11917
Ft. Worth, TX 76110
817-348-0818
Fax: 817-348-8128
BudHibbs.com
Far too many people have the wrong idea about consumer debt. It's okay to have and use credit cards as long as you don't allow them to get out of hand and control you, but what choice do you have when that happens to you? When you owe money, there are really only four options available:
A. Pay Your Debt B. Credit Counseling
C. Bankruptcy Protection (Now more difficult than ever)
D. Stop Paying and Walk Away
1. PAY YOUR DEBTS: Often the best scenario is to pay your debts in accordance with the terms and conditions of your cc agreement (and all subsequent addendums.) This will eliminate any fear of having a bad credit report and avoid the hassles of the collection process. But, if your cards are maxed out and you’re barely making minimum payments, look to moving the highest rates down to lower card rates while continuing to make larger than normal monthly payments. If you are having financial problems, stop using credit cards, tighten your belt, set up a strict budget and follow it. Think of this as a program like losing weight, stopping smoking or quitting some other dreaded habit. You need to implement a plan to change financial course.
2. ENROLL IN A CREDIT COUNSELING PROGRAM: Consumer Credit Counseling Service (CCCS) has had a reputation that for many years it misrepresented itself to consumers in the way that it conducted business. Only because of successful class action lawsuits has their monopoly on this market been broken. My complaint about all credit counseling is that they get paid a commission, (averaging 10-12%, paid by the creditors), yet try to confuse the consumer with misleading words and phrasing such as "non-profit." Don't be fooled! This is a billion-dollar industry which at one time was sold as franchises like McDonalds and Colonel Sanders. Credit counseling is much the same as a Chapter 13 Wage Earner Bankruptcy plan in which debtors enter a long-term program to repay their debts. This can last as long as five years, while seriously hampering your credit recovery. If you follow a CCCS
4. STOP PAYING & WALK AWAY: This choice is the preferred one by most consumers because it affords anonymity without the stigma, the embarrassment and humiliation of credit counseling or bankruptcy court. However, this is where most consumers endure the tremendous hostility of the collection system. When an account is partially due, the in-house collector, who works for the original creditor, will contact you for the purpose of getting a payment. The collector has a computer screen with all of the information furnished by you, such as home phone, employer, work phone, etc. The computer program used to make these calls automatically alerts the collector if there is no contact and redials until contact is made. The auto-dialers cause many complaints about the numerous calls consumers receive. A creditor will not offer you an interest rate reduction or hardship program of lower payments until after you are behind for several months. The debtors, of course, reason that if this type of program were offered at the first sign of problems, then everyone who owes them money would be applying for hardship programs.
THE LAW IS UNFAIR: Federal law, The Fair Credit Reporting Act, requires that the original creditor must 'Charge-Off' which means, it must act as if your account is non-collectable no later than 180 days from the date of your last payment. This information is then forwarded to the three credit bureaus for insertion into your file. Once there, derogatory entries are allowed to remain for up to seven years from the date of first placement, provided there are no further payments. (If you resume payments, the seven-year clock starts over.) At the point of 'Charge-Off' the account is usually turned over to an outside collection agency and/or law firm that collects debts. The agency/attorney collectors are paid commissions ranging from 15-25% of what they collect. When the agencies get your account, they will sometimes contact you immediately and start making demands for payment and, depending on the varied intelligence level or training of the collector (??), make varied threats, innuendoes, or attempt to intimidate debtors into sending them money. I have never heard of an attorney directly making collection calls, so beware, if you are contacted by anyone claiming to be an attorney. It's illegal under the Fair Debt Collection Practices Act (FDCPA) for anyone to misrepresent himself or herself in the collection of a debt. However, working as a debt collector has never required much intelligence or social skills, so don't be surprised with the level of low lives the industry produces.
COLLECTION AGENCY CONS: Should you decide to go "underground," quit answering the phone, get unlisted, refuse to return calls, screen your calls or in any way avoid the efforts, collectors will use other means at their disposal to contact you. Typical collection methods include contacting you where you work, (which is legal unless you properly notify them to stop), contacting your family and neighbors with some type of phony communication such as, there is an "emergency message." My favorite is the Mail-Gram notification ploy, which is a bright yellow letter, mailed by desperate agencies such as The Credit Store, Sioux Falls, SD. The mailer includes instructions for you to call their special 800#, inputting the special pin number contained in the notice which causes a recorded greeting such as "be sure and drive careful out there this week- end." You can put in any number you like because the call is only a con by agencies to capture your telephone number in their computers. The captured numbers are used by collectors to call you back. Whenever you call a number that starts with 800, 888, 877, 866, 855, the party at the other end can legally capture the number you are calling from. Another trick used by desperate collectors is to contact your place of employment and speak to your boss or the human resources department, asking to confirm employment. This method of harassment is used to help an agency begin the (illegal) threat of wage garnishment. Why do collectors lie and engage in this deception? ...$$ MONEY $$
Stop Drowning in Debt
