Datasets:

lkndsjkndgskjngkjsndkj

/

jsjdjsdvkjvszlhdskb

like 0

TITLE: Fingertip Signatures on Credit Card Purchases CONTENT: Giving Merchants the Finger: How Fingertip Signatures Work\n----------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 22, 2017_\n\"Do you take credit cards?\" Gone are the days when you'd ask that question more out of hope than expectancy. Today, credit cards can be accepted anywhere, from storefronts, to street fairs, to garage sales. All it takes is a mobile device equipped with a card reader and touchscreen to capture fingertip signatures.\nWhat is a Fingertip Signature?\n------------------------------\nA fingertip signature is a type of electronic signature now commonly used by merchants to process credit card payments on mobile devices. The card is swiped via a card reader (like Square), then the card owner is prompted to sign their name for the purchase — with their fingertip — inside a signature box displayed on the mobile device's touchscreen.\nIs a Fingertip Signature Legally Binding?\n-----------------------------------------\nYes, the federal Electronic Signatures In Global and National Commerce (ESIGN) Act of 2000 gave electronic signatures just as much weight as those handwritten with pen and paper. The same is true on the state level, via the Uniform Electronic Transactions Act (UETA), which has been adopted by most U.S. states.\nIs it Possible for a Fingertip Signature to Verify Someone's Identity?\n----------------------------------------------------------------------\nNo, a fingertip signature of your name is not enough to prove that you are, indeed, the person whose name you're signing. But, to a certain extent, the same may be said of handwritten signatures as well.\nGranted, a handwriting expert may be able to convince a judge and jury of its authenticity, one or way or the other. But what of a merchant's deciphering of your signature? How well can they make a convincing argument — to themselves or anyone else — that the signature on the receipt doesn't match the one on the back of your credit card (i.e., proving that the person signing isn't who they say they are)? Of course, how often do merchants bother to compare the two signatures at all?\nIs There Any Security Risk Associated With Fingertip Signatures?\n----------------------------------------------------------------\nThere is likely no risk associated with sharing your signature in-and-of-itself. The more practical concern is associated with what comes before the signature — the swiping of your credit card. That said, card readers like Square encrypt the credit card data, and the mobile device does not store it in any form.\nAm I Protected From Fraudulent Purchases Made With a Fingertip Signature?\n-------------------------------------------------------------------------\nYes, you can expect the same level of protection as you would of any other fraudulent purchase made with your credit card.\nHow Could Dynamic Biometrics Advance Fingertip Signature Authentication?\n------------------------------------------------------------------------\nDynamic biometrics can be used to analyze how a fingertip signature is created. Unlike a handwritten signature, which only provides authenticators with the final product for analysis, dynamic biometrics incorporates into the analysis the act of the writing itself. The speed and direction of the strokes you use to sign your name is so unique that its forgery is a near impossibility. This technology already exists, just not yet for mainstream use via card readers on mobile devices. END

TITLE: Secret Credit Scores - Alternative Scores Used by Lenders CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: September 26, 2017_\nCredit scores can predict your ability to pay back debts, but new scoring models purport to predict your behavior beyond creditworthiness. Similar to credit scores, these new scoring models are based on the assumption that past behavior can predict future risks.\nThere is big business in credit cards and knowing who is a good credit card customer and who is not is imperative to the bank looking for new customers. There are companies that furnish this information to the banking industry to drum up business. Ever wonder why you receive certain types of direct mail credit card offers? Wonder why a credit card company suddenly decreases your credit limit despite your perfect payment history? With the advent of the computer, many types of sophisticated modeling is available to the banking industry. The whole point of these models is of course, to maximize profitability.\nRevenue Score\n-------------\nYour revenue score, calculated by banks, has nothing to do with your income. The revenue score actually has to do with how much money you are expected to make for the credit card issuer. This score predicts how much money a credit card company is likely to make from a specific customer, based on past behaviors and payment history.\nYou've heard of the term \"credit card deadbeat?\" A credit card deadbeat is the insider term used by credit card company executives and refers to all of the credit card users who pay off their bill each month promptly; in doing so, such customers pay no interest and prevent the creditor from making any profit.\nThis score can lead to the ironic situation where a customer with a perfect paying history may find their credit cards cancelled or credit limits lowered. This is because the credit card companies are actually losing money on unprofitable clients.\nBehavior Scoring\n----------------\nBehavior scoring is a decision-making customer prediction tool based on customer behavior and life-style. This powerful tool plays an important role in banking, credit card, insurance, and telecommunication industries as it helps solving business issues, such as:\n* Contractual credit loss\n* Fraud\n* Bankruptcy\n* Customer attrition\n* Account management\nWith the capability of identifying which customers will turn 'bad' in the future, scoring models can develop proactive strategy to reduce the potential loss months before the customers actually become bad. On the 'good' customer group, different sets of action can be taken to improve the profitability and retain the customers.\nResponse Model\n--------------\nResponse model helps businesses to better understand and anticipate their customer needs, behavior patterns, and value. With response model, it is possible to design, test, and implement more effective strategies for acquiring, growing and serving customers. Some of the areas that can be addressed with a response model are:\n* Product cross-sell and up-sell\n* Direct mailing solicitation\n* Activation & promotion programs\nTransaction Score\n-----------------\nA transaction score is generated for each purchase you make, and is used to determine whether the transaction should be approved, or whether it might be fraudulent. This score also factors in the risk of whether or not the customer is likely to return the purchase, or whether questions concerning an online purchase will deter the completion of the purchase.\nYour transaction score is based on profile data. Some examples of this data are:\n* Contain summaries of historical data that include prior customer transaction data.\n* Number of times a customer returned a purchase.\n* Whether or not the customer will complete the transaction\n* Number of previous fraudulent transaction connected to the consumer.\n* Probability based on the likelihood that a user customer will terminate the transaction if the user customer is presented with an online shopping cart follow-up question set.\nCollection Score\n----------------\nThere is no single credit-lending business which has no delinquent customers. The collection scoring system is based on customer's past behaviors in both non-delinquent and delinquent states, the system is able to determine which of delinquent customers has higher chance of collectibility\/recovery, who should get harsher treatment, what is the cost-effective medium to use, etc.\nThis score is beneficial to collection agencies who have large portfolios of debt. Why spend a bunch of time and money on accounts which are unlikely to be collected?\nApplication Score\n-----------------\nYour application score contains secondary information not factored into your FICO® credit score. Examples of this type of information are:\n* Your age\n* Where you live\n* Your ethnicity\n* Your profession\nBankruptcy Risk Score\n---------------------\nYour bankruptcy risk score is just what it sounds like: a measure of how likely you are to declare bankruptcy. Analysts at credit reporting agencies say advanced mathematics and data analytics are used to determine the complex score. However, they say, some variables come directly from your credit report, such as how the credit is used, how often a bill payment is late and the number of inquiries made.\nResearchers say the score typically surfaces when a consumer gives the bank permission to pull his credit report during the application process for a new loan, bank card or credit card, and during the periodic review of clients' accounts to determine whether to increase a consumer's credit limit.\nWhat goes into a bankruptcy score? Of course, developers of the model are not giving out too many details. However, there are some clues. For instance, where you live can change your bankruptcy risk score. According to Nerd Wallet, the states with the highest amount of consumers to file for bankruptcy in 2016 are:\n1. Tennessee \n2. Alabama\n3. Georgia\n4. Illinois\n5. Mississippi\nAttrition Risk Score\n--------------------\nAn attrition-risk score measures how likely you are to close your account. Lenders use this in combination with other scores to decide whether a customer is worth retaining.\nIn addition, research has shown that retaining existing customers is more profitable than acquiring new customers due primarily to savings on acquisition costs, the higher volume of service consumption, and customer referrals. END

TITLE: Information on New Credit Scoring Models CONTENT: New Credit Scoring Models — Lenders Using More Than FICO Score\n--------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: September 25, 2017_\nBeyond the FICO credit score, banks and credit card issuers are digging deeper into people's lives and using powerful new tools to see where you live, how often you switch jobs or whether or not you get paid with direct deposit to decide whether you deserve a loan or a credit card. These new credit scoring models are being developed and used by lenders to look at more of a person's credit and employment history than simply pulling up their FICO score.\nBecause of the new federal regulations a lender will have to disclose why they are denying someone credit or charging a person a higher interest rate. But, the underlying data and formulas used to determine a person's credit worthiness will still remain a mystery to the average consumer.\nDeposit Behavior Score\n----------------------\nOne of these new credit scores is called the _Deposit Behavior Score_. This tracks how people manage their money by reviewing their checking and savings accounts. The actual formula is not know, but it has been determined frequent overdrafts will drag this score down. Also, people who do not have their payroll checks direct deposited or if their account goes from $3,000 to $100 every month, their scores will be lowered accordingly.\nJob Security Score\n------------------\nScoreLogix has been marketing a _Job Security Score_ to lenders since 2008. This score attempts to gauge a person's credit worthiness based on income stability. Your score is based on hundreds of economic variables — right down to employment and income levels in specific ZIP codes.\nCredit Optics Plus\n------------------\nTransUnion unveiled a new score called _Credit Optics Plus_. This score attempts to predict risk by tracking \"stability\" factors such as changes of address, cell phone service and other personal data. The score may benefit young people or recent immigrants who may have stable incomes and employment but thin credit histories, while possibly penalizing people who move a lot because of their jobs. Lenders are still testing the score.\nOther Scoring Models\n--------------------\nIt is estimated there are more than 100 credit scoring models in circulation — most with unknown names and algorithms. With 25 percent of U.S. consumers with a FICO score of 599 or less, lenders are trying to find new ways to measure risk or simply put - determine a persons credit worthiness. Digging deeper and deeper into our lives and factoring in more than just our credit history, is what lenders are doing now to evaluate whether or not your will get that car or home loan.\nSo what can you do to make sure you are not denied that loan? Pay your bills on time and monitor the information on your credit report to make sure it is accurate. Even though there are a lot of new credit scoring models floating around, banks and lenders still use the information on your credit report as the basis of their decisions. If your report is solid, the other infractions may not seem so bad. END

TITLE: Credit Card Billing Errors and Fraudulent Charges CONTENT: Questions and Answers On Credit Card Billing Errors\n---------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 23, 2017_\nWe all use credit cards to purchase everything from gas to groceries. Have you ever noticed how little cash we carry in our wallets these days? And that is not for a lack of it (hopefully), but the general overall convenience of paying for everything with plastic. There are people who even pay their mortgage with their credit card just to reap the rewards of frequent flyer miles.\nIn this article, we are going to deal with the mishaps you might encounter using your credit card. You might have to deal with billing errors, merchants who charge you incorrectly, someone stealing your information and using it fraudulently, or maybe you just have questions about using your credit card.\nWhat Types of Problems Can Be Disputed?\n---------------------------------------\nThe Fair Credit Billing Act and the Federal Truth in Lending Act both protect you from honest errors and outright fraud by merchants when you make the purchase through a bank issued credit card. The types of problems can be:\n* Billing errors \n* Being charged for goods you ordered but never received \n* Being charged more for a good or service other than what was originally agreed upon \n* Charged for damaged goods \n* Charged for products that did not work as represented by the seller \n* Charged for unsatisfactory services \n* You notice fraudulent charges on your billing statement \nWhat If There is an Error on Your Billing Statement? \n-----------------------------------------------------\nIf you find an error on your billing statement, turn your bill over and chances are there are instructions to follow. The rules are pretty simple - If you report a problem in writing within 60 days of the billing date, the bank must investigate it and respond to you within 30 days. While they are investigating, you don't have to pay the disputed amount or any finance charges associated with that charge. If their investigation shows the item was correct, they can restore finance charges retroactively and you will have to pay them.\nSome banks try to resolve problems over the phone; others insist that you write a letter. If you decide to call, make sure you note the date and time of the call, whom you talked to, and what they promised to do. Then send a letter to them mentioning this information. If you resolve a problem by phone, but the bank doesn't follow through, the confirming letter that you sent will preserve your rights.\nWhat Recourse Do You Have if You Were Ripped-Off By a Merchant?\n---------------------------------------------------------------\nThis applies to any situation listed at the beginning of this section, except billing errors. Fortunately, the U.S. Fair Credit Billing Act gives you strong protection if you used a credit card. Because this comes up so frequently, and people are understandably emotional when they think they've been cheated. We suggest you refer to the legal language found on the back of your bill, under \"Special rule for credit card purchases.\"\nWhat Types of Purchases Qualify Under the Fair Credit Billing Act?\n------------------------------------------------------------------\nYou are protected if **all** of the following are true:\n* The purchase was made with a credit card. (If it was a debit card, the money is already gone from your account and the bank won't get involved.)\n* The amount charged is more than $50. (The amount in dispute could be less, for example if you bought a $90 lamp but were billed $100. The amount in dispute is $10.)\n* You made the purchase somewhere in your home state, or within 100 miles of your mailing address. \nIf some of the above are not true, you are still protected if the credit card company owns or operates the merchant, or the credit card company mailed you the advertisement for what you bought. In that case, your purchase is covered by the rules no matter where you bought or how much you paid.\nIn addition, you MAY successfully protest charges outside of these parameters, but there is no legal requirement for the credit card company to correct the problem.\nWill the Bank Get Involved in a Dispute?\n----------------------------------------\nNo. Under the law, you must first try \"in good faith\" to resolve the problem directly with the seller.\nWhat Does \"In Good Faith\" Mean?\n-------------------------------\nResolving an issue \"in good faith\" is not defined in the law, but in practice it means that you behave like a reasonable person. The merchant is expected to act reasonably, too.\nAt a minimum, you should talk to the merchant's customer service department and send a follow-up letter. You have to allow the merchant a reasonable time to respond. What's reasonable? Depends on circumstances. Enough time for mail to go both ways, plus a couple of working days.\nActing \"in good faith\" also means that you acted promptly. Don't wait three months after the charge shows up on your bill to complain that you never got what you ordered.\nBack orders are a frequent problem. If the merchant tells you the stuff is back ordered, you have the right to cancel the order. You can tell the merchant you don't want to wait and ask for the charge to be canceled. This may not happen the same day, but it should be reasonably prompt. Wait a few days and call the bank to see if the credit has come through yet.\nHow to Deal With a Difficult Merchant\n-------------------------------------\nMost importantly, remember that the person you are talking to is probably not the person who caused the problem. Don't yell and don't sound crazy or make threats.\nPlenty of good people work for bad companies and many work for good companies that make an occasional mistake. You may be lucky and deal with one of them. If your approach is \"You dirty rotten so-and-so!\" you probably won't get anywhere. If your approach is \"There's a problem here; can you help me?\" you'll have a better chance of getting your issued resolved.\nBe prepared with specific information before you call. Have all the information such as order date, what you ordered (item number and price), when you were promised these items, your credit card number, and how much you were charged. Be clear about what you want - be it a refund, a replacement, shipment by a certain date, repair, etc. Most people respond best if you tell them clearly, calmly and reasonably what you want.\nWill the Bank Help If a Merchant Won't Settle the Disagreement?\n---------------------------------------------------------------\nYes. In fact, the law says the bank must help. Write or call the credit card issuer and ask for a chargeback. Use the same address as for billing errors and make sure you give these important facts in the letter:\n1. Date you are writing the letter.\n2. Your name and address, as they appear on your billing statement.\n3. Your account number, and the statement date on the bill.\n4. Explain your issue in detail - start with \"I am writing about a problem with (company name). The transaction date was (mm\/dd), the posting date was (mm\/dd), and the transaction amount was $(amount).\"\n5. Explain, clearly and briefly, what's wrong.\n6. Explain the fact you tried in good faith to resolve the problem directly with the merchant, but did not succeed. List dates you made phone calls and what was said by the merchant. Include copies of your letters to the merchant and the merchant's response, if any. (Don't overload the bank with this. You're showing that you acted in good faith; don't write a novel.)\nWhat Does the Bank Do During a Chargeback?\n------------------------------------------\nThe bank will credit your account and charge the amount back to the merchant. This must happen within one billing cycle, if you have done everything you were supposed to. If the merchant doesn't respond, the amount is gone from your bill forever.\nIf the merchant disputes the chargeback, the bank has to decide who is telling the truth. For more detailed information on chargebacks, read our article entitled A Chargeback Provides Protection From Fraudulent Credit Card Charges.\nWhat Happens to the Finance Charges on the Disputed Amount?\n-----------------------------------------------------------\nYou don't have to pay them while the bank is investigating. When the bank credits your account, they are also supposed to credit your account with any finance charges that were assessed on the disputed amount from the date of purchase. They may or may not do this without further prompting from you.\nWhat if You Paid the Bill in Full Before Noticing a Problem?\n------------------------------------------------------------\nStrictly speaking, the Fair Credit Billing Act says you may not have to pay \"the remaining amount due.\" We have found that some banks aren't quite so picky. Follow the standard procedures for disputing a charge and simply not to bring up the issue of whether you've already paid part or all of it. Odds are your bank won't raise that issue either.\nHowever, it's best to examine bills carefully before you pay them. If you question a charge on the 58th day, a month or more after you've already paid it, the bank is entitled to wonder if you're really acting \"in good faith\" as the law requires.\nHow to Avoid Problems With Unauthorized Charges\n-----------------------------------------------\nCredit card fraud has been growing every year and is a serious problem. Many banks have an entire unit devoted to just identity theft and fraud protection and prevention. In the case of unauthorized use of your credit card, the Truth in Lending Act limits the personal liability to $50. There is no time limit to report a card lost or stolen, but if you alert the issuer before someone else goes shopping with your card, you aren't on the hook for the charges.\nDebit cards don't get the same treatment. You have to report a lost or stolen debit card within two business days to limit personal liability for fraudulent charges to $50.\n**When traveling:**\n* Don't leave your rental agreement in car where thieves can get it.\n* Shred travel itineraries and ticket receipts issued by airlines and travel agents.\n**When at shops and restaurants:**\n* Refuse to write address and phone number on credit slips, or credit card account numbers on checks.\n* Don't let a clerk write your driver's license number on your check if it's the same as your Social Security number.\n**When using a calling card:**\n* Don't use a personal identification number (PIN) that's obvious, such as a birth date, work extension, or consecutive numbers.\n* Cover the phone with your body to prevent anyone from seeing what you dial; if you must tell an operator your account number, assume people are eavesdropping.\n**When at home:**\n* Destroy all pre-approved credit card applications; when cleaning files, shred old statements, pay stubs, and checks.\n* Don't give card numbers to callers who say you've won a prize.\n* If monthly statement doesn't arrive on time, call the issuer immediately.\nHow to Handle a Claim Which Involves Goods and Services\n-------------------------------------------------------\nIf your problem concerns the quality of goods or services purchased on your credit card, the Fair Credit Billing Act gives you the right to dispute the charge and stop payment on that portion of the bill until the matter is resolved by the issuer.\nAccording to the law, the goods must have cost at least $50 and the purchase had to have been made in your home state or within 100 miles of your mailing address. END

TITLE: Social Media Credit Scoring - The Pros and Cons CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: September 26, 2017_\nWhile there is no universal credit score based on your social media presence, your activity on Twitter, Facebook, LinkedIn, and other platforms absolutely influences your creditworthiness.\nThis is not to suggest that social media influences your FICO score; it does not. (Though the folks at FICO have hinted the day could come.) However, there are a number of lenders that do, indeed, rely heavily on social media signals.\nBottom line, social media credit scoring is alive and well. Weigh the pros and cons, and choose the level of participation that works for you.\nPros of Social Media Credit Scoring\n-----------------------------------\n### Alternative to Conventional Credit\nIf you have an excellent credit score, you may feel no need for other options. However, if you have a bad or limited credit history, social media credit scoring is a helpful alternative.\nThere are a number of lending websites that use a social media credit scoring model to make lending decisions, including Kabbage, Kreditech, Lenndo, Moven, and Zest Financial. Granted, your social media credit score may not be the only factor in their lending decisions, but you can be sure it weighs heavily.\n### You Have Absolute Control Over Your Social Media Profiles\nThough the listings on your credit report are determined by your credit activity, you have no direct control over what actually gets reported to credit the bureaus and what does not. Plus, while there are steps you can take to have erroneous and negative listings removed from credit reports, you have no direct control over that either.\nYour social media profiles are absolutely your domain. You have complete control over what they say, and what they don't.\nIt's your profiles that determine your social media credit score, so make sure you pay attention to what lenders want to see -- elements that speak to your character:\n* Complete Profiles\n* Education\n* Job History\n* Quality Connections and Posts\n### Authorization Required\nThe lenders who want to lend you money based on a social media credit score must receive authorization from you before they can access your accounts.\nCons of Social Media Credit Scoring\n-----------------------------------\n### Accuracy\nUnlike the credit bureaus that are required to verify information that influences your Experian, TransUnion, and Equifax credit scores, the same is not required of lenders utilizing a social media credit scoring model.\nWhy not?\nBecause the three major credit bureaus share their information with third parties. Lenders using social media credit scores do not, using them only in-house, so to speak, to make lending decisions.\nFinally, the Equal Credit Opportunity Act (ECOA) states that a lender cannot make a lending decision based on a scoring model that is not \"empirically derived \\[and\\] demonstrably and statistically sound.\" It is probably safe to say social media credit scoring has not met this criteria. However, lenders utilizing these scoring models seem to be flying under the radar because they do use other scoring models in their lending decisions as well.\n### Concerns\nDo lenders (and employers, for the matter) go too far digging through our private lives, publicly-viewable or not?\n### Pressure to Participate\nChoosing to engage in social media is a choice, and not one that everyone wishes to make. If and when social media credit scoring goes go mainstream, it may demand your attention.\nSo, what's the verdict? Social media credit scoring— yea or nay? You decide. END

TITLE: Alternatives to Credit Scoring Gaining in Popularity CONTENT: Credit Score Alternatives Are Gaining Ground\n--------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: September 25, 2017_\nAre you one of the millions of Americans who saw their credit scores plunge during the recession? The housing crisis of 2008 saw many of us locked into mortgages we couldn't afford and many people either lost their jobs or were forced to take a pay cut. Translation, a lot of bills went unpaid and many credit scores took a nosedive.\nToday, many of us are back on track. We are back to work and back to on-time payments but our credit reports still retain the negative listings that remain with us for up to seven years. This leaves creditors scrambling for alternative lending models because they are finding it difficult to qualify consumers based on credit scores alone.\nWhat Credit Scores Are Currently Being Used by Lenders?\n-------------------------------------------------------\nEach of the three major credit bureaus uses the FICO Score. This score is based on reports made to Experian, TransUnion and Equifax. Not all creditors report to all three bureaus so the bureaus' FICO scores vary. Still, it is based on the same scoring model, determined by:\n* Consumers' history of paying their debts on time.\n* How much of their available credit have they used.\n* How many different types of credit are they using.\n* Do they have a history of unpaid debts.\nOther scoring models include:\n* Deposit Behavior Score — This score tracks how people manage their money by reviewing their checking and savings accounts.\n* Job Security Score — This score is based on a person's credit worthiness which is based on income stability.\n* Credit Optics Plus — This scoring model predicting risk by tracking stability factors such as changes of address, telephone lines and other personal data.\nWhat Are Some Alternative Ways of Determining Credit Worthiness?\n----------------------------------------------------------------\nInstead of relying on the quantitative credit score, lenders may be moving toward a more qualitative approach based on a combination of factors. In addition to traditional credit scores and income, lenders may also consider:\n* Social networking\n* Professional licenses\n* Value of your home\n* Criminal history\nCould the Way You Interact on FaceBook, Twitter, and Other Social Networks Affect Your Credit Worthiness?\n---------------------------------------------------------------------------------------------------------\nIt is absolutely possible. While it is by no means a mainstream approach to credit extension, lenders realize the potential for garnering invaluable information from our social media profiles. There are different variations of this lending platform, but the gist of your social networking creditworthiness may be based on what lenders can tell about:\n* Your education.\n* How long you have held jobs.\n* How many connections you have.\n* The quality of your connections.\n* The location and seniority of your connections.\nHow to Maximize Credit Worthiness Via Alternatives to Traditional Credit Scores\n-------------------------------------------------------------------------------\nFirst and foremost, keep doing all the things that ensure a healthy FICO Score, like paying your bills on time, keeping your credit utilization ratio low, using your credit cards but paying off the balances each month.\nBeyond that, do all you can to create a healthy stable lifestyle. Secure lucrative work you like and want to keep. Consider continuing your education and\/or pursuit of professional licenses. Build a network of positive, like-minded connections via social media sites where you share the best of yourself, and encourage the best in others. END

TITLE: Find Out if Credit Card Arbitration is Fair to Consumers CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 13, 2017_\nMandatory arbitration clauses, which essentially strip consumers of their right to go to court, are becoming commonplace, with most consumers completely unaware of their existence or implications. The information is buried in the fine print or worse, simply tacked on to credit card agreements, which most customers don't even bother to read. If you did read through your credit card terms and conditions, beyond the usual definitions of rates, late fees, annual charges, etc., you'll find some interesting things and probably learn at least one new phrase: binding or mandatory arbitration.\nWhat is Binding Arbitration?\n----------------------------\nBinding arbitration sounds intimidating, and it can be. By including a binding arbitration clause, the credit card issuer is giving notice that if the cardholder has a dispute with the company (including identity theft, fines, penalty or late fee disputes, interest rate guarantees, etc.) he or she can't sue the card issuer in court. Instead, the consumer must take the case to an arbitrator or judge.\nIn arbitration, a dispute is handled by a \"neutral\" third party, that hears both sides and makes a decision. Just about any type of dispute, whether it's between a worker and an employer, a retailer and a customer, or an insurance company and a policyholder, can be arbitrated. Attorneys agree that arbitration has its advantages. For one, it's faster. The American Bar Association estimates it takes two years for the average court case to be resolved, compared with 8.6 months for arbitration. Expediency can save thousands in legal costs.\nCritics of Arbitration\n----------------------\nConsumers may not realize they've agreed to arbitration and aren't in a position to negotiate contracts. And even if they shopped around for another credit card, all the lenders use the same mandatory arbitration language in their contracts.\nThere is also no proof that mandatory arbitration offers a fair outcome. Consumer advocates laugh out loud at the notion that it might be fair, since it's the credit card companies that select the arbitration companies. In California, the only state where arbitration outcomes have to be disclosed in detail, the results aren't encouraging, at least in the debt collection field. A Public Citizen study found that the National Arbitration Forum, a company that handled collection disputes, had ruled in favor of creditors 94 percent of the time. Does that seem like a fair outcome?\nWho Are the Arbitrators?\n------------------------\nThe majority of big business arbitration cases are handled by the National Arbitration Forum, the American Arbitration Association, and JAMS, all of which employ lengthy lists of professionals in law and other fields. The National Arbitration Forum (NAF), a for-profit company based in Minneapolis and one of the nation's largest private arbitration firms, specializes in resolving claims by banks, credit-card companies, and major retailers that contend consumers owe them money.\nAccording to an article in Business Week, the NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail. It goes on to state some current and former NAF arbitrators say they make decisions in haste based on scant information and rarely with debtor participation. Consumers who have been through the process complain that NAF spews baffling paperwork and fails to provide the hearings that it promises.\nRecently, the Minnesota's attorney general sued the NAF alleging the company had business ties to major collection firms and was not being the impartial arbitrator it had claimed to be. NAF agreed to stop handling consumer cases, and, in the wake of the scandal, several major credit card issuers agreed to temporarily stop enforcing the mandatory arbitration clauses in their contracts.\nCan You Avoid Mandatory Arbitration?\n------------------------------------\nSome basic guidelines you may want to consider regarding mandatory arbitration include:\n* Educate yourself. Review your credit card terms to find out if you are currently in a binding arbitration agreement. If so, consider switching to a card that does not have such a clause.\n* Try a credit union or smaller bank to find a credit card that doesn't require this. AARP says its cards do not require the clause.\n* Read the correspondence you receive in the mail regarding \"changes in terms\" from your credit card companies so you are not caught off guard.\n* If obtaining a new credit card that includes mandatory binding arbitration, sign an arbitration opt-out if one is available or strike the clause from the contract and initial the change.\n* Reduce credit card debt as much as possible to avoid costly fees, penalties and credit disputes.\n* Voice your disagreement and reason for switching credit cards to your bank if applicable.\nWhat if You Are Faced With Arbitration?\n---------------------------------------\nIf you are faced with a situation requiring arbitration, you may want to:\n* Get your credit report and make sure there are no errors; address any errors immediately.\n* Verify that your debt has not passed the statute of limitations for your state.\n* Read and respond immediately to all correspondence you receive from an arbitration group.\n* Research the arbitrator assigned to your case. Depending on the creditor making the claim against you, you may have the right to object. Consider striking any arbitrator who's a \"creditors' rights\" attorney.\n* Consider hiring a lawyer. An attorney for either a court or an arbitration case may cost more than it's worth if the debt is only a few thousand dollars.\n* Try to settle. Neither arbitration nor litigation is cheap. A debtor may have to pay thousands of dollars in attorney's fees tacked on by the creditor. So if you owe the money and the debt isn't old, negotiate with the collection agency or debt buyer. They probably bought your debt at a greatly reduced rate and may agree to a reduced payment.\nBinding mandatory arbitration clauses in credit card, employment, and insurance contracts force individuals to forfeit their right to a trial by judge or jury. Mandatory arbitration does not help ordinary people, but benefits big corporate interests like national banks and insurance companies. It is used as a means to evade accountability for any harm they cause or laws they break - laws meant to protect consumers and employees. Protect yourself! END

TITLE: Find Out if Credit Card Arbitration is Fair to Consumers CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Watch Out For Questionable Credit Card Practices CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 27, 2017_\nAfter the economic meltdown of 2008, the government has stepped in to try to regulate and oversee the business tactics of banks, mortgage companies, credit card companies, and debt collectors. This massive overtaking by the government resulted in the passing of the \"Dodd-Frank Wall Street Reform Act,\" which then spawned the Consumer Financial Protection Bureau in July of 2011. The CFPB was formed to regulate consumer protection with regard to financial products and services offered in the United States.\nPrior to these regulations, card companies were \"loading their credit cards with tricks and traps so they can maximize income from interest rates and fees,\" according to Elizabeth Warren, a Harvard University law professor who was responsible for the formation of the CFPB.\nThe Federal Reserve Board has taken notice and requires issuers to disclose clearer information about rates and fees and 45 days (as opposed to 15 days) notice before they can lawfully raise rates. Congress has also held hearings to investigate credit card business practices, and many large credit card companies, such as American Express, have been fined for illegal tactics. American Express agreed to pay $85 million in refunds to 250,000 cardholders because of unscrupulous marketing incentives.\nExamples of Questionable Practices\n----------------------------------\nIn general, most consumers will argue that credit card disclosures are so confusing and so many penalty rates and fees may apply, it's extremely difficult to know how to avoid them. There are so many different credit cards to choose from, but only a bare minimum of the terms are likely to be reviewed by the average consumer. And, most disclosure forms are typically written in a language only a lawyer can interpret. But there are some questionable practices that you should be aware of, and by law these must be disclosed\/defined in your credit card agreement, so read your terms and conditions carefully.\n**Some Examples:**\n* **Universal Default.**  A common but often criticized practice, this is when a credit card company raises a customer's interest rate because he or she made a late payment on another, usually unrelated bill. These card issuers may monitor credit reports for notices of late payments, and at any sign of delinquency they boost cardholder rates to the highest penalty rates. Issuers may also raise your rate if your overall debt has increased. Nearly 45 percent of banks used universal default in 2005, according to the Consumer Action advocacy group. Compounding matters, many card issuers who practice universal default also charge rates based on the \"first in, last out\" method, meaning cardholders must pay their outstanding balances in full before card issuers will drop rates back to normal levels.\n* **Double-cycle, Two-cycle or Double Billing.**  With double-cycle billing, a card issuer calculates interest by reviewing a customer's average daily balance over two months, not just one - which causes many people to pay more than they otherwise would. For example, say you have a $500 balance, and you pay $400 by the by the due date. During the next billing cycle, your interest would be based on the entire $500 rather than the $100 you owe. According to the Government Accountability Office, it usually results in finance charges at least 50 percent higher than those calculated using a single month's balance. The two-cycle billing practice generally doesn't affect people who pay their balances off religiously each month, or borrowers that maintain a revolving balance; but can burn those who occasionally carry over a balance to bridge a gap, for instance.\n* **Credit Line Decreases.**  Credit-card companies are required to notify you by mail if they change your credit-card terms, including reducing your credit limit, but there is no guarantee that you will receive and read that notification in time. Creditors are most likely to reduce your limit if they notice activities that suggest you may be in debt trouble, such as high credit charges, late payments, or applying for too much credit. In general, anything that could result in a credit-score decrease may also put you at risk for facing a credit-limit decrease.\nHow to Control Credit Card Costs and Questionable Billing Practices\n-------------------------------------------------------------------\n**You need to complain!** If you've been hit with a high fee because your payment was a day late, call and ask for it to be waived. If you are a customer with a good payment history there is a good chance they will agree to disregard the fee.\nBe sure to review your card terms and conditions thoroughly; if they contain many of the questionable features, switch to a more consumer friendly card. If you need to submit a complaint to the CFPB, here is more information on how to go about it.\nSupport legislation proposed by Congress or your State which would restrain some of these questionable policies and restrict\/cap fees and rates charged by card-issuers. The recently passes Credit CARD (Card Accountability, Responsibility and Disclosure) Act provides the following protection to consumers:\n* **No Interest on Debt Paid on Time.**  Prohibit interest charges on any portion of a credit card debt which the card holder paid on time during a grace period.\n* **No Trailing Interest.**  Prohibit added interest charges on credit card debt which the card holder paid on time and in full.\n* **Limits on Penalty Interest.**  Prohibit interest rate hikes on a credit card account unless the card holder agrees to them at the time, and, in any event, limit penalty interest rate hikes to no more than a 7 percent increase.\n* **Apply Interest Rate Increases Only to Future Debt.**  Require increased interest rates to apply only to future credit card debt, and not to debt incurred prior to the increase.\n* **No Interest on Fees.**  Prohibit the charging of interest on credit card transaction fees, such as late fees and over-the-limit fees.\n* **Restrictions on Over-Limit Fees.**  Prohibit the charging of repeated over-limit fees for a single instance of exceeding a credit card limit, and allow such fees to be charged only when a card holder's action, rather than a penalty, causes the limit to be exceeded.\n* **Fixed Credit Limits.**  Require that card issuers must offer consumers the option of operating under a fixed credit limit that cannot be exceeded.\n* **No Pay-to-Pay Fees.**  Prohibit charging a fee to allow a credit card holder to make a payment on a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise.\n* **Reasonable Currency Exchange Fees.**  Require currency exchange fees to reasonably reflect the credit card issuer's actual costs.\n* **Prompt and Fair Crediting of Card Holder Payments.**  Require payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges. Prohibit late fees if the card issuer's actions caused the delay in crediting the payments.\n* **Prime Rate Reference.**  Require interest rates linked to a \"prime rate\" to use the prime rate published by the Federal Reserve Board.\n* **Annual Audit.**  Require the credit card issuer's primary regulator to perform annual audits to ensure compliance with credit card requirements and prohibitions.\n* **Improved Data Collection.**  Improve existing data collection efforts related to credit card interest rates, fees, and profits.\n* **Transition Period.**   Allow credit card issuers six months to implement the bill's provisions.\nDid Credit Card Companies Respond to the Complaints?\n----------------------------------------------------\nThe Industry's stance seems to be that it would welcome better disclosure, but it opposes curbs on it's ability to raise fees or rates or change policies.\nSeveral major credit-card companies announced some policy changes. Citi Card said it would no longer raise interest rates for customers who pay their bills on time, but make a late payment to another creditor (i.e. eliminating universal default). They also announced that they would not increase interest rates or fees on a customers credit card until the card expires and a new card is issued - unless the customer pays late, exceeds his credit limit, or pays with a bad check. If the card's interest rate is linked to the prime rate, it will change only when this moves.\nChase Bank also announced it is dropping it's two-cycle billing practices, along with easing up on some of the fees it charges customers who exceed their credit limits. END

TITLE: Watch Out For Questionable Credit Card Practices CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Suing Your Credit Card Company CONTENT: Can You Sue Your Credit Card Company?\n-------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: June 17, 2016_\nChances are you have not read the fine print of your credit card contract because what you were really interested in is the annual percentage rate or the cash back rewards you are going to get. The contract that comes with your credit card looks like a bunch of legal mumbo-jumbo and who really understands any of it anyway? But lurking in all of that legalese is language regarding dispute resolution and arbitration clauses regarding litigation against their company. Of course they want to protect themselves and why not — you know how expensive a lawsuit can be.\nFor years, consumer advocates have claimed that binding arbitration clauses have quietly but dramatically limited a consumer's right to their day in court. Which is a sad state of affairs when we the consumer are not given our chance to sue someone for infringing on our rights. Recently, a study came out revealing this atrocity and something has been done about it.\nStudy Done by the Consumer Financial Protection Bureau\n------------------------------------------------------\nBack in March of 2015, the CFPB released a study which showed the majority of banking customers are subjected to arbitration agreements that restrict their ability to join class-action lawsuits. Three-quarters of these consumers were unaware of the agreements, and only 7 percent realized they had a clause in their agreement which restricted their ability to sue in court.\n“_Tens of millions of consumers are covered by arbitration clauses, but few know about them or understand their impact_,\" said CFPB Director Richard Cordray. “_Our study found that these arbitration clauses restrict consumer relief in disputes with financial companies by limiting class actions that provide millions of dollars in redress each year. Now that our study has been completed, we will consider what next steps are appropriate._\"\nWhat is Contained in These Arbitration Clauses?\n-----------------------------------------------\nArbitration is intended to provide dispute resolution outside the traditional court system. In recent years, many consumer contracts have included a pre-dispute arbitration clause - which means either side can generally block lawsuits, including class actions, from proceeding in court. So hence, these arbitration clauses act as a barrier to class actions in court.\nInstead, disputes are heard by an arbitration panel saving money, which in turn lowers consumers’ costs for services. But in actuality, there was no evidence found by CFPB leading them to believe these arbitration clauses were lowering prices for consumers. \nTens of millions of consumers are covered by arbitration clauses. In the credit card market, card issuers representing more than half of all credit card debt have arbitration clauses – impacting as many as 80 million consumers.\nArbitration and Consumer Confusion\n----------------------------------\nAs part of this study, the CFPB surveyed credit card consumers to see if they were aware and if they understood the arbitration agreements that were found in the credit card agreements. As stated earlier, over 75 percent of them had no idea there was an arbitration clause. As stated by one consumer advocate;\n\"_Many consumers have no idea that they have been stripped of their rights – until it is too late,\"_ said Theresa Amato, executive director of consumer advocacy organization Citizen Works. \"_It's time for the CFPB to use its power to ban these unfair forced arbitrations and class action waivers to correct the widespread problems their own research reveals.\"_\nThe Dodd-Frank financial reform bill banned arbitration clause in mortgage contracts, and this precedent lent itself to the CFPB to make rules about their use in credit card contracts. As of the writing of this article, a decision has not been made as to what the CFPB is going to do about these arbitration clauses. Hopefully in the near future, this watch-dog agency will make it harder for credit card companies to add these clauses and give back to the consumer the right to sue them. END

TITLE: Details About the Credit Scoring Conference in 1999 CONTENT: Credit Scoring Conference - Fair Isaac Credit Score, FTC, Federal Trade Commission\n----------------------------------------------------------------------------------\n###### Written by: Kristy Welsh\nNotes From the Credit Scoring Conference\n----------------------------------------\n_FTC Building, Washington, D.C. July 22, 1999_ \n_Transcript of the FTC Credit Scoring Conference_\nBack in 1999, Kristy Welsh was able to attend the Credit Scoring Conference that was held in Washington, D.C. Below are my notes from that memorable meeting and all of the events that took place surrounding this trip. Here is the agenda. Here is her story........\n* * *\nJust my luck that the 4 days I spent in our nation's capital were some of the hottest on record. I did the D.C. thing and didn't use a car, but relied on taxis and the fabulous Metro system. The dutiful pressing I gave my only suit in the hotel lasted about 5 minutes in the _un_\\-airconditioned taxi ride I took to the FTC (Federal Trade Commission) building. (I made the driver of the next cab demonstrate that the air conditioning did in fact work before I would get in.)\nIn comparison to ultra sensitive metal detector at the Smithsonian Holocaust Museum, which went off loudly if you had a quarter in your pocket, the security check at the FTC building was a breeze. About 150 people turned up for the all-day event, with some of the people stuck in overflow conference rooms watching a live broadcast of the proceedings.\nThe basic topics covered by the panelists were as follows:\n* The Use of Credit Scoring in the Mortgage Industry\n* Consumer's Experiences with Credit Scores\n* Is Credit Scoring Fair?\n* What Information Should Consumers Receive About Credit Scoring?\n**Some of the biggest shockers revealed at this conference:**\n1\\. The Fair Isaac scoring system, because its credit scoring method is not given out to anyone, is completely uninvestigated, unregulated and unverified for accuracy, bias, or legality, as admitted by the Federal Reserve Board panelist present.\n2\\. Some credit card companies are pulling your credit report to watch your behavior with your other creditors and using that information to increase your interest rates. If you are late on one of your accounts, your credit score drops dramatically and therefore, they feel justified in jumping from say, 12 to 27% interest. Several consumers were present to whom this had actually happened.\n3\\. Age, something a consumer cannot control, is a key factor in how your credit score is calculated. The older the better, with ages 50 and above being the least risk statistically as calculated by Fair Isaac. Not only that, but the Fair Credit Act forbids denial of credit based on age. Fair Isaac has somehow gotten the FTC to give them a waiver and allow age to factor into your credit score. Actually, The three biggest factors in calculating your score, other than your payment history and major delinquencies are: Age, home ownership and length at your current address. Completely unfair to those who have not or who are unable to purchase a home and to those who move around a lot for their jobs.\n4\\. If you use a finance company for any reason, this is a negative and your score will drop. A finance company is basically anyone who is not a bank. (Examples: financing a computer or appliance from a Circuit City, Rent-to-Own companies, local private investors. Definitely unfair to people who do not have access to banks as a source of loans.)\n5\\. Fair Isaac made the unbelievable statement that passing out to a consumer his or her credit score is not beneficial. The Fair Isaac Panelist went on to say that their job is not to educate the consumer on his or her credit score _(they only create it, and don't hand out the formula, so this will work well - yeah right)_. As a matter of fact, the Fair Isaac Panelist went on to say, that they don't want to tell people how to improve their scores, because this would encourage people to \"behave differently\" and skew their model. They also claim that the one of the reasons the score is not given is because the consumer would be confused by the score and it would just be meaningless to them _(yep, we're all too stupid to understand these things)_.\n6\\. When asked a direct question about why the credit bureaus don't hand out credit scores, the informative response from Ray Crescenzo (the credit reporting agencies rep) was \"I cannot address this issue today.\" _(So why'd ya show up?)_\n7\\. The score range (all right, we finally get something concrete out of these guys) for your credit score (AKA FICO score) is 325 - 900 points.\n8\\. Fair Isaac claims to be able to tell if you live in a high minority concentration area via your zip code, but also claims that it doesn't factor in this minority factor.\n**Next Articles:**\n* Reasons Why Credit Scoring is Unfair to Minorities and Low Income Individuals\n* All of the Factors Used to Calculate Your Credit Score\n* Follow up Meeting with Sen. John McCain's (R-AZ) aides and how you can vote for credit scoring reform. As a result of our meeting, and the persistence of Richard LeFavre of AAA Credit, Sen. McCain sent a letter to the FTC.\n**Notable People Who Were in Attendance:**\n* Peter McCorkel, Senior Vice President and General Counsel, Fair Isaac\n* Representatives from Freddie Mac and Fannie Mae, **Peter Mahoney** and **Pamela Johnson**, respectively, the two largest secondary markets for mortgages in the country.\n* Robert Cook, Fair Lending Specialist, Federal Reserve Board\n* Several Housing Association Representatives including, **Debby Goldberg**, Center For Community Change, **Marcia Griffin** Home Free USA and **Elisabeth Prentice**, Neighborhood Reinvestment Corporation. These organizations act to counsel mostly first time home buyers to get them credit worthy enough to purchase a home in areas targeted for revitalization. They are NOT debt counseling organizations.\n* Margot Sanders, Managing Attorney, National Consumer Law Center. NCLC provides case assistance, legal research, and technical advocacy training in consumer and energy law for local legal assistance and private attorneys representing low-income clients, lay advocates, and community-based organizations. NCLC also teams with counsel for consumers in the courts and before legislators and government agencies. (Their web site is excellent, you should check it out!)\n* Two representatives from the credit reporting agencies (though no one from the 3 credit bureaus themselves showed up), Ray Crescenzo, Vice President, Associated Credit Bureaus, Inc. and Richard LeFebvre, AAA American Credit Bureaus.\n**Notable Absentees**\nIncredible as it may sound, the biggest users and proponents of credit scores were not there:\n* No one from the 3 credit bureaus (Equifax, TransUnion or Experian), which pass out your credit score right and left, was present.\n* No one from the credit card industry, which will raise your interest rate at the drop of a hat due to your credit score, was there.\n* While there were many representatives from various mortgage companies, no auto finance people showed up.\n_Kristy Welsh \n_ END

TITLE: Details About the Credit Scoring Conference in 1999 CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Pros and Cons of Credit Card Insurance CONTENT: Is Credit Card Insurance a Scam or a Necessity?\n-----------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 23, 2017_\nPayment protection, also called credit card insurance, is an added benefit to your credit cards — or is it? If you have a credit card, chances are you have been contacted by them trying to sell you on their credit card insurance. Usually this happens right after you activate your card and you are immediately transferred to a customer service rep who is trying to blurt out her sales pitch before you hang up on her.\nThe credit card calls it balance protection insurance and it is suppose to provide monetary protection if you lose your job, become disabled, you die, or you become critically ill. They say it will cost just pennies on the dollar but is it worth it?\nThere are typically four different types of credit card insurance:\n* **Involuntary Job Loss:** This pays your monthly minimum payment for a specified period of time after you lose your job through downsizing or layoffs.\n* **Disability:** Like above, your monthly minimum payment is covered for a specified time period upon becoming disabled and unable to work.\n* **Critical Illness:** Similar to above.\n* **Life or AD&D (Accidental Death & Dismemberment):** If you die, your entire credit card balance will be paid.\nThe cost may initially seem small at between $0.75 and $1.50 per $100 of outstanding credit card balance each month, but in the spirit of being frugal, is that money wisely spent?\nIs Credit Card Insurance Worth the Cost?\n----------------------------------------\nConsider the fact that with the exception of credit life protection, this insurance doesn't actually pay off your debt. It simply makes the minimum payments on your outstanding balance for the term of the contract. In fact, depending on the credit card and interest charges, you may sometimes find that the balance at the end of the contract is actually higher than when the claim occurred due to compounding interest.\nAre those minimum payments something that would cripple you financially in the event of an illness or job loss? The answer will be different for everybody — this is just food for thought.\nCredit Card Disability Insurance\n--------------------------------\nCredit disability insurance protects credit card holders who suddenly become disabled. This type of credit card insurance pays the minimum balance amount that is due on the specific credit card for any purchases that were made prior to the disability. It pays only the minimum balance due on the credit card each month for any purchases that were made prior to the disability and only for a predetermined number of months.\nCredit disability insurance does not cover any additional charges that are made once the credit card holder has become disabled. Each credit card company sets its own terms for this insurance. Credit disability insurance is designed to protect the consumer's credit rating and score so that it does not fall victim to unfortunate circumstances.\nInvoluntary Unemployment Credit Insurance\n-----------------------------------------\nInvoluntary unemployment credit insurance protects consumers who become unemployed involuntarily due to downsizing and layoffs. This type of credit card insurance pays the minimum balance amount that is due on the specific credit card for any purchases that were made prior to the unemployment and only for a predetermined number of months.\nInvoluntary unemployment credit insurance does not cover any additional charges that are made once the credit card holder has become unemployed simply because at this juncture the consumer knows of his circumstances and should act responsibly. It pays only the minimum balance due on the credit card each month relating to any purchases that were made prior to the unemployment and only for a predetermined number of months. Involuntary unemployment credit insurance is designed to protect the credit card holder's credit rating so that it does not fall victim to unfortunate circumstances.\nCredit Property Insurance\n-------------------------\nCredit property insurance is designed to protect the consumer in the event that property or merchandise purchased with the credit card in question becomes damaged beyond repair or destroyed. Typically, deductibles are not in play with this particular type of credit card insurance. Each credit card company has its own terms that apply to their credit property insurance as to the specific circumstances that must surround the destruction of the items. In some cases, the loss of the property due to theft might be covered with this type of credit card insurance.\nCredit Life Insurance\n---------------------\nCredit life insurance is designed to pay off the outstanding balance of the specific credit card in question in the event that the credit card holder dies. The payment completely wipes out the credit card debt for that specific account. The beneficiary listed on the credit life insurance policy is the credit card company. Credit life insurance is designed to protect the family of the credit card holder.\nIt is important to note that each type of insurance must be obtained separately for each individual credit card account that a consumer has. Some credit card companies offer one or more of these insurance coverages free with their credit card. However, most companies charge a monthly or annual fee in order to maintain the insurance coverage on a specific credit card account. END

TITLE: MRS Associates - MRS Debt Collection Agency CONTENT: Who is MRS Associates?\n----------------------\n###### Written by: Kristy Welsh\n_Last Updated: May 30, 2017_\nIf MRS Associates is trying to collect a debt from you, here’s what you need to know. They are indeed, a legitimate collection agency. However, as with any other debt collector, they are required to follow debt collection laws. Dealing with debt collectors during the credit repair process can be confusing, so the more you know about MRS — and your debt collection rights — the better.\n**About MRS Associates**\n------------------------\nMRS Associates is a debt collection agency that also goes by the name MRS BPO, LLC. It was founded in 1991 by brothers Saul Freedman and Jeff Freedman, and is based in Cherry Hill, New Jersey.\n### **Industries MRS Associates Serves**\nAccording to its website, MRS provides accounts receivables management to companies in the following industries:\n* Auto\n* Retail\n* Education\n* Financial services\n* Parking, tolls, and fines\n* Heathcare\n* Commercial\n* E-commerce\n* Technology\n* Telecommunications\n* Utilities\nFor MRS collections, the agency says it uses skip tracing, letters, “human interaction,” scoring, and credit reporting.\n### **MRS Associates Accreditation**\nMRS BPO, LLC is a member of ACA International, a trade group that represents collection agencies. Its mission? Contributing “to the success of its members and the positive reputation of the credit and collection industry through education, advocacy and services.”\nACA members take the Collector’s Pledge, which states:\n* I believe every person has worth as an individual.\n* I believe every person should be treated with dignity and respect.\n* I will make it my personal responsibility to help consumers find ways to pay their just debts.\n* I will be professional and ethical.\n* I commit to honoring this pledge.\nBeyond that, MRS has an A+ letter grade from the BBB. It also has 3.68 out of 5 stars based on four customer reviews (not to be confused with customer complaints; see below). Its BBB file was opened in 2006 and it has been accredited since June 2016.\nThe MRS LinkedIn page also states the following about its customer service:\n“We’ve invested highly in our in-house MRS employee-training program which is six-weeks in duration for new agents, and it emphasizes quick response times and an excellent customer experience through rapport based customer service skills and compliance training.”\n**What to do when you hear from MRS collection agency**\n-------------------------------------------------------\n### **Debt validation**\nBefore you pay any collection agency a dime, you should request validation of the debt. If they cannot provide the necessary verification, you are not legally obligated to pay it and, if it’s listed on your credit reports, it must be corrected or removed. Here is a sample debt validation letter to send to MRS Associates, which you should send via certified mail with return receipt requested. Just be sure to do so within 30 days of receiving the initial communication from them. Until they provide the requested debt validation, they are prohibited from taking any other collection action against you.\n### **Submit a credit dispute**\nIf you see anything inaccurate about a debt that MRS says you owe, you have the right to dispute it. This applies to debts for which they have provided debt validation, as the information they are basing it on may be incorrect. Maybe the amount owed is wrong. Maybe you already paid it. Or maybe you never owed the debt in the first place. In any case, you can and should dispute it as inaccurate.\nThough the MRS collection agency offers an online dispute option, we recommend you send your dispute via certified mail with return receipt. Send your letter to:\nMRS BPO, LLC \n1930 Olney Avenue \nCherry Hill, New Jersey 08003\nBe sure to include supporting documentation.\n### **Disputing with the credit bureaus**\nIf you haven’t already, check with Experian, Equifax, and TransUnion to see if inaccurate MRS collections are showing up on your credit reports. If so, dispute the listing directly with the credit bureaus, too. Here is a sample credit dispute letter to send to the credit bureaus that you can tweak and send with supporting documentation.\n(You can see copies of your credit reports for free every 12 months through AnnualCreditReport.com or you can see them in all sorts of other ways through various free and paid credit monitoring services.)\n### **Complaints about MRS Associates**\nDespite its A+ rating from the BBB, as of this writing the MRS collection agency has had 83 customer complaints registered with the BBB, categorized as follows:\n* 69 complaints about billing\/collection issues\n* 14 problems with product\/service\nOf these complaints, the BBB says:\n* 27 were resolved to the satisfaction of the consumer\n* 56 were either not resolved to the satisfaction of the consumer or the BBB did not hear back from the consumer about the MRS response to the complaint\nIf you have a complaint about MRS, you too should let the BBB know about it. Just be sure to do so as a “customer complaint,” which signals to the BBB that you are seeking their involvement to help resolve the matter. The receipt and outcome of these complaints can also affect the BBB letter grade. If you leave a “customer review,” you are simply leaving feedback and not initiating any sort of BBB response.\nBut don’t stop there.\nYou can also submit a complaint to the CFPB and the FTC. And, again, if there is anything inaccurate about the debt, you should also dispute it with MRS, as well as the credit bureaus if it has appeared on your credit reports.\n### **Your debt collection rights**\nThanks to the Fair Debt Collection Practices Act, you have a long list of debt collection rights. Check out our summary of FDCPA violations so you know what’s okay for MRS Associates to do and what’s not. END

TITLE: Learn How to Settle Your Debts with the Original Creditor CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 17, 2017_\nAn original creditor is the party with whom you originally opened an account with and with whom you owe money to. For example, when you applied for and received your credit card, there is a bank that is funding that credit card — such as Chase Bank, Wells Fargo, or Capital One Bank.\nNow, when it comes to negotiating and settling your debt, the tactics are quite different when dealing with an original creditor and a collection agency. This article is going to talk about how to deal with the original creditor and how to negotiate an outstanding debt with them.\nBefore Negotiating Your Debt, Know Who is it You Need to Deal With\n------------------------------------------------------------------\nWe explained above what is an original creditor, but how will you know if that is the party you actually need to deal with? You will know your account is still with the original creditor if all of the following are true:\n1. You are not more than 150 days late on your payments. If you are over that time limit, chances are your account is being sold to a collection agency.\n2. Your account has not been transferred to a collection agency. You will know this by having received a letter in the mail from the collection agency or you may be getting phone calls from a collection agency trying to collect this debt.\n3. The original lending company is still managing your account — you can call them to verify this.\nIf any of the above points are not true, your account may have been transferred to a collection agency. Your negotiating tactics will be quite different when dealing with the collection agency as in the following ways:\n* How you pay them\n* If you need to get agreements in writing\n* Contacting them\n* Negotiating your credit rating\nHow to Negotiate With an Original Creditor\n------------------------------------------\nIf you are intimidated by the prospect of calling a creditor, you could try soliciting the help of a local consumer credit counseling service. Settling your debt is a time consuming ordeal and many people find it confusing and as a result, turn to a CCCS. But, you will most likely get a better deal, and save a lot more money, if you handle the negotiations yourself. CCCS's main goal is a worthy one, but they often do not negotiate on how the account will be reported, which could leave you debt free, but with a ruined credit report and a lower credit score than when it all started.\nIf you are panicking about how to deal with your debt, read our article on Handling Debt Stress.\n**How do you know your account is still with the original creditor?** \nThat's easy, just call them. Unlike all of our advice on how you should never call a collection agency, calling the original creditor is just fine and is actually the best way to get things accomplished. If your account is still with them, they will start dealing with you. Otherwise, they will just refer you to the collection agency they sold your account to. As a matter of fact, they will refuse to talk to you at all if your account is in collections.\n**Try to avoid your account going into collections.** \nNot only can be dealing with a collection agency a headache, but you then have to worry about two negative marks on your credit. To make sure your account doesn't go into collections, don't let your payment go more than 90 days late. American Express will typically send your account to collections after 90 days. With everyone else, you are in dangerous waters after 120 days. Try to make an effort to deal with the original creditor before they sell your account to a collection agency.\nWhy Would a Creditor Settle With You\n------------------------------------\nMost credit card companies may not be willing to talk to consumers until the account is 60 to 90 days late. If you think about it, why would they offer to just let half of the debt go if you are current on your payments? Also, if you are current on everyone but the creditor you are trying to settle with, they are not going to be willing to reduce your debt.\nIf they see you are paying everyone else but them, they are going to feel that since you are able to pay everyone else, you really do have the ability to pay them.\n**Other reasons they would settle:**\n1. If they believe it is in their best interest.\n2. if they think you don't have many assets. Because, if they try to sue you they won't be able to collect much if anything from you even if they win.\nSo what does this say? If you've been paying on time and all of the sudden call up the credit card company and tell them you can't pay, they are going to be suspicious and less likely to make a deal. But don't stop paying your bills just to try and convince them to settle. Have an honest conversation with them first.\nHow to Settle Your Debt With the Creditor\n-----------------------------------------\n**You don't need anything in writing from the original creditors in order to accept a deal.** \nAs a matter of fact, they will refuse to give you anything in writing and that's ok. You might want to record the conversation, if you are not in a two party state, but you must inform them you are recording the conversation. What's a two party state? It means that in some states, only one party on the telephone needs to give permission to have the conversation recorded and that one party can be you. Check your state for exact federal regulations.\nAlso, keep a careful record log of your phone calls, who you talked to, etc. Just a file or notebook containing all of your notes is just fine.\n**Paying by checks over the phone, credit cards is fine.** \nWe still recommend paying with a cashier's check or money order. Credit card companies are highly regulated, much more so than the collection agencies, and they are, as a result, much more ethical.\n**Get a \"Paid as Agreed\" rating, otherwise, \"Settled\" is the next best thing.** \nIn recent years, the credit card companies have adopted a immovable stance on your account rating if you settle for less than is owed. They will agree to list your account as \"settled,\" but that's it. You can always try to get a better rating, but we doubt if you are going to have much luck. Remember, settled is better than charge off. At the very minimum the account should have a ZERO balance. You should only agree that the account show settled if all other negative notations, such as charge off, repossession, late notations, and collection, are deleted at the same time. END

TITLE: Difference Between Debt Negotiation and Debt Settlement CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: June 13, 2017_\nMany people are confused by all the programs proclaiming they can help you get out of debt. There is debt settlement, debt negotiation, and consumer credit counseling. In most people's minds, all these programs are the same and all they are really concerned about is getting you out of debt the quickest and easiest way they can find. But, these methods of erasing debt are not the same. We're going to explain the difference between **debt negotiation** companies and how their operations are different from **debt settlement** companies. By the way, in case you're thinking we are advocating debt settlement firms, this is not the case. We are only explaining the difference.\nWhat's Wrong with Debt Negotiation\n----------------------------------\nMany of the nasty practices by these companies are now illegal, per the FTC regulations that went into effect in 2010. However, we are going to keep posting their old tricks so you can recognize them if you see them in a firm you've hired to settle your debts. (Notes regarding the new laws are highlighted in blue.)\nSetting Up Unsecured Trust Accounts\n-----------------------------------\nDebt negotiation companies will try and set up a \"trust account\" for you even though they are not a licensed bank entity under the Federal Reserve. They will also try to collect a monthly fee to maintain this account. On top of these fees, they will ask you to put away a certain amount of money towards your debt. The idea is to create a savings account until the debt is paid off. Unlike consumer credit counseling services, they do not pay your creditors each month. And your creditors are not told of your arrangement with the debt negotiation company. Per the new laws, all monies must be put into an FDIC insured bank account.\nDebt Negotiation Companies Don't Consider Your Current Financial State\n----------------------------------------------------------------------\nConsumer Credit Counseling Services (CCCS) will make you qualify financially for their program. Unlike CCCS, a debt negotiation company doesn't qualify you for the amount of the payments vs. debt. As a result, you can wind up paying very little towards the principal of the debt on each payment, effectively stretching out the payments for years. The longer you are in the program, the more money they make in their \"monthly admin\" fees. Per the 2010 laws, the firm has to give you a good faith estimate showing you the length of time you'll be in the program based on your ability to pay.\nNo Protection from Lawsuits\n---------------------------\nEven if the debt negotiation programs are run by lawyers, these programs offer you no legal protection. You can be sued by your creditors, they can get a judgment against you and your wages can be garnished. This debt negotiation scenario is also unlike consumer credit counseling where they handle all calls from the credit card companies (but they are also PAYING them for you). YOU must deal with the nightmarish phone calls.\nThere are some credit card companies that are aggressively suing non-paying customers right now, and if they decide to take you on, they will win. Being sued by the credit card company is not like being sued by a collection agency, which usually has poor documentation and no case.\nInterest and Fees Are Not Negotiated\n------------------------------------\nIn addition to putting yourself in danger of being sued, there is no attempt to negotiate interest or fees, so they keep piling up on you. It could mean that while you think you are doing the right thing and making payments towards your cards, your debt continues to grow. Per the new laws, the firm has to disclose the total amount you have to pay per their past history with an individual creditor.\nOnly Credit Card Debt Qualifies\n-------------------------------\nYou can't negotiate anything that is a secured debt, like an auto loan or mortgage. You also can't negotiate down student loans, tax liens, or judgments.\nFees Are Usually Paid Upfront\n-----------------------------\nUsually your first 2-to-4 months of payments go towards fees. There is such a high dropout rate on debt negotiation companies that these guys want to make sure they get paid first. Per the new laws, the firm cannot collect any upfront fees before they've done work for you.\nMost debt negotiation companies claim to be able to negotiate your debt with the credit card companies for about 50 percent of what you owe. You must realize that after 180 days, if you are not sued, your debt gets turned over to a collection agency. The negotiation company is NOT planning on talking to the original creditor, but to a collection agency down the line who will accept debt settlement offers fairly easily. Per the new laws, the firm has to disclose the total amount you have to pay per their past history with an individual creditor. They can't claim \"best case,\" but must cite average case results, including factoring in the dropout rate.\nKnow What's In Your Debt Consolidation Contract\n-----------------------------------------------\nEven if a debt negotiation company did clearly explain what was going on and it was in all of their documentation, we have found none of the debt negotiation companies explained what they were doing. All of their victims had a vague recollection that they were paying a management fee, but they had no idea that their credit cards would go into COLLECTION while they were in the program. Per the new laws, the firm has to give you a good faith estimate showing you the length of time you'll be in the program based on your ability to pay.\nThe U.S. Government Accounting Office (GAO) released a report on April 22, 2010 regarding widespread abuse in the debt settlement and debt negotiation industry.\nHow Does Debt Negotiation Work?\n-------------------------------\nLet's say the company you hire follows all the new laws to the letter. You may still be tempted to sign with them and that's your prerogative. How much money can you actually save?\nYou have $20,000 in credit card debt and the debt negotiation company says all you have to do is pay $300 for 3 years and you'll be debt-free for about 50 percent of the debt. At $300 a month for 36 months, that is only $10,800, so you will be saving $9,200 and you'll be debt-free in 3 years. Sounds like a good deal, right? Wrong. Let's do the math.\n* You agree to a 3-year plan where you pay $300 a month to the settlement company — $10,800 of total payments.\n* Your first two monthly payments are the \"admin fee,\" so this is $600 — nothing gets put into your trust account until your third month.\n* The negotiation company keeps $50 of your $300 payment each month for the service fee. That means only $250 a month is being added to your trust account.\n* After 34 months, you have $8,500 to settle $20,000 in debt. Remember, 3 years minus the first 2 months for admin fees is 34 months.\n* The negotiation company, if you are still with the program, will negotiate your debts down to zero with the collection agencies using the $8,500.\nYou save: $9,200. \nDebt negotiation firm makes: $600 + (34 x $50) = $2,300.\nOther Dangers of These Programs\n-------------------------------\n* So you say, what's wrong with that? I'm getting a good deal by saving $6,000! Yeah, except almost any collection agency will accept 25 percent of the debt without much of a fight and many will accept 10 percent. You do not have to pay an admin fee to pick up the phone or send in a debt settlement agreement, and you can mostly make a settlement within 6 months to a year. You will also be debt-free. It is really easy to do it yourself.\n* Let's say of the $20,000 debt, one of the cards comes to $4,000. If the negotiation company gets the collection agency to accept $2,000, it will take you 10 months at $250 per month to have enough in your trust account to pay off just that one credit card. But remember, your first three payments to the settlement company only paid the admin fee. That means your first credit card settlement is 13 months _after_ you started sending them money.\nDo-it-Yourself Debt Settlement\n------------------------------\nAgain, you can settle your debts on your own. Put away some money so you can save the 25 percent of the $20,000. You'll have enough to be debt-free in 16 months, and it will only cost you $5,000. This is not going to be a pain free process; you will still have to deal with creditors calling you, and there is the possibility that you will be sued. However, you will be enduring the same kind of telephone calls and possibility of lawsuits if you signed up with a debt relief company. \nYou can do the same thing without paying a company by following these steps:\n1. Save $300 a month until you have about 25 percent of the total debt (25 percent of the total debt in our example is $5,000).\n2. After 16 months of saving, use the $5,000 to settle the $20,000 debt with the collection agency.\nYou don't have to wait until you have the entire amount to pay off a credit card debt that is being handled by a collection agency. You can — and should — try and settle it for less than you owe. END

TITLE: Difference Between Debt Negotiation and Debt Settlement CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Collection Agencies Who Violate the Law CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 24, 2017_\nDo collection agencies violate the law? You bet they do. So, who regulates the debt collection industry? The Consumer Financial Protection Bureau took over the regulation of debt collectors and handling of debt collection complaints from the Federal Trade Commission (FTC) in late 2011. However, today, the FTC still takes an active role in cracking down on illegal debt collection practices. According to the FTC letter to CFPB in March 2013, seven debt collection cases were resolved in 2012. These cases involved collectors whose practices included using abusive tactics to intimidate consumers, misleading consumers while seeking payment on time-barred debts, using faulty data to identify debtors and the amount they owe, using deceptive tactics to collect on payday loans, and otherwise committing egregious violations of the Act and other federal laws.\nIn their last report on debt collection practices in 2011, the FTC reported that hundreds of thousands of consumers contacted the FTC in that year with complaints regarding debt collection issues. In 2011, the FTC received more complaints about the debt collection industry than any other specific industry. In 2010, the FTC received a total of 140,036 complaints which accounted for 27 percent of all complaints received by the FTC. This was up over 4 percent from 2009.\nThere are many cases of collections agencies performing illegal acts. Imagine the number of companies who have not been caught yet! Collection agency stocks are now traded on Wall Street but are more unscrupulous than ever.\n### FTC Lawsuits in 2011-2012\nIn two cases that included civil penalties, the FTC obtained $2.8 million and $2.5 million, respectively, for West Asset Management, Inc., and Asset Acceptance, LLC, the two largest civil penalty amounts the agency has ever obtained for alleged violations of the Fair Debt Collection Practices Act.\nThe FTC charged two other debt collectors with especially egregious practices: Defendants in Forensic Case Management Service, Inc., doing business as Rumson, Bolling & Associates, allegedly threatened physical harm to consumers, desecration of their deceased family members, and killing of their pets to persuade consumers to pay.\n### FTC Lawsuits in 2010\nHere are some recent court cases which were settled in 2010 against collection agencies caught in the act of illegal practices:\n* In February 2010, the FTC settled an action against Credit Bureau Collection Services and two of its officers to resolve allegations that the defendants violated the law in the course of collecting debts from consumers. Among other things, the complaint alleged that the defendants violated the FDCPA by misrepresenting both to consumers and to consumer reporting agencies (\"CRAs\") that consumers owed the debts and by failing to inform the CRAs that those debts were disputed by consumers. The complaint also alleged that the defendants violated the FTC Act by misrepresenting that consumers owed debts or by failing to have a reasonable basis for such representations. The consent decree filed requires the **defendants to pay a $1,095,000 civil penalty**.\n* In March 2010, the Commission announced a settlement agreement with collector West Asset Management, Inc. (\"WAM\"), resulting in a **$2.8 million civil penalty**, the largest civil penalty ever obtained by the FTC in a debt collection case. The complaint alleged WAM violated the FDCPA by calling consumers and third parties repeatedly with intent to harass or annoy, and by revealing debts to third parties and calling them for reasons other than to obtain location information about the consumer. In addition, the Commission alleged that WAM engaged in deception in violation of the FTC Act by materially misrepresenting to consumers that WAM was a law firm, it would bring civil action or criminal prosecution against consumers who failed to pay, and nonpayment would result in the seizure, garnishment, attachment, or sale of consumers' properties or wages, or their arrest or imprisonment. The FTC further alleged WAM engaged in unfairness in violation of the FTC Act by debiting consumers' financial accounts or charging their credit cards without their express, informed consent.\n* In April 2010, the FTC filed suit under Section 13(b) of the FTC Act against an alleged common enterprise composed of Internet-based payday lenders, a collection agency, and their principals, seeking preliminary and permanent injunctive relief in addition to consumer redress or disgorgement of ill-gotten gains. The complaint alleged the defendants violated the FTC Act and the FDCPA by falsely claiming to consumers' employers that they were entitled by law to garnish wages without obtaining a court order; falsely claiming to have informed consumers of their intent to garnish and provided consumers with the opportunity to dispute the debt; and communicating with consumers' employers and co-workers about debts without the consumers' knowledge or consent. The defendants also were alleged to have violated the Credit Practices Rule 32 and the FTC Act by including an unlawful wage assignment clause in their loan agreements with consumers. In April, most of the defendants stipulated to the entry of a preliminary injunction. In September, the Commission entered into a settlement with defendant Mark S. Lofgren containing a $38,133 suspended judgment and permanent conduct relief. Litigation against the remaining defendants - payday lender Eastbrook, LLC, also doing business as Ecash and Getecash; collector LoanPointe, LLC; and principal Joe S. Strom - is ongoing.\n* In October 2010, the FTC reached a settlement agreement with collector Allied Interstate, Inc. (\"Allied\"), one of the nation's largest debt collectors. The Commission alleged that Allied continued collection efforts even after consumers told the company that they did not owe the debt, without verifying the accuracy of the disputed information or otherwise having a reasonable basis for representing that the consumers owed the debt. The FTC further alleged that Allied violated the FDCPA and Section 5 of the FTC Act by making improper harassing phone calls to consumers (using abusive language or calling many times a day for weeks or months); making repeated calls to third parties seeking to locate a consumer; revealing alleged debts to third parties without the consumer's consent or court permission; and threatening legal action against consumers that it did not intend to take. Under the settlement agreement, Allied paid a **$1.75 million civil penalty** and agreed to stop collection efforts on disputed debts in the future unless and until it conducts a reasonable investigation and verifies the debt. In addition, the agreement bars Allied from violating the FDCPA or from engaging in the types of conduct the complaint alleged violated the FTC Act.\n### FTC Lawsuits in 2009\n* In June 2009, the FTC settled an action against Oxford Collection Agency, Inc., its officers, and an attorney who acted as its agent, for collection practices allegedly in violation of the FTC Act and the FDCPA. The FTC's complaint alleged that the defendants falsely threatened to garnish consumers' wages, bring lawsuits against them, or have them arrested. It also charged that the defendants used illegal and abusive collection methods such as calling consumers before 8 a.m. or after 9 p.m.; calling their workplace when the collectors knew or had reason to know that the calls were inconvenient; telling employers, co-workers, relatives, and neighbors about the consumers' debts; continuing to call after receiving consumers' written demands to stop; calling consumers repeatedly throughout the day; calling back immediately after the consumer hung up; and using profane or other abusive language. Separate FTC settlements, one with Oxford and its officers, and the other with the attorney and his law firm, each imposed a **$1,060,00 civil penalty** which was partially or wholly suspended based on inability to pay.\n* In October 2009, the FTC and the State of Nevada settled an action filed in November 2008 against an international Internet payday lending operation that used unfair and deceptive debt collection tactics. The defendants, ten related Internet payday lenders (including Cash Today) and their principals, operated from the United Kingdom and targeted consumers in the United States. The FTC charged them with, among other things, violating the FTC Act by: (1) falsely threatening consumers with arrest or imprisonment; (2) falsely claiming that consumers were legally obligated to pay the debts when they were not; (3) making false threats to take legal action that they could not take; (4) repeatedly calling consumers at work; (5) using abusive and profane language; and (6) disclosing consumers' purported debts to third parties. Under the terms of the settlement, the **defendants had to pay $970,125 in consumer redress** for distribution by the FTC and $29,875 to the State of Nevada.\n* * *\n### FTC Lawsuits for 2008\nThe Commission surpassed its 2007 record for the largest amount of civil penalties obtained in a single FDCPA case with the following settlement:\n* The largest amount of civil penalties ever in an FDCPA case Academy Collection Service, Inc. (\"Academy\") and its owner, Keith Dickstein, agreed in November 2008 to pay **$2.25 million in civil penalties** to settle charges that they violated the FDCPA and Section 5 of the FTC Act. The complaint alleged that those defendants and two other corporate officer defendants, Albert Bastian and Edward Hurt III, had \"formulated, directed, participated in, controlled, or had the authority to control\" the following acts by Academy collectors: (1) misleading, threatening, and harassing consumers; (2) depositing postdated checks early; (3) falsely threatening or implying that the company would garnish consumers' wages, seize or attach their property, or initiate lawsuits against the consumers if they failed to pay; (4) making unfair and unauthorized withdrawals from consumers' bank accounts; (5) communicating impermissibly with third parties about consumers' alleged debts; and (6) engaging in harassing or abusive behavior, such as threatening the use of physical violence, using obscene or profane language, and repeatedly or continuously causing the telephone to ring.\n* In May 2008, the Commission settled an action filed in June 2007 against Tono Records and related companies and individuals whose representatives allegedly victimized Spanish-speaking consumers nationwide by posing as debt collectors seeking payments for purported debts that consumers did not owe. Because the defendants presented themselves as if they were third-party debt collectors, they were subject to the FDCPA as well as the FTC Act. The defendants were charged with violating the FTC Act and the FDCPA by: (1) falsely claiming that a debt is owed; (2) falsely claiming to be, or to represent, an attorney; and (3) falsely threatening legal action, arrest, imprisonment, property seizure, or garnishment of wages. Other FDCPA violations alleged included attempting to collect an amount of debt not authorized by contract or permitted by law; harassing consumers; and failing to inform consumers, within five days of their initial communication with them, of their right to dispute and obtain verification of their debt and the name of the original creditor. The settlement imposed a **$1.19 million judgment** against the defendants and permanently enjoined them from violating the FTC Act or the FDCPA.\n* In September 2008, the FTC settled charges that EMC Mortgage Corporation and its parent, The Bear Stearns Companies, LLC, violated the FDCPA and Section 5 of the FTC Act, among other statutes, in conjunction with servicing and collecting on mortgage loans, including debts that were in default when EMC obtained them. Among other practices, the complaint alleged the defendants had: (1) misrepresented the amounts consumers owed; (2) assessed and collected unauthorized fees; and (3) misrepresented that they possessed and relied upon a reasonable basis to substantiate their representations about consumers' mortgage loan debts. The complaint further alleged the defendants to have made harassing collection calls; falsely represented the character, amount, or legal status of consumers' debts; and used false representations and deceptive means to collect, including falsely representing to consumers with \"Caller ID\" service that defendants were calling from a consumer's local area code. The settlement required the defendants to pay **$28 million in consumer redress**. END

TITLE: Collection Agencies Who Violate the Law CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Negotiate Credit Rating When Settling Debt CONTENT: Negotiate Credit Rating When Settling Debt with Collection Agency\n-----------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: June 14, 2017_\nNote: This page addresses debts that are with a COLLECTION AGENCY. Here is the article addressing debts still with ORIGINAL CREDITORS.\nOne very important, but often overlooked, area of debt negotiations is negotiating your credit rating. What exactly does that mean you might ask? Well, when you look at your credit report, there are notations after a listing such as, \"paid as agreed\" or \"charged-off\" and these notation affect your credit score. When you are in negotiations with a collection agency, you want to make sure you are able to change these listings to your advantage. Because what's the point of settling the debt when it still may be hurting your credit score?\nInformation on Listing Notations\n--------------------------------\nWhen dealing with a collection agency, always insist on complete removal of a listing from a collection agency. Having a \"paid as agreed\" notation on a collection account will not help you. No matter what the rating, _every collection account is a negative mark_. It's no skin off their nose to delete the listing.\nIf you do make a deal with a collection agency and wind up making arrangements to pay, and there is an original creditor reporting a charge off on your credit report, you can do a bit of clean up. Contact the original creditor and tell them the debt was \"settled\" and they need to update your account to reflect this. Technically, they are obligated to do this, as this is the truth. The original creditor's notation on the account should at the minimum say \"settled for less than owed,\" \"settled charge-off\" or \"paid was charge-off\" and the balance should reflect ZERO. For the creditor to NOT do this is a violation of the FCRA.\nDon't contact the original creditor about this if you plan on disputing the account through the Method of Verification system or just a plain ole credit repair dispute. If you dispute the listing and can't get it off your credit report, only then should you contact the original creditor about updating their account notation.\nImperfect Credit Listing as Part of Your Settlement\n---------------------------------------------------\nYou may find that some of your creditors are willing to hold out longer than you are before agreeing to delete the negative listing from your file. It may seem that they are unwilling to delete the negative listing under any circumstance. Once again, let it be said that every creditor will eventually give you what you want if you speak to the right person, are patient and persistent, and make the right offer. But if you are on a time-line, and even your attorney can't get them to agree to full deletion, you have a couple of other options.\n**List the account as \"Paid\" only**. You may counter-offer that the collection agency list the account as \"Paid\" rather than delete it altogether. This is a true indication of the status of the account and many creditors will concede and agree to this wording. A \"Paid\" status is still very negative for a collection account or an account that will show \"Paid Charge-Off\" or \"Paid Repossession.\" You should insist that the account show \"Paid\" only and that all other negative notations, such as \"Charge-off,\" \"Repossession,\" or \"Collection,\" are deleted at the same time. A simple \"Paid\" notation on a regular trade line is neutral and should not hurt your credit.\n**List the account as \"Settled\" only**. You may counter-offer that the creditor simply list the account as \"Settled\" rather than delete it altogether. \"Settled\" is an inherently negative listing but not as negative an unpaid collection. Don't agree to a \"Settled\" listing until you have exhausted all other possibilities. \"Settled\" will still trigger a credit denial. If you agree to a \"Settled\" notation, you must continue to work hard to delete the notation through the credit bureau dispute process.\n**List the account as \"Paid Charge Off\" or \"Paid Collection\" or \"Paid was 30, 60, or 90 days late.\"** This will be the creditor's first choice, and your _last_ choice, of what to place on your credit report once you have paid. These notations are almost as damaging as showing the same debt unpaid. It sometimes happens that an account is easier to get deleted (through credit bureau disputes) once it has been paid - the creditor now has no compelling reason to keep the negative listing on your report. For this reason, it is still usually a good idea to settle even if the creditor won't budge on deleting or positively modifying the negative listing.\nNow you've negotiated your credit rating, next step is paying the debt. How you pay can make a big difference, so be sure you read our article on the correct ways of paying your debts.\n### **More Articles About Debt Settlement**\n* DIY Debt Settlement\n* Difference Between Debt Negotiation and Debt Settlement\n* How to Negotiate Medical Debt and Hospital Bills END

TITLE: Debt Settlement Myths - You Can Settle Debts On Your Own CONTENT: Uncovering Debt Settlement Myths\n--------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 13, 2017_\nIt's too bad these debt settlement myths are still floating around out there, steering people in one wrong direction or another. Don't get caught in that trap. Whether you're considering settling a debt, or already decided against it, do yourself a favor and get the facts first.\n### 1\\. Anyone Can Qualify for Debt Settlement\nThough many people successfully negotiate debt settlements, debt collectors are partial to people who are going through genuine hardships. So unless you have recently lost income, are going through a divorce, are dealing with medical expenses, or the like, your debt settlement options are slim. There is one exception: debt that has been charged off and sold from the original creditor to a collection agency. The older the debt, and the more times it's been sold, the better the deal you should be able to get. Of course, in that case you want to try debt validation first. Plus, if it's old enough, you may have reached the statute of limitations, in which case you are not legally required to pay the debt at all.\n### 2\\. Any Type of Debt Can Be Settled\nDebt settlement is an approach that only works with _unsecured debt_, such as credit cards, medical bills, and student loans. If you're having trouble paying on a _secured debt_, such as a house or car, your creditor simply seizes the property.\n### 3\\. Only a Debt Settlement Company Can Settle a Debt\nThere is nothing a debt settlement company can do that you cannot do for yourself. Period.\n### 4\\. Any Debt Settlement Company Will Do\nIf you do decide to use a debt settlement company, do your homework. While there are legitimate companies out there, many employ shady practices that could end up doing you more harm than good. Check them out first with the Better Business Bureau.\n### 5\\. Debt Settlement Companies Have Special Relationships With Creditors\nCreditors absolutely do not foster special relationships with debt settlement companies. In fact, creditors would much prefer to work with you, a preference you should embrace provided you have done your homework first.\n### 6\\. Only a Professional Can Get Me the Best Deal\nThere is nothing a debt collection company knows that is not public knowledge. Debt settlement requires no special education or certification. Here at Credit Info Center, we have all the information you need to negotiate a debt settlement on your own.\n### 7\\. Working With a Debt Settlement Company Will Protect You From Lawsuits\nJust because you have a debt settlement company negotiating on your behalf, this in no way affects the debt collector's right to sue you.\n### 8\\. Your Money is Safe With a Debt Settlement Company\nOne tactic many debt settlement companies will employ is asking you to stop making your payments to the collector, and to send your payments to the debt settlement company instead. The idea is that once the debt collector sees that you're not going to make your payments, they'll be more open to a settlement. The debt settlement company negotiates a deal, and your money is already in their possession to make good on it (minus, of course, their profit). Unfortunately, the money you \"deposit\" with a debt settlement company is not FDIC insured, as it would be in a bank. In some unfortunate cases, these debt settlement companies go out of business or simply disappear, taking their clients' money with them.\n### 9\\. A Settled Debt Will Automatically Fall Off My Credit Reports\nOne of the biggest mistakes people make when settling debts is failing to negotiate the terms of how the debt will be handled on their credit reports. What you should start out insisting is that, in addition to what you agree to pay, the listing will be removed from your credit report. If for some reason the collector will not agree to this, hold out for it. Every collector will eventually give you what you want. It just might mean waiting it out or talking to someone different. However, if you are on a timeline and need to resolve the debt sooner than later, ask for \"Paid\" status. Second to that should be \"Settled.\" Your last resort (and the collector's preference) is \"Paid Charge-off\" or \"Paid Collection\" or \"Paid was 30-, 60-, or 90-days late.\"\n### 10\\. Settling a Debt Will Improve My Credit Score\nTheoretically, settling a debt should improve your credit. You are, after all, paying a debt collector based on a renegotiation that both parties have agreed to. However, if you do not insist on the listing being removed from your credit report, even a settled debt will continue to drag down your score.\n### 11\\. The Only Alternative to Debt Settlement is Bankruptcy\nIf you're having trouble paying on unsecured loans, let your creditors know what's going on ask them for help in the form of a forbearance. If they agree, this will reduce your monthly payments, or defer them completely, until you can get back on track.\nAnother alternative to debt settlement (as well as bankruptcy) is debt validation. This can prove an extremely effective approach for old debt that has been charged off and sold from the original creditor to a collection agency. Often times, proof of the debt is not transferred from one party to the next. This plays in your favor, as the debt validation process requires proof they can legally collect from you. Minus this proof, you are not obligated to pay and the listing must be removed from your credit report.\n### 12\\. If You Do Not Settle Your Unpaid Debt, It Will Never Go Away\nThough debt collectors will attempt to collect from you as long as they are able, there comes a time when you are no longer legally responsible for it based on the Statue of Limitations in your state.\n### 13\\. You Don't Have the Time or Energy for DIY Debt Settlement\nDebt settlement companies would love you to believe that settling a debt with a collector takes more time and energy than you can muster. This is absolutely not true, as proven every day by people who successfully settle their debts on their own. We have all the debt settlement information and sample letters you will need in our bookstore. END

TITLE: Do It Yourself Debt Settlement and Debt Negotiation Techniques CONTENT: Debt Settlement Techniques: Settle Debt On Your Own\n---------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 18, 2017_\nYou can find numerous articles on debt consolidation, debt negotiation and debt settlement companies right here on our website. Our position on these companies is that you don't need them — you can settle your debts on your own! Our eBook \"Settling Your Debts For Pennies on the Dollar\" can be purchased in our bookstore and thoroughly covers how to negotiate and settle your debts for pennies on the dollar.\nEven with all of the free information available on our website, many people are still afraid to take on debt settlement, but we assure you that you can do it! Don't get discouraged — keep reading!\nAdvantages to Settling Your Debts\n---------------------------------\n* Handling everything yourself cuts out the monthly expense of hiring a debt settlement company.\n* You have access to a complete library of resources, forums, books, and video right here on our site.\n* You decide what debts you want to settle and for how much.\n* If you have a question, you can post a question on our discussion forums.\n* You will not feel alone, instead you will feel supported and informed.\nDo it Yourself vs Using a Debt Settlement Company\n-------------------------------------------------\n1. Excessive Fees Charged\n2. Creditors Refuse to Work with Debt Settlement Companies\n3. More Regulations\n4. Large Up Front Fees\n5. False Claims Made by Debt Settlement Employees\n6. Debt Settlement Companies Control Your Money\n### Excessive Fees Charged\n**Reason #1:**  When the industry was started about 20 years ago the fee structure was on a success oriented basis meaning commissions or fees were charged on the amount of savings the company was successful in negotiating for their client. Now fees are 12 to 15 percent of the total principle balance before any effort is made to work on your account. Usually the fees are prorated over the first year of the contract but some companies take their fees over the first 3 or 4 months. This is money that cannot be used for settlement purposes. Some companies also charge a start up fee and monthly service charges.\n**Creditinfocenter Answer:**  Our eBooks, Forums, videos and pages upon pages of information in the website, will show you how to work the system to position your accounts in a way that your creditors will want to settle with you for 35 to 50 percent of the total amount. You can use our forums where you can share experiences and successes with other forum members. You can also post questions for our in-house experts for any further advise you may need.\n### Creditors Refuse to Work with Debt Settlement Companies\n**Reason #2:**  Their point is that the high fees should be better used to apply against any debt. For example, let's say you owe $25,000 on five cards at $5,000 per card. Your up front fee to a debt settlement company for professional services may cost you as much as $3,750 or more.\n**Creditinfocenter Answer:**  Our free and low cost information on our website, leaves you with more of your money to apply to your debts, which will allow you to become debt free sooner and at less cost. Recently both MBNA (now Bank of America) and Citibank have announced their refusal to deal with debt settlement companies. To get around this roadblock, the debt settlement companies are having their clients call on their own after a training lesson. We provide you all the information so you can feel confident about negotiating on your own.\n### Increasing Industry Regulations\n**Reason #3:**  More and more regulations are being forced on the debt settlement industry by various federal and state regulators.\n**Creditinfocenter Answer:**  In 2004, the FTC shut down one of the largest credit counseling and debt settlement companies for charging millions of dollars in erroneous fees. See Our related articles on Ameridebt, and other debt consolidation companies. The following states have either banned the use of or severely reduced the activities of debt settlement companies: Delaware, Georgia, Idaho, Kansas, Maine, Mississippi, Minnesota, North Carolina, South Carolina, Utah, and Wisconsin. We will provide you with the proper information to negotiate a settlement on your own.\n### Excessive Up Front Fees\n**Reason #4:**  Fees being charged by debt settlement firms constantly go up or they charge large fees up front.\n**Creditinfocenter Answer:**  The debt settlement companies know how unpredictable your financial situation can be, what you think you can do today can often change by tomorrow. You might work the program for a year and may have settled 1 or 2 accounts but what if you have to stop the process? Where are you now financially? Your accounts are now a year older with hardly any money to settle because you paid the Debt Settlement company their fees up front based on your total debt.\n### False Claims Made by Debt Settlement Employees\n**Reason #5:**  Debt settlement company professionals and employees claim they can dictate to the creditors sizable discounts on your debt.\n**Creditinfocenter Answer:**  This is simply not true! Debt settlement companies work in the same arena as other debtors and have no influence on the collection or debt reduction practices of the large credit card companies. However, as we've laid out in our DIY debt settlement article, you can usually settle with collection agencies for 10 to 25 percent. We can show you how to approach the process in a serious business like manner, which will impress both you and your creditor. The debt settlement process is complicated but we have broken down the entire process making it more simple and easy to understand. With our eBooks and information on this site, you will have everything you need to reduce your debt.\n### Debt Settlement Companies Control Your Money\n**Reason #6:**  Most debt settlement companies will set up your set aside money in an \"escrow account\" that they control. Red flag items here! What is this escrow account? Do they give you a monthly statement on it? Remember, these companies are not banks, and therefore the accounts are not FDIC insured like most regular savings accounts. Just think of it, thousands of dollars of your money which you cannot touch and which is at risk.\n**Creditinfocenter Answer:**  We will suggest ways for you to set up your own account in a bank that you choose. It is important to manage these accounts based on you financial abilities. END

TITLE: Who and What are Junk Debt Buyers? CONTENT: What is a Junk Debt Buyer?\n--------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 10, 2017_\nA junk debt buyer is a collection agency who purchases delinquent or charged off debt from credit card companies, or even other collection agencies. Also referred to in the industry as bad debt buyers, zombie debt collectors, or simply debt buyers, these companies fall under the Fair Debt Collection Practices Act definition of Collection Agency. As the visibility and profitability of this rapidly expanding new industry has grown, junk debt buyers range in size from small private businesses up to million dollar publicly traded Wall Street companies! Credit card debt accounts for nearly 70 percent of the accounts sold to JDBs, followed by auto loans, telecommunications debt and retail accounts.\nHow Do Junk Debt Buyers Operate?\n--------------------------------\nJunk debt buyers generally buy alleged debts for cents on the dollar and then attempt to find ways to collect on the debt. Often times, the debt is \"out-of-statute\" (That is, the statute of limitations on it has expired and it no longer legally needs to be repaid). The buyer then attempts to get the debtor to pay a small portion of the debt. If the debtor does so, they have reaffirmed the debt and started the statute of limitations over again. It is very important that consumers be aware of their rights and the laws that protect them as an alarmingly large number of these debt buyers are barely operating within the law.\nSome typical unacceptable practices by JDBs include pursuing debts that are not actually owned by the consumer in question; harassment or verbal abuse; multiple listings of the same debt; and, as stated previously, attempting to collect a debt that has passed it's statute of limitations. Frequently in these situations, the JDBs will use the practice of re-aging an account which basically means that they report it as more recent than it really is.\nListing of Common Junk Debt Buyers\n----------------------------------\nThe listing below is by no means an exhaustive list of junk debt buyers, but some common names of companies that pursue third-party or junk debts. If you see one of these names listed on your credit report, then you know your debt was sold to a junk debt buyer.\n* CACH, LLC\n* Midland Funding, LLC\n* Midland Credit Management, Inc.\n* LVNV Funding, LLC\n* Portfolio Recovery Associates, LLC\n* Cavalry SPV I, LLC\n* Asset Acceptance, LLC\n* Copper State Financial Management, LLC\n* Cortez Investment Co., LLC\n* Unifund CCR, LLC\n* Salander Enterprises, LLC\n* Lakewalk, LLC\n* Skystreak, LLC\n* Berkeley Row, LLC\n* Razor Capital, LLC\n* ELCHE, LLC\n* Autovest, LLC\n* Security Credit Services, LLC\nHow Much do Junk Debt Buyers Pay for Debt?\n------------------------------------------\n* Debts that have recently been charged off: 6 to 7 cents on the dollar.\n* Accounts that are slightly older and on which a collection agency or two has already taken a whack: 1.5 cents to 2 cents on the dollar.\n* Years-old, out-of-statute debts: A penny or less.\n\\* Source: Sean McVity, portfolio broker at Keefe, Bruyette & Woods. END

TITLE: Who and What are Junk Debt Buyers? CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Who and What are Junk Debt Buyers? CONTENT: | | | | \n: . END

TITLE: Successful Debt Negotiation Stories CONTENT: Successful Debt Negotiation and Debt Settlement Success Stories\n---------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: June 12, 2017_\nOur methods of debt settlement do work. Some of you out there may be skeptical, but we can back up our claims by giving you some real life success stories as shared by our debt forum readers. You can visit our forum at any time and ask questions, read other posts, and get a lot of helpful tips from people just like you.\nBelow are just a few of the stories we have heard over they years. We hope yours will be another success story!\n* * *\nWas able to settle with collection agency, rather quickly, at about 30 percent. Their letter is good, covers what's needed.\n* * *\nI've thus far been able to negotiate 2 settlements - Wells Fargo and Bank of America. They both negotiated right before charge off @ 50% (3k and 1k settlements, respectively). The negotiations were relatively painless compared to the other creditors.\n* * *\nI just finished settling with Bank of America for 15%.\n* * *\nI just entered a settlement with HSBC for 50% of the balance paid over 6 months. I was at day 100 overdue not yet charged off. They sent a letter offering 60% but I was able to talk them down to 50%.\nIn December of 2007, I stopped making my credit card payments and I had $133,000 in credit card debt that was growing monthly at 29.99% interest with late fees and over-limit fees. I was more than panicked with many sleepless nights and the phone ringing off the wall.\nI'm happy to say that with the right planning; I borrowed from my 401k, received money from family, cut back on my expenses and sold personal possessions - I was able to come up with enough money to settle my accounts. I had the following results:\nBOA - 38% at 90 days delinquent \nChase - 45% at 120 days delinquent \nCiti - 38% at about 100 days delinquent (they called me) \nDiscover - 50% at 170 days delinquent (the hardest one to settle) \nSears - 0% financing for 5 years at 120 days delinquent.\nI now only owe $6,000 in credit card debt with Sears and resolved my credit card situation in about 7 months. I still have some tax implications to deal with, but I'm trying to sell my home so I can take care of that. If I do not sell by filing next April, I will just have to work something out with the IRS. I am insolvent for about $45,000 of the savings so my tax implications should be around $12,000 - I receive a refund generally of $5,000-$6,000 so that means I'll have $6,000-$7,000 left to pay them; the IRS will take a installment plan at 8% interest if you work it out with them and I could do that until I filed a few more years. They can have my refunds, to me it beats paying those credit cards who were at $4,000 a month by the time they were done with me.\nI did my own negotiating with the creditors and found that if you treat them with respect; most of them treat you with respect. I talked to some very caring people that could relate to my situation.\nI guess I would say from my experience, to anyone thinking of doing debt settlement, is to sit down and figure out what you owe and figure 50% of that amount is what you will need settle your accounts. I was fortunate because I saw it coming and was able to borrow before it was too late and that is what made my debt settlement successful. If you wait until it is too late and you have no resources to borrow from or family to help you; you will be less successful.\nI think the biggest mistake people make is waiting and trying to keep paying until they are at the end of their rope. If you know you are in trouble, see it coming and still have some assets available by borrowing from your home or 401k or you still have some savings; don't use up all your resources until you have nothing else to tap into; stop the bleeding before it's too late.\n* * *\nThis reader mailed in his experience with negotiating his debts down and repairing his credit report. We thought it was extremely valuable, so we are posting it here.\nFrom 1992-1996, I went through a horrible period, mostly due to a bad marriage. During this time, my credit went downhill... fast. Needless to say, now I have a lot of work ahead of me to get my credit back.\nI saw an ad back in March for AmeriDebt, which advertised for a \"Debt-Consolidation Loan\". While, by this time, I had already started to make some progress with repaying my debts, I thought that obtaining a consolidation loan might speed up the process a little. I filled in the information and applied, and got a response two days later.\nThe gentlemen that I spoke with sent a form for me to fill out, and explained to me that they were a \"non-profit\" organization. When I asked about the process, he explained that they could help me reduce my interest, and negotiate with my creditors. There really wasn't any mention about a loan. What was mentioned was the fact that they charged a \"small fee\" for their services to pay for their overhead. It didn't take me but a minute before I decided that I didn't want to spend extra money to pay someone else's bills. Needless to say, I didn't join.\nI would like to let all of your readers know that they should be extremely cautious when dealing with debt consolidation companies. Much of what they offer, I have been able to do on my own, although it has been difficult.\nThe first step I did is request copies of my credit reports from all 3 CRA's. When requesting them, I asked for the list of creditors, which contains the addresses and phone numbers of all creditors listed. Then, I went through and itemized all of my negative bills, by both amount and type of certain bills are more often overlooked (medical bills, for instance) than others (charge-offs, installment accounts, repossessions, judgements, rent, and related items, etc.).\nAt this point, I began making payment plans with two or three creditors at a time. I found that oftentimes the amount shown on the credit report is the principal amount only, and the creditors have added interest. Nearly all of them cannot or will not negotiate on the principal amount, but will discuss reducing the interest (especially if they think they can get the bill paid immediately). Once I was satisfied that I was getting a fair deal, I paid the bill off, in each instance writing a check.\nOnce the check had cleared, I immediately contacted the CRAs and disputed the status and balance of the bill. I have found that this has worked to my advantage. Most of the collection agencies would respond as a paid collection (the best that I could hope for at the time, as they were 4-5 years delinquent), but many didn't respond to the CRAs, allowing the items to be deleted. Within the past six months, I have reduced my TransUnion report from 10 pages to 6! By year's end, I will have 1 negative account left open, and that one will be paid within the following year!!!\nAnyway, sorry to ramble, but I want to let everyone out there know that they should strongly consider working on their own to repair their credit. I certainly believe that no one should have to pay someone to help them get out of debt. I appreciate the services that you offer, and find the site very insightful. I hope that more people are made aware of what they can do on their own.\nSigned,\nSuccessful Hardworking Negotiator\n* * *\nAnd here's another letter from a determined lady who negotiated her way out of debt on her own:\nYou are the very BEST! I took all your advice and dealt with my creditors myself with great results! Not surprisingly, the credit card companies that are the biggest crooks (i.e. consistently post payments late so they can gouge out a \"late fee\") gave me the most grief. Others were really terrific.\nAll the info I got from you gave me the confidence to take matters into my own hands. I lined up my creditor info and started calling with my sob story and the when\/how much I could pay. They seemed surprised that I called them. Then I told them I'd cooperate if they'd cut me some slack on the credit report. For the most part, they were okay to deal with. Their part of the game was to try to make me cough up more $$ than I could afford but I reminded them I'd been unemployed for almost 7 mos. and they backed down. Four of them were totally okay, but First USA (of course) and G.E.Card Services were jerks.\nYou may already know this but I'll mention it anyway. I found out its a very good idea to decide early in one's financial crisis which credit card(s) one will never be able to pay (or can live without) and use that to salvage a little portion of your credit report. For example, G.E. took it upon themselves to close my acct. once the pmt. was 57 days late. Well, now the report will reflect late pay AND they had to stop my deviant behavior by canceling my acct. Whereas if I'd beaten them to it and cancelled it myself (sensing that they'd probably be jerks anyway) when I knew I was about to take a financial dive, that wouldn't have been yet another glitch on my beloved credit report. It's not a big deal but maybe I can defend myself a little better someday if I can make it at least appear that I made the effort to stop the madness by closing the account. Thanks again.\n* * *\n### **More Debt Settlement Articles**\n1. Negotiate Your Credit Rating\n2. Can a Creditor Sue You After Settling Your Debt?\n3. Difference Between Debt Negotiation and Debt Settlement\n4. How to Negotiate Medical Debt and Hospital Bills END

TITLE: Alternatives to Filing Chapter 7 and Chapter 13 Bankruptcy CONTENT: Alternatives to Filing Bankruptcy — Get Your Debt Under Control \n----------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nWe get a lot of questions on our forums about bankruptcy and many are looking for a way to avoid filing for bankruptcy. While there is no easy answer and everyone has a unique situation, we thought we would put together some of best recommendations for getting control of your debt so you can avoid filing for CH 7 or CH 13 bankruptcy. Be warned, there is no easy way to get out of debt. Some hard choices are in front of you but there are always alternatives to the long-lasting effects of filing bankruptcy.\nBelow are some basic strategies for getting your debt back under control. We've listed them in order of best to worst in terms of the effect they will have on your credit.\nReduce Your Expenses\n--------------------\nIf your credit isn't in terrible shape, can you reduce your other expenses while you pay the debt off? Perhaps some fairly painless changes to your lifestyle can bring your bills in line with your income. If not, some hard choices may be required. Some examples:\n* Do you really need things like cable television? Get rid of the extraneous expenses.\n* Ask a relative for a loan.\n* Can you do without the second car? If so, sell it.\n* Pull equity out of your home by refinancing.\n* Apply for a non-secured signature loan.\n* Sell your home, pay off your debts with the proceeds, and rent.\n* Cash out your 401K or any other retirement benefits.\n* Sell those family heirlooms\/jewelry\/guns that are too valuable to use anyway.\nSave More Money\n---------------\nSometimes the best way out of your financial situation, especially if your problem is credit card debt, is to just not pay your bills, and save the money you would have put towards minimum payments into a savings account.\nSettle Debts with Creditors\n---------------------------\nIf you are willing to negotiate with your creditors, you can try and settle your debts yourself for less than you owe, sometimes without damaging your credit rating.\nGet Help From a Credit Counselor\n--------------------------------\nIf your credit is really bad and the suggestions above won't make a dent in your debt, we suggest going through Consumer Credit Counseling Services (CCCS). Check the Internet for an office near you. CCCS will give you a plan for paying off your debts as if you were in a Chapter 13 bankruptcy without ever filing a bankruptcy.\nIf Consumer Credit Counseling Services (or CCCS) won't take you, you may want to consider bankruptcy. Doing a Chapter 13 bankruptcy takes longer, but your credit is in a little better standing than it will be if you file Chapter 7. You have up to 5 years to pay off your debts when you file Chapter 13 bankruptcy. Another plus is the bankruptcy drops off 7 years from the date you FILE, not finish. Therefore, you will have the bankruptcy for a maximum of 7 years.\nFile Chapter 7 Bankruptcy, as a Last Resort\n-------------------------------------------\nIf you are so far in debt that you will never be able to repay it, the best solution may be a Chapter 7 bankruptcy. A Chapter 7 bankruptcy is the least desirable credit-wise but you are typically out of bankruptcy in 6 months and you don't have to repay any debt. One disadvantage is that this shows on your credit report for 10 years from the date of filing your bankruptcy. Another disadvantage is that creditors are starting to tighten their credit requirements. You may have a tough time getting financing in the future.\nThere is no magic solution for getting out of debt. Don't believe anyone who tells you otherwise. END

TITLE: Creditor Can Sue You After Settling the Debt CONTENT: Can Creditor Sue After Negotiating and Settling Your Debt\n---------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: June 13, 2017_\nSettling your debt is not an easy task and hopefully some of our debt settlement articles have been helpful. Up to this point, you have been in contact with the collection agency and you have been successful in negotiating down your debt. Now comes the most important part of the entire process, paying them. This is a crucial part of the entire process and this is where you need to be the most careful in how you pay, who you pay, and knowing what will happen next.\nCan You Be Sued After You Settle Your Debt?\n-------------------------------------------\nYes, if you don't protect yourself during and after the settlement. You need to get a written agreement with the collection agency saying the amount being paid is considered payment in full.\nTips on Paying Your Debt After It's Settled\n-------------------------------------------\n**Never Disclose Where You Work or Bank** \nIf you are asked, refuse to give out this info. Why? If your settlement falls through, and the creditor gets a judgment against you, knowing where you bank or work will make it easy to collect on the judgment. In addition, this is none of their business and not relevant to the matter at hand.\n**Never Pay Your Settlements With a Personal Check** \nHow you payment them is very important. If you pay via personal check, you have just given your creditor complete banking information. For this reason, NEVER send a personal check. Get a cashier's check or money order. Make sure you get the money order or cashier's check from a different bank than your own bank or the post office. This may sound a bit paranoid, but better to be safe than sorry.\n**Keep a Copy of the Money Order or Cashier's Check**  \nCollection agencies keep notoriously bad records and it's your word against theirs if you say you paid and they said you didn't...unless you have the copy of the money order or cashier's check.\nIf You Negotiated a Settlement for Less Than You Owed, Can the Creditor Sue You For the Balance?\n------------------------------------------------------------------------------------------------\nYes! You need to read the following information carefully.\nSome collection agencies will agree to settle with you for far less than you owe and then turn around and hire another collection agency to collect the difference. However, in many states this is illegal. Once a creditor deposits or cashes your check, even if they strikes out the words \"payment in full\" and writes \"I don't agree\" on the check, they can't come after you for the balance. The states where this law is enforced:\n**Arkansas**\n**Colorado**\n**Connecticut**\n**Georgia**\n**Kansas**\n**Louisiana**\n**Maine**\n**Michigan**\n**Nebraska**\n**New Jersey**\n**North Carolina**\n**Oregon**\n**Pennsylvania**\n**Texas**\n**Utah**\n**Vermont**\n**Virginia**\n**Washington**\n**Wyoming**\nSome states have modified this law. In the following states, if a creditor cashes a full payment check and explicitly retains his right to sue you by writing \"under protest\" or \"without prejudice\" with their endorsement, they can come after you for the balance. But those exact words must be used. If they write \"without recourse,\" communicates with you separately, notifies you verbally, or writes on the check this is \"partial payment,\" it is not enough.\n**Alabama**\n**Delaware**\n**Massachusetts**\n**Minnesota**\n**Missouri**\n**New Hampshire**\n**New York**\n**Ohio**\n**Rhode Island**\n**South Carolina**\n**South Dakota**\n**West Virginia**\n**Wisconsin**\nCalifornians Get a Break Due to a Legal Loophole\n------------------------------------------------\nCalifornia lets creditors cross out the full payment language and sue you for the balance. However, when they passed this law, they also passed a separate law allowing California debtors to get around it. Getting around this law requires specific steps and language. To use it, this procedure must be followed exactly.\nHere is the procedure and the sample letters.\n* * *\n**More Articles About Debt Settlement**\n---------------------------------------\n* Negotiate Your Credit Rating\n* Difference Between Debt Negotiation and Debt Settlement\n* How to Negotiate Medical Debt and Hospital Bills END

TITLE: How to Protect Your Kid's College Savings from Debt Collectors CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 19, 2017_\nIf you have been saving for your child's education, the last thing you want is for a debt collector to take it all away. But can they? Are college savings accounts safe from creditors? What if you are sued by a creditor and you lose — can they collect the money owed by tapping into your son or daughter's college fund? These are all scary possibilities and ones that need to be planned for far in advance of collection proceedings or bankruptcies. If you are thinking of starting a college fund for your child, or if you already have one in place, you need to make sure it is set up properly so that it does not become fair game for debt collectors or the court system.\nAre College Savings Accounts Safe?\n----------------------------------\nWe hate to be vague, but the answer to that question is \"it depends.\" It depends on the way the money has been socked away, your state laws, and even how recently savings were put into the account. The most popular type of college savings account is the 529 savings plan. This type of account has 3 parties involved: the owner (parent), the contributor (most likely the parent), and the beneficiary (the child).  Now, here is where it gets a bit muddy. State laws vary with regard to whose interests are protected if there is a judgment brought up as a result of a bankruptcy or a lawsuit. In some states, for example, if there were a judgment against the beneficiary, funds would be protected. But if the contributor lost a lawsuit, that money might be at risk. State laws change so be sure to consult an attorney for specific advice.\nSet Up Savings Account Properly\n-------------------------------\nOne way to protect the money you are saving for your child's college education is to put it into a trust, more specifically, an irrevocable children's trust (ICT). This type of trust can contain a variety of assets without the limitations of a 529 savings plan. Also, this trust can be earmarked in whole or in part to cover educational expenses other than simply tuition.\nBut, in order to protect the assets of the trust from creditor's claims, it must be set up properly. It requires a grantor, a beneficiary, and a third-party trustee who is neither the grantor nor the beneficiary. Our best advice to you would be to contact either a well-qualified financial planner or an estate attorney to set up this trust. Depending on your net-worth, size of the savings account, and possibly other assets you want to include in the trust, your best bet it to have an experienced person do all of this for you. You want to make sure you present all possible scenarios to your attorney so that you have the best protection for your money.\nPlan Ahead\n----------\nNo one likes to think of the possibility of being sued or filing for bankruptcy, but you never know what could happen in your life in the next 5 to 10 years. What you don't want to have happen is to find out you are facing a lawsuit or bankruptcy and then try to dump money into these savings strategies after the fact. This will probably backfire for a couple reasons;\n* There are limits on how much can be contributed to the plans without running into gift tax issues.\n* This type of action may be considered \"fraudulent conveyance,\" which can make a bad situation even worse.\nIn the case of bankruptcy, there is a \"look-back period\" during which transfers made too close to the bankruptcy filing can be reversed and you might lose all that money to pay off your creditors. Of course, even the best-laid plans can not foresee a serious illness, natural disaster, or unemployment, but if you being proactive about saving for your child's education take the time to plan ahead. Always consult with a financial planner to make sure you are structuring everything correctly so in the event of a catastrophe, your child's money will be safe.\nKnow Your Rights When Dealing with Debt Collectors\n--------------------------------------------------\nLastly, knowing your rights when dealing with debt collectors is crucial. If a debt collector threatens to take your kid's college fund, it may be an illegal threat under federal law. The FDCPA (Federal Debt Collection Practices Act) does not allow collectors to threaten things they cannot do. And, since these accounts are off-limits to them, such a threat is a violation of the FDCPA and you may be able to sue them for breaking this law. If you know your rights, you won't be pressured into paying debts you don't owe, or using money you have saved for other purposes. END

TITLE: How to Protect Your Kid's College Savings from Debt Collectors CONTENT: | | | | \n: . END

TITLE: Prevent Debt Collectors From Ruining Your Credit CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 14, 2017_\nIf you are behind on paying your bills, chances are a debt collector may be calling you soon. Though debt collectors would prefer you to think otherwise, having a debt in collections is not the end of the world. Certainly, your credit will take a hit, but there are steps you can take to minimize damage.\n**Challenge the Validity of the Debt**\n--------------------------------------\nThis is a particularly effective tactic for old credit card debt. The more times it has been sold, from one debt collector to the next, the less likely they have on file an adequate paper trail proving the debt belongs to you.\nIf the debt collector cannot provide such proof, they cannot collect on the debt and the collection listing must be removed from your credit reports. Click here to learn more about debt validation.\n**Consider Settling the Debt**\n------------------------------\nIf the debt collector manages to provide proof that you do, indeed, owe the debt to them, consider debt settlement.\nJust be sure to:\n* Play it cool. Don’t let on how anxious you are to get this thing resolved. That’s a sure way to prolong it even further, as they know you’ll break before they do.\n* Do not accept the first offer, or even the second. Decide on what _you_ are willing to pay to resolve the debt and keep rejecting their offers until they get there (or very close).\n* Before agreeing to a settlement, insist on complete removal of the collection listing. And make sure to get this stipulation in writing.\nLearn more about settling debts on your own.\n**If You Are Being Sued, Make Sure to Respond**\n-----------------------------------------------\nThe vast majority of people sued by a debt collector simply ignore it. Unfortunately, this results in a default judgment against you, requiring you to not only pay the debt but also the debt collector’s legal fees. Of course, debt collectors know this all too well, which is why they are increasingly filing so many lawsuits. Don’t let them get away with it!\n### **_Check the statute of limitations._**\nCould it be the debt collector is not even allowed to collect on this debt? It could be, as many debt collectors are \"robo-signing\" lawsuits these days, meaning they’re not taking the time to be sure they have the legal right to proceed as such.\n### **_Challenge the debt._**\nIf the debt collector cannot prove that you owe the debt or that they have the legal right to collect on it, the court will throw out the case.\nThe truth is, debt collectors don’t want to spend the time and money taking you to court. Filing the lawsuit is simply used as a scare tactic that works more often than not. So don’t be surprised if, after responding to the lawsuit, the debt collector offers you a deal.\nLearn more about fighting a debt lawsuit.\nFor specific questions not answered here, try asking in our free and very active forum. END

TITLE: How To Deal With a 1099-C IRS Tax Form CONTENT: Step to Take if You Received a 1099-C\n-------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 12, 2017_\nThey can come out of the blue, reminding you of debts you thought finally resolved. Isn't that the point of debt settlement, after all? Unfortunately, the debt you've been forgiven is considered income by the Internal Revenue Service (i.e., you're expected to pay taxes on it). Thus the purpose of the 1099-C, a form creditors are required to file on forgiven debts of $600 or more so that the IRS knows to how much to bill you for. Fortunately, there is also a system in place to protect the rights of tax payers. Under certain circumstances, you may owe nothing.\n### Step One\nDon't ignore it. If you received a copy of a 1099-C in the mail, so did the IRS. Ignoring it suggests to the IRS that you are trying to avoid paying the tax you owe. Best case scenario, they take what you owe out of your income tax return, or they send you a bill. Worst case, you get audited.\n### Step Two\nValidate the debt. If you've been through the debt settlement process, you're probably well aware that creditors can make mistakes. The information on a 1099-C is no exception. Look over the form carefully and request validation of the debt from the creditor. If they cannot prove you ever owed this debt, you can provide documentation of such to the IRS so that you can be relieved of your tax liability.\n### Steps Three and Four\nDetermine if you qualify for an exclusion or an exception. Such qualifications mean the settled debt amount should not be counted toward your gross (taxable) income.\nYou may qualify for an exclusion in the follow circumstances:\n* Cancellation of qualified principal residence indebtedness.\n* Debt canceled in a Chapter 11 bankruptcy.\n* Debt canceled due to insolvency.\n* Cancellation of qualified farm indebtedness.\n* Cancellation of qualified real property business indebtedness.\nYou may qualify for an exception in the following circumstances:\n* Amounts specifically excluded from income by law such as gifts or bequests.\n* Cancellation of certain qualified student loans.\n* Canceled debt that if paid by a cash basis taxpayer is otherwise deductible.\n* A qualified purchase price reduction given by a seller.\nNote, the two most common circumstances under which tax payers qualify are exclusions for either debt canceled in a Chapter 11 bankruptcy; or debt canceled for insolvency, meaning it is proven the tax payer's liabilities exceed their assets.\n### Step Five\nFill out and submit Form 982 to the IRS. It is on this form that you will indicate why you qualify for an exclusion or exception.\n### Step Six\nConsult a tax professional if you have any doubt as to how to fill out Form 982 and\/or whether you qualify for an exclusion or exception.\n### Step Seven\nPay the tax, if need be, but only after exhausting all of your other possibilities, as discussed with a tax professional. END

TITLE: Discharged Debts in Bankruptcy May Return on Credit Report CONTENT: Can Discharged Debts Spring Back to Life?\n-----------------------------------------\n###### Written by: Kristy Welsh\n_Last updated: July 13, 2017_\nWe have heard a lot of horror stories where debts potentially forgiven by bankruptcy courts have been sold by Bank of America to junk debt buyer, CACH, LLC. Based on letters from readers, this practice continues today. We'll summarize the main points for you in the next few paragraphs and add some additional information.\nThe sad, rather frightening thing is that many of these consumers are actually giving in and paying off debts they no longer owe. In a recent Business Week article, it was reported that Capital One continued to report a man's discharged debt to credit bureaus as a live balance. When the man tried to close on a mortgage for a new home, the lender informed him that he would either have to pay his debt to Capital One or show proof from the credit-card company that it had been discharged.\nCapital One had never revised the credit report, a failure that is not uncommon by creditors. Through his attorney, he attempted to get Capital One to correct his credit report, but finally gave in and paid Capital One the debt he no longer legally owed. A motion in bankruptcy court was filed claiming Capital One had failed to update his credit report. A U.S. bankruptcy judge agreed.\nKnow Your Rights if Your Debt has Been Discharged in Bankruptcy Court\n---------------------------------------------------------------------\nThe law is quite clear as far as defining what the debtor can do if a creditor attempts to collect a discharged debt after the case is concluded. If a creditor attempts collection efforts on a discharged debt, the debtor can file a motion with the court, reporting the action and asking that the case be reopened to address the matter.\nThe bankruptcy court will often do so to ensure that the discharge is not violated. The discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be sanctioned by the court for violating the discharge injunction. The normal sanction for violating the discharge injunction is civil contempt, which is often punishable by a fine.\nWhat is less clear is how to enforce the obligation that creditors have to inform credit bureaus that accounts that have been discharged by bankruptcy have a zero balance, as it is not currently included in any statute. The Fair Credit Reporting Act requires credit bureaus to ensure \"maximum possible accuracy\" of their reports. Unfortunately, the bureaus are allowed to rely on lenders to provide consumer's debt information. Given the ambiguity not surprisingly bankruptcy judges are divided on whether a creditor's failure to update a consumer's credit report should be considered an improper attempt to collect.\nWhy is it Happening if it is Illegal?\n-------------------------------------\nAccording the the Business Week article, since the 1990's firms that track and trade consumer debt have been expanding their portfolios to include accounts involved in bankruptcies, a now robust market. Although some of the trade in the bankruptcy paper involves collectible debt, much of the market now also includes billions in discharged debts, technically with no dollar value.\nThe Business Week article further states that owners of these cancelled liabilities \"can revive their value in two main ways: by directly pressuring consumers to cough up cash or by gaming the credit system, as allegedly happened in the Rathavonga case.\"\nA second example provided by the article is the case of Belinda Hedge, who filed for protection from creditors in November 2005. In March 2006, the majority of her debt including several credit card accounts with Capital One totaling $2,414, were discharged by the U.S. bankruptcy court in Tennessee.\nSubsequent to the discharge, according to Hedge, Capital One and other debt collection agencies attempted to make contact with her over 140 times by telephone and mail to collect on one of the debts, a clear violation of the bankruptcy injunction. Despite providing the company and collectors court records from the bankruptcy, they continued to make contact. A Capital One spokeswoman attributed the collection efforts \"to the lender's failure to update Hedge's credit report to reflect the discharge,\" stating that it will correct the error.\nAccording to Brian Budsberg, a Tacoma Washington U.S. bankruptcy trustee, Ms. Hedge's experience is not uncommon, stating that \"his impression is that the number of debtors alleging collection abuse is greater than it has ever been,\" adding that he has observed \"an emboldened attitude by the collection arms of credit card companies and debt buyers.\" There has been a surge in the growth of businesses sometimes called Junk Debt Buyers or JDB's in recent years which includes the trading of discharged debts as well.\nWith Chapter 7 debt growing in our current economy, sales of Chapter 7 debt is growing as well. In order to be successful in the JDB market, companies must buy debt very inexpensively, even at a fraction of a cent, according to the Business Week article.\nHow to Avoid This Happening to You\n----------------------------------\nWell, stay out of debt is a good start, but of course that is sometimes easier said than done. Know your rights if you file bankruptcy and succeed at having your debts discharged; creditors are notified by the court both when a consumer files bankruptcy, and again when a discharge is granted.\nFor further information regarding discharge in bankruptcy, go to uscourts.gov. You can also read our articles in our bankruptcy section. END

TITLE: Cancellation of Debt 1099-C IRS Tax Form CONTENT: When is a 1099-C Issued For Debt Settlement?\n--------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 19, 2017_\nIf and when you settle a debt for less than what you owe, it feels like a done-deal to be celebrated. But temper that sigh of relief with the knowledge that, though you may no longer be required to pay back said debt, the IRS expects you to claim that amount as income. How can they possibly know how much of your debts have been forgiven? The creditor who forgave the debt will issue you a 1099-C form. They're not doing this to get even. Creditors are required to file this form with the IRS under certain circumstances surrounding cancellation of debt.\nWhat is a 1099-C Form?\n----------------------\nA 1099-C is a cancellation of debt form filed with the IRS by a creditor that has either 1) reached a settlement with a debtor for less than was originally owed, or has 2) forgiven the entire debt, concluding it will never be able to collect the debt.\nWhat Sort of Debt Qualifies for Inclusion on a 1099-C Form?\n-----------------------------------------------------------\nDebt that may be claimed on a 1099-C form includes stated principal, stated interest, fees, penalties, administrative costs, and fines.\nWhat is the Significance of a 1099-C Form to the Debtor?\n--------------------------------------------------------\nIf and when a creditor issues a 1099-C in your name to the IRS, whatever amount is included on the form is considered income that you must claim and pay taxes on.\nWhen is a Lender Required to File a 1099-C?\n-------------------------------------------\nCreditors must file a 1099-C with both the IRS and with the debtor for all debts of $600 or more under the following circumstances:\n1. Cancellation or extinguishment making the debt unenforceable in a receivership, foreclosure, or similar federal or state court proceeding.\n2. Cancellation or extinguishment when the statute of limitations for collecting the debt expires, or when the statutory period for filing a claim or beginning a deficiency judgment proceeding expires. Expiration of the statute of limitations is an identifiable event only when a debtor's affirmative statute of limitations defense is upheld in a final judgment or decision of a court and the appeal period has expired.\n3. Cancellation or extinguishment when the creditor elects foreclosure remedies that by law end or bar the creditor's right to collect the debt.\n4. Discharge of indebtedness by agreement between the creditor and the debtor to cancel the debt at less than full consideration.\n5. Discharge of indebtedness because of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt. A creditor's defined policy can be in writing or an established business practice of the creditor. A creditor's practice to stop collection activity and abandon a debt when a particular nonpayment period expires is a defined policy.\n6. The expiration of nonpayment testing period. This event occurs when the creditor has not received a payment on the debt for a 36 month period beginning on December 31st. (this 36 month period is rebuttable by creditor based on facts and circumstances)\nWhat Information is Included on a 1099-C Form?\n----------------------------------------------\n1. Date debt was canceled.\n2. Amount of canceled debt.\n3. Amount of canceled debt attributable to principal only, reduced by any amount received by lender in satisfaction of debt.\n4. Description of origin of debt (i.e., student loan, mortgage, or credit cards).\nAm I Required to Report as Income an Amount Filed Via a 1099-C by a Collection Agency, or Only if it is Filed by the Original Creditor?\n---------------------------------------------------------------------------------------------------------------------------------------\nIt depends on whether or not the collection agency can prove you owe the debt, which they may not be able to do since your account may have been transferred so many times that the proof of your debt has been left behind in the process.\nDebt validation is key. If the collection agency cannot prove that you owe the debt, but they have filed a 1099-C, you may include with your tax return a letter stating that said agency has no proof that you owe the debt.\nCan a Collection Agency Issue a 1099-C?\n---------------------------------------\nThe latest trend for collections firms is to issue a 1099-C. Can they do this? The IRS is not clear on their answer to this question. You might want to read this thread in our discussion forums.\nI filed Bankruptcy Can They File a 1099-C on Discharged Debts?\n--------------------------------------------------------------\nNo, they cannot. However, you must file a form. Title 11 of the bankruptcy code states you can file form 981 to get rid of the debt. END

TITLE: Defend Yourself in a Debt Lawsuit CONTENT: How to Fight and Win a Debt Lawsuit\n-----------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 13, 2017_\nThe New York Times ran a story about the recent surge of credit card debt lawsuits being filed and compared this epidemic to the \"robo-signing\" fiasco which plagued the mortgage industry. Now it seems the debt collection industry has taken up \"robo-lawsuits\" and are filing hundreds of lawsuits A DAY, assuming that 99 percent of the Defendants will not answer.\nIf you are being routinely hounded by a debt collector, chances are you are going to be slapped with a lawsuit at any time. So, what can you do if you are being sued by a collection agency? We have some tips for you to fight and defend yourself against a debt lawsuit.\nAnswer the Debt Lawsuit\n-----------------------\nIf you were served a Summons and Complaint, you MUST respond to it. The number one mistake people make when they are sued is failing to respond to the notice. If you owe the debt or even if you think you are being sued in error, you have to respond to these allegations in the form of an Answer. Failing to do so will give the debt collector the opportunity to file a default judgment against you, which will open up an entirely new can of worms. The collector can now try to garnish your wages, take money out of your bank account, try to collect attorney's fees and court costs, and\/or collect interest charges.\nEven if you owe this debt, a two-sentence response denying liability to the lawsuit filed in court will likely lead to a negotiated settlement and save you money in the long run. When you do respond to them, it will force the debt collector to either back down or offer a settlement. The debt collector is betting you will not file an Answer to his Summons and Complaint so when you do, they are actually surprised and not really wanting to spend much money on collecting from you. This is why if you deny liability they will pretty quickly try to settle the debt lawsuit with you.\nChallenge the Debt Lawsuit\n--------------------------\nChallenge the debt collector's, or Plaintiff's, ability to file this lawsuit against you in the first place. Credit card debt is almost always bought for pennies on the dollar by a collection agency who in turn is going to try to sue you to collect the money owed. Bottom line, the collection agency needs to prove they have the right to collect this debt as evidence by a transfer of the signed credit card agreement. We can bet 99.9 percent of the credit card debt is not properly transferred to the collection agency in this manner.\nSo, you are going to ask the court to dismiss the case because the Plaintiff does not have the \"chain of custody\" paperwork giving them the right to collect this debt from you. A lot of judges will look at the paperwork that debt collectors provide and tell the Plaintiff they must be kidding — and dismiss the case.\nMake the Plaintiff Prove What You Owe\n-------------------------------------\nMore often than not, your debt has changed hands multiple times before the current collection agency purchased it and is now suing you for it. So, you will want the Plaintiff to provide the ORIGINAL signed agreement and a balance on the account from zero to the present. We are going to bet doughnuts to dollars the collection agency will only have a portion of the statements and they most certainly will not have the original signed agreement.\nIt will be this lack of documentation from the Plaintiff that can get your case dismissed. If the Plaintiff can not prove what you owe, the judge will not be able to make a ruling and will throw the case out.\nUse the Statute of Limitations as a Defense\n-------------------------------------------\nAs we mentioned before, a collection agency is betting the borrower will not respond to their lawsuit and they will be awarded a default judgment. Therefore, creditors don't always stop to see if they can actually legally sue you for this debt, i.e., if the Statute of Limitations has run out on this debt. In most states, creditors have a maximum amount of years they can legally sue you for this debt. After that, the Statute of Limitations expires and the collector will lose.\nIf the Statute of Limitations has expired, you can use this a defense and get your lawsuit dismissed. Every state's statute on debt is different, so see our page which lists out each state's limits on debt collection.\nSue Your Creditor\n-----------------\nThis is an idea we talk about very often on our website. If a debt collector has violated any of the provisions in the Fair Debt Collection Practices Act (FDCPA), you may be able to sue them and be awarded damages. Consumers can successfully sue for violations of the debt collections practices act and are entitled to statutory damages of $1,000, plus punitive and economic damages. To read more on this topic, you can purchase our eBook entitled How to Sue Your Creditors.\nFile For Bankruptcy\n-------------------\nWe are not advocating to file bankruptcy, as this type of decision should be at the very least, talked over with a qualified bankruptcy attorney. But, if the debt you are being sued for is so large or if it is just one of many debts you owe, it may make sense to file bankruptcy. When you do, you will be protected by the automatic stay, which will halt any and all debt collection efforts being made against you. If you are thinking about filing bankruptcy, talk to an attorney as soon as you are served with a Summons and Complaint. Don't wait until the day you are suppose to be in court!\nHopefully these tips have given you the confidence you need to stand up to a debt collector's lawsuit. Being served with a lawsuit is not the end of the world and more often than not, you can beat the debt collectors at their own game. Being an informed consumer is the one thing the debt collectors did not count on, so do your homework and you will be victorious. END

TITLE: Protect Yourself From Zombie Debt and Debt Collectors CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 16, 2017_\nWhether you are just embarking on the credit repair process, or your credit is in tip-top shape, the last thing you want or need is some old and moldy debt rearing its ugly head. Believe it or not, debt that may have fallen of the credit reporting radar long ago can come back to haunt you in the form of zombie debt.\nWhat is Zombie Debt?\n--------------------\nWhen a person does not pay on a debt, the lender has numerous ways in which they can try to collect the debt from you. Once they give up on you, they mark the account as a charge off and sell it to a debt collector for pennies on the dollar. Fast forward a few years and now this debt is snatched up by a debt \"scavenger\" who buys up these very old debts in hopes of bullying or tricking you into paying on it. This is usually debt you've forgotten about it, or debt you don't recognize because it was never yours in the first place.\nAre You Legally Responsible For Zombie Debt?\n--------------------------------------------\nZombie debt is usually debt where the statute of limitations has passed, meaning you are no longer required to pay it. Also, in some cases, the debt buyers are unaware when a debt has been discharged in bankruptcy, again freeing you from any responsibility for the debt. Finally, zombie debt may simply be a case of mistaken identity; either they think you are someone else who actually does owe the debt, or you may be a victim of identity theft.\nHow Do Debt Scavengers Buy Zombie Debt?\n---------------------------------------\nDebt buyers purchase the old debt from the company that was the last to own it. This may be the original creditor, or it may be another debt buyer. In either case, the previous owner of the debt deems it uncollectible, so they sold the debt to a company that wants to give it a try. \nWhat Price Do Debt Scavengers Pay for Zombie Debt?\n--------------------------------------------------\nIt is common practice for debt collectors to purchase debt from original creditors for pennies on the dollars. In the case of zombie debt, though, debt scavengers may pay less than a penny per dollar owed. Why? The older the debt, the less collectible it is and, in turn, the cheaper its going rate.\nWhat Types of Debt is Zombie Debt?\n----------------------------------\nInitially, debt buyers focused on old credit card debt. But beware of collection efforts on other types of debt that you may not be legally required to pay, such as mortgage loans, auto loans, or medical bills.\nWhat is the Statute of Limitations on Collecting Debts?\n-------------------------------------------------------\nThe statue of limitations varies by state and type of debt and you can find out yours by checking out our state by state listing and act accordingly. Zombie debt collectors are counting on you not knowing that the statute of limitations has run out on the debt they are trying to collect from you.\nIf a Debt Collector Offers to Accept a Small Payment in Exchange for Forgiving an Old Debt, Should I Do It?\n-----------------------------------------------------------------------------------------------------------\nNo, at least not before you have asked for and received validation of the debt, including its age. If the SOL has expired, you are not required to pay. In fact, if you make a payment or even a promise-to-pay, it will re-age the account, and the statute limitations starts all over again.\nCan I Try to Validate the Debt?\n-------------------------------\nGet the address of the debt collection agency that has bought your account. Write them a letter requesting validation, including a copy of the original contract, date and details of your last payment made, and proof that the company does, indeed, own the debt. If they cannot provide validation, or the validation proves the debt has reached the statue of limitations, you are no longer legally responsible for the debt. This is an extremely effective means of dealing with debt scavengers, as they rarely receive the supporting information and documentation they need to prove the debt.\nWhat Tactics Will Zombie Debt Collectors Use?\n---------------------------------------------\nDebt scavengers know that most of the debt they buy is on accounts for which the borrowers are no longer legally responsible. For this reason, they prey on ignorance and fear. Common tactics include:\n* Offering to stop collecting on the debt, or promising not to report it to the credit agencies, if you will just make one small, good-faith payment. This is a bad idea, as making a new payment re-ages the debt, resetting the statute of limitations. This means the collector then has the right to sue you for the full amount. As for reporting to the credit agencies, it is illegal for collectors to report a negative listing on a debt for which the statute of limitations has run out.\n* Threatening to sue you if you do not pay the debt. Provided the statute of limitations has been reached, it is illegal for them to sue you anyway. The same is true of bankruptcy charge offs or debt that they cannot prove belongs to you.\n* Using abusive language to bully you into making a payment, which is a violation of Fair Debt Collection Practices Act.\n* Referring to themselves as a litigation firm. Most zombie debt collectors are not lawyers.\nWhat if I Receive Notice a Debt Collector is Suing Me For a Zombie Debt?\n------------------------------------------------------------------------\nDon't believe it, but don't ignore it either. Through a third-party resource, such as the internet or a phone book, get the address and phone number for the court through which the lawsuit has supposedly been filed (as the debt buyer could very well have used a bogus address and phone number for the bogus filing). Contact the court and verify that the lawsuit is, indeed, legitimate. If it's not, file a complaint with the FTC. If it is legitimate, go through the debt validation process. If the debt, indeed, can be proven you may want to enter into negotiation with the debt collector. Either way, if a debt collector is suing you, it is in your best interest to consult an attorney to walk you through the process.\nWhat if a Zombie Debt Collector Calls Me?\n-----------------------------------------\nAsk for their address and then hang up immediately without divulging any information whatsoever. Once you have their address, write them a letter requesting validation of the debt and to stop calling you.\nWhat are Zombie Debt Collectors Legally Prohibited From Doing?\n--------------------------------------------------------------\nCollectors of zombie debt may not report your old debt to a credit reporting agency, or threaten to sue you for the debt, provided it is debt that has already reached its statue of limitations.\nIf It's So Hard for Debt Collectors to Validate Zombie Debt, Why Do They Even Bother?\n-------------------------------------------------------------------------------------\nDebt scavengers are able to purchase zombie debt at such a low price that they can make a pretty penny even if just a fraction of people pay. Collecting on these debts is big business, at $3 billion a year.\nWhat is My Best Defense Against Zombie Debt Collectors?\n-------------------------------------------------------\n**Knowledge is King**. You need to know your rights and, most importantly, you need to exercise them. You do not have to talk to debt collectors on the telephone. After getting their address, hang up. You can then send them a letter requesting validation of the debt. If they are unable to provide proof, you are not legally required to pay it. And if and when a debt collector crosses the legal line, report them to the FTC and\/or seek legal counsel. END

TITLE: IRS Hires Collection Agencies to Collect Tax Debt CONTENT: How IRS Hiring of Collection Agencies Could Affect You\n------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 20, 2017_\nIf you owe back taxes to the IRS, a change in federal tax collection should be of interest to you. Starting April 2017, the Internal Revenue Service is turning some overdue accounts over to private collection agencies. Find out how this change in federal tax collecting could affect you.\n**Which taxpayers are affected?**\n---------------------------------\nIf you have tax debt going back several years, you could see your account turned over to a private collection agency. However, the IRS states on its website that this does **_not_** apply to taxpayers who are:\n* Subject to pending or active offers in compromise\n* Subject to an installment agreement\n* Subject to a right to appeal\n* Classified as innocent spouse cases\n* Victims of tax-related identity theft\n* In designated combat zones\n* In presidentially declared disaster areas and requesting relief from collection\n* Currently under examination, litigation, criminal investigation or levy\n* Under the age of 18\n* Deceased\nAnd even if your account is turned over to a private collection agency, it would return to IRS management if your circumstances change to reflect any of the scenarios listed above.\n**How will affected taxpayers be notified?**\n--------------------------------------------\nIf your account is turned over to a private collection agency, expect to receive two letters:\n1) Letter from the IRS, which should include:\n* Notification that your account has been transferred to a private collection agency\n* Name of the collection agency\n* How much you owe\n* Your unique taxpayer authentication number\n* Copy of IRS Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency\n2) Letter from the private collection agency, which should include:\n* Name of the collection agency\n* How much you owe\n* Your unique taxpayer authentication number\n**What if you question the debt or the amount?**\n------------------------------------------------\nDo the same thing you would do with any other type of debt collector. The FTC advises you to write to the collection agency and request debt validation.\nYou can also check your account balance at IRS.gov\/balancedue.\n**Which agencies are collecting debt for the IRS?**\n---------------------------------------------------\nThe IRS has selected four private collection agencies to work with, one of which will be assigned to you:\n**CBE** \nP.O. Box 2217 \nWaterloo, IA 50704 \n1-800-910-5837\n**ConServe \n**P.O. Box 307 \nFairport, NY 14450-0307 \n1-844-853-4875\n**Performant** \nP.O. Box 9045 \nPleasanton CA 94566-9045 \n1-844-807-9367\n**Pioneer** \nPO Box 500 \nHorseheads, NY 14845 \n1-800-448-3531\nIf you’re not happy with the collection agency assigned to you, you’re not stuck with them. As stated on the IRS website, \"If you do not wish to work with the assigned private collection agency to settle your overdue tax account, you must submit a request in writing to the private collection agency.\"\n**How can you spot scams?**\n---------------------------\nThe IRS is already anticipating fraudulent phone calls to taxpayers trying to take advantage of this new debt collection process. If you get a call, the FTC says to watch for these red flags:\n* Calls made from a collection agency before you have had any prior contact from the IRS about the debt. Forbes says the IRS will try to contact you multiple times before transferring your debt to a collection agency.\n* Robocalls or pre-recorded messages. If the collection agency calls you, it will be a live person.\n* Requests for credit card, debit, gift card, or wire transfers. The private collection agencies hired by the IRS will only instruct you to pay one of two ways – 1) online via IRS.gov\/payments, or 2) by sending a check directly to the IRS, made out to the United States Treasury.\n* Inability to provide you with the unique taxpayer authentication number sent to you in the two letters notifying you of the new collection activity\n**Why is this happening now?**\n------------------------------\nOn December 4, 2015, President Obama signed the Fixing America’s Surface Transportation Act (FAST Act), which requires that the IRS use private collection agencies for some federal tax debts.\n**What if your debt collection rights are violated?**\n-----------------------------------------------------\nAll private debt collectors are subject to debt collection laws. Those collecting on behalf of the IRS are no exception. As stated in Publication 4518:\n\"Private collection agencies under contract with us to collect overdue tax accounts are, with some exceptions set forth in the Internal Revenue Code, required to conform to the rules, regulations, and provisions of the Fair Debt Collection Practices Act. Specific provisions of this act prohibit private collection agencies from threatening or intimidating taxpayers.\"\nAnd these private collection agencies are not authorized to take any enforcement action against you (though the IRS certainly can, such as filing a lien or issuing a levy).\nIf you believe the private collection agency assigned to you has violated your rights, submit a complaint to the Treasury Inspector General for Tax Administration (TIGTA):\n* Online at TIGTA.gov \n* Write to:\nTreasury Inspector General for Tax Administration Hotline \nPost Office Box 589 \nBen Franklin Station \nWashington, DC 20044-0589\n**Where can you turn for help if you can’t pay and can’t afford an attorney?**\n------------------------------------------------------------------------------\nIRS Publication 4518 refers taxpayers to:\n* Taxpayer Advocate Service\n* IRS Publication 4134 for a list of Low Income Taxpayer Clinics (LITCs)\n* Directory of Federal Tax Return Preparers\n* Referral system operated by your state bar association, state or local society of accountants or enrolled agents, or another nonprofit tax professional organization\nWhatever you do, don’t ignore these collection attempts. And even if your account hasn’t been turned over to a collection agency, don’t wait to take care of back taxes. The sooner you can work something out — either through a private collection agency or directly with the IRS — the sooner you can start getting out of debt, repairing your credit, and realizing your financial goals. END

TITLE: Consumer Credit Counseling Service Rep Letter CONTENT: Consumer Credit Counseling Service Correspondence\n-------------------------------------------------\n###### Written by: Kristy Welsh\nLetter From CCCS\n----------------\nMy name is Treg Hansen, Marketing and Education Director for Consumer Credit Counseling Service of Idaho.\nI would like to clarify some of your comments about our services. There are some statements that I would like to address.\n1\\. On your page about our organization, you stated that clients who utilize our Debt Management Program are ruining their credit. You stated that they will have 30, 60, and 90 day lates because of a lower payment. You also implied that our sole function is to lower payments.\nThe truth is most clients who walk in our door already have 30, 60 and 90 day lates on their credit report. The only time this will show on their credit report is if the client does not make their payment on time, or they miss their scheduled payment. At CCCS we negotiate with creditors to have interest waived or reduced as well as late and over limit fees eliminated. Not all creditors negotiate in all of these areas but a majority do. This is how we are able to help the public pay off their debts in a shorter period of time.\n2\\. You also compared the CCCS Debt Management Program to a Chapter 13 bankruptcy.\nThere is a vast difference between our Debt Management Program and aChapter 13 bankruptcy. In our program, the client pays off all their balances and not just a portion as with the 13BK. Also, people who are on the program do buy houses, cars, and establish credit when they demonstrate the ability and stability to do so.\n3\\. On your Alternatives To Filing Bankruptcy page, I thank you for recommending CCCS. However, on your Consumer Counseling Services page you stated, \"I usually don't recommend Consumer Credit Counseling Services, because it ruins your credit.\"\nAt CCCS we help people take financial responsibility for their debts. We help citizens avoid bankruptcy, which helps all of us. We are a non-profit community service organization that is committed to educating the public about family finance topics. We offer free workshops on various topics that include, but are not limited to: Couples and Money, MoneyManagement, Budgeting, Credit, Buying a Home, Balancing your Checkbook,and Cutting Expenses. We go to high schools, businesses, prisons, and local libraries to educate on several credit-related issues.\nWe at CCCS are trying to educate and dis-spell some of the myths about our organization and would be happy to answer any of your questions.I am pleased that there are sites like yours because, we need all the help we can get.\nI personally work for this company because I am able to help people,which is very rewarding.\nSincerely,\nTreg R. Hansen\n**Note:** Unfortunately, since the receipt of this letter, their office has since closed. END

TITLE: Consumer Credit Counseling Service Rep Letter CONTENT: | | | | \n: . END

TITLE: Discharge Student Loans in CH 7 Bankruptcy CONTENT: Can a Student Loan be Discharged in Chapter 7 Bankruptcy?\n---------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: August 18, 2017_\nThe topic of student loans and student debt is now at the forefront of the conversation about overall consumer debt in America. Student loan debt is now larger than credit card debt with a collective $1.4 trillion burden of debt and student loan delinquency rate is now 11.2 percent (90+ days delinquent or in default). It is no wonder the question of whether or not student loans can be included in a Chapter 7 bankruptcy comes up all the time.\nPrivate student loans are generally non-dischargeable in a Chapter 7 bankruptcy. That being said, on February 6, 2013, U.S. Congressmen Steve Cohen (D-Tenn.) introduced H.R. 532: Private Student Loan Bankruptcy Fairness Act of 2013, which proposed amending the U.S. Bankruptcy Code to modify the ability to discharge certain debts for educational payments and loans. This particular bill died in Congress but Congressman Cohen re-introduced the same concept in H.R. 2527: Private Student Loan Bankruptcy Fairness Act of 2017. This bill is currently in the House under debate.\nCan a Student Loan be Discharged?\n---------------------------------\nIt used to be that private student loans could be discharged in bankruptcy. But, after the signing of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, Congress stated that student loan borrowers would be required to file an \"adversary proceeding\" (a type of lawsuit within a bankruptcy case) to prove undue hardship in order to get their loan forgiven. Even being able to do this, many people have thought it darn near impossible to discharge their student loan and don't even try. This has left many just living with this overwhelming burden of debt.\nJason Iuliano, a Harvard Law School professor, took a closer look at student loan discharges in bankruptcy and his findings were shocking. He found four out of 10 people who attempted to discharge their loan were successful. That may not seem like great odds, but everyone once thought their chances were nil at best. The most shocking finding was that 99.9 percent of student loan debtors in bankruptcy never even tried to get a discharge.\nProving Undue Hardship\n----------------------\nThe number one reason a person will be successful in getting their student loan discharged is being able to prove undue hardship. In a Chapter 7 bankruptcy, an undue hardship has these characteristics:\n1. The debtor is less likely to be employed.\n2. The debtor is more likely to have a medical hardship.\n3. The debtor is more likely to have lower annual incomes the year before they filed for bankruptcy.\nFurthermore, in order to pursue a successful claim to discharge the loans in bankruptcy, the debtor should be able to show;\n1. a current inability to repay the loans,\n2. a future inability to repay the loans, and\n3. a good faith effort to repay the loans.\nIf you can successfully prove undue hardship, your student loan will be completely canceled. If you cannot prove due hardship, you might want to consider repaying your student loans through a Chapter 13 bankruptcy plan. As always, it is best to get advice from a qualified bankruptcy attorney so you understand and can take full advantage of your options. END

TITLE: Discharge Student Loans in CH 7 Bankruptcy CONTENT: | | | | \n: . END

TITLE: Consumer Credit Counseling Service - Get the Facts CONTENT: Understanding Consumer Credit Counseling Services\n-------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 13, 2017_\nMany people are so far in debt they don't really know what steps to take to get themselves out of debt. If you ever visited our discussion forums, the most active category is the debt settlement forum, with hundreds of people asking and answering questions every day about debt and how to get out of debt. One service out there for people to use is called Consumer Credit Counseling Services (CCCS). But how do you know if this is right for you? Read on.\nBack in 1951, the National Foundation for Consumer Credit (NFCC) was founded to promote credit and financial awareness in response to a new product called credit cards. Soon after, credit counseling emerged as part of the NFCC's nonprofit services and individual CCCS offices began opening up all over the country. These office were independently operated but all under the central membership of the NFCC.\nIn 1993, the Financial Counseling Association of America (FCAA) was founded and offered an alternative to the NFCC. CCCS offices can be members of either parent organization or both and all offer free of charge debt counseling to consumers.\nHow Does Consumer Credit Counseling Work?\n-----------------------------------------\nConsumers who call a CCCS office talk to a certified counselor in a confidential, non-judgmental 45 to 90 minute session. The counselor offers expert advice along with a workable budget based on the client's financial situation. Using this information, the counselor offers a realistic plan for paying down debt, increasing savings, and improving the client's overall financial situation. This session is free of charge and carries no obligation.\nSometimes this initial session may be all you need to get your debt under control. But if not, you may need to enroll in a debt management program.\n### Debt Management Program\nIf you need more assistance after your initial session with a CCCS counselor, you may need to enroll in a debt management program. This program combines your debts into one monthly payment that you make to the agency. This how it works:\n**Process:** A debt management plan is an agreement worked out between a credit counseling agency and your creditors. A debt management plan can only be used on **unsecured debt**, such as credit card debt. The credit counseling can usually get some concessions from your creditors, such as a reduction in interest rates or an elimination of late fees. As part of a debt management plan, you need to close your credit card accounts. All of your payments are then combined into one large payment you make to the counseling agency. The agency then distributes the appropriate payments to your creditors.\n**Cost:** Usually there is a program setup fee and a monthly fee. These fees vary depending on the state you live in and your income. Generally, waivers are available if you earn up to 150 percent of the poverty line. Additionally, most agencies have a cap on their fees.\n**Risk:** A debt management program isn't as risky as some other options for managing your debt, such as debt consolidation. A debt management program will impact your credit score because you will need to close your accounts. This is short lived, but it could affect your ability to get loans while you're enrolled in the program. In the long term, using a debt management program can help your credit score by reducing your debt load.\nHow to Evaluate a Good CCCS Agency\n----------------------------------\nAs with anything, it is a good idea to do some checking around before you sign up with a CCCS agency. Not all are the same and the differences between them can be staggering. Call or visit numerous agencies to see which one is a good fit for you. Here are some things to look for:\n* They give you a full breakdown of your debts and income, and they work with you to establish a budget, send follow up materials and recommend alternatives to a debt management plan.\n* They propose a debt management plan as just one of many options for managing heavy debt.\n* They provide numerous educational resources, such as calculators and budgeting tools, to help you learn about finances and managing your money. \nCCCS Agencies We Recommend\n--------------------------\nAccording to numerous sources, here is a list of some recommended Consumer Credit Counseling Services.\n* ClearPoint Credit Solutions\n* Springboard\n* AAA Fair Credit Foundation\n* American Consumer Credit Counseling\n* InCharge Debt Solutions\nIt may take a little time to investigate potential CCCS agencies to use, but the investment in time will be worth the investment in your financial future. END

TITLE: Fair Trade Commission Debt Consolidation Company Regulations CONTENT: FTC Debt Consolidation Company Rules and Regulations\n----------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 14, 2017_\nWhile many Americans struggle to pay their credit card bills, a lot of them turn to businesses offering debt relief services. These are for-profit companies that say they can renegotiate what consumers owe or get their interest rates reduced. In response to this growing business model, the FTC (Fair Trade Commission) put together the Debt Relief Rules which took effect October of 2010. The regulations are very comprehensive and are aimed to curb deceptive and abusive practices associated with debt relief services offered by debt consolidation companies.\nFor-Profit Companies Required to Give Upfront Disclosures\n---------------------------------------------------------\n* **_Proposed fees must be disclosed along with refund policies._** They can't get away with estimates or potential ranges of fees. Instead, the proposed fees must be must be based on real results based on experiences with individual creditors.\n* **_Time to get through the program._** Just as in a mortgage, consumers must be given a good faith estimate describing how long it is likely to take to settle their debts based on their debts, and their ability to save money to settle.\n* _**Savings required.**_ Firms must accurately estimate how much money prospective clients will have to save up in order to settle. The figures must be based on actual settlements they have made for other clients.\n* **_The negative effect on credit._** Consumers must be given warnings that include the likely damage to their credit reports, the potential risk of lawsuits, and possible tax consequences.\nAccurate Estimate of How Much Money a Consumer Will Save\n--------------------------------------------------------\n* Claims about how much money consumers can save must be based on the firm's actual experience with all clients, not just the \"best\" examples.\n* Experts have estimated that about 60 percent of customers end up ditching the program before it's over. Firms must accurately estimate the success rates of their clients.\nSavings Accounts Must be Held in an Insured Financial Institution\n-----------------------------------------------------------------\nIn times past, payments consumers make to the debt settlement firm went into an escrow account, though many firms labeled it as a savings account, a misleading term since there was no savings account opened at a real bank. Under the new rules:\n* The dedicated account is maintained at an insured financial institution;\n* The consumer owns the funds (including any interest accrued);\n* The consumer can withdraw the funds at any time without penalty;\n* The provider does not own or control or have any affiliation with the company administering the account; and\n* The provider does not exchange any referral fees with the company administering the account.\nNo Upfront Fees\n---------------\nThe debt settlement firm must wait until one of the following occurs before they collect any fees.\n* The debt relief service successfully renegotiates, settles, reduces, or otherwise changes the terms of at least one of the consumer's debts;\n* There is a written settlement agreement, debt management plan, or other agreement between the consumer and the creditor, and the consumer has agreed to it; and\/or\n* The consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.\nIf you do find yourself signing up with a firm and they are not following these regulations, do not hesitate to report them to your state attorney general's office or file complaint with the FTC. END

TITLE: Fair Trade Commission Debt Consolidation Company Regulations CONTENT: | | | | \n: . END

TITLE: Pros and Cons of Debt Consolidation CONTENT: Using a Debt Consolidation Company to Consolidate Your Debt \n------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Update: June 12, 2017_\nIt seems these days that more and more Americans are falling further into debt. If you have fallen behind on your payments, it can feel like there’s nowhere to turn for help. One possible option to get organized and streamline your bills is to go the route of debt consolidation. Debt consolidation lets you roll several debts into one loan with a lower interest rate and longer payment term. That means you’ll pay less each month to just one lender instead of making payments to multiple creditors.\nWhile it’s not as drastic as debt settlement or debt management, debt consolidation has its own pitfalls that you need to be aware of. If you need help educating yourself on your debt consolidation options, read on.\nWhat is Debt Consolidation?\n---------------------------\nDebt consolidation is when you consolidate your debts by taking out a new, bigger loan to pay off a bunch of your existing debts. Instead of paying several different creditors, you’ll be paying a single bill for the new loan. Your monthly payment will likely be lower with the new single loan than the combined payments of your previous debts. Unlike debt settlement, you do not actually reduce the principal amount you owe — you will still be paying the full amount.\nDebt consolidation is not without risks. Experts warn against consolidation unless you’re truly struggling to make minimum payments on your debts each month and are ready to turn over a new leaf with your spending habits. Here are the pros and cons of debt consolidation.\n### Pros\n* **Short-term relief.**  A single loan with a lower interest rate, spread out over a longer term, can drastically reduce the amount you pay each month.\n* **It’s easier to stay organized.**  It can be hard to keep track of several bills and monthly due dates, leading to more late or missed payments, but it’s easy to remember to pay just one bill.\n* **No damage to your credit.**  Debt consolidation keeps your credit intact since you’re still paying off all of what you owe. This isn’t always the case with debt settlement, debt management plans, and bankruptcy.\n### Cons\n* **Long-term pain.**  Your lower monthly payment is usually the result of a longer payment term, not just a lower interest rate. In other words, instead of paying a lot for a short period, you’ll be paying a little for a long period. And you might be paying **much more** in interest over the long run, once it’s all said and done.\n* **Big risks, depending on your new loan.**  If you use a secured loan to consolidate your debts, the collateral associated with that loan (for instance, your house) will be at risk if you can’t make your new payments. Falling behind on an unsecured loan isn’t as dire, but it could still trash your credit score.\n* **You’re fighting debt with debt.**  While debt consolidation can work for the fiscally disciplined, bad habits might be the reason you’re considering consolidation in the first place. If you do not change your habits, you may end up much deeper in debt than you were before you consolidated.\nTypes of Debt Consolidation Loans\n---------------------------------\nThe first type of loan is a **secured loan** which is tied to some sort of collateral - a valuable asset that the lender can take in the event you no longer pay your bills. Common collateral includes your house or car. It’s easier to get a secured loan since there is less risk to the lender. For the same reason, it’s also usually easier to get a larger amount at a lower interest rate. The interest may also be tax-deductible.\nOf course, while it’s easier for you to land this kind of loan, you could also lose your assets if you default. You may also be paying down this kind of loan for much longer. Home equity loans are among the most common kind of secured debt consolidation loans.\nThe second type of loan is an **unsecured loan** which is not tied to collateral. Because of that, it’s less risky and if you default on this loan you are only risking credit damage instead of an asset. Unsecured loans also usually take less time to pay down.\nHowever, getting an unsecured loan is tougher, especially if you have bad credit. Because the lender takes on more risk with unsecured loans, you’ll probably be offered a higher interest rate and a smaller amount, and there are no tax benefits. Personal loans, credit-card balance transfers, and loans offered solely for the purpose of debt consolidation are among your options here.\nAlternatives to Debt Consolidation\n----------------------------------\nIf debt consolidation doesn’t seem quite right for your situation, there are several other debt-relief methods. Of course, all of these strategies have their own pros and cons, and only you can decide whether they are better or worse for your unique situation.\n* Credit Counseling\n* Debt Settlement\n* Debt Management\n* Bankruptcy\nAvoid Debt Consolidation Scams\n------------------------------\nIf you’re in the market for a debt consolidation loan, remember to keep your guard up. Unscrupulous companies target people seeking any form of debt relief, including personal loans. Here are some things to keep in mind:\n* **You don’t need a middleman.**  Many companies that claim to offer debt consolidation actually are pushing debt management and debt settlement. If you are simply looking to consolidate, no one needs to negotiate with your creditors for any reason.\n* **You should be the one to initiate contact.**  Shady lenders are more likely to aggressively search for and hound potential borrowers.\n* **You shouldn’t pay upfront fees.**  You should never be charged simply to apply for a debt consolidation loan.\n* **Be wary of guarantees.**  Legitimate lenders simply can’t guarantee that you’ll qualify for a personal loan without knowing your income, credit score, and other personal information. If you see such a guarantee, move along.\n* **Reject scare tactics.**  Legitimate lenders will not discourage you from searching for the best deal or pressure you into borrowing more than you can afford.\n* **Do your homework.**  Look at the company’s Better Business Bureau rating and any other online reviews you can find. Almost every company will generate complaints, but some will generate far more than others.\nDebt consolidation can be an excellent option if you’re ready to dig your way out of debt for good. A debt consolidation loan will allow you to stay organized and pay off your debt with a reasonable interest rate and affordable monthly payment. END

TITLE: Pros and Cons of Debt Consolidation CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Pros and Cons of Debt Consolidation CONTENT: | | | | \n: . END

TITLE: Help Finding a Good Debt Consolidation Company CONTENT: Tips for Finding a Reputable Debt Consolidation Company\n-------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 14, 2017_\nAre you carrying a large load of debt? Do you feel like you can never get out from under all of this debt? Does it seem no matter what you do, you can't get rid of all of this debt? These are thoughts shared by thousands of Americans who are in the same debt laden boat as you. This leads us to our next question: Are you thinking about using a professional debt consolidation company to get out of debt? If so, you better read this article on how to find a reputable debt consolidation company. \nHelpful Tips When Looking for a Debt Consolidation Company\n----------------------------------------------------------\n* **Read the FTC Regulations** regarding debt relief, settlement and negotiation companies.\n* **Locate a Local Consumer Credit Counseling Office.**  Of all the debt consolidation companies, in my opinion, they are the least harmful to you and your credit. The NFCC.org is a good place to search for the one nearest you, by zip code. Local companies are also a good idea because the local authorities have jurisdiction over them. They can do little if the company is out of state.\n* **Check Out the Company with the BBB.**  You can check out any company you are thinking of signing up with immediately online. In addition, you should also call your state's consumer protection agency\/state attorney general's office to see if there have been complaints.\n* **Evaluate Advertisements.**  Just because a credit counselor has a big advertising budget does not necessarily mean it is a good company! Also, you would be wise to ignore e-mails that arrive \"out of the blue\" from credit counselors offering their services. Good credit counselors often rely on past clients for referrals; they do not need to solicit business through constant television advertising, infomercials, telemarketing or spam e-mails.\n* **Are They a Member of a Reputable Debt Consolidation Organization?** Check to see if the firm is a member of the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). Agencies that are members of these organizations must adhere to strict standards of professionalism and accreditation and use only certified credit counselors.\n* **What are the Qualifications of Their Counselors?** Ask if the counselors are certified and by whom? Try to select an agency whose counselors are certified by an outside organization, preferably NFCC. One way to test a counselor's knowledge: debt consolidation monthly payment fees are subject to state law, and the agency representative should be able to tell you the specific regulations for your state of residence.\n* **How are the Counselors Paid?**  Steer clear of organizations that pay employees a commission; that might well influence the number or nature of services they decide you need.\n* **Are Their Services Personalized?** A cookie-cutter approach most likely will not address your financial situation. Find out if the counselor will devise a plan tailored to fit your personal circumstances. Also, think beyond your immediate credit\/debt problems and find out if the agency will offer you advice on avoiding problems in the future.\n* **What About and Security?** What assurances do you have that the agency will keep information about you confidential? Does the agency have a privacy policy and are you comfortable with its terms? If not, select another agency. Security practices are also of importance. How does the credit counselor protect the security of client information?\n* **Make Sure They Provide Their Terms of Service in Writing.** Debt settlement firms are required to give you a good faith estimate regarding all fees, the time it will take to finish their program and how much money they can save you. Only do business with agencies that offer formal written agreements or contracts. Carefully read through the terms of agreement or contract. It should describe in straight-forward fashion the services to be performed, the counselor's name, business name, address and contact information.\n* **What are Their Fees?** Fees are required to be presented to you up front. It is illegal for a firm to collect any money until some actual work is performed. If there are set-up fees or monthly service charges, the agency should explain what they are based upon. In general, you should not expect to pay more than $75 in set-up fees or make a monthly payment that exceeds $40. The agency should also be willing to advise you how your funds will be protected before payment to your creditors.\n* **How are Payments Distributed to Your Creditors?** Your creditors should always be credited with one hundred percent of the amount you pay through a debt consolidation agency. Why would your money NOT go to your creditors? With unscrupulous firms the money gets eaten away by extra fees.\n* **How is the Agency Funded?** Most credit counseling agencies are partially funded through voluntary contributions from creditors who participate in Debt Management Plans. (Creditors have a business interest in receiving their payments, so most of them are willing to help support participating credit counseling agencies.) Go elsewhere for assistance if the credit counseling agency refuses to discuss its funding sources. If the agency claims to be tax-exempt or not-for-profit, double-check with your state charity official (for contact information, visit the Web site of the National Association of State Charity Officials at ). Some credit counseling organizations using questionable practices have sought tax-exempt status in order to circumvent consumer protection laws. It is illegal for a company to represent itself as non-profit when that is not the case.\n* **Do They Offer Budget and Credit Education?** Reputable organizations are willing to help you manage your finances through counseling and education. Ask if the agency offers workshops or educational materials. Are they available for free? Are they accessible online or can the materials be mailed to you? If the agency insists that a debt management plan is the only option for clients, look elsewhere. Creating and maintaining a budget should be a primary tool of the agency.\n* **Where is the Debt Consolidation Firm Located?** Not all states require licensing for debt consolidation agencies. The most notable examples are the states of Maryland and Florida. In addition, some states have started licensing credit counselors. If you know your proposed counselor's name, another question to ask your state attorney general is whether or not he or she is licensed.\n* **Look Before You Leap!** It is **crucial** to think things out carefully and do your homework before signing on the dotted line. _This contract will affect you, your credit and therefore your lifestyle for years to come._ A few days will not make any difference in the overall scheme of things if you are really behind in your bills or if creditors are hounding you. You can tell any callers that you are going to join a consumer credit counseling service and this should quiet them.\nYou need to consider how you got into this mess in the first place — not being able to exercise control over your finances, right? If you only come out of these programs with your debt gone, you are only treating the symptom without addressing the root problem. You should look for programs which include \"financial fitness\" programs and budgeting plans as one of the primary focuses. END

TITLE: Help Finding a Good Debt Consolidation Company CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Help Finding a Good Debt Consolidation Company CONTENT: | | | | \n: . END

TITLE: Debt Relief and How it Can Affect Your Credit Score CONTENT: Can Debt Relief Hurt or Help Your Credit Score?\n-----------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 11, 2017_\nWhen you imagine yourself relieved of debt, it's a purely positive feeling. Unfortunately, debt relief in some of its forms can carry with it some pretty negative consequences. That said, any one of these options could be the best option, depending on the circumstances.\nThere are five ways you can relieve yourself of debt:\n1. **Pay Off Your Balances.** Granted, this is easier said than done, but it will certainly relieve you of the debt that is costing you money in the form of interest payments and, likely, a big headache in terms of the stress associated with outstanding debt that never seems to go away. If you keep all of your paid-off credit card accounts open after paying them in full, this should have only a positive impact on your credit. Not only will your accounts be reflected as current, but you will improve your credit utilization rate. On the flip side, closing your credit cards will have the opposite affect, hurting your credit utilization rate. The key is keeping as many of your accounts as possible, but at zero balances.\n2. **Consolidate Your Debt.** By using this option, you pay off your balances, but with the help of a loan, through which you consolidate your debt into one account (i.e., use the new loan to pay off all your others). This should lower your interest rates and monthly payment and, in turn, help you get out of debt faster. Of course, taking out a new loan increases your risk in the eye of lenders, which theoretically should lower your credit score. However, this should be balanced out by the positive impact of paying off the outstanding loans reflected in your credit report.\n3. **Get Credit Counseling.** Like options one and two, credit counseling also involves paying off the full balance of what you owe. However, credit counselors work with creditors on your behalf to lower payments, fees and interest rates. The credit counselor also collects your payments each month and pays creditors on your behalf. Though FICO typically does not count against you reports of \"making payments via a credit counselor,\" this option can hurt your score via the required closing of all your credit cards. Theoretically, this should lower your credit utilization rate, but if all the cards are maxed out, it's not as if they were helping much in that regard in the first place.\n4. **Negotiate\/Settle Your Debts.** Instead of paying your balances in full, this option enables you to negotiate with creditors and settle on less than the amount owed. Unfortunately, \"paid less than full\" counts as a pretty strong strike against your credit. Your credit score represents your risk as a borrower and, naturally, if you fail to live up to your obligation of paying your debt in full, your score will be lowered accordingly.\n5. **File For Bankruptcy.** Depending on whether you file Chapter 7 or 13 bankruptcy, all or much of your debt will be forgiven. A Chapter 7 bankruptcy will stay on your report for up to 10 years, Chapter 13 only up to 7 years, as it requires you to pay at least some of the debt you owe. Probably needless to say, both count as big strikes against your credit.\nWhich Debt Relief Option Will Help Your Credit The Most?\n--------------------------------------------------------\nThe best way to help your credit, guaranteed, is to find a way to pay off your balances on your own. This will have only positive impact on your credit. Since bankruptcies remain on your credit report for 7 to 10 years, they have the most negative impact on your credit. That said, debt negotiation and settlement run a close second, as your credit risk is considered considerably higher when you fail to pay, as agreed, what you owe in full.\nWhich Debt Relief Option is Right For You?\n------------------------------------------\nTo answer that question you will need to do your homework. The information shared here is a good place start, but should only be the beginning of your research. Other debt articles here at CreditInfocenter.com can help, including our comprehensive coverage of credit counseling, debt negotiation and settlement, and bankruptcy.\nCan You Improve the Negative Impact of Debt Relief on My Credit\n---------------------------------------------------------------\nAbsolutely! Once you have completed whichever debt relief option is best for you, keep any and all loans current and paid to a zero balance every month. If after your debt relief you are left with no open accounts, get yourself a secured credit card that reports to the credit reporting agencies. Use your credit on a regular basis, but only as much as you can afford to pay off at the end of every month, which is the ideal way of proving you understand how credit works and are disciplined enough to use it responsibly. END

TITLE: Debt Relief and How it Can Affect Your Credit Score CONTENT: | | | | \n: . END

TITLE: Exempt vs Non-Exempt Property When Filing Bankruptcy CONTENT: What Property Can You Keep When Filing For Chapter 7 Bankruptcy?\n----------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nIf you are thinking about filing for Chapter 7 bankruptcy, you are probably wondering how much of your personal property you will be allowed to keep once you file. Can you keep that signed painting, your coin collection, even your furniture — the thought of losing all of your prized possessions can be a very scary thought indeed. The answer to your question largely depends on the types of property you have, how much it is worth, and the bankruptcy exemptions you use.\nWhat is the Purpose of Exemptions in Chapter 7 Bankruptcy?\n----------------------------------------------------------\nAfter you file Chapter 7, the court appoints a bankruptcy trustee who is given the authority to sell your assets to pay your creditors. Luckily, filing BK does not mean you have to turn over every item you own, exemptions allow you to keep a certain amount of your personal property and the trustee can not sell these items to pay off your creditors. How much you can keep and what you can keep depends on the value of the asset and the specific exemptions in your state or the federal bankruptcy code. Thanks to these exemptions, you will probably be able to keep the majority of your personal property.\nHow Do Exemptions Work in Chapter 7 Bankruptcy?\n-----------------------------------------------\nEach state and the federal system have a set of exemptions — some states require you to use their exemptions while others let you choose between your state system or use the federal exemptions. Therefore, the amount of property you can protect depends entirely on the state you live in. The following states let you chose between using the state list of exemptions or using the federal bankruptcy exemptions. Obviously, you want to choose which system benefits you the most. If you live in a state that is not listed below, you have no choice but to use the state list of exemptions.\nAlaska\nNew Jersey\nArkansas\nNew Mexico\nConnecticut\nNew York\nDistrict of Columbia\nOregon\nHawaii\nPennsylvania\nKentucky\nRhode Island\nMassachusetts\nTexas\nMichigan\nVermont\nMinnesota\nWashington\nNew Hampshire\nWisconsin\nNow that you have decided which exemption system you are going to use (either the state or the federal), you will then need to fill out a Schedule C — Property Claimed as Exempt — along with your other bankruptcy paperwork. On this form, you list all of the property and assets that are legally exempt.\nSince each state has their own exemption list, we will just go over the **federal exemption list**. If you have to use your state's list, we suggest you look up the bankruptcy code for your state on the Internet to see what property you can list on your Schedule C. The following are the most important federal exemptions and the amount you can take. These amounts are adjusted for inflation every three years and the recent adjustment was made April 1, 2016.\n* Homestead — Real property, including mobile homes and co-ops, or burial plots up to $23,675. Unused portion of homestead, up to $11,850 may be used for other property.\n* Automobile — up to $3,775. The equity in your car is based on the car's market value, less any loans against it.\n* Household items (appliances, furniture, clothes, books, crops, or musical instruments) — up to $12,625 aggregate value and $600 per individual item.\n* Jewelry — up to $1,600 in value.\n* Tools of the trade — up to $2,375 in value.\n* Health aids\n* Life insurance policies that have not matured except credit life insurance.\n* Up to $12,625 in loan value of life insurance policy.\n* Alimony and child support — amount reasonably necessary for support of debtor and dependents.\n* Public benefits — such as unemployment, workers compensation, public assistance, Social Security or Veteran's benefits.\n* Retirement accounts are exempt, however, there is a cap of $1,283,025 on IRSs and Roth IRAs.\nFederal Non-Exempt Personal Property\n------------------------------------\nAs we stated before, when you file for bankruptcy, there is certain property that must be turned over to the bankruptcy trustee to be sold to pay off creditors. Below are examples of property a debtor will usually have to give up in order to be liquidated with the proceeds being dispersed to your creditors:\n* Expensive musical instruments, unless you are a professional musician.\n* Collections of coins, stamps, family heirlooms, and other collectable valuable items.\n* Cash, bank accounts, stocks, bonds, and other investments.\n* A second car or truck.\n* A second or vacation home.\nIf you have any questions about what property you can keep and what you cannot keep, the best advice we can give you is to seek the help of an experienced bankruptcy attorney. END

TITLE: Exempt vs Non-Exempt Property When Filing Bankruptcy CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Exempt vs Non-Exempt Property When Filing Bankruptcy CONTENT: | | | | \n: . END

TITLE: Read a Rebuttal Letter Sent to Ameridebt CONTENT: ###### Written by: Kristy Welsh\nAmeridebt is no longer in business. You can refer to our debt section of our website for more information.\nAmeridebt Rebuttal Letter\n-------------------------\n_June 25, 1999_\nHere's the letter Ameridebt's lawyer sent me. Despite what they said, I published it literally 20 minutes after I got it. The entire letter is unedited. Enjoy!\nDear Ms. Welsh:\nOur client Ameridebt informs me that you have not posted its reply to the charges made on your website regarding its operations and that you have in fact posted additional letters of complaint.\nIn the conversation that I had with you, you offered to post a reply from the company, and I am surprised that you have not abided by that pledge. In the event you did not actually receive the reply, I am pleased to forward a copy. If you have any questions about the following, you should feel free to be in touch with Ms. Wilson, Ms. Shuster, or with me.\nVery truly yours,\nJulian H. Spirer\nJHS:sj\nM E M O R A N D U M\nTo: www.creditinfocenter.com (Kristy Welsh)\nFrom: Ms. Pamela Shuster, President, Ameridebt, Inc.\nDate: May 13, 1999\nRe: Unfairly Critical Report\nWe have learned that www.creditinfocenter.com and its reporter, Ms. Kristy Welsh, have posted a critical report regarding our company. We find it shocking that a website, apparently created to assist consumers with credit related issues, would write a negative report about AmeriDebt, a non-profit organization, created solely to assist consumers in need of help with their personal finances.\nWe disagree strongly with all of the harsh comments and innuendos in the report for the reasons set forth below:\nThe first concern pertains to the so-called complaint that Ms. Welsh received from a consumer who had enrolled in our debt management program. The client contacted creditinfocenter.com inquiring as to whether or not they had heard of Ameridebt. He had recently enrolled in our debt management program and had not yet detected any improvement in his credit situation. This complaint could only be characterized as the routine apprehension that clients will have during the first 60-90 days before a payment arrangement can be finalized with creditors. We address this apprehension with all our clients and alert them not to expect favorable results for the first two to three months.\nOur second concern relates to the manner in which Ms. Welsh addressed this complaint to us. Ms. Welsh called us at approximately 8:00pm EST insisting on speaking with a manager. Our offices were closed. Luckily she was able to reach one of our representatives who was staying late. Ms. Welsh told the representative, \" I received a complaint from one of your clients and I am going to post a \"scam notice\" about your company on our website. Do you have any comments?\" The representative responded that she was not in a position to handle such an issue and that all the mangers had gone for the day. Ms. Welsh threatened, \"This is your only chance to respond, and if I don't hear from somebody, I am going to post a scam notice tonight.\"\nWhere was the emergency? If Ms. Welsh had bothered first to inquire generally about Ameridebt, she would have learned that we have assisted well over 30,000 individuals or families to resolve troublesome credit problems. There was little risk of imminent catastrophe if the response from Ameridebt had to wait until we opened for business the next day. Ms. Welsh faced no deadline in posting the \"complaint\" on her website.\nGiven Ms. Welsh's threat, the representative decided to call one of our managers at home. The manager called Ms. Welsh from her home in an attempt to defend our company. She explained exactly how our programs work. Ms. Welsh appeared to be satisfied with all of her responses. Ms. Welsh stated that the manager was, \"very nice and cordial.\" Ms. Welsh gave the impression to the manager that she was not going to post anything negative. She then thanked the manager for returning the call.\nThe next day, the manager spoke to the credit counselor who had originally enrolled the allegedly dissatisfied client. The credit counselor was surprised that the client was unhappy, and he decided to call the client himself to find out what the problem was. According to Ms. Welsh's report, our counselor was not very friendly to the client during this call and gave the client a hard time about filing a complaint with creditinfocenter.com.\nWhen the report was posted, we asked our counselor what had happened. The counselor denied that he have been intentionally unfriendly to the client, although he acknowledges that he was upset that the client questioned our legitimacy and that his tone of voice might have given the client a reason to feel that he was being unfriendly.\nWe decided to call the client again to get a more complete story. We explained what had happened. The client replied that he had never intended to file a complaint against us. He said that he stumbled upon Ms. Welsh's website, was apprehensive about how things were going with his creditors, and decided to inquire as to whether they knew anything about us. He said that he was not dissatisfied, nor did he mean to create any problems. He stated that he was upset when the counselor called him back and he did write back to Ms. Welsh regarding the incident. However, he stated that, even at that point, he did not mean to create any problems and said that he was sorry if his comments crated difficulties for us.\nHe further stated that, if we needed him to, he would be more than happy to provide us with a letter stating his satisfaction and clarifying any confusion.\nIn summary, Ms. Welsh simply received a rather routine inquiry from one of our clients. She then took it upon herself to assume that we were doing the public an injustice, threatened at 8:00pm to post a \"scam notice\" immediately, and, then, even after we called her and explained our procedures, decided to write a critical report. While we understand that she has the right to post her opinions on her website, we are pained that she would target Ameridebt, a non-profit organization that assists thousands of people every day.\nI would like to address further some of the particular accusations that Ms. Welsh made in her report.\nMs. Welsh mentioned that she received a call from our PR person stating that we wanted to advertise on her site. Ms. Welsh expressed a concern that our inquiry may have been intended as a bribe.\nThe first time that we ever heard of the website creditinfocenter.com was when we first received the phone call from Ms. Welsh. After our manager spoke with her, we thought that the confusion was clarified and that she was satisfied with our company. After looking at their website and realizing that there were other credit counseling organizations advertising there, we felt that it might be a good place to advertise. We simply contacted the site and inquired about the advertising rates that they charge. At no point did we do anything other than inquire about rates and availability. We have absolutely no idea whatsoever how Ms. Welsh could possibly view our inquiry as a bribe.\nMs. Welsh stated that it \"bothers her that we are collecting extra cash from the desperate debt strapped masses to cover operating costs\".\nOnce again, Ms. Welsh did not get all of the facts. We do not \"collect extra cash\" from our clients. We do request that they make a voluntary monthly contribution to help cover our operating costs. Although we are a non-profit organization, we obviously have expenses and do need to generate revenue to pay those expenses. Most of our revenue comes from contributions that the creditors make. We do, however, rely on the voluntary contributions from our clients as well. Please keep in mind that the funds collected from our clients are voluntary contributions and that many of our clients do not pay us anything for our assistance. In fact, the client who filed the inquiry with creditinfocenter.com was only giving us a contribution of $10.00 per month, and we had to cover the expenses involved with managing five of his accounts. Also keep in mind that the contributions that the clients make are extremely small in comparison to the money that they save by having their interest rates reduced on our program.\nMs. Welsh expressed a concern that Ameridebt's counselors are former collection agents since, in her experience, collection agents are trained to be as nasty and threatening as possible.\nWe have over seventy-five counselors on our staff. To my knowledge, only three have previously worked for collection agencies. The three counselors who had previous collection experience are just as friendly and courteous as any of our other counselors. In our opinion, it is actually a benefit for counselors to have previous collection experience because they are better able to advise the clients as to how to handle any collection agents who may be calling.\nMs. Welsh asked rhetorically, \"Does getting a 12 percent loan to pay off an 18 percent loan make sense?\"\nIn our opinion, it makes obvious sense if clients with $10,000 in debt can lower their interest rates by 6 percent by taking a loan. They end up saving $50.00 per month, $600.00 per year, or $2,400 over a four year period. Any financial analyst would say this makes a tremendous amount of sense.\nFor some reason, Ms. Welsh expresses the opinion that going through our program or any other credit counseling program will ruin your credit.\nApparently, creditinfocenter.com posted a previous report on this topic at some time in the past. At that time, another credit counseling organization objected and creditinfocenter.com posted the objections. We agree that credit counseling in no way destroys a client's credit. Please read the report of CCCS, a fellow agency, posted at this website.\nIn closing, we appreciate the opportunity to defend ourselves. Ms. Welsh may be trying to protect the public, but she does the public a disservice, by discrediting companies like Ameridebt whose reason for being in business is to help people. END

TITLE: Dischargeable and Non-Dischargeable Debts Filing Bankruptcy CONTENT: What Debts Can Be Discharged When Filing Bankruptcy?\n----------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nFiling for bankruptcy offers a fresh start when you find yourself overwhelmed by your debts. People may turn to bankruptcy for no fault of their own and for many different reasons. Maybe you lost your job or a family member suffered a sudden catastrophic illness, which used up your life savings and then some. Sometimes bad decisions and not being responsible with spending caused you to become burdened with too much debt. Bankruptcy offers people a way to begin their life over again.\nWhat Does it Mean to Discharge Your Debts?\n------------------------------------------\nThe main focus of bankruptcy is to discharge you from your debts. Discharge means that your personal liability for a debt ends, and creditors can't make any further collection efforts. However, not all debts are eligible for discharge as we shall see in the following paragraphs were we will show you what you can and can not discharge in a bankruptcy.\nDebts That Can Be Discharged in a Bankruptcy\n--------------------------------------------\nThe following is a list of debts that can generally be discharged in a bankruptcy:\n* Credit card or unsecured loans\n* Medical bills\n* Payday loans\n* Collections\n* Judgments\n* Unpaid rent\n* Utility bills\n* Mortgages (but you will lose your home)\n* Auto loans or leases (but you will lose your car)\n* Individual tax debt including penalties, owed for more that three years after a tax return is filed\nChapter 7 Non-dischargeable Debts\n---------------------------------\nIn a Chapter 7 bankruptcy filing, the following debts cannot be discharged:\n* Taxes that have become due in the last three years \n* Student loans\n* Alimony and child support\n* Debts obtained through fraud, false pretenses or false representation \n* Debts you failed to schedule in time to allow creditors to file proofs of claim (unscheduled debts) \n* Debts for fraud while you were acting in a fiduciary capacity, or for embezzlement or larceny \n* Debts for willful and malicious injury \n* Debts for fines or penalties to governmental units \n* Debts for judgments in wrongful death or personal injury lawsuits resulting from motor vehicle, vessel or aircraft accidents while you were intoxicated \n* Condominium or cooperative association fees or assessments \nChapter 13 Non-dischargeable Debts\n----------------------------------\nIn a Chapter 13 bankruptcy filing, the following debts cannot be discharged:\n* Student loans\n* Alimony and child support\n* Fines and restitution\n* Unscheduled debts\n* Certain taxes, such as withholding taxes if you had employees, or taxes connected to fraudulent tax returns or tax evasion \n* Debts incurred through fraud \n* Debts for fraud while you were acting in a fiduciary capacity, or for embezzlement or larceny \n* Debts for willful and malicious injury \n* Judgments in wrongful death or personal injury cases arising from your intoxication \n* Debts incurred after filing your case, which weren't included in your Chapter 13 plan \n* Debts that are non-dischargeable under other laws, for example amounts owed for certain health education programs \n* Interest owed on non-dischargeable debts \nFiling bankruptcy should not be taken lightly and before you even start the process, it is a good idea to talk to an experienced bankruptcy attorney. Sometimes, there are other options available to you other than filing for bankruptcy. Don't forget, a bankruptcy will stay on your credit for 7 to 10 years so make sure to exhaust any and all other options before going down the BK road. END

TITLE: Dischargeable and Non-Dischargeable Debts Filing Bankruptcy CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Dischargeable and Non-Dischargeable Debts Filing Bankruptcy CONTENT: | | | | \n: . END

TITLE: How to Get Out of a Debt Consolidation Program CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 10, 2017_\nIn our debt forum, we read horror stories from people who have signed up with a debt consolidation company to help them get out of debt only to have their credit ruined. Even with a lot of the really bad companies going out of business due to litigation, there are still that many more waiting to take advantage of you and your bad situation.\nStatistics show only **one in ten consumers** lured into a debt settlement plan ever actually becomes debt free. This makes the risky scheme the No. 1 threat facing the most deeply indebted Americans, says a consumer alert issued last year by the nonprofit National Association of Consumer Bankruptcy Attorneys.\nTips When Looking For a Debt Consolidation Company\n--------------------------------------------------\nIf you are looking to sign up for a debt settlement program through a debt consolidation company, you need to be wary of organizations that:\n* Charge high up-front or monthly fees for enrolling in credit counseling or a Debt Management Program (DMP).\n* Pressure you to make voluntary contributions or another upfront fees.\n* Refuse to send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers, and balances.\n* Try to enroll you in a DMP without spending time reviewing your financial situation.\n* Offer to enroll you in a DMP without teaching you budgeting and money management skills.\n* Demand that you make payments into a DMP before your creditors have accepted you into the program.\nFor more information on what is illegal per FTC guidelines, read our article entitled Debt Consolidation Rules and Regulations.\nBefore Engaging in a Debt Management Program\n--------------------------------------------\nIf you suspect that your debt management\/debt settlement company may not be delivering on their promises, check your bills to make sure the organization fulfills its promises as far as the monthly fees and any money being taken out of your checking accounts. If you are paying through a Debt Management\/Debt Settlement Program, contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the organization handling your DMP.\nWhat if the Debt Management Company Has Gone Out of Business?\n-------------------------------------------------------------\nWhat happens to your debt settlement program if the company that managed your debts shuts down? A counseling agency that is going out of business may send you a notice telling you that your DMP is being transferred to another company. Or it may tell you that you need to take some action to keep your financial recovery on track. If a government agency has filed an action against your debt management company, you may get a notice from a third party. If you discover that the organization handling your debt management is going out of business you need to:\n1. Contact your bank to stop payment if you are making your payments through automatic withdraw.\n2. Start paying your bills directly to your creditors.\n3. Notify your creditors that the organization handling your debt is going out of business. Consider working out a payment plan with your creditors yourself. Ask if they will give you a reduction on your interest rate.\n4. Order a copy of your credit report. Check for late payments or missed DMP payments  that may result from the company going out of business. If you see \"late\" notations you don't expect, call the creditor immediately and ask that the notation be removed. Understand that they have no obligation to do it.\nIf payments are late because the organization handling your debt management has failed to make scheduled payments, the consequences can be just as devastating as if you failed to make payments to the DMP. If you do not act quickly to make arrangements with your creditors, you could incur late charges that increase your debt, lose the lower interest rates associated with the settlement, and have late marks on your credit report.\nAnother thing to do is to immediately pull out of the program and contact your existing creditors and see if you can work out a plan with them to make payments on your own in one of their hardship programs. If you do not act quickly to make arrangements with your creditors, you could incur late charges that increase your debt, lose the lower interest rates associated with the settlement, and have late payment notations on your credit report.\nGetting Your Money Back\n-----------------------\nUnfortunately, most people don't read the fine print on the contracts with the DMP companies. According to this blog post, Confessions of a Debt Settlement Company Worker:\n_\"The contract actually states that the company is not responsible for any negative repercussions due to their enrollment in our program. It also stated we could cancel a client without refund at any time (which happened a few times in a year), and that if a client cancelled we were still due our year's worth of fees no matter what. Money that we were practically guaranteed because we drafted directly from the client's checking accounts. No person in their right mind would sign this contract if they understood what it meant.\"_\nEven if your credit report doesn't have such scurrilous language, you may still have to threaten the DMP with legal action, reporting them to your local attorney general's office, the FTC, or the Better Business Bureau.\nFix the Damage to Your Credit Report\n------------------------------------\nOnce you have negotiated with your creditors, you can begin the process of credit repair. For details on how to do this read our free credit repair articles.\nYou can also try to see if a lawyer might take on your case and see if they know of any class action lawsuits that are currently in progress against your DMP Company. NACA is a great website to visit to find a good attorney.\nLastly, to help you negotiate with your creditors, you can also order our Settle Your Debts for Pennies on the Dollar eBook for some more tips on talking to your creditors.\nGood luck to you, and don't file bankruptcy. You can get through this. END

TITLE: Dispell the Myths About Filing Bankruptcy CONTENT: Bankruptcy Myths — What is Fact and What is Fiction\n---------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nFiling bankruptcy can be a scary proposition and one that should not be taken lightly. Even though bankruptcy cases filed in federal courts for fiscal year 2016 are the lowest since 2010, you probably know someone who has recently filed for bankruptcy. Even though you might know someone going through a bankruptcy, that is not to say you know what is truth and was is fiction regarding bankruptcy. Like those scary noises in the middle of night, bankruptcy is not that scary once you are able to cut through the myths and get down to the real truths about bankruptcy.\nBankruptcy Myth #1 — Filing Bankruptcy is Something to be Ashamed of Doing\n--------------------------------------------------------------------------\nThis could not be further from the truth. Many people get into serious financial trouble after a divorce, a major medical problem, or maybe they lost their business or their job, and they are unable to pay their bills. Bankruptcy was designed to help people like these, who for no fault of their own, are now in serious financial trouble and just need help getting out from under all their debt. Bankruptcy is there to help and to afford a person a fresh start. Sure, there are people who abuse the system and carelessly run up a bunch of debt only to file bankruptcy to get out of paying. You are going to find that with anything in life, but for the most part, filing bankruptcy seems to be done by those who are truly in financial dire-straights and need a helping hand.\nBankruptcy is a public legal proceeding and your name could be published in a local newspaper or other public publications, but the chances of someone really reading these listings is slim to none. The only ones that will really know about your bankruptcy will be your creditors.\nBankruptcy Myth #2 — All Debts Will Be Wiped Out in a Chapter 7 Bankruptcy\n--------------------------------------------------------------------------\nThis is a myth. Filing Chapter 7 bankruptcy does not discharge all debt and there are certain types of debts that cannot be discharged. These debts include child support, alimony, student loans, restitution for a criminal act, and debts incurred as the result of fraud.\nBankruptcy Myth #3 — If You Are Married, You and Your Spouse Have to File Bankruptcy\n------------------------------------------------------------------------------------\nNot necessarily. It is not uncommon for one spouse to have a significant amount of debt in their name only. However, if both spouses have debts they want to discharge that they are both liable for, they should file together.\nBankruptcy Myth #4 — All Bankruptcy is the Same\n-----------------------------------------------\nThis is not true. There are two types of bankruptcies that are used for personal bankruptcy. In a Chapter 7 bankruptcy, your non-exempt property will be liquidated and used to pay your creditors. This option allows you to discharge some of your debt. A Chapter 7 bankruptcy will stay on your credit report for 10 years and it the most damaging one to your credit score.\nA Chapter 13 bankruptcy allows you to restructure your debts and follow a repayment plan. This type of bankruptcy is for those individuals who have a lot of assets and do not want to liquidate those assets to pay their debts. They are looking to restructure their debts and work out a payment plan with their creditors. This bankruptcy can last for years and will also stay on your credit report for 10 years after it is finalized.\nBankruptcy Myth #5 — It is Very Difficult to File Bankruptcy\n------------------------------------------------------------\nIt really is not that difficult and you really don't even need a bankruptcy attorney — however, it's not recommended to go through the procedure without one. Anyone can file for bankruptcy but there are limits on how often you can file for bankruptcy. You can only file for Chapter 7 once every eight years and you need to qualify to file bankruptcy by taking a means test and satisfying the requirements outlined therein.\nBankruptcy Myth #6 — Your Credit Will Be Ruined Forever After Filing for Bankruptcy\n-----------------------------------------------------------------------------------\nBankruptcy will seriously affect your credit, but the negative ramifications will not last forever. It won't be long before you can obtain a secured credit card, which will help you rebuild your credit history. Using this card for the next few years, paying your bills on time, and being careful not to run up your credit limit, will help establish some positive credit on your credit report and will help increase your credit score over the long run.\nBankruptcy Myth #7 — You Can Go On a Shopping Spree, Max Out Your Credit Cards, Then File for Bankruptcy\n--------------------------------------------------------------------------------------------------------\nDefinitely NOT a good idea! This spending spree will be considered fraud in the eyes of the bankruptcy judge. Since this could be seen as fraudulent debt and will not be discharged. END

TITLE: Changes to Bankruptcy Laws - Means Test, Bankruptcy Counseling CONTENT: Recent Changes to the Bankruptcy Laws\n-------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nFiling for bankruptcy in 2017 is virtually no different than any other year. The bankruptcy laws haven't changed much since 2005, when President Bush signed into law \"The Bankruptcy Abuse Prevention and Consumer Protection Act.\" This article will summarize the changes made back in 2005 and what those changes mean to you.\nCredit Counseling Required\n--------------------------\nBefore you can file for bankruptcy, either Chapter 7 or Chapter 13, you must complete credit counseling with an agency which is approved by the United States Trustee's office. The purpose of this counseling is to give you an idea of whether or not you really need to file for bankruptcy. All consumers must attend a credit counseling education session at least 6 months before filing for bankruptcy. Here is a website which gives you a list of qualified credit counseling centers. Only education from one of these centers qualifies. In addition, consumers must complete additional financial education\/certification before having their debts finally discharged in the process. Here is a list of the approved centers for financial education.\nPrior to the new bankruptcy laws of 2005, filers could choose the type of bankruptcy that was best for them, either Chapter 7 (liquidation) or Chapter 13 (repayment). Most filers chose to file Chapter 7 Bankruptcy. Now, applicants must pass a Means Test to see if their income and\/or ability to pay excludes them from filing one or the other type of bankruptcy. That is, if you have enough disposable income to make payments on a Chapter 13 plan, you will not be able to file Chapter 7.\nLonger Repayment Time For Chapter 13 Bankruptcy\n-----------------------------------------------\nFor those filing Chapter 13 bankruptcy, the repayment period has been extended to five years instead of three.\nState Exemptions\n----------------\nYou cannot use the exemptions in your state of residence unless you have lived there at least two years.\nHomestead Exemptions\n--------------------\nThe exemption is limited to $125,000 of your state's homestead exemption, if the property was acquired within the previous 1,215 days (3.3 years). The cap is not applicable to any interest transferred from a debtor's previous principal residence, which was acquired prior to the beginning of such 1,215 day period. How does this work?\nExample 1: In Arizona, the homestead exemption is $100K. No matter when you have acquired your home, the amount of equity you are allowed to keep in your home is $100K. If you have more equity than this, you will probably be forced to sell.\nExample 2: Kansas, Texas, Florida, Iowa, and South Dakota have unlimited homestead exemptions. So if you have $1 million in equity in your $2 million dollar Texas mansion, and you've owned it more than 3.3 years before filing a bankruptcy, the equity is completely exempt. If you bought it within the last 3.3 years, you are only allowed to have $125K in equity.\nVehicles\n--------\nIf there is security put in place within 3 years on your vehicle, you must pay the full amount owed or lose the vehicle. Current bankruptcy laws allow you to get the loan stripped down to the value of the vehicle and you make payments at that rate.\nWhat does this mean to the consumer? Let's say you had poor credit and could only afford to buy a car from that shady used car dealership that sells cars to people with bad credit. Typically, the interest rates are over 20 percent, which can make a $2,000 car loan equate to well over $16,000 if you added up all the payments made for the life of the loan. Under the new laws, the consumer would be required to pay the entire $16,000 back, or lose the car. The old laws reduced the amount of the loan to what the car was worth, and payments would continue from that point.\nChild Support and Alimony\n-------------------------\nThese debts went from a priority of 7th to 1st.\nBankruptcy Lawyers are Accountable for Supplying Accurate Information\n---------------------------------------------------------------------\nUnder the new law, if information about a client's case is found to be inaccurate, the bankruptcy attorney may be subject to various fees and fines. What this means is that a lawyer can be fined if his client has supplied false information to the lawyer, who, having no reason to think the information is incorrect, forwards this information to the court. This doesn't cover information supplied by a lawyer which he knows is false, obviously wrong and fines should be levied in such cases. But this isn't what the law says. The law can be interpreted to say **_a lawyer can be found liable if his client lies to him._**\n### Tithing\nUp to 15 percent of your income can be given to charity. This is seen by some as a loophole allowing people who may be just over the thresh hold of having to file Chapter 13, able to drop their income down low enough to file Chapter 7.\n### Asset Protection Trust\nThe new law leaves intact an increasingly popular loophole called asset protection trusts. These trusts allow people to protect substantial assets from creditors even after filing for bankruptcy.\nSetting up these trusts can cost many thousands of dollars. Maintaining them and paying an in-state trustee can cost thousands more. That rules these trusts out for people of modest means, making them an option mainly for the wealthy.\nUntil 1977, these trusts could only be opened offshore. But since then, eight U.S. states — Alaska, Delaware, Utah, Nevada, Rhode Island, Oklahoma, South Dakota and Missouri — have passed laws exempting assets held in the United States from federal bankruptcy laws. People opening one of these trusts don't have to be a resident of the state, but merely establish the trust through a financial institution located there. END

TITLE: Avoid Filing Bankruptcy If You Are Under 30 CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nWhen you're deep in debt and under the age of 30, it feels like you're going one step forward and two steps back. You might be just getting started in your career, but all the money you make goes toward bills instead of building the kind of savings and investments you may equate with success. For this reason, it's tempting to flirt with the idea of filing for bankruptcy, for the second chance it gives you at a clean slate. But here's the thing: it's probably not as clean as you think.\nBankruptcy Will Not Discharge Student Loans or Recent Income Taxes\n------------------------------------------------------------------\nIf the debt you're having trouble paying includes student loans or recent income taxes, keep in mind that bankruptcy will not discharge either one. Student loans are exempt and the only income taxes that could possibly qualify are those more than three years old. So before starting bankruptcy proceedings, make a list of other debts that could qualify.\nDischargeable debts may include:\n* Credit card debt\n* Auto loans and leases\n* Mortgages\n* Apartment and home leases\n* Medical debt\n* Business debt\n* Judgments\nTake the time to explore your negotiation and payment plan options for each one of these categories. Bankruptcy stays on your credit report for 7 to 10 years, at which time you're then faced with the challenge of rebuilding your credit score. If you can make arrangements to pay off your debts in even half that time, it's an alternative well worth your consideration.\nBankruptcy Damages Your Credit For Years to Come\n------------------------------------------------\nAs you know, lenders don't like to see a bankruptcy on your credit report. So you can expect it to negatively affect your credit worthiness. A Chapter 7 bankruptcy will stay on your credit for 10 years and a Chapter 13 bankruptcy will be on your credit for the next 7 years. This does not even take into consideration the time it will take to rebuild your credit score once the bankruptcies fall off your credit report.\nIn the meantime, if you have decent credit now — say 700 — you can expect it to fall 100 to 150 points, to 600 or lower. If you already have a credit score below 600, you may not see it fall quite so far — maybe 30 to 50 points — but the state of your credit will be the same: _guaranteed_ be poor, for a very long time.\nIf you file bankruptcy, you can expect to find it difficult, if not impossible, to qualify for:\n* Credit cards\n* Auto loans\n* Home loans\nNot planning on buying a home anyway? Well, you may find it equally challenging to rent a house or apartment with a bankruptcy on your credit report, as it speaks volumes to landlords looking for responsible tenants who pay their bills. Plus, there's the added expense you will no doubt face when trying to open accounts for utilities, for which those with low credit scores are required to pay deposits.\nTime is on Your Side\n--------------------\nWe all have financial goals for ourselves, be it in our 20's, 30's, 40's, or beyond. So it's certainly natural to feel frustrated with this un-manageable debt looming over you. Fortunately though, with responsible, focused attention, you can pay down your debt in plenty of time to realize your financial goals. The \"clean slate\" of bankruptcy not only stains your credit for 7 to 10 years, but it robs you of the character-building opportunity to learn now, while you're still so young, how to manage your money in a way that will reap you huge benefits in your long, lucrative future.\nAll of this is not say bankruptcy is definitely not the best option for you, as everyone's situation is unique. Please take the time to review our other articles on bankruptcy to determine your wisest course of action. END

TITLE: Avoid Filing Bankruptcy If You Are Under 30 CONTENT: | | | | \n: . END

TITLE: Is Debt Free Always Good CONTENT: How to Live Debt Free - Our List of Do's and Don'ts\n---------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 11, 2017_\nWhile there's no doubt the most practical part of ourselves prefers debt-free living, there's a fair amount of conflicting messages on the subject, specifically as it relates to your credit score. On the one hand, you need activity on your credit reports to prove your are a responsible user of credit. On the other hand, carrying too much debt can actually hurt your credit score. The truth is, the do's and don'ts of debt-free living lie somewhere in the middle.\nDebt-Free Do's\n--------------\n**Do Use Your Credit Cards.** Simply having a credit card in no ways exhibits to lenders that you are a responsible user of credit. The key is to actually use the credit account, then demonstrate behavior that signals to lenders you know how to handle it.\n**Do Aim For a Zero Balance on Your Credit Cards.** The only way of ensuring a zero balance — on a card that you actually use — is to only charge as much as you have cash to back it up (i.e., pay it off by the end of the month). Otherwise, you could be stuck carrying a balance, only able to make your minimum payment. While the credit card companies certainly won't mind making money off your finance charges every month, your pocketbook will.\n**Do Carry Debt That Makes Good Sense.** Credit card debt does not fall into this category as 1) credit card debt is not an asset that grows in value over time and 2) credit card debt does not have the potential to generate future income. Debt that does meet one of these criteria includes mortgages, home equity loans, student loans, and even auto loans, provided a vehicle is necessary to get you to and from work.\n**Do Keep Your Credit Utilization Ratio as Low as Possible.** Try not to use more than 30 percent of your credit at any one time, as the more of your available credit you use, the more you are seen as a credit risk which will be reflected in your credit score. If you have mortgages, home equity loans, auto loans and\/or student loans, this makes a zero balance on your credit cards all the more important.\nDebt-Free Don'ts\n----------------\n**Don't Avoid Using Credit Cards.** While a good credit score is not dependent on credit cards, they can be a great way of exhibiting the kind of credit activity lenders equate with responsible credit use. Provided you only use them occasionally and pay off the balance before your statement date, you can avoid finance charges and maintain a history of zero balance, while still exhibiting a good amount of activity on the account.\n**Don't Confuse Credit Card Statement Dates With Due Dates.** If you pay your bill in full before the lender generates your statement, you will avoid finance charges, plus your account will show a zero balance. If you wait and pay on the due date, or any time after the statement is generated, you'll not only be carrying a balance forward (increasing your credit utilization ratio), but you'll also be paying finance charges to boot.\n**Don't Believe That Paying Finance Charges Helps Your Credit Score.** In fact, whether or not you pay finance charges is in no way reflected on your credit reports or in your credit score. The only thing that's noted is activity itself. In other words, your credit score will benefit just as much from you immediately paying off a credit card charge (even the very same day) as it would from waiting until your due date.\n**Don't Confuse Debit and Prepaid Credit Cards With Other Types of Secured Credit Cards That Report to Credit Bureaus.** We often advise those who are rebuilding their credit to consider secured cards if and when they cannot qualify for an unsecured account. However, this is only a helpful decision if the creditor offering the secured card will report your activity to the credit bureaus. This is not the case for debit cards, or for many prepaid cards. This means you should compare cards carefully before applying, so that you're sure to get one that's actually going to help improve your credit score.\n**Don't Take Out Payday Loans or Title Loans.** When you're in a pinch, the dreaded payday and title loans can start to look good. Keep your head, though, at all cost. While, ideally, you would be in and out with one clean swoop, paying off your loan in full under the initial contract terms, this rarely happens. In fact, the average payday borrower takes out 11 loans in one year. This spells disaster, as the annual interest rate can be as high as 300 percent. It's easy and necessary to tell yourself that you'll be the exception, but beware of how easy these lenders make it to roll those loans over and keep you indebted indefinitely. The very loans you needed to make ends meet actually spread you even thinner, making it tougher to pay on other debts, a direct threat to your credit score, not to mention your general quality of living. END

TITLE: Overcome Negative Stigmas of Bankruptcy CONTENT: Four Stigmas Not To Believe About Bankruptcy\n--------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nIf you have exhausted all of your alternatives to bankruptcy, but still find yourself shying away from the process, ask yourself why. One of the many reasons people choose not to file bankruptcy, even if it would benefit them, is the stigma associated with it. If it's shame or guilt holding you back, or fear of your financial future, you're not alone. These are common feelings associated with common thoughts that you need to let go. Although the stigma of bankruptcy varies greatly from person to person, you need to consider the actual benefit of filing before you decide against it.\nEmotional and Social Stigma\n---------------------------\nIt's common to equate success with financial status and stability. The more money you have, the better you must be at your job. The better you are at your job, the smarter and more talented you must be. With ingrained beliefs like these in today's society, it's no wonder people feel so much shame associated with filing for bankruptcy.\nThe fact is, authentic success is not defined by the jobs we hold or the money we make. Our success is defined by how we live our lives, evolve, and learn from our mistakes.\nIf you determine bankruptcy is the best option for you, it's because you recognize it as the smartest way for you to move forward to create the kind of successful living you want for yourself and your family.\nFinancial Stigma\n----------------\nIt's common to equate debt with financial intelligence or responsibility. The more quickly you pay down your debt, the better you must be at managing your money. On the flip side, the more you let debt balloon out of control, the worse you must be at keeping your spending in check.\nThe fact is, the financial problem that compels most people to file for bankruptcy stems from a reason beyond their control — medical debt. Even those with health insurance often find themselves in thousands of dollars in debt they cannot afford to pay due to high deductibles. Bankruptcies stemming from credit cards are closely tied to the struggle to make ends meet in the wake of the recession. And while student loans cannot be discharged in bankruptcy, they are an indirect contributor for those living off credit cards just so they can make the monthly loan payments.\nIf you determine bankruptcy is the best option for you, it's because you're smart enough about money to know it's the only way to improve your financial situation.\nPersonal Failure Stigma\n-----------------------\nIt's common to equate the fulfillment of a financial responsibility with character and integrity. If you pay your bills on time, you're good. If you're late, you're bad. If you don't pay them at all, you're worse.\nThe fact is, who you are as a person has nothing to do with the money you pay, owe, or make. Your financial situation reflects just one aspect of your life yesterday, not who you are today or who you are going to be in the future. And that past aspect is often one that represents a situation beyond your control, such as a job loss or medical expense.\nIf you determine bankruptcy is the best option for you, it's because you're the kind of person who's big enough to admit you need, and deserve, a second chance.\nCredit Failure Stigma\n---------------------\nIt's common to equate bankruptcy with bad credit — not just in the immediate aftermath, but for the 10 years it can stay on your credit reports.\nThe fact is, while bankruptcy certainly lowers a credit score considerably, most people are able to rebuild credit within a year or two. Why are lenders open to extending credit to those with a bankruptcy? Certainly, it's not out of the goodness of their hearts, but because you have to wait 8 years before you can file for bankruptcy again (i.e., borrowers who have recently filed for bankruptcy are likely to make good on their debts).\nIf you determine bankruptcy is the best option for you, it's because you know it's the best thing for your credit down the (not too distant) road. END

TITLE: Overcome Negative Stigmas of Bankruptcy CONTENT: | | | | \n: . END

TITLE: Ways to Know if You Are in Debt Denial CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 14, 2017_\nOf all the things ripe for denial in this world, debt certainly earns its place somewhere toward the top of the list. Answer these 18 questions to help gauge where you may be on the debt denial side of things, supplemented with no-nonsense tips on what to do about it.\n1. **Do you spend without a monthly budget?** If you're in debt, from credit cards and student loans, to home and car loans, you need a budget. It's the only way to be sure you're freeing up as much money as possible to put toward your debt instead of unnecessary monthly expenses.\n2. **Do you set bills aside, unopened, letting them pile up or disappear into a mess of other paperwork?** Open your bills immediately, noting the due date and amount owed.\n3. **Do you frequently discover misplaced, unpaid bills, past their due dates?** Set up a filing system in which bills (immediately opened) are organized visibly so as to ensure timely payment.\n4. **Do you wait to pay bills until the last possible day, even though you have the money to pay them now?** Why wait? Paying now not only ensures prompt payment, but it's one less thing you need remember or worry about.\n5. **Do you frequently pay your bills late?** Not only does this result in late payment fees but more often than not, negative listings on your credit report. Get organized and find a system that ensures you pay your bills early or, at the very least, on time!\n6. **Do you only make minimum monthly payments on your credit cards?** As you probably know, you'll never pay down the debt this way, as your payments are probably only enough to cover the cost of interest fees. Always make more than your minimum payment, even if it's just an extra five dollars a month.\n7. **Do you apply for new credit cards when your current cards are maxed out?** One of the best reasons to apply for a new credit card is as a means of improving your credit utilization ratio. Granted, if all your current cards are maxed out, a new card will do the trick in this regard. But not for long if it too is maxed out almost as soon as you get it.\n8. **Do you incur long-term debt in order to take vacations?** If you're in debt and the only way you can afford a vacation is to incur long-term debt, plan a more affordable mini-vacation or day trip instead. By all means, charge the trip if it's something you can pay off within a month's time. But if it's expense you'll be paying for months, even years to come, you're a basic principle: no debt should last longer than the item purchased.\n9. **Do you spend so much paying on debt that you have nothing left to set aside for emergency savings or retirement?** Pay yourself first, period. Even if it's just five dollars here, ten dollars there, over several years' time, savings add up.\n10. **Did you buy a more fuel-efficient vehicle only to increase your spending via a new monthly car payment?** Of all the excuses to justify a major purchase, this is an especially attractive one. But do the math first! If the money you'll save on gas every month does not exceed the extra expense of a new car payment, the gas-guzzler you already own is the better deal.\n11. **Did you buy a house you can't afford counting on a significant rise in your income 5, 10, 15 years from now?** It's not uncommon, or irrational, to believe your income will increase significantly in the years to come. But there's not guarantee, especially in these volatile economic times. You're always best-served buying a house you can afford now.\n12. **Are you thinking about quitting your job without another lined up to cover the cost of not only your debt, but also your basic monthly living expenses?** If you're unhappy at work, by all means, start pounding the pavement for something new. But avoid any rash decision that leaves you vulnerable in today's job market. Even if you have a few months' savings to get you by, it may not be enough.\n13. **Did the size of your debt increase considerably over the past 12 months?** Clearly you're living above your means. It's time to go through your expenses with a fine-tooth comb and make cuts anywhere and everywhere you can.\n14. **Do you incur debt for purchases simply as a means of keeping up with the Jones'?** This is an especially tempting habit in today's tech-intensive world, from iPhones and iPads to flat screens and Xboxes. Instead of priding yourself on the latest and greatest, challenge yourself and your family to hold on to things as long as possible. In other words, if it's not broke, don't fix it.\n15. **Do you allow your partner to continually make poor financial decisions, or to influence your financial decisions in a way, that incurs more debt than is prudent or necessary?** While both partners should have equal say in how shared money is spent, it is your right and responsibility to voice your opposition to spending habits that are unnecessarily deepening your debt.\n16. **Do you spend money on things you don't need while your debts go unpaid?** Acquiring new things can be a fulfilling, though fleeting, experience. Try resisting the temptation whenever you can, instead putting the amount you would have spent toward paying down your debts. In the long run, freedom from debt is a fulfillment beyond compare.\n17. **Do you frequently feel guilty for spending money while debts for previous purchases go unpaid?** This is your gut telling you something. Listen!\n18. **Do you fantasize scenarios in which your debt magically disappears, like the day you win the lottery or that million-dollar-idea finally pays off?** Your brain power is far better utilized taking the practical steps toward getting out of debt today. END

TITLE: Ways to Know if You Are in Debt Denial CONTENT: | | | | \n: . END

TITLE: Questions to Ask Before Taking on New Debt CONTENT: Questions to Ask Yourself Before Taking on More Debt\n----------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 16, 2017_\nIt seems that piling on debt happens very quickly and rather easily. Americans have more than $10 trillion in residential mortgage debt, more than $2.4 trillion in other loans, of which over half is student loan debt, $885 billion in credit card debt, all of which consumers are paying an average interest rate in excess of 13 percent. These statistics seem to suggest Americans collectively may be borrowing a little too much money and borrowing is a little too easy. So, before you borrow any more money, you should be asking yourself these tough questions before you take on any more additional debt.\nCan You Use Cash Instead?\n-------------------------\nThe answer to this question will largely depend on what you are trying to purchase and how much cash you have on hand. For smaller purchases such as clothes, small appliances, vacations, or other luxury items, you need to ask yourself if you can pay cash for these items instead of adding this purchase to your already overextended credit card or line of credit. Do you really need to buy it and if so, are you willing to plunk down the cash for it. If so, then it is worth buying. If not, then skip the purchase as it probably is not a truly needed item and one which would be better off forgetting until later down the road. If you can't pay cash for it, you probably really don't need it.\nIs This the Most Cost-Effective Type of Borrowing Available?\n------------------------------------------------------------\nBefore taking out a loan on a large purchase, you need to make sure you are using the best borrowing vehicle available. In simple terms, is it cheaper (as in lower overall interest paid) to put the purchase on your credit card or to maybe use a home equity loan. If your credit card has a current interest rate of 22 percent but you can get a home equity loan for 10 percent, the choice seems a bit obvious don't you think?! Make sure to check out all avenues of borrowing before you make a large purchase, it will save you thousands in interest over a few years.\nAre You Getting an Ideal Repayment Term?\n----------------------------------------\nShorter loans typically carry lower interest rates. However, if a longer mortgage or car loan leave more room in your budget to avoid charging so much on your credit card, you might be better off because mortgage and car loan rates are usually much lower than credit card rates.\nWill the Monthly Payments be Affordable?\n----------------------------------------\nNever borrow without taking a careful look at the repayment schedule, and knowing how you will come up with the money for those payments. The best way to know whether or not you will be able to make these payments every month is to work up a monthly budget. Listing out all of your monthly expenses and then deducting that from your monthly net income will show you in black and white how much money you have left over and if you can afford these new payments.\nWill These Payments Crowd Out Future Needs?\n-------------------------------------------\nAnswering this question may take a little forethought and planning on your part first. For example, before you purchase the latest and greatest flat screen television are you anticipating purchasing a refrigerator or computer in the near future? If so, buying the TV may not be the best thing to do at the moment when you know you are going to have another large purchase coming very shortly.\nWill the Item Last as Long as the Repayment Terms?\n--------------------------------------------------\nAvoid debts that will take longer to repay than the useful life of the purchase. A great example of this is buying a used car. Would you really want to put 5 year loan on an older used car that might not last you 5 years? Because if the car dies after 3 years, you are still responsible for 2 more years of payments on a car you are no longer driving. Doesn't really make much sense, does it? Think long and hard about the useful life of the purchase and does it make sense to the length of the loan terms.\nWill This New Debt Hurt Your Credit?\n------------------------------------\nAs we have gone over in other articles, the amount you owe determines 30 percent of your credit score. So, the more you borrow, the lower your score, the higher the interest rates you are going to be offered. Bottom line, heavy borrowing can be made more expensive if your low credit score is raising your interest rates, which in turn higher interest rates make debt more difficult to pay down.\nAre There Other Lenders Offering a Better Deal?\n-----------------------------------------------\nThe financial industry is very competitive so you should always get multiple quotes on loans and shop around for the best interest rates. Bank and credit card companies have invested heavily on loan and credit acquisitions and the ability to make the process as easy as possible for us consumers. Because getting credit can be so easy, don't fall into the trap of settling for the first loan and\/or rate quote that comes your way. Make sure to get at least 3 other quotes so you can compare loan products and get the best one for your situation.\nAnswering these question truthfully and honestly with yourself will go a long way in lessening your overall debt. Getting into debt can be fairly easy, but getting out is the hard part. Don't let yourself fall into the trap of heavy borrowing because you might not be able to get out from under it. END

TITLE: Prevent Declaring Bankruptcy From Medical Bills CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nIf you lose your job due to a debilitating disease, you lose your health insurance just when you need it the most, overwhelming medical bills are the number one reason people file for bankrutcpy. From doctors' visits, to hospital stays, to medications, the cost to you and your family can be astronomical. Fortunately, there are programs in place that can significantly help you with your medical expenses so you can focus your energy where it's needed most: on your health and your relationships with loved ones.\nWhat is COBRA?\n--------------\nCOBRA (Consolidated Omnibus Budget Reconciliation Act) provides for the continuation of health insurance coverage — for you and other qualifying beneficiaries — when job loss occurs for certain specific events, including \"voluntary or involuntary termination of employment for reasons other than gross misconduct.\"\nWhile the premium paid for COBRA may be greater than what you paid in as an employee, the group rate COBRA guarantees you should make the cost considerably less than if you were to take out an individual health care plan.\nWhile you are eligible to receive coverage under COBRA for up to 18 months after termination, this may be extended to 36 months in the event disability can be proven within the first 60 days of COBRA coverage.\nWhat is Medicare?\n-----------------\nMedicare is a federal health insurance program for people:\n* Age 65 or older\n* Under age 65 with certain disabilities\n* All ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant)\nWhat does Medicare cover?\n-------------------------\nMedicare includes:\n* Part A Hospital Insurance for help with inpatient care in hospitals (including critical access hospitals and skilled nursing facilities), hospice care and some health care. No monthly premium should be required for this coverage, as beneficiaries typically have already paid into this program via payroll taxes when previously employed.\n* Part B Medical Insurance for help with doctors' services and outpatient care, as well as some other services not covered by hospital insurance. A monthly premium is required for this coverage.\n* Prescription Drug Coverage, for which beneficiaries pay a monthly premium.\nWhat is Medicaid?\n-----------------\nMedicaid is a financial assistance program for low-income and disabled people, funded by federal, state and local taxes.\nWhat does Medicaid cover?\n-------------------------\nMedicaid covers:\n* Laboratory and X-ray services\n* Inpatient hospital services\n* Outpatient hospital services\n* Health screenings for children and treatment if medical problems are identified\n* Comprehensive dental and vision services for children\n* Family planning services and supplies\n* Long-term care services and supports\n* Medical and surgical dental services for adults\n* Pediatric and family nurse practitioner services\n* Services provided in health clinics\n* Nurse-midwife services\n* Nursing facility services for adults\n* Home health care services for certain people\n* Prescription drugs\nMedicaid also covers the following for children (and may cover the same for adults, depending on your state):\n* Physical, occupational, or speech therapy\n* Eye doctor visits, eyeglasses\n* Audiology, hearing aids\n* Prosthetic devices\n* Mental health services\n* Respite and other in-home long-term care\n* Case management\n* Personal care services\n* Hospice services\nCan I have both Medicare and Medicaid?\n--------------------------------------\nYes, if you qualify, Medicaid can be used to pay for services that are not covered by Medicare.\nWhat is SSDI?\n-------------\nSocial Security Disability Insurance (SSDI) supplements the income of those whose physical or mental conditions prevent them from working. Eligibility depends upon the condition being terminal, or projected to last at least 12 months.\nWhat is SSI?\n------------\nSupplemental Security Income (SSI) is supplemental income for low-income people 65 or older, as well as disabled people based on the same requirements outlined for SSDI.\n### Can I have both SSDI and SSI benefits?\nYes, this may be possible if you are approved for SSDI, but only for a low monthly payment as a result of minimal work\/wages in recent years.\n### How do I apply for these assistance programs?\n* For COBRA, your employer is required by law to provide you with the insurance application paperwork within 30 days of termination.\n* For Medicare go to Medicare.gov.\n* For Medicaid, go to Medicaid.gov.\n* For SSDI, go to SocialSecurity.gov.\n* For SSI, go to SSA.gov\/ssi.\nWhile you may have countless considerations to be made during this trying time, make it your number one priority to apply for these programs as soon as possible. Ask for the help of a family member or friend to help with the application process, need be. While it may feel too overwhelming to deal with such matters right now, you'll benefit most by taking care of this important business sooner than later. END

TITLE: Prevent Declaring Bankruptcy From Medical Bills CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Prevent Declaring Bankruptcy From Medical Bills CONTENT: | | | | \n: . END

TITLE: Bad Money Habits That Keep You in Debt CONTENT: Break Bad Spending Habits That Keep You in Debt\n-----------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 18, 2017_\nAre you one of those people who live from paycheck to paycheck? When it gets closer to payday, do you look at your checking account balance and see that it is almost at zero and you wonder where did all your money go? Without even thinking about it, there are things you subconsciously do in your every day life that contribute to you not being able to get out of debt. You will see, as evident from this article, there are habits you probably have that are keeping you broke and not enabling you to start digging your way out of debt.\nAsk For a Raise\n---------------\nIf you have been working at the same place for a while, ask for a raise at your next performance review. Even in this tough economy, it doesn't hurt to ask and the worst thing that could happen is your boss telling you no. You will never get anything unless you ask for it.\nMaking a little extra money every month could be helpful in paying down your credit cards or socking it away into a 401K or a similar money making account. Speaking of credit cards, call the credit card company and ask them to lower your interest rate. Tell them you are working on paying it off and they might be interested in helping you. Again, the worse that can happen is them telling you \"no\" — but you never know what they will say unless you try.\nStop Carrying Cash\n------------------\nYou know that paying with plastic is bad, but carrying lots of cash can be just as bad, if not a worse, habit. Cash can give you the feeling of having extra money just sitting in your wallet waiting to be spent. Studies have shown, if you have to buy something with a credit card, you will actually think about making that purchase a little bit harder. If you have cash in your pocket, you are more likely to buy that item without even giving it a second thought.\nIf you are going to carry cash, make sure to bring only enough cash for what you need and leave the rest at home. And, another study showed that if you carry large bills, like fifty's or hundred's, you are more likely to not spend those as readily as if you have a pocket full of five's or ten's. It is harder for someone to break a large bill for a small purchase.\nStop Emotional Shopping\n-----------------------\nIt was a rough week, or a good one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget — it was on sale, too. Letting your mood dictate your buying decisions is the quickest way to go broke. Sober up before shopping. Do you need these items, and can you afford them? Be honest with yourself. Reward yourself by doing something that doesn't cost, like taking a nice bath, or spending time with your loved ones and\/or friends.\nAnother bad habit is making impulsive purchases. You see a great sale on the Internet or in a store and you think you can't pass it up because it is too good to be true. Curb your urges to purchase items at the last minute or just because they are on sale. Ask yourself if you really need this item and can you really afford it at this time. Chances are you will answer \"no\" to both questions and you can save yourself a lot of money.\nStick to Your Goals\n-------------------\nHere is a typical scenario — it is Wednesday and you are tired and you are on your way home from work. You have no idea what to make the family for dinner so you stop to get some take-out at the GMO Chicken Shack. A recent study showed the average family of four spends over $4,000 a year on eating out — a very expensive habit that will get you broke in a hurry. Try spending Sunday planning your week of meals and maybe cooking some of it ahead and freezing it — you will not only save a lot of money but you will eat way healthier.\nMaking a plan and setting goals are the best way to break bad habits. It you have a goal to save a certain amount of money each month and put it into a savings account, this will keep you from slipping back into your old habits and keep you focused on creating more productive habits.\nForget About Keeping Up With the Joneses\n----------------------------------------\nIf you're constantly comparing yourself with others and trying to outdo the neighbors with material goods, you could be fueling a debt addiction. One-upping friends and family by purchasing luxuries on credit can turn into a competitive sport — a costly one. Avoid serious financial problems by living within your means and buying only things you can honestly afford. Trying to keep up with the Joneses can be the fast track to debt problems or even bankruptcy.\nDepending on Cash Back Credit Cards\n-----------------------------------\nIf you tend to pay with credit just because you know you are \"earning\" a portion of it back in the form of cash or rewards points, you could be fueling a dangerous addiction to credit card spending. Cash-back credit cards typically pay you back a very small percentage of your charges — think $1 for every $100 you charge. Unless you're very disciplined about paying off your entire balance by month's end, the money you earn back will barely cover the interest charges you acquired on that spending spree.\nThe most important thing about breaking bad habits is actually recognizing them in the first place. If you can relate to any of the above habits, then, you need to take a hard look at your bad habits and think about how you can change them into a good habit. Digging yourself further and further into debt does not take a lot of effort and it is the small things that hurt your financial future the most. END

TITLE: Learn to Eliminate Debt and Reduce Your Debts CONTENT: Debt Elimination and Debt Reduction Strategies\n----------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 14, 2017_\nHave you taken on more debt than you can handle? You're not alone. Thousands of Americans are in the same boat, with many of them defaulting on loans, losing their homes and cars, and some even filing for bankruptcy. It doesn't matter how much money you make, if you can't live within your means, you will become a slave to your creditors.\nThis article is by no means a comprehensive treatise on financial planning, but rather a list of strategies you can use to start eliminating and reducing your debt.\nWhy Are You in Debt?\n--------------------\nMoney is a powerful force that can destroy you if you let it. You have to learn to control your money instead of letting it control you. If you don't, you'll never get out of debt and will continue to dig a deeper hole.\nBe brutally honest with yourself and really examine the reasons why you are in debt. We are not referring to financial conditions which may be beyond your control, but about the times when you let the lure of shiny new toys control you. Ask yourself the following questions - and be honest in your response!\n1. Do you buy stuff to mask your own insecurities?\n2. Are you using money and buying things as a way to comfort yourself?\n3. Do you feel you have to compete financially with your friends, neighbors, or family members?\n4. Are you trying to impress someone? \n5. What is it that compels you to buy something right now?\n6. Why do you lack self-control to buy it later or may never?\nThese are serious questions which must be answered before you attempt to reduce your debt with any kind of budget or financial system. Otherwise, it's like treating cancer with a Band-Aid. You might even consider psychological counseling for your money difficulties.\nHow Much Debt Do You Have?\n--------------------------\nIt is important you be fully aware of how much debt you actually have no matter how painful it is to closely scrutinize this aspect of your finances. Take a sheet of paper, write down the amounts of all your debts and total them. Keep this total amount fixed in your mind. It's been said that pain and pleasure are powerful motivators. If the image and\/or idea of all that debt is causing you enough pain, the theory is that you will take aggressive measures to change your behavior and start on the elimination path.\n### Put Away Your Credit Cards\nPut away your credit cards and make a commitment not use them. If you don't think you can kept the pact you've just made with yourself, give them to a friend or relative to hold. Or better yet, cut them up. The thing you don't want to do is cancel or close your accounts. Closing accounts that are old (60 months or older) are valuable to your credit score and can have a negative impact on your credit score if you close them.\n### Make Payments on High Interest Loans and High Interest Credit Cards First\nPaying off the small debt may offer greater relief, it is not necessarily the best approach to minimizing your debt burden. If you have some extra money at the end of the month, put that extra money on the loan with the highest interest rate. By making a dent on the principle owed, it will lower the amount of interest you will pay on that money which will in turn save you money in the long run.\nAccording to a study done by a consumer behaviorist at the Olin Business School at Washington University in St. Louis, people really like closing accounts. That is, they will close a small debt account that has a low interest rate at the expense of paying down a larger loan with a higher interest rate. Throughout a series of debt-management experiments, the researchers found that participants consistently paid off small debts first, even though the larger debts had higher interest rates. In fact, no participant in their study used their cash to pay off the loan with the highest interest rate.\nBottom line, paying off your highest interest rate credit card first will shave months off your debt. With your other debts, continue paying just the minimum. After you finish paying off your highest interest rate card, move on to the next highest interest rate card. Roll over the amount you paid each month from your first card to pay off this one. Don't be tempted to use the money elsewhere - stay disciplined. You’ll pay off the second card even more quickly. Continue this strategy until all your debts are paid.\n### Contact Your Credit Card Company\nIf you find yourself unable to pay your bills on time, communicate with your creditors. Be honest with them and explain your financial situation. Ask them to reduce your payments or the interest rate. Tell them you plan to pay off the debt. The worst thing you can do is not communicate. They may assume you are unwilling to pay your bills and get nasty.\n### Transfer Balance to a Lower Interest Card\nIf you can, try to obtain a lower interest credit card and then transfer the balance of the high interest card to that one. Make sure to read the fine print when making this transfer. Sometimes the wording of these low interest cards sounds good at first until you really dig down to the nitty gritty and read the fine print of the contract.\nSometimes these low to zero interest credit cards are only available to those with good to excellent credit. If you have not been late on your payments and think your credit may be pretty good, give it a shot. Also, some offer introductory rates of 0% and then jack it up to 12% after the honeymoon period, make sure you stay away from those types of cards. Try to stick with a card that starts off with a low interest rate that does not increase.\n### Borrow Against a Life Insurance Policy\nOne way to get out from under this enormous amount of credit card debt is to find some other sources of money from which you can borrow or withdraw. A great source may be a life insurance policy with cash value you can borrow against. We know, you are still borrowing money to pay off borrowed money, but the interest rate on the life insurance policy will be far lower than what you are paying the credit card company. Pay off the card with the highest interest rate and then you can make payments back to the life policy.\n### Negotiate a Better Interest Rate with Your Creditor\nIf you cannot get a lower rate card and you do not have any other means to get some additional funds, try negotiating a better interest rate with the credit card company. Let them know about your situation and tell them that if they do not work out some new terms with you, you may have no choice but to file for Chapter 7 bankruptcy. More often than not, a creditor would rather work out a deal with their customer than to completely lose the entire account.\n### Roll Your Debts into a Second Mortgage\nIf you own your home, you might consider a debt consolidation loan. This kind of loan is a second mortgage on your property which allows you to consolidate your debts into one payment. Some loan programs require no equity or appraisal. You can use this loan to consolidate credit card bills, car payments, or any other bills. Interest on this loan may be fully tax deductible depending upon your situation. Consult your tax advisor. As with any home loan, this is a lien on your property. If you sell your home, you must pay off both your first and second mortgages. In addition, although you may be making lower monthly payments, you may be paying for a longer time period than if you paid off each individual debt.\n### Consider Consumer Credit Counseling\nMake an appointment to see a credit counselor. You should be able to find a free service in your area that will help negotiate payments with your creditors, and give you good financial advice. You can find one on this site: NFCC.org. They'll give you a fresh perspective on your financial burden, and help you realize you're not the only one dealing with debt. They'll also be candid with you and tell you whether or not you should consider bankruptcy as an option.\nHow to Live Debt Free\n---------------------\nNow that you've reviewed some of the personal reasons you've found yourself in debt, and taken some drastic measures to attack your debt, it's time to develop a plan to determine where all your money is going, and develop a healthy financial strategy. You must be able to account for every penny you spend each month. Don't worry, you won't have to cut your spending yet. Here's a simple method to develop a plan which may fit your comfort zone.\n#### Step 1\nTake a sheet of paper, and write \"Master Budget\" at the top. On one side, list all your relatively fixed expenses (mortgage\/rent, telephone, electric, water, gas, car, credit card minimums, etc.) Better yet, if you have a smart phone, there are tons applications online you can download to track your expenses and make a budget. A nice thing about using a smart phone is that you always have it with you.\n#### Step 2\nNow comes the tough part. You must estimate how much you spend on various expenses like food, eating out, entertainment, stuff for the house, school, clothing, car repair, gasoline, etc. If you have old receipts, you can use them as a guide for real expenses.\n#### Step 3\nTrack all your expenditures for one month. At month's end, total each category, and you'll know exactly how much you spend on everything.\nIf you're not using a smart phone application, you'll need to carry your budget notebook where you go. Carry this notebook with you wherever you go. Be very detailed on your categories. For example, one category might be \"Eating Out.\" Under this heading, write down the date, description, and the dollar amount for each time you eat out.\nNo matter how you do it, tracking your expenses allows you to see exactly where all your money is going. If you don't know where your money is going, how can you expect to control it?\nAfter you've totaled your categories, transfer them and their respective expense totals to your Master Budget spreadsheet.\n#### Step 4\nList your take home income after taxes on your Master Budget. You might want to develop different budgets based on your pay periods. Should you pay the phone bill on the first of the month, or would it be better to pay it later in the month? You may find one pay period has a tighter budget than the other because you have to pay the bigger bills like your mortgage, rent, or car payment at the beginning of each month. Some lenders will let you change the payment date - this might be a good way to space out your large payments.\n#### Step 5\nNow the challenge begins. Balance your income and expense categories, so you stay within your budget. Leave yourself a $200 cushion in your account. Take a long hard look at your expenses and see how you can reduce them. Let’s look at the category of \"entertainment,\" which may include dinners out, movies, movie rentals, plays, etc. Let’s say you’re currently spending $75 per weekend on eating out and entertainment. That’s $300 per month. Why not only spend $100 and take $200 to make a larger payment on one of your high-interest credit card bills?\nYou may be shocked to realize how much you spend on little things. For example, if you spend $2 per day on gourmet coffee, you spend $40 per month just on coffee. Why not buy a nice coffee maker, and make your own, or at least have coffee out only once or twice a week?\nYou'll have to play around with the amounts you set for your expenses categories. You don't want to completely cut out your fun. Otherwise, you'll give up on your budget completely. Cut back a fair amount, and see how it feels. Adjust as you go and ask yourself these questions:\n* Could we sell our home and buy or even rent a smaller place until we get back on our feet financially?\n* Should we move to a different area where housing is less expensive?\n* Do I really need to buy premium gas?\n* Why not wait and rent a movie, instead of paying $10 to $12 to go to the theater?\n* Do I really need all those magazine subscriptions?\n* Do I really need those movie channels? Could I live without cable TV?\n* Do I really use my bottled water service? What are some cheaper alternatives?\n* Do I really need a new dress, suit, purse, jewelry this month?\nHow you answer these questions all depend on how quickly you want to get out of debt.\n#### Step 6\nBy now, your Master Budget should list every category where you money goes. When you start living out your new budget on your the next pay period, enter into your spreadsheet (paper or electronic) the individual amount you have allotted for each category at the top of its own page. Think of each category page as a mini-account log. Every dollar you spend must be categorized and deducted from its appropriate category account balance.\nIf you're recording expenses in a notebook, remember to carry your notebook with you everywhere. If you're doing it on a smart phone, you will probably have your spreadsheet with you at all times.\nWhen you get to zero in one category, you can't spend any more in that area. However, what you'll find is that you have other categories that have money left over at the end of your budget period. You can roll these amounts over to categories you've zeroed out, or better yet, use those extra dollars to hammer away at your debt. Revisit your master budget and adjust it accordingly.\nStill looking for ways to make that budget stretch further? We have lots of articles on budgeting and saving money with tips ranging from using coupons to save money to how to start saving for retirement. With all of this vast information at your fingertips, there is no better time than now to eliminate your debts and build up your nest egg. END

TITLE: Help Finding a Good Bankruptcy Attorney CONTENT: 50 Questions to Ask When Interviewing a Bankruptcy Attorney\n-----------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nAs though filing for bankruptcy isn't stressful enough, you're further challenged with finding a competent bankruptcy attorney you can trust. Naturally, it can be overwhelming, but it need not be difficult. It will most likely be a totally unfamiliar process and can be confusing and stressful. Most attorneys offer a free initial consultation.\nTake this opportunity to meet with multiple attorneys and ask the kind of questions that will help you choose the right one. The toughest task is knowing what to ask of a potential bankruptcy attorney, but even that is made simple with this handy list. The specifics of your case, financial situation and personality are unique, so judging an attorney's answers to many of these questions will be subjective. Others are pretty straightforward, implying a definitive yes or no. A few of the questions, though, are a little more complicated, for which brief explanations follow.\n* Questions to Determine Background and Experience\n* Cost of Bankruptcy Attorney Services\n* Determining the Particulars of Your Case\n* Post Bankruptcy Procedures\nQuestions to Determine Background and Experience\n------------------------------------------------\n#### 1\\. How Long Have You Been Practicing Bankruptcy Law?\n* BAD ANSWER: A few months.\n* GOOD ANSWER: Three to five years.\n* * *\n#### 2\\. How Long Have You Been With This Particular Firm?\n* BAD ANSWER: A few months.\n* GOOD ANSWER: Three to five years.\n* * *\n#### 3\\. What Percentage of Your Practice is Devoted to Bankruptcy Law?\n* BAD ANSWER: Less than 25 percent.\n* GOOD ANSWER: More than 50 percent.\n* * *\n#### 4\\. What Percentage of Your Practice has Been Focused on Bankruptcy Since the New Laws Went Into Effect in 2005?\n* BAD ANSWER: Less than 25 percent.\n* GOOD ANSWER: More than 50 percent.\n* * *\n#### 5\\. How Many Bankruptcy Cases Have You Completed Since 2005?\n* BAD ANSWER: Five.\n* GOOD ANSWER: Five Hundred.\n* * *\n#### 6\\. On Average, How Many Bankruptcy Cases Do You Handle Per Month?\n* BAD ANSWER: One or two cases.\n* GOOD ANSWER: Ten to twenty cases.\n* * *\n#### 7\\. What Percentage of your Bankruptcy Clients are Debtors and What Percentage are Creditors?\n* BAD ANSWER: Twenty-five percent are debtors and 75 percent are creditors.\n* GOOD ANSWER: Seventy-five percent are debtors and 25 percent are creditors.\n* * *\n#### 8\\. What Percentage of Your Bankruptcy Clients are Individuals vs. Businesses?\n* BAD ANSWER: Twenty-five percent are individuals and 75 percent are businesses.\n* GOOD ANSWER: Seventy-five percent are individuals and 25 percent are businesses.\n* * *\n#### 9\\. How Many of the Bankruptcy Cases You Have Handled Were Moved for Dismissal for Abuse by the U.S. Trustees?\n* BAD ANSWER: Quite a few.\n* GOOD ANSWER: Only a couple.\n* * *\n#### 10\\. What Sort of Relationship do You Have With People in the Court System?\n* BAD ANSWER: I know who they are.\n* GOOD ANSWER: We know each other very well.\n* * *\n#### 11\\. Do You Know the People Evaluating my Case?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 12\\. Do You Know the Local Bankruptcy Judges?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 13\\. Do You Know the Local Chapter 7 Trustees?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 14\\. Do You Know the Local Chapter 23 Trustee?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 15\\. Do You Know the United States Trustee in Your Area?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 16\\. Have You Ever Received an Ethics Disciplinary Complaint?\n* BAD ANSWER: Yes.\n* GOOD ANSWER: No.\n* * *\n#### 17\\. Do You Have Malpractice Insurance?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 18\\. Have You Ever Been Sued for Malpractice?\n* BAD ANSWER: Yes.\n* GOOD ANSWER: No.\n* * *\n#### 19\\. Are You a Member of Any Voluntary Bankruptcy Bar Groups?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes, I am a member of the National Association of Consumer Bankruptcy Attorneys (NACBA).\n* * *\n#### 20\\. How is Your Bankruptcy Practice Different From Your Competition?\n* BAD ANSWER: We're all pretty much the same.\n* GOOD ANSWER: We get to know our clients as people first, cases second. We also have a really effective follow-up program for helping you rebuild your credit and make smart, sound financial decisions in the future.\n* * *\n#### 21\\. Can I Have the Names and Contact Info for Previous Clients Whose Bankruptcy Cases Were Similar to Mine?\n* BAD ANSWER: No, I wouldn't be comfortable with that, and neither would my clients.\n* GOOD ANSWER: Why of course!\n* * *\nCost of Bankruptcy Attorney Services\n------------------------------------\n#### 22\\. What Type of Costs Can I Expect in my Bankruptcy Case?\n* BAD ANSWER: It depends.\n* GOOD ANSWER: Federal filing fee and attorney fees.\n* * *\n#### 23\\. What Fees am I Expected to Pay You, and What do Those Fees Cover?\n* BAD ANSWER: Fees vary.\n* GOOD ANSWER: For Chapter 13, the federal filing fee is $274 and attorney fees could run $2,000 to $3,000. For Chapter 7, the federal filing fee is $299 and attorney fees could run from $1,000 to $2,500. These fees should cover everything necessary to complete your case, provided there is not some rare, unforeseen issue that requires more time and attention.\n* * *\n#### 24\\. What is Your Retainer Fee and is it Refundable?\n* BAD ANSWER: $1,000 non-refundable fee.\n* GOOD ANSWER: $100 or more, depending on what you can afford. And yes, the fee is refundable.\n* * *\n#### 25\\. Do You Use a Written Fee Agreement?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 26\\. Do You Have Options for Payment Plans?\n* BAD ANSWER: No.\n* GOOD ANSWER: Yes.\n* * *\n#### 27\\. How do You Expect to be Paid?\n* BAD ANSWER: In cash, up front, today.\n* GOOD ANSWER: We can work out a payment plan that works for both you and the firm.\n* * *\n#### 28\\. Have You Ever Gone to Arbitration or Court Over Your Fees?\n* BAD ANSWER: Yes.\n* GOOD ANSWER: No.\n* * *\nDetermining the Particulars of Your Case\n----------------------------------------\n#### 29\\. Why or Why Not is Bankruptcy a Good Idea for me, Based on my Unique Situation?\n* BAD ANSWER: You qualify, so it's good for you.\n* GOOD ANSWER: Bankruptcy may be a good idea for you if you have exhausted all your possibilities for paying off your debt on your own.\n* * *\n#### 30\\. What Other Options are Available to me Other Than Bankruptcy?\n* BAD ANSWER: In your situation, there are no other options.\n* GOOD ANSWER: There are always options to bankruptcy. You may try re-evaluating your budget so as to start paying down your debts. You may try negotiating with your creditors. Or you may seek help from Consumer Credit Counseling Services.\n* * *\n#### 31\\. After Reviewing my Case, What do you See as Some Potential Challenges that Could Arise?\n* BAD ANSWER: It is impossible to tell.\n* GOOD ANSWER: This varies widely from case-to-case. It may be something as simple as not being able to discharge everything you'd hoped to, or a more serious issue that threatens the bankruptcy case itself.\n* * *\n#### 32\\. How Will Bankruptcy Hurt Me?\n* BAD ANSWER: You're getting out of debt. What could be bad about that?\n* GOOD ANSWER: Bankruptcy will negatively impact your credit score. The better your credit before bankruptcy, the harder the hit you'll take. Chapter 7 will stay on your credit report for 10 years, Chapter 13 for 7 years.\n* * *\n#### 33\\. How Will Bankruptcy Help Me?\n* BAD ANSWER: Isn't it obvious?\n* GOOD ANSWER: Bankruptcy gets creditors offer your back, allows you to keep some of your assets under certain circumstances and, generally, gives you a fresh start.\n* * *\n#### 34\\. Which of my Debts Can I Expect to be Discharged Through Bankruptcy?\n* BAD ANSWER: Bankruptcy discharges just about everything.\n* GOOD ANSWER: Bankruptcy discharges most unsecured debt, including credit cards and other unsecured loans.\n* * *\n#### 35\\. Which of my Debts Will Probably Not be Discharged Through Bankruptcy?\n* BAD ANSWER: There's not much bankruptcy doesn't cover.\n* GOOD ANSWER: Chapter 7 will not discharge taxes, tax liens, student loans, alimony, child support or debt incurred through fraud, among others. Chapter 13 will not discharge certain taxes, child support, alimony, student loans, fines and restitution, or debt incurred through fraud, among others.\n* * *\n#### 36\\. What Will be Your Gameplan if You Were to Proceed with my Case?\n* BAD ANSWER: Like I always do - I will wing it.\n* GOOD ANSWER: Much like question #31, this answer is very subjective. The most important thing to listen for is a plan of some kind relative to the specifics of your case.\n* * *\n#### 37\\. Will you be Doing all the Work on my Case, or Will you Assign it to Someone Else?\n* BAD ANSWER: As long as we get your case settled, what difference does it make?\n* GOOD ANSWER: I will be doing most of the work on your case. However, we do have other attorneys in the office who may help, as well as paralegals and other support staff who will assist as necessary.\n* * *\n#### 38\\. Will you be my Main Point of Contact for Updates, Questions, or Concerns Regarding my Case?\n* BAD ANSWER: You can talk to whoever is free.\n* GOOD ANSWER: Yes, I will be your main point of contact.\n* * *\n#### 39\\. How Many People on your Staff Will be Working on my Case?\n* BAD ANSWER: However many it takes.\n* GOOD ANSWER: Myself or another attorney with the firm will be handling the bulk of your case. However, we do have paralegals and other support staff who will assist as necessary.\n* * *\n#### 40\\. Who Will Accompany me in Court?\n* BAD ANSWER: One of our paralegals.\n* GOOD ANSWER: If not me, then another one of the attorneys with the firm. If indeed, another attorney does accompany you in court, you will have an opportunity to meet with him or her prior to the hearing.\n* * *\n#### 41\\. How Often Will you Keep me Updated About the Progression of my Case?\n* BAD ANSWER: You don't need to worry about updates. We've got it handled.\n* GOOD ANSWER: We'll let you know anytime there is a development in your case and, of course, you are welcome to contact us anytime you want to check its status.\n* * *\n#### 42\\. What will be Your Primary Mode of Contact?\n* BAD ANSWER: We'll find a way to get a hold of you, if the need arises.\n* GOOD ANSWER: We usually do a combination of phone and email, just to be sure we're both getting all the information we need to move your case forward in as timely a manner as possible.\n* * *\n#### 43\\. What are my Responsibilities, as the Client, in Helping to Strengthen my Case?\n* BAD ANSWER: I think you've done quite enough already, don't you?\n* GOOD ANSWER: The most important thing you can do is respond fully and promptly to our requests for the information we need to build your case.\n* * *\n#### 44\\. What Information do I Need to Provide you, Now and Throughout the Bankruptcy Process?\n* BAD ANSWER: Don't worry about it today. We'll let you know what we need, when we need it.\n* GOOD ANSWER: We do have a pretty comprehensive interview process. We'll be asking you a number of questions - verbally and\/or in writing - covering details about your income, assets and financial situation.\n* * *\n#### 45\\. What Should I do\/Not do Before my Bankruptcy Case is Completed?\n* BAD ANSWER: Just go about your life as usual.\n* GOOD ANSWER: Do not apply for any new credit, make any major purchases or withdraw large sums of money from your bank account. Under bankruptcy law, certain luxury purchases over $1,000 within 60 days of the bankruptcy filing are presumed non-dischargeable. And cash advances aggregating $1,000 within 60 days of the bankruptcy filing are also presumed non-dischargeable.\n* * *\n#### 46\\. How Long Before I Can Expect my Case to be Resolved?\n* BAD ANSWER: You never know. These things are complicated.\n* GOOD ANSWER: A typical Chapter 7 bankruptcy case is open for approximately 4 months. Chapter 13 is much more lengthy, as it involves a payment plan spanning up to 5 years.\n* * *\nPost Bankruptcy Procedures\n--------------------------\n#### 47\\. How Will my Credit Score be Impacted by a Bankruptcy Filing?\n* BAD ANSWER: Bankruptcy shouldn't affect your credit score much at all.\n* GOOD ANSWER: The higher your credit score before bankruptcy, the harder the hit you'll take. If your score is already poor, you probably won't see as dramatic of a drop.\n* * *\n#### 48\\. Will Filing Bankruptcy Affect my Ability to Get a Job?\n* BAD ANSWER: Well, a bankruptcy doesn't look good.\n* GOOD ANSWER: Bankruptcy law prohibits discrimination based upon a debtor filing for protection under bankruptcy law. That said, an employer is within their legal right to request a copy of your credit report. So a current or potential employer may know you have a bankruptcy. Legally, however, a bankruptcy cannot impact the employer's decision to retain or hire you for employment.\n* * *\n#### 49\\. How May my Spouse's Personal Property and Credit be Affected by my Bankruptcy? (if not filing jointly)\n* BAD ANSWER: Isn't getting your debts discharged what really matters most?\n* GOOD ANSWER: Your spouse should not be affected, provided you do not jointly own any of the personal property included in the bankruptcy.\n* * *\n#### 50\\. What Sort of Follow-Up Support do You Offer Your Clients?\n* BAD ANSWER: After your bankruptcy case is settled, you're pretty much on your own.\n* GOOD ANSWER: We offer six months to a year of support after the date of your bankruptcy filing. We can also be helpful in giving you advice regarding the rebuilding of your credit and the creation of a budget.\n* * *\nThough it is not necessary you ask these questions word-for-word, this list is at least a good place to start. Make notes from it or simply print out the entire list and take it in with you to the initial consultation. If you sense any hesitancy or judgment on the part of the attorney in response to these questions, move on. Any reputable bankruptcy attorney worth his salt should be ready and willing to answer any questions you may have in order to win your business. You may be at the mercy of the judge in the courtroom, but in the client-attorney relationship, you are the boss. END

TITLE: Help Finding a Good Bankruptcy Attorney CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Learn How to Handle the Stress of Being in Debt CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 10, 2017_\nYou are not a bad person if you are facing the sobering fact that you can't pay your bills. Life happens. It's a common tale these days to hear people talk about the tough times they've faced during the recent recession. However, financial crisis can occur just about any time. The three major causes of bankruptcy are still medical bills, divorce and loss of job. It's rare you hear about someone who refuses to pay bills \"just because.\"\nYou Are Not Alone\n-----------------\nWith so many people out of work, a large population of Americans have to choose between starving their families and charging groceries on their credit cards. Try not to be so hard on yourself — after all, you are the only person judging you. No one else has to know the circumstances you are facing, and if some one does find out and is judging you negatively, they probably don't know the whole story.\nThe Rules Regarding Financial Security Have Changed\n---------------------------------------------------\nBefore the crisis, every financial expert in the U.S. proclaimed that having 6 month's of day-to-day expenses as savings in the bank would protect you from financial disaster. Unfortunately, people who followed this advice still had lots of trouble keeping their heads above water after finding themselves out of work for a year or more. As of February 2015, the average duration of unemployment hit 37.1 weeks. Going into debt can be seen as the only survival mechanism left.\nDealing With the Stress of Overwhelming Debt\n--------------------------------------------\nIt's easy to say and much tougher to do, but you need to stop worrying about the situation you are in. Worrying and ruminating will not help. Obsessing about your situation only adds a new problem to the serious ones you already face, stress and depression.\nProlonged stress and\/or depression are known to cause and excess release of the hormone cortisol which can cause the following health problems:\n* Impaired cognitive performance.\n* Suppressed thyroid function.\n* Blood sugar imbalances such as hyperglycemia.\n* Decreased bone density.\n* Decrease in muscle tissue.\n* Higher blood pressure.\n* Lowered immunity and inflammatory responses in the body, slowed wound healing, and other health consequences.\n* Increased abdominal fat, which is associated with a greater amount of health problems than fat deposited in other areas of the body. Some of the health problems associated with increased stomach fat are heart attacks, strokes, the development of metabolic syndrome, higher levels of \"bad\" cholesterol (LDL) and lower levels of \"good\" cholesterol (HDL), which can lead to other health problems.\nTry relaxation techniques to help you deal with the stress you are facing. The Mayo Clinic recommends several relaxation techniques for dealing with stress:\n* Yoga\n* Tai chi\n* Listening to Music\n* Exercise\n* Meditation\n* Hypnosis\n* Massage\nDealing with Guilt\n------------------\nMany people feel guilty about \"hurting\" the credit card companies because they can not repay their credit card debt. Don't look at things this way. This is a business deal and there is no person being personally hurt here.\nThe reality is that credit card companies are making record profits. In addition, if you don't repay your debt, credit card companies are going to write it off as a business deduction.\nAs a matter of fact, the credit card companies, with their past unethical practices (there is not other way to categorize it) probably gave you a credit card you couldn't afford. This is why the Credit Card Accountability Responsibility And Disclosure Act was passed in 2009. While consumers are ultimately responsible for applying for and making purchases on credit cards, the credit card companies are somewhat at fault for their own losses should a person default on their debts.\nDon't Let Your Emotions Fall Prey to Debt Consolidation Vultures\n----------------------------------------------------------------\nWhile there are still some good debt consolidation firms out there, highly questionable firms are still lurking about. Before you try a firm that charges any fees, you should try your local Consumer Credit Counseling Service (CCCS) office. Located in every major town and city in the U.S., they can help you deal with your credit card debt and come up with a debt settlement plan you can afford.\nIf you do decide to go with a commercial debt consolidation company, review our blog post on new rules regarding the debt consolidation company disclosure requirements. Once you receive information in the disclosure, don't sign the contract right away. Read the information carefully so you know what you are getting into.\nTry Self Help Debt Settlement Techniques\n----------------------------------------\nYou are really capable of negotiating your debts on your own. Numerous readers have told me of their success in dealing with credit card companies and even collection agencies. We offer a complete free debt settlement guide on this site. Even if you go with a local CCCS or a debt consolidation firm, it's worth a read so you know what is going on with your finances.\nConsidering Bankruptcy\n----------------------\nSometimes bankruptcy can seem like the only solution. Have you carefully considered all the alternatives? For example, borrowing from your 401K, selling some personal items, negotiating with creditors? We have a complete article on bankruptcy alternatives that you might want to read.\nSometimes, believe it or not, the best route is to just not pay your bills if you're not in a position negotiate your debt or file a bankruptcy. Many people are afraid of this option because they might be sued or just don't know what will happen. If you'd like to know exactly what will happen if you just stop paying your bills, you can read our article, \"I'm in Credit Card Debt, I Can't Pay and Don't Qualify for Bankruptcy\". This article tells you exactly what will happen and when. It's definitely worth a read.\nIf you've weighed all the options and decided to go the way of bankruptcy, read up on our article about doing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.\nBeing in debt is highly stressful. Hopefully, this article gave you some tools to help you deal with it. Remember:\n* You are not a bad person.\n* Try not to worry. Use relaxation techniques.\n* Don't feel guilty — the credit card companies share some of the responsibility.\n* Don't do anything hasty and sign up with a debt consolidation firm without doing some research.\n* Consider handling debt settlement on your own.\n* Don't rush into bankruptcy without considering all the alternatives. END

TITLE: What If You Don't Qualify for Bankruptcy CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nWe respond to questions on our discussion forum from people who are $75,000, $100,000, or more in debt. Due to the changes in bankruptcy law in 2005, many people who could have filed for Chapter 7 bankruptcy in the old days are now out of luck. They don't qualify for CH 7 bankruptcy because they can't pass the bankruptcy Means Test. If you have found yourself in this situation, we have some ideas for you that just might help you settle and\/or pay off your debts.\nUse Equity in Your Home to Pay Off Debts\n----------------------------------------\nCan you refinance your home and pull cash out to pay off your credit cards? This assumes good credit and enough equity to make the refinance worthwhile to you and your family. If the answer is no, then go to our next tips. If the answer is yes, then contact your lender to see if you can refinance your home to pay off your debts.\nUse Saved Cash to Settle Your Debts\n-----------------------------------\nYou would be amazed how many people do have some cash to settle their debts, but want to hang on to it instead of paying off credit cards. This is a mistake as the interest on your credit cards can be as much as 30 percent. You should run the numbers to see if it makes sense.\nLet's say the numbers are overwhelmingly in favor of paying off cards versus keeping money in a savings account. There may be another reason to hold off spending your cash: emergency reserves. If you don't want to use your cash because you want it as an emergency fund, this might be a good idea. If you're unemployed or your employment situation is shaky, having reserve cash can get you through some tough times.\nHere are a few questions you should be asking yourself:\n* Your savings accounts are paying what interest rate per month?\n* What is the interest on your credit cards? How much in finance charges are you paying per month?\n* Do you feel more secure having a little cash saved?\nIf the answer is no, you don't have cash, or no, you don't want to use it, then go to the next tip. If the answer is yes, you have cash and want to use it, then you may be able to settle your debts with the credit card companies. Read our article on How to Negotiate Your Debt With the Original Creditor to learn how to negotiate and settle your debts for a fraction of the amount owed.\nUtilize a 401K or a Retirement Fund\n-----------------------------------\nAccessing your 401K or retirement funds is sometimes a route people may want to take. You must be careful about this, though, especially if you are near retirement age. Taking out money from 401K or investment mutual funds makes the temporary (we hope) loss in your portfolio permanent. Why is this? If you hold on to your mutual funds portfolio, they have a chance to recover. If you withdraw money now, you are essentially selling at the low point of your mutual funds. Here are other things to consider when pulling funds out of your 401K or IRA.\n**If you cannot do any of the above, you have no choice but to......**\n### Stop Making Credit Card Payments\nThis might sounds ridiculous, but really, what other option do you have? You are really backed into a corner here. Stopping the payments to your creditors is what happens when you file for bankruptcy, so you are creating your own bankruptcy status. If you create your own \"bankruptcy\" by not paying your cards, you are doing so without the hassle of the court system, but also without the protection of the court system.\nLet's say you did qualify for a bankruptcy - what are the advantages and disadvantages to filing a BK Chapter 7?\n**Filing Bankruptcy Chapter 7**\n* You don't have to make payments on your credit cards.\n* All of your debts are wiped out, your creditors will not be contacting you.\n* Your credit is ruined for 10 years, you will have a tough time getting an unsecured credit card, and it's tough to get a bankruptcy off your credit report.\n**By Not Paying Your Credit Cards**\n* You don't have to make payments on your credit cards.\n* All of your debts are not wiped out and your creditors will start hounding you.\n* Your credit is ruined for seven years. Late payments and any corresponding collections only stay on for 7 years from the date of first delinquency. You will have a tough time getting any credit for a while.\n* It's possible to fix your credit before the 7 year reporting time is up.\n### Not Paying Your Debts vs. Filing Bankruptcy\nYour strategy should be:\n1. Stop paying your bills.\n2. Put aside the money you were paying the credit card companies into a separate saving account. This will be used for possible settlement with collection agencies later.\n3. Save all correspondence from credit card companies and collection agencies.\n4. Don't answer the phone unless you want to talk to the credit card companies or collection agencies. Talking to them is not recommended.\n5. Once you get a letter from a collection agency, send them a debt validation letter IMMEDIATELY.\n6. Once you have enough money saved, you should attempt to settle your debts with the collection agency. You can settle for 10 to 25 percent on the dollar.\n### If You Stop Making Payments on Your Credit Cards, What Happens?\nTime From Last Payment\nAction Taken Against You\nWho is Holding Debt\n0-30 days late\nNothing\nCredit Card Company\n30-60 days late\nPhone call from credit card company or letter reminding you to pay.\nCredit Card Company\n60-90 days late\nIncreasingly urgent phone calls from credit card company or letters reminding you to pay.\nCredit Card Company\n90-120 days late\nIncreasingly urgent phone calls from credit card company or letters reminding you to pay. Possible settlement offer letters.\nCredit Card Company\n120-150 days late\nPhone calls and letters, possible settlement offers, possible charge off.\nCredit Card Company\n150-180 days late\nPhone calls and letters, possible settlement offers, possible charge off.\nCredit Card Company\n180+ days late\nCharge Off\nNo One\n6-8 months late\nSold\/Assigned to Junk Debt Buyer or Collection Agency\nJDB\/CA\n8-12 months late\nFirst contact made by CA\/JDB, either by phone, letter or mark on credit report. Possible lawsuit.\nJDB\/CA\n12 months until Statute of Limitation expires\nletters, calls, possible lawsuit\nJDB\/CA\n### Frequently Asked Questions\n**Q.** Do credit card companies sue you? \n**A.** No. First of all, let me define a credit card company as any financial institution that issues a credit card, which could include your independent small bank or a credit union. Credit card companies either sell or assign bad debts to collection agencies or junk debt buyers. Credit card companies write off the bad debt and take the tax benefit.\nIt is a collection agency or junk debt buyer that could sue you. In some cases, the collection agency or junk debt buyer will name the credit card company as the plaintiff in the lawsuit, which is not quite legal, but gives them advantages.\n**Q.** Do you know which collection agency will get your account once it is charged off? \n**A.** No. It is impossible to guess which collection agency will get your account after it is charged off. Bad debt paper is sold on the junk debt market to the highest bidder. In some cases, your credit card account will NEVER be sold or assigned to a collection agency.\n**Q.** Do collection agencies ALWAYS sue? \n**A.** No. In some cases, even if a collection agency is known for filing a large amount of lawsuits, they may not sue you. It is impossible to predict whether or not a collection agency will sue you.\n**Q.** Can a collection agency or credit card company seize my house, garnish my wages or get into my bank accounts? \n**A.** No one can ever seize your home - most states have homestead exemptions protecting your home from creditors. Since credit card companies do not sue - your credit card company would never seize your assets.\nIf a collection agency sues you, you can beat them in court. If they do win a judgment against you (another big if), yes, they can garnish wages and get into your checking account.\n**Q.** When am I \"safe\" from lawsuits or when can I stop worrying about my debts? \n**A.** You will be \"safe\" from lawsuits when the statute of limitations on your debt is up or you settle with the collection agency. END

TITLE: Who is at Fault for Your Personal Debt CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: July 6, 2017_\nEvery day we hear about how the cost of higher education is soaring, car prices increase each year, the value of our dollar is shrinking, so it is no wonder no one can save any money. Not being able to save money, and higher cost of goods and services, leads one right down the path of overwhelming debt. Is it really your fault you have a mound of personal debt and no savings to speak of? Not entirely. Now we are not saying you can blame all your debt on someone or something else, you do have to take responsibility for your spending and saving actions. But what we are going to point out, is the fact there are some circumstances beyond your control that are driving you and thousands of other Americans, down the road of crippling debt and ultimately into bankruptcy.\nDifficulty Saving Money\n-----------------------\nIf you are lucky enough to have a job, how discouraging is it when you have deposited your paycheck into your savings or checking account, only to see a near zero balance by the end of a week or two. A student loan payment, cell phone, rent, car payment, these are all just a few of the monthly expenses the normal person has to pay with their measly paycheck. After all of these expenses are paid, it does not leave much in the bank to even try to put aside the recommended 10 percent into a retirement account. Why is it so hard to save money these days when your parents or grandparents were able to put aside money?\nCompounded interest, that is the missing ingredient in today's banking environment. With the Federal Reserve's zero interest rate policy, this causes decreased savings and the ability to grow your savings. Even if you saved the same amount each month as say your grandparents did, without compounded interest, the money in your savings account is not growing as it did back then. Your grandparents were earning interest on their money, you are not.\nBorrowing Money is Cheap\n------------------------\nOn the flip side of saving money is the aspect of borrowing money. Today, the Federal Reserve has made borrowing money extraordinarily cheap by any historical comparison. When the cost of borrowing money is too low, it becomes too irresistible and lures people into debt. For example, that annual tuition to Yale of $63,000 doesn't seem so bad when your monthly payment is only $650 and deferred until after you graduate. Sounds great now, but when you can't find a job because the economy is faltering and the dollar does not buy as much as it used to, that $650 seems like a heavy burden in the real world.\nAlso, when credit is too cheap, people buy what they want even if they really don't need it. This pushes price points up on goods and services making things more expensive. More expensive purchases equates to borrowing money, which brings us to overwhelming debt. It is a vicious cycle and one that is hard not to get caught up in.\nWho is To Blame For Your Personal Debt?\n---------------------------------------\nIf you asked your parents or grandparents this question, they would probably say your debt is your own fault and yours alone. They may also try to offer you advice or make you feel guilty, which is not really helpful nor does it really address the underlying issue of why more and more young adults are finding themselves in debt up to their eyeballs, so to speak. Can young adults really control the cost of a college education or how much a car will cost or what AT&T is going to charge for cell phone service? Not really. With the Federal Reserve's zero interest policy, the low cost of borrowing money, and the false sense of security of our dollar, there is not much young adults or any person can do about the growing personal debt in America. Until we start to back our currency with gold and get out from under the control of the central bank of the Federal Reserve, there is not much we can do but ride the tide of growing debt until we eventually fall off the cliff. END

TITLE: Who is at Fault for Your Personal Debt CONTENT: | | | | \n: . END

TITLE: Use a Personal Loan to Pay Off Your Debts CONTENT: Using a Personal Loan to Pay Off Debt Is a Great Idea\n-----------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 16, 2017_\nWe have a lot of articles on our site offering advice on how to pay off your debts and become debt-free. We know that finding yourself over your head in debt eventually leads you down the road of missed payments, repossessions, and foreclosures — not to mention the endless phone calls and letters from collection agencies. The three basic steps to paying off your debts are to stop accumulating more debt, pay off high interest loans first, and put as much money as you can toward paying down your outstanding balances. \nGetting out of debt, particularly consumer debt, is the cornerstone of financial freedom. It frees up cash for saving and investing. It enables us to get off the treadmill of living month-to-month. And being debt-free just feels great and we have a great way to help you pay off your debt — personal loans.\nTips When Using a Personal Loan to Pay Off Debt\n-----------------------------------------------\nUsing a personal loan as a debt payoff tool is often overlooked and it may seem odd to use new debt to get out of old debt. OK, yes, there are some risks to this approach, but if used correctly personal loans can lower your interest payments and shorten the time it takes to become debt-free. Here are some tips when considering using a personal loan to pay off your outstanding debt.\n**1) Check the Interest Rate.** Refinancing your debt at a lower interest rate is like hitting the lottery. A lower interest rate reduces the amount of interest paid and, assuming the term of the loan is the same, also reduces the monthly minimum payment. Refinancing existing debt with a lower-rate personal loan is a smart way to accelerate debt repayment. If you are able, try consolidating all of your high interest rate debt into one lump sum loan at a lower interest rate - this not only lessens the amount you will be paying in interest but it gives you just one payment to make each month. And, having one monthly payment can help when planning your budget and it prevents payments from being forgotten or missed.\n**2) Check the Term of the Loan.** Care and planning must be taken to make sure the term of a personal loan is consistent with your budget and financial goals. If a personal loan has a shorter term than the existing debt, your monthly payments may be more than your budget and\/or income can support. On the flip side, extending the term of a loan can result in more interest paid over time. Both of these factors need to be carefully considered when you are thinking about taking out a personal loan to pay off existing debt. \n**3) Does the Loan Need Collateral.** Typically, personal loans are a type of unsecured debt. However, there are some instances where lower interest rates can be obtained through secured loans, such as a home equity line of credit. While this is a reasonable option in some cases, it’s important to understand that failure to pay a home equity line of credit could result in the foreclosure of your home.\n**4) Weigh the Benefits of Consolidation.** We touched on briefly the notion of consolidating your debts but the key to using personal loans as a tool to getting out of debt is achieving lower interest rates (as noted above). While this can include consolidating multiple debts into a single new loan, consolidation by itself is not beneficial. It may reduce the number of monthly payments that must be made, but if the new loan comes with a higher interest rate, the added convenience may not be worth the cost. So, if you are thinking about combining all of your debts, make sure the interest rate of the personal loan is lower than the rate of all of your other debts.\nBottom line, if you are looking for a way to pay off your debts, consider using a personal loan. But before you apply for a personal loan, it helps if you know where you stand, credit-wise, so you can look for the best rates within your credit range. Just like getting a credit card, when it comes to getting a personal loan, having a higher credit score will get you access to lower interest rates. Make sure you shop around for the best rate because if you are not lowering your overall interest rate, there is no point in going down this road in the first place. END

TITLE: Use a Personal Loan to Pay Off Your Debts CONTENT: | | | | \n: . END

TITLE: Mistakes Made When Filing Ch 7 or CH 13 Bankruptcy CONTENT: Common Mistakes and Errors Made When Filing Bankruptcy\n------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nBankruptcy does happen to good people — so don't beat yourself up if you are thinking about filing Chapter 7 or Chapter 13 bankruptcy. Bankruptcy was designed to help those facing insurmountable debt and financial hardship, get a fresh start and eliminate most if not all of their debt. You should never enter into filing bankruptcy lightly and hopefully you have extinguished all other options first.\nBefore you file bankruptcy, make sure to get competent advice from a competent bankruptcy attorney. If you cannot afford to hire an attorney, do your homework first and make sure you know all the ins and outs of filing bankruptcy. Below are a few of the common mistakes people make when they are filing bankruptcy. As you can see from reading them, one little misstep could lead to your bankruptcy being dismissed. So, make sure you dot all of you i's and cross all of your t's and you will come out of bankruptcy with a clean slate.\nNot Telling the Truth\n---------------------\nThe first step in the bankruptcy process is taking the means test, which is a series of financial questions used to determine if you have the capacity to pay your creditors. The majority of people who file for bankruptcy will qualify but those who don't, generally will have other options available to them. By leaving out assets or income on your means test just so you qualify, could result in getting your case dismissed down the road. Even worse, lying and being caught lying could get you banned from filing on those particular debts ever again.\nOmitting a Source of Income\n---------------------------\nYou might think that part-time job does not really count as income but in fact it does in eyes of the bankruptcy court. What you might think is an insignificant means of income, is still plain and simple — income — so you need to report it.\nAnd this goes for ALL household income. If you have a child, who still lives with you and you claim him or her as a dependent in your bankruptcy, and this child has a part-time job, you have to include his\/her income. Failure to do so will result in getting your case dismissed.\nLeaving Out Cars or Car Loans\n-----------------------------\nWhen you think of bankruptcy, the first thing that may come to mind is, \"I don't want to lose my car.\" If you have a car with a loan on it, you must list it as one of your liabilities. And, if you own it outright, you have to list it as an asset in your bankruptcy paperwork. Failure to do so, or transferring it to another family member right before you file for bankruptcy, is a sure fire way to lose your car.\nWhen it comes to the loan on your car, you have to notify the lender you have filed for bankruptcy. Usually, the lender will work some type of agreement with you so you can keep the car.\nLeaving Out Some Creditors\n--------------------------\nFace it, you can't hide from your creditors so don't leave any of them off of your bankruptcy filing. With everything now computerized, most credit card companies have centralized their information so they will know if you have filed for bankruptcy protection. It is better just to come clean and list them all than to try to hide one and get caught. Leaving out creditors may get your case dismissed.\nTransferring Assets Out of Your Name Prior to Filing Bankruptcy\n---------------------------------------------------------------\nThis is a big no-no and it is illegal. Transferring any assets for the purpose of protecting them from being taken is not the right way to go about protecting them. Talk to your bankruptcy attorney about how to legally protect assets that might otherwise be at risk.\nFailing to List all Potential or Pending Lawsuits You Have Against Anyone\n-------------------------------------------------------------------------\nThis is an area that is frequently overlooked by people filing for bankruptcy. If you are in the process of suing anyone for anything, that is considered an asset and must be listed as such in your bankruptcy paperwork. You may be able to continue with these cases, but the court-appointed bankruptcy trustee must know about any and all lawsuits or potential lawsuits.\nRunning Up Credit Card Balances Before Filing Bankruptcy\n--------------------------------------------------------\nMany potential filers say that they are going to use up all their available credit before filing for bankruptcy. This usually does not work for the filer. The creditor will review your credit card charges after receiving the bankruptcy notification. If the creditor believes you ran up your credit card balances before filing, it has the right to challenge your request to eliminate some or all of your balance. You could end up owing money on your credit cards after your bankruptcy is over.\nBankruptcy does not have to be a difficult procedure. As long as you adhere to the laws and regulations, your bankruptcy will go smoothly and quickly. We always recommend you talk to an attorney before filing bankruptcy. You need to understand all of your options and alternatives to bankruptcy before you file. END

TITLE: What if You Can't Afford to File Bankruptcy? CONTENT: What if You Can't Afford a Bankruptcy Attorney or the Fees?\n-----------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nIt is not uncommon for people who have been struggling for years to make minimum payments on their debts to suddenly find out they are too broke to pay a lawyer or pay the bankruptcy filing fees. As a result, people filing bankruptcy without the help of an attorney rose from 6 percent of Chapter 7 and Chapter 13 filings in 2015 to 8 percent of Chapter 7 filings and 10 percent of Chapter 13 filings in 2016. Some might think that is because people do not like lawyers but we tend to think this is a way for people to try to save what little money they have left.\nThe bankruptcy filing fees effective January 1, 2017 are as follows:\n* Chapter 7 — $335\n* Chapter 13 — $310\nThe most common type of bankruptcy, a Chapter 7 filing, erases most consumer debts and typically costs anywhere between $1,500 to $3,000 with an attorney. Chapter 13 filing, which involves a debt repayment or reorganization plan, can cost from $3,000 to $4,000 with an attorney.\nAfter the passing of the 2005 Bankruptcy Reform Act, costs for both types of bankruptcy filings rose considerably. This increase in cost was due to the imposed Means Test and other limitations on filing, which was a direct result of the 2005 Bankruptcy Reform Act.\nShould You Use an Attorney to File Bankruptcy?\n----------------------------------------------\nNow that you have finally made the decision to file bankruptcy, can you afford an attorney? If you can't, does it really matter if you don't use one? Well, like anything, having some expertise in something goes a long way in getting a project done correctly. A poorly filed bankruptcy can be dismissed, which means you will not get any relief from your creditors. On top of that, filing your bankruptcy incorrectly could leave some of your property and assets unprotected which could lead to you losing a lot of things you could have kept after the bankruptcy is finalized.\nIf you can somehow scrape the money together, it is always a good idea to seek expert advise. But before you go out and hire any Tom, Dick, or Harry Esquire, read our article on the 50 Questions to Ask When Looking for a Bankruptcy Attorney. This way, the little money you do have to pay an attorney, will not be wasted on some incompetent fly-by-night attorney who will do nothing for you except get you further into debt.\nAlternative Options to Use\n--------------------------\nBefore you start bankruptcy proceedings on your own, here are a few things to consider that will go a long way in saving your assets and some money.\n1. **Figure Out If You Are Judgment-Proof.**  If you are judgment-proof, you may not need to file bankruptcy and you can just send your creditors a letter telling them to stop contacting you. You are judgment-proof if:\n * Your income and property are legally protected from creditors.\n * You own very little and have no income.\n * All of your income is from Social Security - Social Security payments are legally protected.\n * The list of property you own is only clothing, household items, and a car worth $2,000 or less.There is a hitch in being judgment-proof. If your creditors go to the trouble to sue you and get a court judgment, they may be able to collect from you if your circumstances improve in the next 10 years. A bankruptcy filing, by contrast, would legally erase the debt.\n2. **Think of Ways to Raise the Money Needed.**  Your bank account might be empty, but there are some ways you can quickly raise the money you need to file bankruptcy and hire an attorney.\n * Cancel some luxuries such as cable TV, cell phone, or eating out. This will free up some money instantly.\n * Sell some items you are likely to lose in a bankruptcy, like a second car, expensive artwork, or jewelry, on eBay or Craigslist.\n * Stop making payments on debts you are hoping to erase in the bankruptcy - what's the point of paying on these if they are going to be discharged in your bankruptcy.\n * Get a loan from a friend or family member. The loan would be legally wiped out in the bankruptcy filing, but that wouldn't prevent you from repaying them later.\n3. **Look For Low-Cost Bankruptcy Help.**  Many bankruptcy attorneys offer discounted initial sessions. Use this session to explore whether or not filing bankruptcy is going to be right for you and what you will need to do to proceed with a bankruptcy filing.\n If your income is below the poverty level (currently $18,530 for a family of three), you may be eligible to receive free help from your local legal-aid society. There are also a few bankruptcy courts that have \"pro se help desks\" (pro se means filing without an attorney) so contact your local court and ask if they are offering this type of service.\nGiven how complicated today's bankruptcy procedures are, you should at least read as much as you can before you decide to file bankruptcy. Our website is loaded with information on Chapter 7 and Chapter 13 filings and the most popular questions asked regarding filing either one. We also have a Bankruptcy Forum where you can read questions and answers from other members and you can ask your questions for free. Doing you homework before jumping into filing bankruptcy will give you a much better chance for a successful filing and a brand new start . END

TITLE: What if You Can't Afford to File Bankruptcy? CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: What if You Can't Afford to File Bankruptcy? CONTENT: | | | | \n: . END

TITLE: Voluntary and Involuntary Bankruptcy Dismissal CONTENT: Dismissal of Your Bankruptcy Petition — Voluntary or Involuntary\n----------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nA bankruptcy petition can be either **discharged** or **dismissed** after it has been filed. Should your bankruptcy be discharged, this means that you have met the terms of your agreement, and your bankruptcy has been completed. A dismissal, however, occurs when the petitioner does not meet the terms of the bankruptcy. Bankruptcy dismissal may be either voluntary or involuntary.\nVoluntary Dismissals\n--------------------\nA voluntary dismissal occurs when an individual decides that filing for bankruptcy was a mistake. You may wish to request a voluntary dismissal if the court informs you that the primary debt you wished to discharge is not dischargeable or you find employment that will permit you to successfully pay off your debts without the aid of the bankruptcy court.\nIf your bankruptcy case was filed under Chapter 13, you may secure a voluntary dismissal merely by filing a formal request for dismissal with the court. Should you choose to stop making payments to the bankruptcy trustee, this will also result in your Chapter 13 bankruptcy being dismissed.\nUnfortunately, if you file under Chapter 7 of the U.S. Bankruptcy Code you may not have the same freedom to be granted a dismissal at any time. Once a Chapter 7 case is filed, it is up to the judge in the case as to whether or not to grant you a voluntary dismissal.\nInvoluntary Dismissals\n----------------------\nAn involuntary bankruptcy dismissal occurs if you fail to meet the requirements of the court. This can be as simple as neglecting to file paperwork with the bankruptcy court or pay a fee. Your bankruptcy may also be dismissed if you fail to seek government approved credit counseling or have neglected to file any of your tax returns over the previous four years.\nWhen you stop making payments to the bankruptcy trustee on your Chapter 13 bankruptcy repayment plan, the court will issue an involuntary dismissal. Your decision to stop making payments, however, is a voluntary one.\nReinstating Your Dismissed Bankruptcy\n-------------------------------------\nIf your bankruptcy was involuntarily dismissed, you may have the option to have the bankruptcy reinstated. When working to get your case reinstated, it is vital that you move quickly. Depending on your state of residence, you will have a very limited amount of time in which to plead your case before the dismissal becomes permanent.\nYour first step should be to find out why the bankruptcy was dismissed. If the reason is not present on the formal notice of dismissal you were sent by the court, visit the courthouse and inquire about the reason the bankruptcy was dismissed. In the majority of cases, a bankruptcy is dismissed due to a simple oversight on the part of the debtor or his attorney. This is known as an administrative dismissal. To combat an administrative dismissal, you or your attorney must file a Motion to Reconsider with the bankruptcy court. You must also provide the court with any missing paperwork or fees.\nIf your bankruptcy dismissal occurs due to information provided by your creditors, you may have a more difficult time having your bankruptcy case reinstated. At this point, you will be required to present new evidence to the court formally contesting your creditors' statements. Should the bankruptcy court decide in your creditors' favor, you have the option to file an appeal and request a hearing on the case. Unless you are positive that you no longer wish to pursue a bankruptcy, it is important that you adhere to all of the requirements of the bankruptcy court to prevent your bankruptcy from being dismissed. Once your bankruptcy is no longer in effect, you will lose the court's protection from creditor lawsuits, foreclosure, and repossession.\nFiling a Second Bankruptcy After Dismissal\n------------------------------------------\nIf you are unable to have your bankruptcy reinstated or change your mind after requesting a voluntary dismissal, you have the right to file for bankruptcy again. Federal restrictions state that you must wait 180 days after your bankruptcy dismissal before attempting to file for bankruptcy a second time. It is irrelevant whether your initial bankruptcy was filed under Chapter 7 or Chapter 13, if it was dismissed prior to being discharged.\nYou must remember that a bankruptcy is recorded on your credit report as soon as it is filed with the court. The bankruptcy filing then may appear on your credit report for the full duration of the federal reporting period even if it was dismissed. Filing a second bankruptcy will result in yet another bankruptcy record being placed on your credit report and your credit score will drop by a significant amount. END

TITLE: How to Handle Debts Before and During a Divorce CONTENT: How to Handle Jointly Held Debt During a Divorce\n------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 13, 2017_\nUnless you were still in the dating stage, chances are you and your ex share in some debt. While it's no easy feat discussing financial matters before, during, or even after a break-up, it simply must be done — for the sake of your sanity, your bank account, and your credit score. It may help to have a third-party's advice in this trying time, in which case you may want to refer to this checklist, of sorts.\nTransfer Lease Agreements\n-------------------------\nOne of the first steps in taking care of outstanding debts and obligations is to transfer lease agreements, utilities, and the like into one responsible party's name. If one of you will continue to live in your previously shared home, take the other party's name off of the lease agreement and transfer the utilities accordingly.\nRevoke Authorized User On Credit Card Accounts\n----------------------------------------------\nIf you added your spouse or partner as an authorized user on your credit card, or checking account for that matter, contact the bank and have the authorization revoked immediately.\nClose Joint Credit Card Accounts\n--------------------------------\nProvided they are at a zero balance, close joint credit card accounts. Should you have a balance due, both parties should share in paying it down to zero so that the account can be closed.\nFreeze Joint Credit Card Accounts if You Cannot Close\n-----------------------------------------------------\nIf the balance due is greater than both parties can afford to pay, at the very least, freeze the account so that nothing more can be charged.\nAgree to a Payment Plan for Joint Accounts With a Balance Due\n-------------------------------------------------------------\nWhile you may agree to make payments on one credit card, and your ex agrees to make payments on another, you are still at the mercy of someone else. That's never a good feeling, particularly when it's an ex. One solution may be for both of you to make equal monthly payments on each joint account. This amount should be at least the minimum amount due, for each of you, so that if your ex ever misses or is late with their monthly payment, yours will prevent any late payment fee and, worse, hit to your credit score.\nKeep Tabs on Payments Your Ex is Responsible For on Unresolved Joint Accounts\n-----------------------------------------------------------------------------\nWhatever payment arrangements you make on joint accounts that cannot be closed, agree that each of you can (and should) check in on your jointly-held accounts on a monthly basis to be sure the other is upholding their part of the deal. Ideally, this is something that can be checked via an online account, or you can simply call the creditor directly and check payment history. While this may sound like the last thing you need on top of all your other responsibilities, protecting your credit is well-worth this extra effort.\nSell House and\/or Car or Refinance Into One Party's Name\n--------------------------------------------------------\nIf you own a home together, or a car, the simplest solution is selling it. But if one of you is intent on keeping it, said party should refinance in their name. Of course, this is often easier said than done depending on the borrower's credit score. The borrower should take a look at their credit report and see how they may be able to raise their score. It may be the credit utilization ratio bringing the score down, in which case credit accounts should be brought to zero (or as low as possible). Or it may be old debt that's to blame, in which case the debt validation process can be invaluable, as it's likely this debt has been sold to collection companies that do not have the necessary documents to prove liability.\nHelp Pay Your Ex's Share of the Debt, if Needed\n-----------------------------------------------\nIt may not be equal, and it may not be fair, but sometimes it pays to take on your ex's share of the debt if they're struggling, irresponsible or, worse, vindictive. You very well could end up paying more in the long run for a credit score that takes a tumble due to late payments, missed payments, defaults, charge-offs, a repossession, or a foreclosure. Certainly seek legal advice if it comes to this, but be prepared to bite the bullet and protect your credit at (almost) any cost.\nGoing through a divorce is never easy and it can be difficult to face some tough decisions head on. But, if you don't take care of some of the little things during a divorce, like closing credit card accounts, they can turn into much larger problems down the road. The best advise is to be pro-active and try to work together to end the marriage, and your joint debt, in a civilized manner — all will win in the end. END

TITLE: Overwhelming Debt for Newly Married Couples CONTENT: Debt Can Be a Problem for Newlyweds\n-----------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 18, 2017_\nWhen you walked down the aisle with your significant other to finally tie the knot you heard the preacher say, \"for richer or for poorer,\" and did not even think twice about that statement. Fast forward a few months and now that phrase has taken on a whole new meaning. Student loans and credit card debt now seem a far bigger issue now that two people are contributing to the bottom line amount of what is owed and what needs to be paid on every month.\nToday, as many Americans struggle with massive debt, younger adults are in even worse shape when you figure in the ten of thousands of dollars owed in schools loans, auto loans and credit card balances. What in the world can these poor newlyweds do about this compounding problem?\nBe Honest With Your Spouse About Your Debt\n------------------------------------------\nDuring your courtship, who had the time or the desire to talk about finances let alone how much money you owed in loans or credit card debt. Well, now is the time to start being honest with your spouse. Both of you need to lay it all out on the table, so to speak, and divulge to the other just exactly how deep you are in debt. Make a list of all your creditors and the balances due to date. Next, itemize out the minimum monthly payments due on each loan and when each payment is due.\nHaving this heart-to-heart discussion will not only get everything out in the open, it will alleviate any misunderstandings down the road. For say, when you are trying to buy a house and the lender pulls your credit only to find a bunch of outstanding loans and then denies your loan.\nWork Together to Form a Payment Plan to Get Out of Debt\n-------------------------------------------------------\nAfter the two of you had your heart-to-heart talk about how much debt each of you have, now is the time to work out a payment plan to pay down your debts. Eventually, you will want to buy a house and to qualify for a decent mortgage loan rate, you have to have pretty good credit. Making sure your payments are up to date and your credit card balances are low, are the biggest factors when evaluating your credit scores.\nThe best way to tackle this is to list out all the outstanding balances with the minimum payments due on each. Add them all up. Now, figure out what you take home each month in combined salaries and subtract the total payments from your net income. Do you have enough left over for rent? Food? Gas? If so, then start paying down your loans. If not, look into possibly consolidating a few of the debts or negotiating a settlement with your creditors. See our article on Settling Your Debts for more information.\nNow that you have all the debt payments figured out, put one of you in charge of making the payments every month. This way, one person is in charge of paying on all the loans so that nothing will be overlooked. This person should also try to pay a little bit extra on some of the debts each month, if you can. This will save you money in interest payments and pay a few of the debts off quicker. Every six months or so, sit back down together and review the balances to see if anything needs to be readjusted. You will see that in no time, debts will start to be paid in full freeing up a little bit more money to pay on something else.\nOrder Copies of Your Credit Reports\n-----------------------------------\nAfter you get married, it is a good idea for both of you to order copies of your credit reports and check them over closely. This will help to identify any negative items that may be dragging down your credit scores. You may want to work with a credit repair company to fix your credit or you can do it yourself. Either way, if you do have inaccurate or negative marks on your credit, now is the time to work to get them off and get your credit back on track.\nDetermine Your Future Financial Goals\n-------------------------------------\nProbably one of the most important things you can do as a couple is to write out your future financial goals. To make it easy, break your goals up into increments of say two years. When you write out your goals, make sure to be as specific as possible. For example, your first goal could be in one year and then the next goal could be two years later.\nYour first year's goal could be to cut down your debt by 50 percent and your goal for two years later could be to purchase your first home. Then, in a year, when you sit down with your spouse to review your goals, you will need to evaluate if you achieved your goals. If you didn't, talk about what you can change to make those goals a reality.\nYou will always need to adjust your goals — which is fine — but you always want to have some goals so you know where you are headed financially.\nThe most important thing you, as a young newlywed, can do is to make sure you are honest with your partner about the financial realities you face, and to formulate the best possible plan to deal with your debts together. Working together to pay down your debts will help to realize a better financial future for both of you. END

TITLE: Bankruptcy Fraud is Rarely Caught and Prosecuted CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nBankruptcy fraud is a white-collar crime and there are four distinct methods of committing bankruptcy fraud:\n1. Concealment of assets\n2. Intentionally filing incomplete or false forms\n3. Filing multiple times using false or real information in several states\n4. Bribing a court-appointed Trustee\nIn the United States, bankruptcy fraud is a federal crime punishable by a fine of up to $250,000 and\/or up to five years in prison. But even with these harsh consequences, bankruptcy fraud is not frequently prosecuted. Let's find out more about the different types of fraud and then why the majority of people get away with it.\nBankruptcy Criminal Referrals Submitted\n---------------------------------------\nAccording to the United States Courts, bankruptcy cases filed in federal courts for fiscal year 2016 (12-month period ending June 30, 2016) totaled 819,159, down 6.9 percent from fiscal year 2015, which saw 879,736 bankruptcy filings. (all-time high was 2010 with over 1.6 million bankruptcy filings)\nAccording to a report by the U.S. Department of Justice, in fiscal year 2016, the United States Trustee Program (USTP) filed 2,158 bankruptcy and bankruptcy-related criminal referrals, a 1.3 percent increase over the 2,131 criminal referrals made during fiscal year 2015. The five most common allegations contained the following:\n1. Tax fraud\n2. False oath or statement\n3. Concealment of assets\n4. Bankruptcy fraud scheme\n5. Identity theft or use of false\/multiple Social Security Numbers\nOutcomes of Criminal Referrals\n------------------------------\nOut of the 2,158 criminal referrals made in fiscal year 2016, 887 referrals remained under investigation or review, 16 referrals resulted in formal charges, 723 referrals were declined for prosecution, and three were administratively closed.\nIs Bankruptcy Fraud on the Rise?\n--------------------------------\nThe United States Department of Justice estimates that one in every ten bankruptcy filings has an element of fraud associated with it and 25 percent of cases were found to contain \"material misstatements of income or expenditures.\" The USTP does not publicly disclose what specifically constitutes a material misstatement but the term may refer to an understatement or omission of a debtor's assets or income.\nAccording to an article in The Wall Street Journal, the arm of the Justice Department that monitors corporate and consumer bankruptcy filings has \"indefinitely suspended\" audit proceedings due to budget cuts. According to Mr. Talbot, a senior VP for the Financial Services Roundtable, \"The audits are designed to catch and prevent abuse. The absence of the audits could lead to more instances of abuse of the Bankruptcy Code.\"\nReasons for Bankruptcy Fraud\n----------------------------\n**Criteria For Asset Detection Absent.**  The agency claims, \"detecting and combating bankruptcy fraud is a U.S. Trustee Program priority.\" The trustees appointed by the Justice Department to oversee almost every bankruptcy filed in the U.S. are not required by law or regulation to have any expertise in tracing or recovering concealed or stolen assets. Indeed, criteria that individuals seeking appointment as a U.S. Trustee are required to meet contain no mention of the sort of asset tracing and recovery skills that would enable a trustee to detect the signs of fraud.\n**Professional Qualifications.**  According to the Code of Federal Regulations, there are relatively few professional qualifications required for appointment to the panel of trustees charged with overseeing filings under Chapter 7 of the bankruptcy law or to appointment as a standing trustee. Attorneys admitted to practice before the highest court of a state or the District of Columbia are eligible, as are Certified Public Accountants.\nHowever, those without such professional qualifications can still be eligible for appointment if they graduated from a four-year college and earned at least 20 credit hours of \"business-related courses.\"\nWhat Experts Say About Bankruptcy Fraud\n---------------------------------------\n\"The numbers don't surprise me terribly,\" the article quotes James W. Boyd, a Traverse City, Michigan attorney, currently president of the National Association of Bankruptcy Trustees.\n\"I think the USTP system is very aggressive in its pursuit of these matters, and I think most trustees are quite aggressive when they see what they believe is an intentional fraud committed on the system by the debtor, they are referring them to USTP,\" he said.\nHowever, Mr. Boyd stated that asset \"mistakes\" or \"mis-statements\" about assets have to be viewed in context. Many personal bankruptcies involve individuals with little education in legal matters and little ability to hire experienced counsel. (Bankruptcy trustees are barred from providing advice to filers.)\nReally?  People don't know that they should report that they have three cars?  Report they own lots of gold jewelry, boats or stocks?  What about their bankruptcy attorneys? The trustees may not be able to advise filers but don't the attorneys explain to their clients what has to be included as assets?\nIf you are hiding assets from trustees during your Chapter 7 bankruptcy proceedings, you have a one in one thousand shot in not being detected in the current system of trustees. We are not sure how much press this has gotten or if the public cares. \nStatistical Data — Bankruptcy Fraud\n-----------------------------------\n**FY 2016**\n**FY 2015**\n**FY 2014**\nInvestigations Initiated\n29\n28\n44\nProsecution Recommendations\n19\n29\n25\nIndictments\/Informations\n17\n24\n12\nSentenced\n18\n11\n8\nIncarceration Rate\n61.1%\n63.6%\n75.0%\nAvg. Months to Serve\n17\n16\n53\n_For an in depth look at bankruptcy prosecution, read the white paper by Emory Law._\n* * * END

TITLE: Rebuild Your Life After Filing For Bankruptcy CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 3, 2017_\nIf you are reading this article, chances are you took the plunge and filed for bankruptcy. Hopefully, this decision was made with a lot of thought and advice from a competent financial and legal professional. Rebuilding you life after bankruptcy, including your credit rating, finances and your emotional well-being, can sometimes feel like an overwhelming task. But it needs to be seen as the first step toward a more financially sound future. Don't feel like it is the end of the world, take the view you will be better off down the road and there is indeed life after bankruptcy.\nTypes of Bankruptcy Protection\n------------------------------\nJust to get everyone up to speed, there are two types of bankruptcy protection, Chapter 7 and Chapter 13.\nChapter 7 Bankruptcy is the most widely used and it for those who have few assets and no ability to work out a repayment plan with their creditors. These people turn over their assets to repay their debts and whatever cannot be repaid is wiped clean. The debtor comes out of this bankruptcy fairly quickly and debt free.\nChapter 13 Bankruptcy is for those individuals who have a lot of assets, such as cars, homes, stocks, and want to keep the majority of their assets. They are willing and able to work out a payment plan with their creditors because they have an ongoing and possibly substantial income — they are just looking for help in restructuring the debts in order to pay them off or negotiate them down. This type of bankruptcy can last for years until the debts are paid off.\nWhile both types of bankruptcies last for 10 years on your credit report, a Chapter 7 filing can have a more detrimental effect on your credit score.\nRebuilding Your Credit and Your Life After Bankruptcy\n-----------------------------------------------------\nThe first goal for someone emerging from a Chapter 7 or during a Chapter 13 bankruptcy, is to begin to rebuild your credit. There is no quick and easy way to do this so don't think it is going to happen overnight. It will takes years to get your credit score back to where it once was but if you follow these steps, you will see the rewards of your hard work.\n1. **Get and Use a Secured Card Card.**  If your credit score has taken a severe hit, you will more than likely not be able to get an unsecured credit card. A secured credit card will require you to make a deposit up front before they will issue you a card. The benefit of using one is that they will report your activity to the credit bureaus so you will begin to build up a new credit history. Eventually, you might be able to convert this secured card into an unsecured card, as long as you pay your bills on time and show the bank you are becoming a good credit risk.\n2. **Manage Your Credit Post-Bankruptcy.**  Filing bankruptcy affords you a fresh new start in your financial life, so avoid at all cost falling back into the same mess you just came out of! You are going to need to manage every dollar that comes in and goes out to make sure you are not falling into debt again. Get on a budget plan and stick to it — even it that mean slimming down your lifestyle. An over zealous lifestyle is probably what got you into this mess in the first place so don't repeat the process again.\n3. **Build Up a Savings Account.**  After you have worked out a manageable budget, make sure to factor into your budget saving money and putting it into some type of savings account. Have a set amount you are going to sock away every month. Before you know it, you are going to have a nice nest egg built up, which you can use for an emergency or just let is grow for retirement. This will show lenders you are capable of saving money, not spending it.\n4. **Pay Your Bills on Time.**  You are going to need to show future lenders that you are becoming a more desirable credit risk and the only way to do this is to pay your bills on time. Don't come out of bankruptcy and fall back into your old habits — this will not get you any new credit down the line. Lenders want to see that you corrected your mistakes and are now able to control your financial life and spend within your means and pay your bills on time.\nHaving a Life After Bankruptcy\n------------------------------\nFiling for personal bankruptcy is the last resort for those who cannot carry their current debt load, but it often comes with further financial damage and emotional strain. Understanding the reasons for your crushing financial picture and slowly rebuilding your credit history are critical steps in surviving the process. There is life after bankruptcy but you will need to take the necessary steps to make sure you do not fall into debt again. You now have a fresh start with some new challenges so keep your chin up and all of your hard work and determination will pay off in the end. END

TITLE: Rebuild Your Life After Filing For Bankruptcy CONTENT: | | | | \n: . END

TITLE: Millennials or Generation Y Adults Have a Lot of Bad Debt CONTENT: Why Do Millennials Have So Much Bad Debt?\n-----------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 18, 2017_\nThough Americans of every generation carry bad debt, one generation seems to be at the top of the class. Millennials, those born between the late 70s and the early 2000's (also know as Generation Y), seem to be particularly susceptible to overwhelming bad debt. While some contend there is no \"good\" debt, mortgages and student loans are considered in this category. While Generation X tends to excel on the good debt front, Gen Y has far more in the way of \"bad\" debt, including credit cards, other lines of credit and car loans. The question is, why?\nConstant Engagement\n-------------------\nParents of Millennials were particularly attuned to the importance of giving their kids every opportunity to further themselves — socially, intellectually and artistically. From play groups; to tutoring; to music, dance and art classes, Gen Y was raised to stay busy, not with just any run-of-the-mill activities, but those equated with social and\/or cultural status. As adults, this may translate into a chronic need for Millennials to keep their schedules full of more engagements than they can afford, be it brunch, lunch and\/or dinner with friends; near-nightly entertainment; or trips abroad.\nAccording to a recent study by the Department of Agriculture, parents now spend over $40,000 more on each child compared to child rearing costs back in 1960. Of course you have to factor in inflation, but, two income families seem to spend a lot more on the \"needs\" of their children than they did when just dad went to work every day and mom stayed home to entertain and take care of the kids.\nInstant Gratification\n---------------------\nUsing the Internet as children taught Generation Y-ers early on, what they want is just a mouse click away...right now. Instead of the prolonged shopping experience of planning a shopping trip, physically visiting different stores — perhaps over a period of days or even weeks to find the perfect (affordable) thing — Millennials may condense the same into less than hour's time online. This heightens impulse-buy behavior, as any sudden desire to have something can be realized immediately. Unfortunately, this deprives Gen Y of good-old-fashioned second-guessing that helps keep the best of budgets in check, as there may be no lag time between desire and realization. Add to that the tendency of Gen Y parents to provide for their kids' every want and whim, and it's no wonder Millennials tend to live above their means.\nTighter Job Market\n------------------\nConventional wisdom has always held that a degree gives college graduates a leg up, particularly during tough economic times. But in the wake of The Great Recession, the experience of Millennials proves there is no guarantee in the job market. Since the number of qualified applicants far exceeds the number of job openings, Gen Y college grads are forced to take positions that may have no degree requirement at all, which almost always means earning far less than their education presumably deserves.\nSo, after spending four years in college to obtain a college degree, Gen Y-ers now have all of that student loan debt to contend with. Thinking they would be getting a job right after graduation making a nice income, when in actuality they are making just over minimum wage, makes it difficult to keep up with the monthly payments that need to be made on that now useless college education.\nContinuing Education\n--------------------\nTo better themselves (and their position amongst the competition), Millennials tend to enroll in advanced degree programs. While this will hopefully translate into higher earnings down the road, today it means higher student loan payments. For many, it's tough enough covering student loan debt incurred via a bachelor's degree. Tack onto that a master's, then maybe a doctorate, and it's no wonder Gen Y is drowning in debt. While student loans may be considered \"good\" debt, as it's an investment in future money earned, often covering the cost of student loans means charging up credit cards (bad debt) to make ends meet.\nSo what is the Millennial Generation to do? Budget, budget, budget (i.e., spend less, save more). If you can't afford to cover it with cash by the end of the month, you can't afford to charge it today. While this may mean holding off on something you want now, you may be surprised at how much more gratifying it is to wait for something you want until you've saved enough to have it. END

TITLE: Predatory Lending Hurting Military Personnel in Debt CONTENT: Predatory Lending Practices Are Hurting Our Troops\n--------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 19, 2017_\nMillions of Americans have financial difficulty, but for men and women in the service, trouble making ends meet is compounded by a direct threat to their work. Finances for many military personnel are a month-to-month struggle. Deployments, relocations, and more can make this situation much worse for military families. Even by cutting corners, buying only necessities, and carefully budgeting income and expenses, many households are just one emergency or expense away from a financial crisis.\nPayday loans can be a quick solution to this need for short-term financial assistance. However, the high fees and structure of these loans can turn them into a debt treadmill. One loan often turns into multiple rollovers, and you find yourself paying hundreds or thousands of dollars more than expected. In the end, they are often a more serious problem than the one they were meant to solve.\nThe security clearance that millions of military personnel need to do their jobs is revoked if they fall into delinquent or excessive debt. That's because it is in direct violation of the Uniform Code of Military Justice, which requires military members to pay their debts. Thus, payday loans and title loans are particularly attractive to service men and women, as they offer immediate, discreet solutions for trouble making ends meet. \nWhat is the Military Lending Act?\n---------------------------------\nThe Military Lending Act was passed in 2006 to protect service men and women from predatory lending practices. In particular, the law caps the annual percentage rate at 36 percent for military personnel who take out payday loans and car title loans (as well as tax refund anticipation loans).\nHow Have Lenders Responded to the Military Lending Act?\n-------------------------------------------------------\nRather than discontinuing loans to service men and women, payday and title loan lenders have simply tweaked the specifics of their loan terms so as to fall within the legal limits of the Military Lending Act. Since the legislation only applies to payday loans 91 days or less and title loans six months or less, lenders have simply extended the length of their loans accordingly.\nWhat is the APR Charged For Payday Loans and Title Loans?\n---------------------------------------------------------\nThough it varies by state, the annual percentage rate for payday loans and title loans can be as high as 400 percent. Again, the Military Lending Act was intended to limit this rate to 36 percent on payday loans and title loans, but lenders have found ways around this simply by extending the length of their loans. Unbelievably, this means a loan of just a few hundred dollars can end up costing thousands to pay back.\nWhat Alternatives do Military Members Have to Payday Loans and Title Loans?\n---------------------------------------------------------------------------\nThe military offers financial assistance at low interest rates to those in need, but considering the potential for revocation of security clearance, service men and women are understandably leery of pursuing this option. Another alternative is a third-party financial counselor, such as VeteransPlus, a non-profit that offers advice and resources to military personnel. END

TITLE: Predatory Lending Hurting Military Personnel in Debt CONTENT: | | | | \n: . END

TITLE: Delinquent Debt Stats - How to Avoid Falling into Debt CONTENT: Delinquent Debt Statistics and What to do About Them\n----------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 15, 2017_\nFalling behind on your monthly payments can be a pretty powerless feeling. The good news is, there is always something you can do to get control of your debt and not to become another delinquent debt statistic. Below are four common debt scenarios along with what you can to do avoid getting further and further into debt.\n### 1 out of 20 people are at least 30 days late on a credit card or other non-mortgage account (e.g., automobile loan, student loan).\nBeing late on a credit card payment is one thing. Being 30 days late (or more) is quite another. That’s when you get reported to the credit bureaus and your credit starts taking a hit.\nSo, if you’re in the habit of paying late – on credit cards or anything else — it’s time to snap out of it.\nIt’s not only costing you in the form of late fees, but also in a lowered credit score that means higher interest rates going forward or the inability to qualify for new credit at all.\n**What to Do About It**\n* Pay the bill as soon as you get paid, even if that means sending it in _before_ the due date. This way you cannot be tempted to divert those funds toward something else.\n* Revisit and revise your budget so you can stop spending more than you earn.\n### Among people with debt past due, the average amount they need to pay to become current on that debt is $2,258.\nYou need not have over $2,000 in delinquent debt for it to feel too intimidating to tackle. It’s all relative to how much you have left over to put toward your debt at the end of the month, which may be nothing at all.\n**What to Do About It**\n* Look at your budget, red pen in hand, and start slashing everywhere you can. Can you cancel cable? Cut your food budget in half? Move into a cheaper place?\n* Look at your work. Could you be making more money somewhere else? Could you take a part-time job or side hustle? Start looking around.\n* Put all extra money saved and earned toward your debt…period.\n* Communicate with your creditors, letting them know you’re taking steps to get caught up.\n### 35 percent of people with credit files have debt in collections reported in these files.\nOnce a debt goes into collections, your problem is compounded. You’re not only behind on your debt payments; you’re also being hounded for them by unrelenting debt collectors.\n**What to Do About It**\n* Confirm you actually owe the debt and not a scam.\n* Confirm you are still legally required to pay the debt via debt validation and the statute of limitations (for details, see #4 below).\n* Don’t ignore them. The problem will only get worse and could result in a lawsuit.\n* Do the math to figure out how much you can afford to put toward the debt every month.\n* Work out a payment plan with the debt collector. Just be sure not to agree to anything you know you cannot swing. Otherwise, you’re sure to fail.\n* Know your rights. There are a number of things that debt collectors cannot legally say or do.\n### Among people with a report of debt in collections, the average amount owed is $5,178.\nIf you have thousands of dollars of debt in collections, it may seem insurmountable. But people climb their way out of debt every day, and there’s no reason you cannot be one of them.\n**What to Do About It**\n* Try debt validation. This can be an especially effective tactic for old credit card debt. And more time your debt has been sold from one collector to the next, the less likely they have supporting documents to prove you owe the debt at all.\n* Check the statute of limitations in your state. Once it passes, you’re no longer legally required to pay the debt. Debt collectors won’t let you know this though. It’s up to you to know your rights.\n* For any debts that cannot be eliminated via debt validation or the statute of limitations, negotiate a payment plan to wipe the slate clean once and for all.\nRead the Urban Institute’s Delinquent Debt in America in its entirety. END

TITLE: Delinquent Debt Stats - How to Avoid Falling into Debt CONTENT: ### Useful Links\n* FREE Credit Repair Letters\n* How to Settle Your Debts\n* Understanding Debt Validation\n* What's the Statute of Limitations on Debt\n* Order Your Credit Reports\n* FREE Bankruptcy Evaluation\n### Latest Blog Posts\n* Affirmative Defenses That Don’t Work\n* New Rules Implemented by The Consumer Financial Protection Bureau (CFPB) Clarify the Way Debt Collectors May Deal with Consumers\n* How Will Unemployment Affect My Credit? END

TITLE: Delinquent Debt Stats - How to Avoid Falling into Debt CONTENT: | | | | \n: . END