Industry Association Warns Collectors of Calling During the Holidays
Consumers going through the debt settlement process will be forced to deal with collection calls at some point. Collection calls, while stressful for most people, are actually an important part of the process. It is vital that you remain in contact with those creditors you wish to negotiate a settlement with.
Unfortunately, some consumers fall victim to overly aggressive and persistent collectors. If you have several different creditors or collection agencies calling at the same time, it can be quite nerve-racking.
Good News!
The (ACA International) recently released a statement to their members with regards to collection efforts during the holiday season. Read the rest of this entry »
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Loading ...Debt Settlement Companies Can Provide Valuable Assistance Consumers
“We choose not to work with debt settlement companies,” said Matt Towson, spokesman for Discover Financial Services, Riverwoods, Ill in an article for InsideARM.com.
Virginia O’Neil, spokesperson for the American Bankers Association (ABA), in the same article was noted as saying “the vast majority of banks do not have formal written procedures in place to deal with debt settlement companies. Settlements reached with the help of intermediary companies are typically the same as settlements reached dealing directly with the consumer”.
It would appear that hiring a debt settlement company, according to Discover Financial and the ABA, would be a waste of money.
For some, that would certainly be the case. For others, hiring a third party debt settlement company may fill a need.
(3 votes, average: 5 out of 5) Loading ...Debt Settlement Can Lead to Higher Debt Levels
A recent Wall Street Journal Online article tells the story of a part-time security guard in Ohio who watched his debt swell from $15,000 to $20,000 during the time he was working with a debt settlement firm. The company he was working with failed to settle any of his debts and he wound up filing for bankruptcy.
On Monday, a Florida judge entered an order to wind the debt settlement firm he was working with down and set up a procedure for consumers to request refunds of the fees they had paid.
Like many consumers, he was most likely drawn towards debt settlement as a way to eliminate his consumer debt within a reasonable period of time and get a fresh start. Debt settlement can be an effective alternative to bankruptcy.
(3 votes, average: 5 out of 5) Loading ...FTC Holds Debt Settlement Workshop
On September 25th, the Federal Trade Commission (FTC) held a workshop titled “Consumer Protection And The Debt Settlement Industry”. Video and transcripts of the workshop are available on the FTC’s website. The primary focus of the workshop was to discuss the use of debt settlement companies by consumers and what can be done to protect consumers from deceptive marketing practices. Anyone considering debt settlement would be well served by spending an hour or so scanning thru the transcripts.
The 2nd panel covered the following topic, “The For-Profit Debt Settlement Industry Today: Perspectives on Current Industry Trends and Practices”. The speakers, some representing debt settlement companies, did a good job of covering some of the more common issues within the industry.
(4 votes, average: 5 out of 5) Loading ...Debt Settlement: Not a sure thing!
At the end of September, former customers of Express Consolidation Settlement will need to determine if they want to cancel out of their debt management program or have their account transferred to another agency authorized in their state. In December of 2006, the FTC filed a complaint against Express Consolidation Settlement which has now been settled.
In October of 2007, the FTC sued Edge Solutions which ultimately led to its recent closure.
Consumers looking for an alternative to Bankruptcy, often explore debt settlement as an option.
In most cases, if you decide to move forward with debt settlement, you will be asked to stop paying your creditors and to put those funds into a settlement account each month. The settlement account will grow each month until it reaches a point that the debt settlement company feels is sufficient to negotiate the settlement. The amount you owe, the amount you are able to save each month, and what the creditors are willing to accept will dictate how long this process takes.
So, what happens if the debt settlement company you are working with closes during the process?
If a government agency took action against the settlement company, in many cases you will be given the option to cancel out of the program or have your account transferred to another organization. If you discover that the company you are working with is simply going out of business, it is important to do the following:
- Contact your bank to cancel any automatic payments being made to the company.
- Contact the company to determine how to obtain a refund of the money paid into the settlement account. You should also seek a refund of any fees you have paid.
- Contact an Attorney, if appropriate, when having difficulty recovering money already paid.
Once you’ve protected yourself from giving the company any additional money and are looking into ways to obtain a refund of monies paid, you must still determine how to best handle your debt situation. If you are confident debt settlement is the right path for you, you need to choose whether to hire another firm or to attempt to negotiate your debts on your own.
When evaluating any solution to your debt problems, you must understand the consequences of that option not working. Whether the company you choose is ineffective or goes out of business, you must weigh those potential risks when deciding how to best move forward.
Sources:
Express Consolidation
FTC
About the Author:
Chris Rocks is the Founder and Executive Director of the Credit Advisory Alliance (CAA), a membership based organization helping those who have suffered a financial crisis restore their credit and reinsert themselves back into the credit-driven economy. Prior to founding CAA, Chris had successfully helped consumers achieve their financial goals as both a Financial Advisor and the Vice President of a Mortgage Origination Firm.
(2 votes, average: 5 out of 5) Loading ...- This blog covers a wide variety of debt consolidation and loan topics.
We rely on a large network of financial experts and leading authors to write the content for the DebtHelp.com Blog.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to reign in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
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