Is Debt Settlement Companies Reliable - Find Out The Truth
The Truth About Debt Settlement Companies
By Doug Johnson
There are few industries that are as permeated by myths, misinformation and controversy as is the debt settlement industry. It is my goal to provide truthful, factual, unbiased information in order to dispel the confusion and misinformation.
Unlike debt consolidation companies (that forward your monthly payments to your creditors), debt settlement companies place your monthly payments to them into a trust account, then forward the money to your creditors when there is sufficient funds in the account to pay a creditor in full.
Debt settlement companies advertise that they can negotiate with creditors to reduce debts by 40% to 60%. Is this really possible? Not if you believe what you read on the Internet, which offers many pages of compelling arguments against the efficacy of debt settlement companies.
Do you believe everything you read on the Internet? Let’s think this through. If you were a creditor, would you be willing to allow your debtors to pay only one-half of what they owe you? Obviously not.
But what if your debtors were noncollectable, in other words, they refused to pay you and they were in a position where you could not collect from them by levying their bank accounts, placing liens on their properties or garnishing their wages. Now, would you be willing to take a reduced amount? Your choices are - 50% or nothing. Which are you going to choose?
The truth is - of the thousands of debt settlement companies, there are a few that can negotiate or settle debts by 40% to 60% as advertised. But they charge fees upwards of 15% of your debt.
Your goal as a debtor should be to become “bullet-proof” and you will be in the drivers seat to negotiate with your creditors without paying a debt settlement company to do it for you.
A few words of advice. Stay away from back dated documents, hiding assets off-shore or in trusts, transferring properties to other people, or any other strategies that are not lawful.
NOTE: This author is not suggesting that you protect assets from government authorities or put yourself in a position to restrict the payment of child support.
Doug Johnson is a popular radio talk show host in addition to his own webcast lectures and “live” appearances. His global appeal is based on his ability to provide truthful, unbiased education and information as a solutions broker and not a salesman for any given product or program. Get all of the latest in debt relief information from the one and only true source at http://www.RelieveYourDebt.com Be sure to check out our resolve debt pages.
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Knowing Your Rights - Tips To Stop The Debt Collectors From Harassing You
Are Debt Collectors Harrassing You? Know Your Rights!
By Kurt Lehman
Calls from debt collectors can ruffle the toughest of feathers. People have changed their phone numbers and even disconnected phones to avoid the “bill-collector”.
Consumers do have rights. Under the Fair Debt Collection Practices Act, you can tell debt collectors to stop calling you. Collectors prefer to hassle you on the phone because they want to intimidate and upset. They know many people are not aware the FDCPS has laws to protect you from them. While collection laws differ from state to state, there are some firmly fixed rules. Collection agencies may not:
- Harass – They may contact you only between 8 a.m. and 9 p.m. They must tell you they are bill collectors. The use of profane language or threats is not allowed. If they know your employer disapproves, they cannot contact you at work. Since bill collectors usually don’t know your work rules, you should advise them of this.
- Lie – Collectors cannot suggest they are anything but collectors. For example: implying they are a federal or state government agency employee or a law enforcement officer. Suggesting you have committed a crime or you will be arrested for non-payment is not telling the truth. Debtors prison does not exist anymore and you cannot go to jail for an unpaid debt. The exception to this could be Federal and State tax debts.
- Employ Unfair Practices – Collectors cannot threaten to take your property unless they have authority to do so. They may not send you postcards (breach of privacy rights). Accepting a check postdated by more than five days is illegal unless consumers are notified beforehand when it will be deposited.
What should you do if you feel a creditor has engaged in deceptive, unfair or abusive practices? The FDCPA provides consumer protection against unfair practices by collectors. If you decide to sue a debt collector for violation of the FDCPA, it would be left to the courts to decide what actually constitutes harassment.
There are other things you should know about filing a suit. You have up to one year after the alleged violation to sue. If the court rules in your favor and you win, you may be entitled to damages plus an amount up to $1000. You may also be able to recover attorney fees and court costs.
Collection calls can cause a lot of stress. But there is a way to make them stop. Simply write to them demanding they not contact you anymore. Send the letter by certified mail and request a return receipt. After the collector receives your letter, they are permitted to communicate with you once more, by mail, and may let you know further efforts to collect the debt will stop, that the collector may take certain actions or the collector will definitely take certain actions (they may or may not outline those actions in the letter). Stopping the calls does not relieve you of your responsibility. You still owe the money, and the company may pursue other collection tactics.
The best way to avoid these stressful situations is make sure your financial house is always in order. Unfortunately, it can be easy to get trapped in a cycle of debt. One particular problem common today is people getting overextended with payday loan debt. Try to stay out of these debt traps, but if you do find yourself in one, know your rights!
Kurt Lehman is a financial services expert, and writes about payday loans and cash advances and the payday loan cycle of debt.
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