What Can a Debt Management Company Really Do For Me?

I'm often asked a question that goes something like this, "What is a Debt Management Company?" or "What can a Debt Management Company do for me?"  So, let me briefly tell you...

Recently, I had to testify in a trial involving one of our past clients.  And, just like I'd seen on TV or at the movies, I was sworn in, sat in the witness box and the attorneys for both the prosecution and defense asked me a few questions.

The first attorney started off by asking, "Mr. Fontaine, what is a Debt Management Company?"

As co-founder and owner of Debt Relief NW, LLC, I've been asked that question hundreds of times.

I had been told to keep my answers brief and to the point if asked to explain, etc.

So I replied...

"Debt Relief NW helps people with severe debt issues find the best solution to deal with their debt."

Short and to the point....yes.  But, there's a lot more to it!

What people really want to know is, "What can a Debt Management Company really do for me?"


First, it is very important that you only deal with a reputable debt management company that is registered in their state.

As with any profession or business, there are always a few "rotten apples in the barrel".

We have had many clients come to us over the last 15 years or so after they had been taken advantage of by crooked debt management/settlement companies!

Here in Oregon, each debt management company is required to be registered and comply with the statutes governing such companies.

They have some very good insight into looking for a reputable debt management company that you should check out at Debt Management/Managing Your Debt.

In the article, they advise you to make sure the company you are considering is in fact, registered.  To check, click here.

OK, so now that you've done a little homework and made sure that the company your thinking about enrolling with is legit, again, let's see what a debt management company can (and cannot) do for you:

Those who need help with having accumulated too much debt (mainly addressing unsecured debt in this article) have done so because of one or more events that were or are beyond their control, such as:

  • Unemployment
  • Divorce or loss of spouse or partner
  • Serious illness or disability
  • Too little income after retirement!

When this happens, people will use credit cards to help with the intention of "paying them off" when things get better.

But, sometimes, those balances and the corresponding minimum required payments are just too much to handle....NOW WHAT!

We do not believe that "One size fits all" when it comes to dealing with too much debt!

Even though every situation may seem similar, in most cases, there are always several circumstances that have to be taken into consideration BEFORE we can recommend the right solution.

When faces with so much unsecured debt that you cannot (or are starting to fall behind) with the minimum payments required, there are only a few, legitimate options:

  • Credit Counseling Program
  • Debt Settlement Program
  • Bankruptcy

Again, the first step into finding the proper solution to your particular situation is to take the time to find out exactly where you stand in regards to your income/outgo....ie. a monthly household budget!

When someone contacts us for answers, we walk them through a basic budget.  9 times out of 10, they will say something like...

" I had no idea I had this much debt and/or had this little money left over!"


Budget Worksheet FREE Download here!


Once we/they can see exactly where they are, then we can start to find the best solution.


Credit Counseling (or today called Debt Management)

If you have been making the minimum required payments on your credit cards and other unsecured accounts, but the balances are barely coming down, then it may be time for you to enroll in a credit (or debt management) counseling program.

These accounts have not been turned over to a debt collection company....yet.

If you qualify (there are several hoops to jump through), this type of program can help.

The Debt Management Company will contact each creditor and arranged a plan to get your accounts paid off, usually in about 48 months or so.

Most of the major creditors will usually agree to:

  • Lower the interest rate
  • Forgive or eliminate late fees and other charges

You will make ONE PAYMENT to the Debt Management Company and it will be divided and paid out to each creditor per the agreement.

The problem with such plans is that sometimes the total monthly payment required may be the same or in some cases, a little more than the total of the current minimum payments!

If you are having trouble making the minimum payments now, most likely you will not be a candidate for a Credit Counseling/Debt Management Program.




A Debt Settlement Program may be the best solution.

Most prospects for a Debt Settlement Program have missed or stop making payments altogether to their creditors.

Their accounts have been turned over to a Debt Collector (or are about to be) and you have been getting calls and nasty letters.

If an original creditor feels like they will not be able to get you to keep up/catch up with the payments due on your account, they may charge that account off as a loss and sell or transfer that account to a debt collector.

Again, depending on your circumstances and particular situation, you may be a candidate for a SETTLEMENT on your account.


  • You will be making a monthly payment into an FDIC Bank account that will be used to negotiate settlements in the future. 
  • This payment will be much less than the total minimum required payments due now.
  • Your payment will fit into your particular budget.

The debt collection company (or in some case the original creditor) may be willing to take less than the full amount to "settle" this debt.  This could be 50% or less, again, depending on circumstances.

Here's an idea of what an actual settlement agreement looks like:

Once the account has been settled, it will be reported to the major credit reporting agencies as:

  • "settled as agreed", or
  • "settled for less than the balance", or
  • "settled in full"

Either way, your account will now show that you did something about it and now it has a $0 balance!

As each of your accounts are settled, your credit score will start to improve/increase.


But, what is the only option if you simply have too little or nothing to contribute towards either program?



Bankruptcy, in my opinion, should be the last solution after all other solutions are examined and/or tried.

When I am negotiating with a debt collector for one of my clients, I will have to remind them that we are attempting to negotiate settlements rather that having our client seek BANKRUPTCY PROTECTION.

That is what the bankruptcy laws were intended to do...protect a person's property from absolute ruin and detestation!

We do everything we can to help a client with finding the best solution/program to help with their debt problems, but in some cases, bankruptcy is the best solution.

Make sure you interview at least a couple of bankruptcy attorneys to make sure you feel comfortable with them and their experience.


FINALLY...  What can a Debt Management Company do for you?


  • Help eliminate the fear and stress that comes with having too much debt!
  • Help find the best solution to fit your particular situation.
  • Help get you back to being DEBT FREE once again!


Personalized  Program Comparison Click here!




Photo Credit



Tags: debt settlement, debt, credit counseling, debt management, credit cards

Dealing With Debt, Part 1, Debt Management

Does Debt Management really work?  Will I improve my credit score with Debt Management?  Will debt collectors start leaving me alone?

These are just a few of the Frequently Asked Questions about Debt Settlement.  We get them all the time, even though we have numerous blogs about all of the aspects of debt management.

Confused about credit card statement

The truth is, anytime someone gets into trouble having accumulated too much debt, fear of the unknown and misunderstanding about what debt collectors can, and can't do, takes over.

Almost everyone in America has some form of debt. Many people use debt wisely and are OK.  But many people (people just like you and me) have gone through, or are going through a very tough time, financially. 

  • How do you deal with to much debt?
  • What are your options?
  • What can debt collectors do to me?
  • Can they levy my bank account or garnish my wages?
  • Will I have to file for bankruptcy?
  • To be honest, I'm scared!

Over the next three series of blogs about Dealing With Debt, I hope I can answer most of your questions and help alleviate some of the fear and misunderstanding associated with having too much debt.

For this series, I will be addressing UNSECURED DEBT, such as:

  • Credit Cards
  • Store Credit Cards
  • Personal Bank Loans
  • Private (not Federally backed ) Student Loans
  • Repossessions (specifically "deficiency balance", which is the remaining balance after your car, boat, etc. was sold at auction)
  • Pay Day Loans

SECURED DEBT, such at your home, auto, Federal Student loan, etc. have to be dealt with differently.  I will address these in later blogs. 

There are really only a few options when it comes to dealing with too much unsecured debt:

  • Debt Management (or Credit Counseling) Program
  • "Debt Roll-Up" or "Debt Reduction Snowball Plan"
  • Debt Settlement Program
  • Bankruptcy


In the "old-days", well, not really that long ago, when a consumer got behind on their credit card payments, A non-profit, credit counseling (a tax entity title...yes they do make a profit...a lot of profit!) program was created to help people get back on track.

Basically, in a Debt Management Program , instead of making minimum payments to each of your creditors with high or very high interest rates and fees, if you qualify, you will make ONE PAYMENT to a Debt Management Company.  They have established guidelines with all of the major creditors to usually:

  • Lower your interest rate
  • Re-Age or forgive late or over-the-limit fees
  • Stop creditors from calling
  • And, a Debt Management Program IS NOT A FACTOR when calculating your credit score.
  • Most Debt Management Programs last about 4-5 years, depending on how much debt you have, etc.

Although a Debt management Program can help reduce the total amount of interest and fees you will end up paying until these debts are paid off, your required monthly payment may be more than you are making now!

The Credit Card Industry realized several years ago that the worst thing that could happen to them, from a profit stand point, was to have their consumers actually pay off their credit cards.

In the early days of credit cards, the minimum payment could be as high as 4%-5%, depending on each company's policies.

Think about that... 

Let's say you had a balance of $10,000 on your XYZ Credit Card, with an Annual Percentage Rate of 19% and a minimum monthly payment of 4.5% of the balance.  

I know the credit card contracts are almost impossible to understand, so let's keep this simple:

On a balance of $10,000 at 19%, your annual interest charge would be about $1,900!

Divide the 19% interest rate by 12 (12 months in a year) and you get a Monthly Interest Rate of 1.5833%.  $10,000 multiplied by 1.5833% equals $158.33, but's let's round off to $158.

Add the $158 to the $10,000 and you have $10,158, which is the NEW BALANCE.

Multiply that by the Minimum Monthly Payment Percentage of 5%, and you get $507.90 or $508 as a minimum payment.

So, you send in the $508 payment.  Next month, you get your statement, and it shows $10,158 less your $508 payment leaves $9,650. 

But wait...there's that interest charge again!

$9,650 multiplied by 1.5833% equals $152.79 or $153.

Add $9650 plus $153 and you get $9803 as your New Balance (assuming you didn't make any more more charges!)  Multiply that by 5% and you get $490.15 as your minimum monthly payment. Wow!

Yes, in the "old days", your were forced to pay off your credit cards sooner (if you could afford the minimum monthly payment) and therefore saved more money in the long run.

But, the Credit Card Industry got wise and decided to only charge 2% or maybe 2.5% as a minimum monthly payment. 

Without taking a lot of time repeat the above process, you should be able to see that on a balance of $10,158 if you only had to make a 2% minimum monthly payment, your payment would only be $203 instead of $508!  That's $305 less!  Good deal, right?

Well, here's what happened:

For the credit card industry, it was a very, very good deal! But, for those of us who didn't think the process through, we thought, "Wow, I could barely afford the $508 miniumum monthly payment, but at $203, I can CHARGE UP ALMOST TWICE AS MUCH  and still make the payment!" 

So, charge, charge, charge!!!  And we know what happens.  Now you have $20,000 of total unsecured debt at an average annual interest rate of say, 19%.  But, you only have to pay 2% of your "new monthly balance" each month.

OK, $20,000 multiplied by that annual interest rate of 19% divided by 12 or 1.5833% equals $317 of interest.  Add that to the $20,000 and now you have $20,317.  At 2%, that's a minimum monthly payment of $406.  Cool!  Your monthly payment on $20,000 is actually less than it would have been (back then) on $10,000.

Watch out! We all know where this is heading! 

All kinds of calculations are out there on the web that show that if you only make the small minimum payments on your credit cards until they are paid off, you will end up spending 3-4 times as much as you originally borrowed! On $20,000, you could end up paying back $60,000 - $80,000 over many years!

Good deal?  Only for the Credit Card Industry!

So, you call a Debt Management Company.  They go through all the financial consultation (free and if not, hang up!) and determine that your Debt Management Program will be approximately $550/month, which includes their montly fee as well as an enrollment or set up fee to get started!  

But,  if you have an extra $150 (that you could use to qualify for the Debt Management Program), you would be debt free in about 48 months and save thousands of dollars in interst and fees.

Not bad at all, but there is another option.

Debt Roll-Up or Snowball Plan

If you have the extra money, and the self discipline to set up and follow a Debt Roll Up/Snowball Plan, then you should consider doing this instead of using a Debt Management Company.

Why?  Well, of that $550 required in this hypothetical Debt Management Program, $50 (or maybe a little more) may be going to the Debt Management Company to administer the plan.  Now, that's not outrageous, and if the program ends up not only saving you a lot of money in the long run and giving you peace of mind, then go for it.

But, if you are like me, I like to do things myself if at all possible and, I don't like spending a dime more than I have too!

I've written an entire blog about a Roll Up/Snowball Debt Program. Click here.

But what if you are in deep financial trouble?

Maybe you have:
  • Lost your job
  • Went through nasty divorce
  • Lost a spouse, loved one or partner
  • Been Disabled and are permanently Disabled and only receive Disablility Income
  • Are retired and the fixed income from your Social Security and/or Retirement Plan is just not enough to keep up!

Then you should check out a Debt Settlement Program.

I will be writing about that in Part 2, but if you'd like to know more now, click below:

Is a Debt Management Program for you?  It depends on many factors.


Photo credit:

Jason Rogers



Tags: credit card debt, debt snowball, debt, credit counseling, debt management, credit cards, credit card debt help portland or, snowball plan

Is Debt Settlement Your Best Option?

When faced with too much credit card and other unsecured debts, you really have only a few options. 

Here's some tips how to determine your best option?

I'm talking about credit card debt as well as other unsecured debts such as:

  • Personal loans
  • Private student loans
  • Store cards
  • Medical bills
  • Repossessions

Next to a very large consolidation loan (personal or home equity type), borrowing money from family and friends, withdrawing money from your 401(K) or other retirement plans, you really only have 3 basic options.


  • Debt Management (or in some cases using a Snowball Debt Reduction Plan)
  • Debt Settlement
  • Bankruptcy

Notice I didn't mention using the creditor's offer of a Hardship Plan as this is only a temporary, short term fix, that only delays the inevitable repayment of the debt!

And also notice that I didn't mention the so called "Pay-Day" loans.  Stay clear of those at all costs!!!

Do you qualify for a Debt Management Program?

If you are only able to make the minimum payments required of all of your credit cards and other unsecured debts, you should know by now that it may take you many years (anywhere from 10-15, depending on which article your read) and 3-4 times the original amount borrowed to repay those debts!

If you enroll in a Debt Management Program (formerly and sometimes still referred to as a Credit Counseling Program), here's what usually happens:

The Debt Management Company will contact each of your creditors.  Most of the hundreds upon hundreds of creditors usually have an agreement with Debt Management Companies to:

  • Lower or eliminate interest rates
  • Forgive or reduce late or over-the-limit fees
  • Re-Age your account (make it look like it you are not behind on payments)

You will make ONE MONTHLY PAYMENT to the Debt Management Company.  Although some of the Ads you see or hear seem to say that they can reduce your monthly payment, that is not usually the case.

Credit card companies figured out many years ago that they could make more money by NOT HAVING THE CONSUMER PAY OFF THE CARDS!  That's right, the credit card industry actually makes more profit from late fees, over-limit-fees, annual fees and low minimum monthly payment requirements, than they do on the high interest rates they charge.

For some shocking insight into what credit cards companies are doing, click here.

I don't want to get lost in the various calculation methods the credit card companies use to calculate the minimum monthly payment, but most credit card companies only charge 2% of the balance/12.

In most Debt Management Programs, the total or single monthly payment you will be required to make is about 2.7%.  This includes the payment to the Debt Management Company.  Did you really think they worked for free because they are incorporated as a "non-profit"?

Example:  Let's say you have a total of $20,000 of credit card debt.  (BTW...the average consumer has 8 cards with an average total balance of $9,000!)

$20,000 x 2% = $400 minimum monthly payment required now

In a Debt Management Program, $20,000 x 2.7% = $540 per month or $140 more!!!

If you are barely making the minimum payments now, how can you increase it by $140?

But before I move on to the second option, if you could make increase your monthly payments each month, why not check out a SNOWBALL DEBT REDUCTION PLAN?

A Snowball Debt Reduction Plan is a great way to reduce your debts more quickly and avoid paying the cost to a Debt Management Company.

However, not everyone has the discipline to set up, monitor and track a Snowball Debt Reduction Plan.  If you're like this, maybe you could use a little help...

But what if you don't have any extra money at the end of the month?  In fact, you are not  making the minimum payments and some or all of your accounts are "past-due" or in collections?

Then you should consider a Debt Settlement Program.

Or, perhaps you have fallen behind because of:

  • Small fixed retirement income
  • Disability
  • Unemployment
  • Divorce
  • Death of spouse or partner
  • Too little income...too much debt!

A Debt Settlement Program may be just what you need!

  • One monthly payment (customized to fit your existing budget)
  • Most debts will eventually be settled for 50% or more
  • Avoid seeking bankruptcy
  • Become DEBT FREE in 36-48 months 

Want a complete overview?  Download our FREE BOOKLET:


What about Bankruptcy?

If your financial situation is such that you not only cannot afford extra payments required of a Debt Management Program, a Snowball Debt Reduction Plan or a Debt Settlement Program, then you need to consult an attorney about BANKRUPTCY.

There are differing opinions about bankruptcy, but regardless, if you have accumulated so much debt that realistically you will never be able to repay, you owe it to yourself to check out your bankruptcy options.

Other questions?  Let us help.







Tags: snowball, credit card debt, debt settlement, Bankruptcy, credit counseling, debt settlement in oregon, bankruptcy attorney, debt relief

3 Tips for Debt Relief

debt relief portland oregon


If you have too much debt and not enough income to service the minimum payments, it is time to take action before bankruptcy is your only option.

Here are 3 tips that will help you find debt relief

#1 Take a close look at your finances

You need to find out exactly where you are in your finances. In other words, you must know how much you have coming in each month and how much must go out.  One of the best things you can do is to sit down and complete a BASIC BUDGET.

debt relief in Portland Oregon


NET INCOME means this is what you have left to spend after mandatory state and federal taxes are taken out of your paycheck. If you are self employed...don't kid yourself...you are going to have to PAY UP, so deduct those taxes (including payroll if you have employees).

#2  Evaluate your debt

How much unsecured debt (credit cards, store cards, personal lines of credit, medical bills, etc.) do you have and more important, how much is the minimum payment required to meet all of them?

If you must have $500 a month just to cover the minimum payments required, and you honestly only have $350 a month after all mandatory expenses, YOU'VE ONLY GOT A COUPLE OF CHOICES.

#3  Review Your Options with an Experienced Counselor!

Don't give up and just seek bankruptcy.  Bankruptcy may end up being the best choice for you, but before you jump in, make sure you know all of your options!

In order to determine which program is best for you, you will need to spend a few minutes with an experienced counselor.  This service is FREE and you are under NO OBLIGATION.

debt relief in portland oregon







Tags: credit counseling, debt settlement in oregon, debt relief in Portland Oregon, debt relief

How to Cope with Financial Stress with 3 Simple Tricks

cope with financial stressThere is nothing more stressful than being in debt. Every morning people in debt wake up and think about what they can do, and they go to sleep at night worrying about it as well. They aren't alone. According to the Washington State Department of Financial Institutions, 40 percent of American families live beyond their means and the average household with debt has about $10,000 to $12,000 in revolving debt and about nine credit cards. Getting out of debt can be very difficult, especially if people are putting all their income toward paying off the interest alone. But stressing about debt doesn't help; action does. Here are three steps that will help you learn how to cope with financial stress. 

#1 Talk to an Expert

You don't have to do this alone. There are financial experts waiting to help. They work with you to provide debt counseling, consolidate your payments and come up with a plan to pay off your debt. If nothing else, talk to a trusted family member or friend who is good at managing money. Tell them you are not asking for money, you just need to get the stress off your chest. Perhaps they will share a great idea for getting out of debt or help you develop a plan, which is the second step to learning how to cope with financial stress. Talking to someone helps you feel like you're not alone.

#2 Develop a Plan

Look at your debt and your income and come up with a plan to pay it off, even if just a tiny bit at a time. Write down the plan; this is the most important part of this step. Hang the plan in an easily visible place, one where you will see it every day. Ideally, the plan should include an action for each day, such as "sell old camping gear and use it to pay debt A" or "clip coupons for grocery store and then use saved money to put toward debt B." Of course, the plan will have larger goals as well, such as putting a small percentage of your paycheck toward paying off a larger debt.

#3 Reward Yourself for Small Successes

Give yourself a pat on the back for any small successes. Cross items off your action plan that you have completed. Instead of allowing yourself to stress about the debt, remind yourself every day that you are working toward a better future.


photo by: eamoncurry123

Tags: debt relief programs, how to cope with financial stress, credit counseling

Now that the honeymoon is over, it's time to face your Wedding Debt!

wedding debtGot Wedding Debt?

The average wedding costs approximately $26,000. No wonder many couples find themselves entering their new marriage in debt. Money troubles are the number one cause of marital discord and you don’t want them hanging over your new marriage. Here’s how to enjoy your life as newlyweds free from debt.

First determine how much money was given as a wedding present. Many guests give money rather than a registry item. Instead of using this money on your honeymoon, or on other things that you want to buy, save yourself some interest charges and put that money towards your debt as soon as possible.

Put off the honeymoon. Couples are beginning to do this more and more as they see the advantages of starting their life together with a good cash flow. If you really want to go away with your sweetie directly after the wedding, consider going to a bed and breakfast somewhere within the country above jetting off abroad. This is extremely romantic and allows you to enjoy some alone time together without driving yourselves further into debt.

Sit down with your new spouse and create a budget. Every penny you make cannot possibly go towards paying off your wedding as you still have all of your regular bills and living expenses as well. Creating a budget will tell you how much you can afford to pay every month and where that money will be distributed. After setting your budget, it’s extremely important that you stick to it.

wedding debt

When you are putting the figures down onto paper, see what loans have the highest interest rate. Usually these are credit cards with interest rates being as high as twenty-one percent! It’s important that you pay these off quickly otherwise, you will end up collecting huge interest charges every month and it will become increasingly harder for you to clear your debts. The next step is to pay off the loans with the largest amount. Decreasing the loan amount decreases your interest and the loan will become more reasonable, changing from the one that doesn’t seem as though it will ever be paid off to the one that can be paid off next month!  Another option is to use the Debt Snowball method.  Whatever method you choose, stick to it!

If the bills seem too overwhelming, seek professional help from a financial consultant. These people you can meet with to review all of your income and expenses and will help you allocate where your money should be going on a monthly basis. Remember an objective third party does not have the same emotional attachment to your money you do. Once they have given you a plan, make sure that you follow it.

The most important thing when it comes to wedding debt is not to argue about it. It makes it very difficult on a new marriage when you not only have money troubles but are also fighting over them. You both enjoyed a wonderful day and you’ve both got to determine how you’re going to pay for it, together. You have a lifetime ahead of you, having to figure out how things are going to be paid for. Now is the time to find out how you work together to solve the problem.

Tags: credit counseling, create a budget, wedding debt

Tips to Get Out of Debt FAST: part 3

tips to get out of debt fastLast week I discused the first two parts to getting out of debt FAST!

Tips to Get Out of Debt FAST: part 1

Tips to Get Out of Debt FAST: part 2

Now it is time to move on to part 3:

Get the Lowest Interest Rates Possible on Your Debt

While you are working to improve your credit, it’s important to be on the lookout for ways to reduce the interest rate on your debt. Whether the debt is a home loan, car loan, credit card or some other debt, getting the lowest possible interest rate will help speed up the time it takes to eliminate your debt. Here are some tips and tools to help you lower your rates:

  1. Refinance Your Mortgage: The general rule is that you should refinance if you can lower your interest rate by 1%. While that’s a good starting point, it is important to also consider how long you plan to stay in the home and whether you need to convert from an adjustable rate mortgage to a safer fixed rate loan. Interest rates are still at historic lows, and it is easy to compare mortgage rates online.
  2. Negotiate Lower Interest on Home Equity Lines of Credit: If you have a home equity line of credit, compare your interest rate with current market rates. If you think you can do better, step one is to call the mortgage company and request a lower rate. While there are no guarantees, it can’t hurt to try.
  3. Lower the Interest on Credit Cards: Debt Consolidation Programs allows you to consolidate all of your unsecured debt into ONE LOW MONTHLY PAYMENT and offer the following benefits:
  • PAY LESS: Better repayment terms are offered by most creditors. Most will lower interest rates, wave late and over the limit fees AND bring your accounts back to current without making up those missed payments. This can save you thousands over the life of the debt!
  • PAY OFF YOUR DEBT FASTER: You’ll be able to pay off your debt in three to five years rather than the average 25 years it could take without our program.
  • REDUCE YOUR STRESS: Our customer’s are relieved when the collection calls disappear.
  • ONE EASY LOW MONTLY PAYMENT: Your credit cards and other unsecured debts are consolidated into one monthly payment so you don’t have to juggle payments.

Although getting to know your debt and creating a plan are two very important steps in gettin out of debt FAST, this third step is the most important one.  Getting your interest rates lowered will make the money you are paying towards your debt go further, and you simply can't beat that!

Would you like to know how we can help you Get Out of Debt FAST?  Click the link below for a FREE Debt Elimination Summary or simply give us a call:

1-877-492-4109  tips to get out of debt fast

Tags: tips to get out of debt fast, debt consolidation, best way to eliminate credit card debt, credit counseling

HELP! Can a debt collector leagally call my neighbor?

It is one thing to "love thy neighbor", but it is quite another thing to share financial information with the folks next door.  However, we get calls from people all the time looking for help because their creditors have started calling their neighbors, parents, siblings etcetera. 

Can a debt collector legally call your neighbors?

Surprisinglygly, yes.  In some cases this practice is actually legal.  This is just another example of how collectors are getting more resourceful as more and more consumers become buried in debt. 

Federal law regulates only third-party bill collectors.  Calls to someone other than the debtor, such as a neighbor or family member, are allowed as long as collectors only verify the debtor's address, phone number or place of employment. 

debt collector leagally call my neighbor

What CAN'T debt collectors do?

Debt collection laws vary from state to state, but here are the basic rules that all collectors must follow.  These laws prohibit debt collectors from:

  • Calling outside the hours of 8am and 9pm, threatening violence or using profane language
  • Refusing to identify themselves, misrepresenting what is owed or falsely implying legal action has been taken
  • Contacting debtors at work if it is possible to reach them at home in the evening
  • calling more than once weekly at work or continuing to call the workplace if the debtor has told them not to

Are you being harrased by collection calls. If so, you may need the services of a professional debt relief agency.  Their solutions specialist can help you to determine whether you would benefit from a Debt Consolidation or Debt Settlement program.   

If you need help immediately, CALL NOW for assistance!


Tags: fair debt collection practices act, debt collection harassment, creditor legally call my neighbor, common collection practices, debt relief solutions, credit counseling

Debt Consolidation Program vs. Debt Consolidation Loan


With all the terminology that is being thrown around today, it is easy to understand how you might become confused with the difference between a Debt Consolidation Program and a Debt Consolidation Loan.  

Are they the same thing? NO

Debt Conoslidation Loan

  • In general terms, a Debt Consolidation Loan refers to the action of combining several smaller debts into one larger debt. This usually creates a lower interest rate and a fixed monthly payment. However, it is important to fully understand the implications of choosing a debt consolidation loan to pay down your debts. Do you have equity in your home? In today’s market, housing values are falling. Is it wise to put your home on the line to pay off credit cards? Consider this, credit card debt is considered unsecured. This means that the only collateral underwriting your credit card balance is your signature. By using your home equity to pay off your usecured credit card debt you are turning it into secured debt.  If you get behind, you could lose your home.
  • Second mortgages and home equity lines of credit usually carry long terms, so while your interest rate may be lower, you pay it over a long period of time. You may end up paying more over time.

Debt Consolidation Program

  • Debt Consolidation Program Counselors negotiate with your creditors to accept a smaller monthly payment over 48-60 months. Most major creditors have pre-set agreements with Debt Consolidation Programs as to what percent of a balance they will accept at what interest rate. This payment and lower interest rate can save some you hundreds of dollars per month. Not only that, but with a level payment plan (paying the same payment each month) you can be debt free in four to five years You can always pay more if your circumstances change which will get you out of debt even sooner!
  • Through a Debt Consolidation Program, your credidebt consolidation program vs debt consolidation loant card accounts will be re-aged.  This simply means that your accounts are brought back to current status, so you are no longer behind. This will put a stop to the accumulation of late fees and will STOP COLLECTION CALLS
  • Your Debt Consolidation Program Counselors will also arrange for one monthly payment to be withdrawn from your bank account automatically. At that time a pre-arranged payment is dispersed to each of the creditors in your Debt Consolidation Program. As you pay off your creditors, and work towards being debt free, the remaining credtiors get a larger payment, while your monthly payment remains the same.

Although these two options appear similar on the surface. There are some very key differences that you need to understand before making your final decion.  If you still need some assistance in deciding which is the right choice for you, our Debt Consolidation Counselors are happy to discuss your current situation and point you in the right direction.

Debt Consolidation Program vs Debt Consolidation Loan

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Debt Consolidation really works!

This news clip shows a real life Debt Consolidation success story.  Check it out!


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