Dealing with debt collectors is not easy, but it can be done.  Here are a few tips on how to deal with debt collectors.

Not only are things "Bigger and Better in Texas", so is protection from debt collectors!

Living in Texas (I grew up in Dallas) has a lot of advantages, but none as important as protection from debt collectors.

If you are facing overwhelming problems with too much debt and you are fortunate enough to be a Texas resident, then you have certain protection from creditors and debt collectors that other states do not offer!

For the sake of this article, I'm talking about UNSECURED DEBTS, such as:

• Credit Cards
• Store Credit Cards
• Personal Loans
• Private Student Loans
• Medical Bills
• "Pay-Day" Loans

When you can't make at least the required minimum payments on your unsecured debt, and miss a payment or two, here's what usually happens:

First, the original creditor (Visa, Master Card, US Bank, etc.) will most likely give you a call and send a letter reminding you that your account has become delinquent.  Sometimes the language is very...let's say, "firm or somewhat threatening".  Something like:

Dear Mr. So-n-so:

Your account with XYZ company has become seriously delinquent.  Missing payments on your account can have a negative effect on your credit report.  We understand that you may be facing a difficult time and want to work with you on this matter. 

Please give one of our customer service representatives a call to discuss your options. It is imperative that you bring your account current as soon as possible, to avoid legal action.

OK, so what do you do? 

If you think you will be able to get your account caught up, then give them a call to see what can be done.  Sometimes the creditor is willing to forgive late fees and other penalties if you can bring your account current.

But what if you know you can't "bring your account current"?

It has been my experience, that most people who need help with their debts are not someone who just "over-spent" foolishly.  They are people just like you and me who got into trouble. It's important to know how this process works so that you (or someone you know) is not taken advantage of by a debt collector.

There are all kinds of reasons why people get in trouble with their credit:

• Loss of employment
• Loss of a spouse or partner
• Prolonged illness
• Disability
• Retired and on a fixed income not quite enough to keep up!
• and many other reasons that are beyond your control!

After the original creditor has made many attempts to contact you by both phone and mail, they may decide to write-off or charge-off your account and transfer or sell to a debt collector.

Now the DEBT COLLECTOR starts sending "nasty" letters and making call after call!

If you have only missed a payment or two, and have the means to get caught up, I think it is a good idea to contact your original creditor to discuss trying to bring your account current. 

But, I do not believe it is your best interest to call a debt collector.

There are those that disagree with me on this, but my experience in dealing with debt collectors over many years has taught me that they only have one job and that is to get as much money in the shortest period of time.

They don't really care about your situation and for the most part are not sympathetic at all.  In fact, I had one of my retire clients who had also lost her husband of over 50 years tell me that a debt collector told her that she should go get a job and quit making excuses for her debts.  Really?  72 years old and a widow!  And not only that, rather than file for bankruptcy protection as she could have, she has chosen to settle as many debts as possible.

Many debt collectors are fine, professionals and you can work with them. But some are, well... you know!  So, my advice is not to try and call to explain your situation, especially if you live in Texas!

What happens if a debt collector takes LEGAL ACTION?

A debt collector has the option to FILE A COMPLAINT in your county's court.  This is a legal option they can use in order to scare or force you to pay your debt.

Once the COMPLAINT is filed, you will receive a SUMMONS.  The summons will state that the PLAINTIFF (that's the credior or debt collector) CLAIMS that you owe this debt.  It will also state that you have 30 days (some state 20 days) from the receipt of this summons to file an ANSWER.

An ANSWER is a legal brief explaining why you legitimately do not owe this debt.  There is usually a cost to file the ANSWER, and most likely you will need an attorney to file it so it is in the proper "legal" form. About 99.9% of the time, you owe the debt, so there is no need to dispute it.  The key is to know how to handle it.

I've written several blogs over the years explaining what to do if you recieve a summons.  If you live outside of Texas, I would encourage you to not only read about your options, but you will need to take action.

But hey, ya'll...if your a Texas resident, I've got good news!

The purpose of filing the claim is to get you to:

1)  Take action to pay your debt out of fear of what may happen if you don't!

2)  The debt collector hopes to be awarded a JUDGMENT, so they can either GARNISH YOUR WAGES, place a LIEN ON YOUR HOME or even LEVY YOUR BANK ACCOUNT.

In the great state of Texas, you have laws that protect you from creditors like few other states. 

Your wages cannot be garnished for unpaid, unsecured accounts, but even in Texas, they can be garnished for child support or alimony, unpaid taxes and defaulted student loans, so be advised!

Your home is also protected from a lien with a wonderful Texas Homestead Protection!

Although there a some restrictions to the homestead law, basically it means that a creditor cannot apply a lien against your property for unpaid, unsecured debts.

So, your wages and home are protected in Texas, what about your bank account?

As in all states, if your only source of income is from Social Security and/or a Retirement Plan or Fund, Disabily Income, etc. and those monies are directly deposited in your bank account, THEY ARE EXEMPT FROM GARNISHMENT OR LEVY.

HOWEVER, although your wages are exempt in Texas, once they are deposited in your bank account, they would be subject to a garnishment or levy (after a judgment is awarded to the creditor)!

I advise any client who has earned income to NOT DEPOSIT to your bank account with a judgment against you!  I know it can be a hassle, but think about what it would be like to start bouncing checks on Monday after your bank account was FROZEN over the weekend!

Bottom line for all of you Texas Residents:

• Your home (including a mobile or manufactured home) is exempt from a LIEN
• Your wages are exempt from garnishment
• But, you need to take caution with your bank account!

Photo credit: 

https://www.flickr.com/photos/tomjmac/3695294596

If you have ever tried to check and/or improve your credit score, you know it can be pretty confusing.  Here are some tips on how you can improve your credit score.

You've probably seen an ad or had a "pop-up" appear on your computer by a so-called "Credit Repair" company offering to increase your credit scores almost "over night"!

My advice...RUN!  You've heard the old saying:

"If it sounds too good to be true, it probably isn't true."

Although there are many legitimate companies that will help you improve your credit over time by correcting errors and helping you maintain a disciplined approach to using your credit, there is just no "quick fix" when it comes to improving a bad credit history and therefore a poor credit score.

I have been have been helping people settle and manage outstanding credit debt for over ten years now and I believe that one of the most helpful sites you can use can be found at:

www.MyFico.com

While you cannot improve your score quickly,  YOU CAN IMPROVE YOUR CREDIT SCORE over time, by following the following tips:

If you haven't done so already, get a FREE copy of your Credit Report.

We all can get a free copy once a year, so take advantage of this by annually checking your credit report...and it's FREE!

According to Fair Issac or FICO, there are 5 areas that affect your credit score the most:

Paying your bills on time is one of the most important things you can do to maintain a good credit score.  Being just a few days late will hurt you score.

If you have had accounts go to a collection agency, then that obviously will hurt you score.  By-the-way, if you pay off or settle an account with a collection agency, it will remain on your credit report for up to seven years, but the fact that you paid the debt will ultimately help  your credit score.

Using a Debt Management Company to help you get control of your debt can be very helpful.

No, your credit score will not be affected by using or not using a Debt Management Company, but in the long run, the professional help and guidance will help reduce or pay off all of your debt and therefore, improve you credit score.

Next, notice that at least 30% of your credit score is determined by the AMOUNT OF DEBT you owe.

A lot of people think that just because they have never been late on a payment they should always have a great score.  But, if they have a very large amount of debt in relation to their income and total available debt, they will be disappointed with their score.

Here's basically why:

Let's say that you are a credit card company and are considering offering or issuing credit to these two prospects:

Prospect #1 has a good job and employment history.  She in never late on making her payments for her mortgage, car and all of her credit accounts.  But, even though she is earning a "better-than-average" income, she has accumulated over $30,000 of unsecured debt in addition to her mortgage and auto payments!

She would need to be making minimum payments of $750-$850 per month on her unsecured debts (credit cards, store cards, etc.) and that equates to about 25% of her net monthly take-home income just for these unsecured debts.  When you add in a $1200 mortgage and a $400 car payment, that's about $2,400 per month going out to service her DEBT!

Even with her "better-than-average" job and income at say, $75,000 annually, when you take out 30% for taxes and other deductions, that gives her a net monthly income of about $4,375.  With $2400 going out to just meet the minimum payments on all of her debt, that equates to almost 55% of her net income!

One "hick-up" such as long illness, loss of job, or any other hardship would make it almost impossible for her to meet your debt payment obligations.  If you were a credit card company, would you loan her more money?  Hence her credit score is not as high as she though it would be.

How about Prospect # 2:

He had a good job and earns about $4,000 per month.  Not that much really, but he is doing OK.  He isn't buying a home and so is paying about $800 per month in rent.

His old truck (not too old...maybe 8-10 years) is paid for.  Although it doesn't get great gas mileage, at least he doesn't have a big payment each month.

He has a good credit history and although maybe late a couple of times in the past, he has maintained a steady, on-time history for several years now.

He has about $10,000 on 3 credit cards which demands that he makes at least a minimum payment of $215 each month, which he does and sometimes adds a little more than the minimum.

Another VERY IMPORTANT PART OF DETERMINING YOUR CREDIT "WORTHINESS":

The ratio of credit being used to the availability of credit to you.

He has paid off several accounts in the past and actually has about $40,000 of available credit (credit limits on all of his accounts) that he could use if need be.

He is only using $10,000 of the available $40,000 or only 25%.  This is considered a good use of available credit and so he would be viewed as a better credit risk.

Are you starting to get the idea?  It's not just about paying your accounts on time (although that is certainly important), but more about USING AND MAINTAINING YOUR CREDIT WISELY!

You will notice that the LENGTH OF CREDIT HISTORY makes up at least 10% of your credit score.  If you are just starting out and have not established much of a credit history, DO NOT MAKE THE MISTAKE OF OPEINING A LOT OF ACCOUNTS IN A SHORT PERIOD OF TIME!

Opening too many accounts too fast doesn't look good to the credit bureaus.  In fact, it could do more harm than good!  Just open an account or two, make some small charges and pay them off promptly.

How long will this take?  It depends on some and/or all of the other factors we've been talking about.  The point is that establishing good credit doesn't happen quickly.

One more thing...

Closing accounts doesn't help improve your score!  In fact, it will probably hurt your score.

Why?

Again, you want to show that you are a responsible user of credit over a long period of time.  If you close too many accounts (assuming a $0 balance on them), you are reducing your "credit-use-ratio" as we discussed before.

Pay off and/or settle old accounts the best you can.  Sometimes it makes sense to seek the help of a professional Debt Management Company to settle old debts that have been around for a long time.

Sometimes these can be removed (using the proper procedure) from you credit report if they have gone past your state's statute of limitations.

Debt Settlement can help if you are in over your head!

To summarize, the best way to improve your credit is too:

• Manage your credit wisely...not too much...too fast!
• Make your payments on time.  Being a day late hurts more than you know.  Try using "auto-payments".
• Check that Credit Report for errors!  All three credit bureaus will let you go on line to dispute errors.  You don't have to pay someone else if you will take a little initiative.
• Finally, although I don't suggest closing credit card accounts, I do believe that you should only use one card for emergencies only!  Pay cash or don't buy! Saw this sign in the parking lot of a major retailer the other day and it really says it all:

The best way to improve your credit score????  Use credit wisely.

Photo credit:  http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

New year, new year's resolutions. Don't you think it is about time for you to consider Debt Relief?

Sure, you say, but what is "Debt Relief"?

I'm talking here specifically about finally starting to take control of your unsecured debts...mainly credit card debt.

You've heard or read the statistics about how many individuals have too much credit card debt based on their income and living circumstances.

With credit card interest rates anywhere from 12%-24% or higher, if you are just making the minimum payments required, it could take you 10 years or more to finally pay off those debts!

Wouldn't it feel great to be DEBT FREE? OK, here are some tips that can really help if you will apply:

FIRST:  Do you know exactly where you are financially?  I mean, can you account for almost every dollar that comes in and for every dollar that goes out?

Most people have a vague idea, but have never taken the time to do a complete, thorough Financial Worksheet.

After completing a Financial Worksheet, I've had people say, "WOW, I had no idea that I was spending so much money on stuff like Starbucks, movies, burgers, etc."

Until you get a clear picture (and you may not like it) of where you really are, you cannot possibly make a plan to become Debt Free.

Here is a simply, easy-to-use Financial Worksheet that you can download:

SECOND: Now that you have a clear, honest (it won't help if you are not honest with yourself!) picute of where you are, it's time to get an up-to-date CREDIT REPORT.

You can get a FREE CREDIT REPORT annually that will tell you how much debt is being reported to the 3 Major Credit Bureaus (Equifax, TransUnion, Experian).

Not only will this report tell you to whom and how much debt you have, you may also discover that there are errors on the report.  I've read reports that 1 out of 4 people have errors on their report.

If you find errors, you can file a challenge to each of the bureaus on line or you can mail a challenge.

The following links will help:

Equifax disputes

TransUnion disputes

Experian disputes

There is a very good site from the Federal Trade Commission that will give you some good points on for do-it-yourself credit repair.

OK, but how about all of the legitimate debts that is being reported?

Break them down into two basic groups:

Secured debts, such as:

• First Mortgage loans
• Second Mortgare or Equity Line of Credits
• Auto, boat, RV loans
• Government Student Loans

There is not a lot you an do about these except keep paying.

But on the other hand, all of the UNSECURED LOANS, such as:

• Credit Cards
• Store Cards
• Personal loans
• Mecical bills
• Pay Day loans
• Private Student Loans

You do have options as to how to repay these...read on.

NEXT... List all of the unsecured loans like this:

             Creditor, Interest Rate, Payment (minimum), Balance

Here is where the Financial Worksheet is so important.

After completing the Financial Worksheet, you will be in one of the following groups:

After all bills (including all debts) are paid, I have $100 - $200 extra each month that could be used to start paying down unsecured debt.

You find out that you are basically even at the end of the month.  You are paying all bills (including all debts) and you have basically $0 left over, but not negative.

Finally, if after completing a thorough Financial Worksheet, you realize that you are coming out negative at the end of the month. 

You probably alreaday knew this, as you have been "robbing Peter to pay Paul" for a long time.  In fact, some, if not all of your unsecured debts are 30,60 or 90 days late and some, if not all, have been charged off and gone to a Debt Collection Agency.

Here are your options, based on your personal financial situation (revealed from the Financial Worksheet and Credit Reports):

Group One... Those of you who can put an extra $100-$200 towards paying down unsecured debts.

You should use a SNOWBALL PLAN to pay off those unsecure debts a lot sooner and at the same time, save you thousands of dollars in interest!

Basically, you break down your unsecured debts and start paying extra to the one with the lowest balance. 

After this one is paid off, you use the same extra, plus the minimum payment just paid off plus the minimum payment due  on the second and put all of that towards that second debt.

For a more complete overview, click here.

But what about Group 2?  You are making all of your payments, but there is just not anything left over?

You should be able to qualify for a DEBT MANAGEMENT PROGRAM.

• In a Debt Management Program, you will have one monthly payment that will be disbursed to each of your creditors by a Debt Management Company.
• Your interest rates should be reduced significantly.
• Late fees and over-the-limit fees should be stopped or forgiven.

In short, a Debt Management Program can not only help you become Debt Free in a shorter amount of time (usually about 48 months), but save you thousands of dollars in interest and fees.

Finally, what about Group 3?  Those of you who have too much unsecured debt and are not only not getting anywhere but really can't afford your payments...here are your choices:

• DEBT SETTLEMENT
• BANKRUPTCY

Debt Settlement is a great way to pay off/settle your unsecure debts without having to resort to bankrutpcy.

Debt Settlement will allow you to have:

• One Monthly Payment (usually much lower than the required total minimum payments now)
• Your Debt can be settled at 50% or lower (depending on several factors)
• You can be DEBT FREE in about 48 months.

To receive a FREE REPORT called DEBT SETTLEMENT FOR BEGINNERS, click below:

But if you cannot even afford the reduced payment of a Debt Settlement Program, then you should consider BANKRUPTCY as a way to not only cancel your unsecured debts, but relieve the constant finacial pressure and worry that comes from such a severe financial condition.

You should consult a Bankruptcy Attorney who specializes in Bankruptcy.  You should be able to schedule a Free Consultation to deteremine if you qualify.

Regardless of your situation, there is a way to not only become Debt Free, but stop the collection calls and relieve the constanct pressure that comes with too much debt.

Photo By: Eamon Curry

2014 is just around the corner and here are a few tips on how you can live DEBT FREE!

If you are like millions of consumers, you probably have taken on too much debt this last year. 

This could be due to just too much spending or because of circumstances beyond your control, but either way, carrying too much debt creates all kinds of stress!

Here's a few tips that can help you live debt free in 2014:

If you don't know exactly where you are financially, then it's time to find out!  Many people have no real idea of what they are spending money on.  If this is you, it's time to do some homework and complete an honest (that's right...list everything coming in and going out!) budget worksheet.

Once you know where you stand, it's time to decide what the best plan of attack on those debts should be.

If you are just making the minimum payments on all of your unsecured accounts, then you know it could take many years to finally repay those debts.

You may be qualified for a DEBT MANAGEMENT PROGRAM.

Advantages of a Debt Management Program:

• ONE Monthly Payment
• Reduction or elimination of your interest rate
• Forgiveness of over-the-limit or late fees
• Usually DEBT FREE in approximately 48 months (varies)

Click here to learn more about a Debt Management Program.

But, if you are not making the minimum payments, and have had some or all of your accounts going to collections, you should consider a DEBT SETTLEMENT PROGRAM.

Advantages of a Debt Settlement Program:

• ONE Monthly Payment which is usually about half of what your total payments are now!
• Eliminate Debt Collection calls
  
• Settle many of your accounts at 50% or less (varies)
• Usually DEBT FREE in 36-48 months (this will also vary with the amount of debt)

But, what if you just are so far behind that you do not have any discretionary income (money left over after all the major bills are paid)?

If that is the case, then you may need to consider BANKRUPTCY PROTECTION.

Notice I said "Bankruptcy Protection".  Bankruptcy allows someone who is just too far in debt to ever recover, keep a very large portion of their assets (home, car, etc.) and have most or all of their debts dismissed.

There are different types of bankruptcies, and you should consult a BANKRUPTCY ATTORNEY to decide which one would be best for you.

You can be DEBT FREE, but you have to take action.

If it seems overwhelming, we can help.

It is possible to settle your debts on your own, but you need to prepare yourself for dealing with debt collectors!

Here's some tips for Do It Yourself Debt Settlement:

If you have tried unsuccessfully to keep up with all of the required, minimum payments on your unsecured debt, then you should definitely consider Debt Settlement.

Although I have been helping people deal with the financial pressure of having too much debt for over 10 years now, and have helped hundreds of people settle their debts, I do believe it is possible for someone to settle debts on their own, but you need to "buckle up for a bumpy ride!"

You need to be prepared to spend a lot of time (many times very frustrating, emotionally) dealing with professionally trained debt collectors. 

These debt collectors are usually paid a commission or percentage of how much they can get from you, so you know they are not going to give in, willingly!

My point is that you need to understand that the Debt Collection Industry and Debt Collectors specifically are in business to make a profit and they are not going to settle without using every method (legal and border-line legal) to get you to pay as much as possible.

Since you are considering trying to settle your debts for less than the full balance you owe, I'm guessing that you fit one or more of the following criteria:

• You have been laid off or lost a job, and therefore your income has been dramatically reduced.
• You may have had a loved one or spouse become extremely ill or possible die which affected your ability to work.
• Divorce is usually a financial challenge.
• A long term or permanent disability will not allow you to earn what you used to earn.
• Retirement on a fixed income that is barely or not able to keep up with the bills.

But, if you are ready to give it a try, then here's some tips to help:

Understand the basic debt collection process.

Typically, when an unsecured account (not a "secured loan", which is backed by property or other collateral) becomes delinquent, it is usually charged off and turned over or sold to a debt collector.

This debt collector may be an attorney/law firm, that specializes in the collection of debt.

It takes time for a delinquent account to be considered for a settlement. 

Most debt collectors will not consider a settlement until the account has gone 120 - 180 days without any payments.  By the way, please be wary of a HARDSHIP PROGRAM the creditor offers!  Usually, they only barely pay the interest and ultimately you will have to start repaying the payments as before!  Basically, you are just delaying the inevitable of having to repay 100% of the debt you owe with interest.

The best settlements are usually negotiated when you have a lump sum or one-time payment saved up to offer.

After you have carefully prepared a BASIC HOUSEHOLD BUDGET, and know exactly what you can set aside each month to go towards negotiating a settlement, you must be very consistent and disciplined to actually put that money aside.

Set a goal of being able to offer at least 25% - 50% of the balance on at least one of your accounts. 

You'll also find out that the smaller the balance, the harder it is to get a decent settlement reduction!  The debt collector believes that if you ow $300 - $500 or so, then you should be able to come up with $200 -$400 and they may give you up to 6 months to do it!

However, if you owe $5,000, then they may be willing to take a settlement of 50% or less as you are a risk of seeking bankruptcy protection on larger amounts of debt.

Don't answer the phone unless you know who it is!

If they haven't started calling several times a day, they will!

I'll show you how to stop the calls in a minute, but in the meantime, DON'T ANSWER THE PHONE, unless you know who it is.

Debt collectors are trained to intimidate and get you to pay! PERIOD!  If they can engage you in a conversation, they will try to use what you reveal to help them collect more money!

Suppose you have realtives that may be able to help you. DO NOT SAY ANYTHING ABOUT THAT! 

They need to think that you are really in financial trouble and that if settlements cannot be negotiated, then you will be forced into bankruptcy.

I'm not advocating lying, but just don't say too much! It's OK to briefly...I said BRIEFLY, explaine your financial hardship, but don't go into too much detail.  You may think it helps, but it doesn't.

You can put a stop to the collection calls.

You will need to write a letter to each collector demanding that they stop calling you.

For a FREE SAMPLE LETTER, CLICK BELOW:

You'll usually get better settlements during the last week of the month and toward the last week of a quarter.

Debt collectors have their budgets and target collection numbers to meet and are usually a little more willing to deal as the end of the month or quarter is getting close.

Always ask the debt collector what is the best settlement they can offer you.  Remebmer, in negotiating, usually the one who mentions a dollar amount first, loses!

When you finally agree on a settlement, GET THE AGREEMENT IN WRITING!

Don't trust a phone conversation, period! If they will not email, fax or mail the agreement, then you don't have a legitimate, professional debt collector...move on!

Make a copy of the check you mail and keep the agreement.

I've seen several cases over the years when a debt that had been settled a long time ago, showed up again at another debt collector's company.  These are usually debt buyers and have purchased a list of debts for pennies on the dollar.

Many of these so-called "debts" have no paper trail to substantiate or prove that the debt is legitimate.

Providing the settlement agreement and copy of the canceled (they cashed your check) check is proof enough that this debt had been settled.

One final thing...

Depending on your situation, you may be able to have a debt canceled and/or removed from your credit report if the debt collector cannot VALIDATE the legitimacy of the debt!

If you feel like you paid the debt off years ago, but have no proof, try sending a VALIDATION LETTER.  The debt collector must stop collection activity and provide proof that you really owe the debt. This will help:

OK, so there you go!  If you are persistent and follow through, it is certainly possible for you to settle your debts on your own.

But, as you can see, Do It Yourself Debt Settlement can and will be very TIME CONSUMING and challenging. 

If you try to settle your debts on your own and are unsuccessful or tired of the process, let us help.

Annoyed with debt collector calls? 

Here is how to Put a Stop to Debt Collection Calls

Anyone that has had financial troubles and fallen behind in there payments to creditors understands just how frustrating and annoying those calls from debt collectors can be.

Not only are they annoying, but embarrassing as well!

Who wants to hear, "Dad, some guy calling about your credit card bill!"

Debt collectors are paid to get you to pay up.

They are (for the most part) trained professionals who will use every trick in the book to get you to pay.

Most abide by the law spelled out in the Fair Debt Collection Practices Act, but many do not.

First, it is important for you to know the basics of what a debt collector can and cannot do:

A debt collector cannot call you at all hours of the day.  They cannot call before 8:00 AM or after 9:00 PM.

They cannot call you at work if they are told by phone or in writing not to call you there!

A debt collector can call family or friends to inquire about your whereabouts, but the are prohibited from discussing your debts.

What debt collectors CAN'T do:

• use threats of harm or violence
• use profane language
• use threat of legal action if such action is not taken
• give false or misleading information about your debt
• threaten to take any property
• and there are many more... (check out the Federal Trade Commission's Information on how to deal with Debt Collectors).

OK, so you want to put a STOP TO COLLECTION CALLS:

You will need to write a short, legible letter that demands that the debt collector stop calling you immediately.

Although you want to be authoritative, you don't want to be rude or use language you may regret latter.

Remember, most likely, you owe the debt and would like to SETTLE THE DEBT, one of these days.

Located in Portland, Oregon, we have been helping clients stop receiving debt collection calls for over 10 years.

To receive a copy of the letter we use, click below:

Once you have the letter written, you should send it by CERTIFIED MAIL with a RETURN RECEIPT.

This way, you have proof that not only did you mail the letter, but they received it.

WHAT IF Debt Collectors KEEP CALLING????

If the calls don't stop, write down the date, time and try to get name of the person calling.

You will need this later to file a complaint.

You have the right to sue a debt collector in a state or federal court.  You can contact your state's attorney general's office to file a complaint. If successful, you may be awarded up to $1,000 per violation!

To file a complaint with the Federal Trade Commission, click here.

Each state has it's own site, and/or method to file a complaint.

For example, if you live in Oregon, click here to file a complaint.

That should do it, but if you would like more information about how to Stop Debt Collectors or would like to know how a debt settlement program could help you, click below:

Here's some very helpful tips on how to stop the dirty tricks debt collectors use.

Dealing with debt collectors can be very frustrating, especially if you do not know what a debt collector can and cannot legally do!

The Federal Trade Commission acts to enforce the Fair Debt Collection Practices Act when debt collectors violate the law.

The Fair Debt Collection Practices Act - Guide for Consumers, will help you understand your rights and help you deal with debt collectors.

One of the most annoying tactics used by debt collectors is to make numerous calls.  Many debt collectors use automated dialers that seem to work around the clock! 

Even if you are on the National Do Not Call List, a debt collector can legally call you as you have had a previous business agreement.

But, YOU CAN PUT A STOP TO DEBT COLLECTOR CALLS!

In some cases, a faxed letter will work, but to be sure, writing and sending by registered mail is much more effective!

Although a debt collector can call your family, friends and in some cases a neighbor, THEY CANNOT DISCUSS YOUR DEBT.  A debt collector can only call them to see if they can find our your phone number or where you live.

A debt collector cannot call you at work if your employer doesn't allow you to receive calls at work.  Many times you can verbally demand that the debt collector stop calling your place of employment and that will do it.  If not, write a letter.

A debt collector cannot make false statements, use obscene language, make threats of violence on the phone or in writing!

Although most debt collectors act in a semi-professional manner, there are some that will try any and all dirty tricks in order to collect their commission if they get you to pay up!

One of the most used dirty tricks that a debt collector uses is sending a "legal looking letter" that seems to indicate that you are being sued!

The Fair Debt Collection Practices Act clearly prohibits a debt collector, and even debt collectors that are attorneys, from threatening to take legal action if in fact they do not intend to.

For example, a debt collector will send a letter that says something like:

"At this time, this office has not taken any legal action, but...." or...

"If you do not contact this office within 20 days from the date it was mailed, this account will be turned over to our legal department for review."

If you received (or have received) a letter like that, then you know it is scarry!

Remember, a debt collector cannot take "legal action" until they have had an attorney, licensed in your state, prepare and submit a "claim" to your county courthouse.

Then, a SUMMONS is prepared and delivered to you.

If you do not act on the summons, then they would most likely be awarded a DEFAULT JUDGMENT.

After the judgment has been awarded, they can now take legal action such as:

• Wage Garnishment
• Bank Levy
• Place a lien on your home

The point is that just because a debt collector's letter sounds like they have taken legal action, doesn't necessarily mean that they have.

Finally, a debt collector usually has the ability to accept a lesser amount than the full amount that is due.  This is called a DEBT SETTLEMENT.

Debt collectors are paid to collect as much money from you as possible!  They may tell you that their client (the original creditor) will not accept a reduction of the balance or may say that they will only accept a very small reduction.

A consumer that has not had the experience of dealing with professional debt collectors can be intimidated and may pay much more than is necessary to settle the debt.

We have helped hundreds of clients settle debts at 50% or below for many years.

Click here for ACTUAL SETTLEMENT EXAMPLES.

Don't fall for the dirty tricks of debt collectors!

A wage garnishment because of unpaid bills can be devastating!

Here are 3 easy tips on how to stop wage garnishment:

If you are having a difficult time keeping up with your credit card accounts or other unsecured debt, your not alone!

Over the recent years, hundreds of thousands of people just like you have had to take on more credit in order to survive the downturn in our economy or other financial setbacks such as:

• Loss of employment
• Divorce
• Illness
• Death of a spouse
• Disability
• Too little income from Social Security, etc.

Once you miss a payment to one of your creditors, they will start calling and sending late notices.

You can download FREE INFORMATION ON HOW TO STOP COLLECTION CALLS by clicking on the button below:

TIP # 1: DON'T IGNORE THE CALLS OR LETTERS FROM COLLECTORS!

The biggest mistake I see people make that can lead to a wage garnishment is to ignore the calls and/or letters.

Obviously, if you miss a payment, it is going to trigger a signal to alert the creditor.  Creditors don't necessarily want you to pay off your entire account (they make their money on interest and fees!), but they demand a monthly payment...or they get real upset!

Your account will usually be sent to an internal collections department within the company when it is about 90 days over due.  The collection departments job is to save the account...get you to start paying again.

They may offer you a HARDSHIP PLAN, but BE CAREFUL! 

Most hardship plans will offer you a small reduction in your payment and perhaps your interest rate for maybe, 6-12 months.  Sometimes, they may offer to waive the "late charges and/or over-the-limit" fees they may have tacked on to the balance. However, the problem with a hardship plan is that, while it may stop the calls, you are not really paying down the debt.

Also, once the time period of the hardship plan expires, you are right back to making the normal payments!

TIP # 2: DON'T IGNORE A SUMMONS!

If a creditor cannot get you to start making payments again, they may decide to send the account to a collection agency. The calls and letters will start again as you will no longer be dealing with the original creditor anymore.

Just as you did before, you will need to send a letter to the collection agency to stop the calls.

If the collection agency cannot get you to pay, they may decide to file a complaint with your local courthouse stating that you owe the debt. The court will prepare a SUMMONS, and you will most likely get a know at the door one evening and someone (may be a police officer), will SERVE YOU THE SUMMONS.

Sounds intimidating...and it is! Yet, the worst thing you can do (and a lot of people make this mistake) is to ignore the summons!

The summons will state who you owe and how much, and it will say that you have 20-30 days (depending on your state's laws) to give an ANSWER. An answer is a legal term that you would file if you feel that you do not owe the debt.

In most states, you will have to pay a filing fee and it has to be legally correct in order to file, so you may need to hire an attorney.

Just because you received a summons does not mean that you are going to be sued, or go to jail, or have all of your belongings confiscated...you still have rights!

But what it DOES mean is that the creditor is SERIOUS about collecting the debt.

If you are employed, the creditor could be awarded 25% of your net take home pay until 100% of the debt is repaid with interest (9% in Oregon...each state varies a little).

Call the collection company or attorney representing the collection company and try to work out a SETTLEMENT or a repayment plan called a "stipulated agreement".

If you don't, the creditor will be awarded a judgment by default (called a default judgment), and now they can pursue legal avenues including wage garnishment!

TIP # 3: IF AT ALL POSSIBLE, MAKE AN LUMP SUM OFFER TO SETTLE THE ACCOUNT!

I know, you most likely do not have a lot of money in savings, but let's say the total debt is $2,000 including interest, attorney fees and court costs, they may be will to take 70%-80% to settle the debt.

If you had contacted the creditor before the account went to collections and then the legal process, you may have been able to settle for 50% or less!

We have been helping people get out of debt for many years and would like to help you.

                                 FREE, NO OBLIGATION CONSULTATION

One of the most commonly asked question we get here at Debt Relief NW, Inc. is…

“When or at what point is bankruptcy my best option?”

For over 10 years now, we have been helping people avoid bankruptcy through debt settlement.

While debt settlement is not the answer to everyone’s financial problems, many times the traumatic and gut wrenching process of bankruptcy can be avoided through debt settlement.

When we interview someone to determine the best course of action based on  their specific circumstances, there are basically 3 options for most people:

Debt Management

The credit industry figured out that if they only charge you a very small monthly minimum payment coupled with a large interest rate, late fees, over-the-limit fees and an annual account fee, they (the credit card company) would make 3-4 times the original amount they let you borrow!

The goal of the credit card industry IS NOT for you to pay off your debt! 

The goal is for you to be paying small minimum payments for many, many years!

In a debt management program (sometimes still referred to as “credit counseling”), a person who is barely making the minimum payments on their credit cards and other unsecured debts (store cards, personal lines of credit, pay day loans, etc.) will enroll all of those debt with the debt management company.

They will usually be required to have a payment that is approximately 2.5% of their total indebtedness. For example, let’s say you have several cards and personal accounts that total $25,000.

In a debt management program, your single monthly payment would be approximately $600-$625 per month for approximately 4 years or so.

This is a great way to get your credit accounts under control and have a day in the future when you can finally be DEBT FREE!

But, what if you cannot afford the minimum payment required by a debt management company?

Debt Settlement Program

A prospect for a Debt Settlement Program usually fits into one or more of the following scenarios:

• They have too much debt and cannot keep up with the minimum payments.
• Some or all of their accounts have gone (or are about to go) to a collection agency.
• They cannot afford the payment required of a Debt Management Program.
• They want to avoid bankruptcy if at all possible.

In a Debt Settlement Program, your current creditors WILL NOT be receiving normal monthly payments.

Instead, your accounts that have become delinquent will be/or have been charged off and sent to a collection agency for collection.

After a thorough financial consultation, the debt settlement counselor will evaluate what you can reasonably afford to set aside monthly into a Client Reserve Account.  As this account grows, the debt settlement company will be contacting you creditors and/or collection agencies to negotiate settlements.

Depending on several factors, settlements may be negotiated with a one-time payment from the funds accumulated in your reserve account or a term-settlement may be negotiated whereby the collector agrees to a reduced settlement paid out over a specific period of time.

Once the settlement agreement has been completed, the collection agency or creditor will contact each of the 3 major credit reporting agencies (Experian, Equifax and Transunion) to report that the account has been paid-as-agreed.

Over time, as your accounts are settled, you credit score begins to improve.

But what if you cannot afford much more that a small monthly deposit to the reserve account or nothing at all?

This is where Bankruptcy becomes a “tool” to protect you from creditors who choose to:

•     Seek Wage Garnishment
•      Levy a Bank Account
•      Place a Lien on your property

If you are considering bankruptcy, you should consult one or more attorneys who specialize in bankruptcy.

Bankruptcy should not be viewed as a “get out of jail Free Card”, but rather the last and only option when faced with insurmountable debt.