Received a 1099-C!  What do I do?

If you have had an unsecured debt settled for more than $600 and less than the full balance, you may get a 1099-C around tax time.

Unfortunately, many tax preparers and/or accountants do not understand how to take care of this so you don't have to pay much or nothing extra in taxes!


The IRS wants to get as much tax from us as possible.  Although we should pay our fair share of tax, many people pay much more than they should by not knowing or understanding the tax code on a 1099-C!


I am not a tax professional or attorney, so I am not giving tax or legal advice. 

You should always consult a qualified tax authority.

Don't be surprised if they don't really understand how to deal with a 1099-C!


You had a Visa Credit Card with a balance of $5,000.

For whatever reason, you just could not keep up with the minimum payments due and the account became delinquent.

After receiving numerous calls, emails and letters, the account was transferred or sold to a "debt buyer".

A debt buyer (company who buys huge blocks of debt found in the records of the Credit Bureaus) can attempt to collect a debt just like the original creditor or the average debt collector.

Anyway, you are able to settle the account for $2,000, for a difference of $3,000.

Actual Settlements See what we have  done for our clients! Click here!

The IRS says that this $3,000 was "FORGIVEN" and should be added back into your total gross income for that year.

Most people (and many tax professionals) mistakenly think that you have to pay $3,000 of additional tax! 


The 1099-C actually says (fine print at the bottom) that you may be EXEMPT if at the time of this "FORGIVENESS" you were INSOLVENT.

In IRS terms, INSOLVENT means that at the time of this settlement/forgiveness your LIABILITIES were greater than your ASSETS, then you DO NOT have to add this FORGIVEN income back in to be taxed!

How do you prove to the IRS that your were INSOLVENT at the time of the settlement/forgiveness?

The process is actually very simple (although again, many tax professionals do not understand it!).

You will need to provide some documentation and an IRS Form 982.

Here is a link that will provide you with the necessary documentation, IRS Form 982 and a simple example.


At Debt Relief NW, LLC, we have been helping people deal with having too much debt for a little over 20 years now.

If you have questions, let us know:

Personalized  Program Comparison Click here!



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Tags: debt collection, debt relief in Portland Oregon, 1099-C, IRS Form 982

When is Debt Settlement Your Best Option?

Too much credit card and other unsecured debt?  Not able to keep up with the payments?  You may be a prospect for Debt Settlement.

But, before you decide, consider the following:credit cards cut up

Debt Settlement is a very effective program to help people settle unsecured debts for less than the total balance due.

  • The unsecured debts I'm talking about are:
  • Credit Cards
  • Store Cards
  • Home Shopping Club accounts or cards
  • Personal Loans
  • Repossession Deficiency Judgments
  • Medical Bills
  • Personal Student Loans (although there are programs to help on Federal Student Loans as well)

When faced with too much debt and not enough income or cash flow to keep up with at least the minimum payments due, there are only a few options to keep the debt collectors at bay:

A Debt Management Program

A Debt Management Program used to be called a "Credit Counseling Program" and sometimes it is still called by that name.  In a Debt Management or Credit Counseling Program, a person signs up with a "non-profit" (only for taxable reasons, YES, you will be paying fees!), and they will have set up a program with each of your creditors.

Usually, the interest rates are reduced or sometimes eliminated, late fees and over-the-limit fees are usually forgiven after you have made a few payments, and your account is now classified as being paid as agreed or on time.

However, the problem with a Debt Management or Credit Counseling Program is that there is very little forgiveness if you miss or are late on a payment!  I've seen people who had been consistent for many months, and then, due to an emergency, just couldn't come up with the total due that month.  The Debt Management Program was canceled or voided and they were back to square one!

Also, in a Debt Management or Credit Counseling Program, the total monthly payment may be more that the total minimum monthly payment you are required to make now!  And, the company is charging you a monthly service fee as well!

So, if you go through the process of trying to enroll in a Debt Management Program and find out you cannot qualify, what now?

A Debt Acceleration Program

A Debt Acceleration Program (sometimes referred to as a Debt Snowball Plan) is perfect for someone who is making the minimum monthly payments on each of their debts and yet, due to high interest rates and annual fees, realize that at this rate, it will take 15-20 years to pay off those debts!

A person who should look into a Debt Acceleration Program also could add another $100 - $200 each month to help reduce or accelerate paying off these debts.

Most people in a Debt Acceleration Program are DEBT FREE in 48-60 months, saving thousands of dollars in interest and fees!

I prefer the Debt Acceleration Program to a Debt Management or Credit Counseling Program because as far as your credit report is concerned, you were a very consistent debtor and not only paid all of your payments on time, but actually did so sooner than required!



OK, but what if you are one of so many people that due to:

  • Job loss
  • Divorce
  • Disability
  • Death of loved one
  • Major Financial Emergency

...just cannot meet the total minimum payments due on your unsecured accounts and cannot qualify for a Debt Management or Debt Acceleration Program?

Then, you should consider a:

Debt Settlement Program

Debt Settlement is designed for people who have a severe financial hardship, have tried to keep up with all of the bills, but some or all of their credit card accounts and other unsecured debts have been turned over to debt collectors.

These debt collectors are calling all day and even harassing you at work. But, before I explain how a Debt Settlement Program works and could help you, here's how to put a stop to those collection calls:

STOP Collection Calls Free Sample Letter

In a Debt Settlement Program, you will go through a thorough financial overview to determine several things, such as:

  • Type of employment (self or W-2)
  • Basic Monthly Budget
  • Retirement status
  • Type of income you are receiving (disability, social security, unemployment, etc.)
  • Assets (mainly do you have equity in your home)
  • Are you renting?

Once you know where you stand, you will have an amount (that you can afford) deposited into your Debt Settlement Reserve Account (FDIC insured bank) monthly.

The Debt Settlement company will be contacting your creditors and/or debt collectors to arrange settlements.  As you reserve account grows, each of your accounts should be settled for much less than the total balance due.

But finally, what if you just are barely making ends meet on your basic bills and have little or nothing left over to put towards a Debt Settlement Program?

Then, you should consider:

A Bankruptcy Program

There are basically two types of Bankruptcy Programs for individuals:

  • Chapter 7
  • Chapter 13

The Chapter 7 is not used as much these days as it is basically designed for someone to liquidate any assets they have (obviously, not very much) and that small amount is paid to each creditor, and the balances of your debts are "forgiven".

In a Chapter 13, a bankruptcy attorney will present a type of repayment plan to the bankrutpcy court based on your financial status.  Usually, a person will be making a monthly payment of $200-$400  (or whatever your bankruptcy attorney comes up with) for about 3-5 years.  Each of your creditors receives a small portion of the balance due.

At the end of the Chapter 13, the balances of your debts are forgiven.

Oh, by-the-way, if you receive a 1099-C, in most case, you should not be liable for any additional taxes due on the amounts forgiven.

Debt Settlement is a great program for the right person.









 Photo Credit:  Daniel Oines

Tags: credit card debt, debt settlement, Credit Score, Bankruptcy, credit report, debt relief in Portland Oregon, chapter 7 bankruptcy, chapter 13 bankrutpcy, credit card debt relief oregon, credit cards, credit card debt help

Dealing With Debt, Part 2, Debt Settlement

If you cannot qualify for a Debt Management Program, then you should consider a Debt Settlement Program.

In my last blog, "Dealing With Debt, Part 1, Debt Management", I explained about how the traditional Credit Counseling Program or what we refer to today as a Debt Management Program works.

As with about anything in life, there are pros and cons with any program, so you want to make sure that if you are looking for answers concerning what is the best way to deal with debt, you look at all of your options before making a decision!

look at all of your options


When dealing with too much unsecured debt, you really only have a few options:

  • A Debt Management Program
  • A Debt Roll Up or Snowball Program
  • A Debt Settlement Program
  • Bankruptcy


What is a Debt Settlement Program?

When you accumulated too much debt unsecured debt and cannot keep up with the minimum payments due or cannot qualify for a Debt Management Program, then a Debt Settlement Progam may be your best option.

Most people who chose a Debt Settlement Program have had some, if not all of their accounts become very delinquent.  Once you miss 3 or 4 monthly payments, these accounts most likely will be charged off by the original creditor and placed with a collection agency.

Sometimes, the collection agency is actually an attorney or Law Office that only deals with debt collections. 

As you may know by now, once you miss a payment or two, the letters and calls start coming more frequently!  In fact, most consumers are taken advantage of by debt collectors because they do not know their rights.

Under the Fair Debt Collection Practices Act, debt collectors are forbidden to:

  • Call you too many times in a day
  • Say things that are vulgar or might indicate they could take your belongings
  • Make statements or suggestions that you are going to be sued, if, in fact, they do not file a claim and start the legal process.
  • Call you at your place of employment.
  • Any many other acts that you need to know.

You can find some very helpful information called:

Fair Debt Collection Practice Act – Guide for Consumers

OK, so you've looked at your options and Debt Settlement is the way to go...

Although you can attempt to settle your debts on your own, not only does debt settlement takes a lot of time, but you are also going to be going up against trained debt collectors who:

  • Are trained professionals
  • Don't care about your financial circumstances
  • Don't want to hear your story about how you got into this financial trouble
  • Are usually paid based on the amount of money they can get you to pay!

A quality Debt Settlement Company will:

  • Take the  time to conduct a thorough interview with you (by phone or in their office) as to your financial circumstances.
  • Go over you debts and basic household budget to help determine what you can reasonably afford to contribute to the debt settlement program.
  • Not try to pressure you into "signing up" quickly, but be willing to not only answer all of your questions, but will also mail, fax or email you a summary of how the program could work for you.
  • Be registered (if required by law) in the state in which you reside.
  • Maintain a very high rating with the Better Business Bureau.

If it is determined that a Debt Settlement Program is your best option, then:

  • You will stop making payments to your creditors (if you haven't already)
  • You will make a payment/deposit to your Client Reserve Account through the Debt Settlement Company.  This account is with an Insured Bank located in the state of registration.
  • The Debt Settlement Company will contact each of your creditors/collectors in order to stop the collection calls and to begin to negotiate on your behalf.

By the way, you cannot stop the original creditor from calling you about a missed or unpaid account.  They have a right to do so.

But, you can certainly stop the collection calls from debt collectors!

STOP Collection Calls Free Sample Letter

Once your reserve account has sufficient funds, a settlement will be negotiated.  Sometimes this settlement is a lump sum for approximately 50% or less of the balance.  Sometimes this settlement can be paid out over a number of months.

Each settlement, and the subsequent reduction in principal of the settlement, depends on many factors, such as:

  • Your employment status (working, W-2 wages or self employed)
  • Retired
  • Disabled
  • On unemployment, etc.

After a settlement has been negotiated, a SETTLEMENT AGREEMENT is faxed, emailed, or mailed. 

If you are going to try and settle your debts on your own, DO NOT SEND OR AUTHORIZE ANY PAYMENT WITHOUT A WRITTEN SETTLEMENT AGREEMENT!

Once the settlement has been completed (according to the terms of the settlement agreement), a letter will be mailed out stating that this account has been:

  • Settled-as-agreed
  • Settle-for-less-than-the-full-balance, (and sometimes)
  • Paid as agreed or Paid in full

The Debt Collector or original creditor if you are dealing with them, should notify each the three top Credit Bureaus that your account has been closed and settled.

HOWEVER, it is a good idea to follow up by running a FREE CREDIT REPORT (after about 45-60 days) to make sure that this account is not showing a balance, etc.

Most Debt Settlement Programs run about 36 -48 months or maybe longer, depending on your financial circumstances.  Once each account has been settled, you're credit scores should start going up!

Debt Settlement is a noble way to do the best you can to repay debts that you owe instead of seeking bankruptcy protection. 

Bankruptcy, in my opinion, should be considered as your last and only option, and I will be blogging about that next time.

For more information about Debt Settlement, click below:











 Photo credit to Betsssssy

Tags: fair debt collection practices act, debt settlement, Bankruptcy, debt collection in oregon, debt collector, debt relief in Portland Oregon, debt management, credit cards

Don't Panic if You Receive a Summons!

If you are served with a summons for past due debts, DON'T PANIC!

You need to understand what a debt collector CAN and CANNOT DO!


Make no mistake, it is a scary time when someone knocks on your door and says something like, "Are you....You've been served!"

Sometimes, the delivery person is a police officer and that even makes it worse!

Someone has said that FEAR is:

  • False
  • Evidence, that
  • Appears
  • Real

So true!  We often get "freaked-out" because we think something is what is not.

Let me try and help you get over the fear of receiving a summons!

I/we've been helping people with DEBT, basically UNSECURED DEBTS, for many years.

When you have too much debt to keep up with the payments due, they may be charged off by the original creditor or placed with a collection agency in an effort to collect on the delinquent debt.

If you've ever been in that situation, you know that you get letters and calls and calls and calls.  By the way...hears how to put a stop to collection calls:

STOP Collection Calls Free Sample Letter

If the collector cannot get you to pay the debt, they may decide to FILE A COMPLAINT. This is a legal technique whereby an attorney, licensed in your state, is hired by the debt collector or creditor to file an official complaint with your county court.

Next, you will receive a SUMMONS.  And this is when it gets scary!

We're located in Portland, Oregon and in the County of Multnomah.  A client recently sent us a SUMMONS and this is what it said (you can understand why they were upset!):

"YOU ARE HEREBY required to appear and defend the complaint filed against you in the above-entitled action within thirty (30) days from the date of service of this summons to you.  In case of your failure to do so, for want thereof, Plaintiff will apply to court for the relief demanded in the complaint."

"You must "appear" in this case or the other side will win automatically.  To "appear" you must file with the court a legal paper called a "motion" or "answer".  The"motion" or "answer" must be given to the court clerk or administrator within 30 days along with the required filing fee.  It must be in the proper form and have proof of service on the Plaintiff's attorney or, if the Plaintiff does not have an attorney, proof of service on the Plaintiff.  If you have any questions, you should see an attorney immediately."


OK, let's calm down and look closely at the SUMMONS.

First, in the case of UNSECURED DEBTS (Credit cards, medical bills, personal loans, Store Cards, private student loans, etc.), the Plaintiff (this is the creditor or who you owe the money to) cannot:

  • Put you in jail
  • Take other belongings
  • Cause you any harm, etc.

In fact, there are limits and protection for consumers by the Fair Debt Collection Practices Act that you should be aware of.

Next, the SUMMONS seems to say that you are going to have to GO TO COURT!

NO IT DOESN'T!  (Remember, FEAR...False Evidence that Appears Real?)

If you don't believe you owe the DEBT=CLAIM, then you must file an "Answer", which not only costs (about $165 last I heard in Multnomah County) but it must be in the proper, legal format which may require an attorney to prepare...more costs!

BUT, since you owe the debt (not the time to talk about the outrageous fees and interest tacked on), then you won't be filing an ANSWER.


You should contact the attorney for the Plaintiff (creditor) and try to work out a repayment plan.

If you are employed (receive W-2 income), then you are not going to have very much leverage at this point.  But, you should be able to negotiate a reduced settlement (if you have a large sum of funds to offer) or a repayment plan of the entire debt balance.

If the Plaintiff is awarded a judgment (which most likely they will win), then they can file a WRIT OF GARNISHMENT and your employer would have no choice but to deduct 25% of your net income (most states) and send it to the Plaintiff until the entire balance is paid!

Think about that for a minute.  Let's say that you usual bring home pay (after taxes are withheld) is $2,500/month.  At 25%, that's an additional $625 per month that would be deducted, leaving you with only $1875 to pay bills!  Ouch!

Remember when you ignored those letters and calls?  Well, this is one of the results that can happen.  It is always better to try and negotiate with the creditor or collection agency than let the account go to this.

If you are self employed, you may have a little more leverage in that your "salary" may be low enough (if you are using a good accountant) to be exempt from garnishment.  To see what this exemption amount is, check with your state's attorney general's website.

In Oregon, go to: State of Oregon Garnishment Forms.

If you are retired and are living solely on Retirement or Social Security, then those funds are protected from Garnishment or even a Bank Levy.

If you are SELF EMPLOYED or RETIRED, or receiving only DISABILITY INCOME, you should be able to negotiate a pretty decent settlement at 50% or less of the balance.

We've prepared a very good booklet that will explain how Debt Settlement can work:

 OK, I hope you are starting to understand that just because you receive a SUMMONS, you are still going to be OK, BUT YOU HAVE TO TAKE ACTION...AND I MEAN IMMEDIATELY!!!

If you are not sure you can deal with debt collectors or the attorney for the Plaintiff, we can help:



Photo credit:  Kevin B3 at






Tags: fair debt collection practices act, credit card debt, debt settlement, debt collectors, debt negotiaion, debt relief in Portland Oregon, credit cards

Do It Yourself Debt Settlement

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

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.


STOP Collection Calls Free Sample Letter

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.




Tags: debt collection, debt settlement, how to stop collection calls, debt relief in Portland Oregon, do it yourself debt settlement, hardship programs

Put a Stop to Debt Collection Calls!

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!"

help-stop-debt-collector-callsDebt 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:

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:

STOP Collection Calls Free Sample Letter

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:

Tags: debt collection, fair debt collection practices act, federal trade commission, debt settlement, how to stop collection calls, dealing with debt collectors, debt settlement in oregon, debt relief in Portland Oregon

Dirty Tricks of Debt Collectors

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.


STOP Collection Calls Free Sample Letter

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.


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











Tags: debt collection, fair debt collection practices act, federal trade commission, debt settlement, debt settlement in Texas, debt settlement in oregon, debt relief in Portland Oregon, debt collector tricks

Do It Yourself Credit Score Check Up

do it yourself credit score checkupWould you like to know how to improve your credit score?

 Here are a few very helpful tips you can use to do it yourself.

I've written several articles and blogs on the subject of Credit Repair, How to Improve Your Credit Score, How to Have Errors on Your Credit Report Corrected, etc. over the years.

When it comes to the subject of "CREDIT REPAIR", there are several misconceptions, but the most prevalent is that you can get the top three credit reporting agencies (Equifax, Experian or TransUnion) to remove negative information from your credit report.!

You may have seen ads from the newspaper, TV, radio, on line or phone making claims such as:

  • "We can remove bankruptcies, judgments, liens and bad loans from your credit report!"
  • "We can erase bad credit!"
  • "We will help you create a new credit identity that is 100% legal!"

Credit Reporting agencies sell (that's right, they are in business to make a profit) your credit history to those who need to know that if they loan you money, you have (or have had in the past) the ability and track record to repay that loan!

Make sense?  Sure.  Then why would you think that you or some Credit Repair Company could magically make negative information disappear?

Yes, there are some credit repair companies who, in my opinion (and most likely your state's attorey general) have the methodology to have some negative items removed from your credit report for a short period of time or until the creditor realizes it and makes a claim to have it replaced!

Some people will pay a lot of money for this type of shady "credit repair" in order to get a loan or possibly qualify for an apartment or even for employment.

Be very careful of these claims!  They could come back to  haunt you!

The Federal Trade Commission has written many good articles on this subject and credit repair in general.

Here's a link to a very good article: CREDIT REPAIR: HOW TO HELP YOURSELF

OK, but what about LEGITIMATE ERRORS?

If you haven't done so already, you need a copy of your credit report (not necessarily your score at this time) from each of the top 3 Credit Reporting agencies.

If you have applied for credit, insurance or employment, and were denied, you can request a copy of the report, if you do it within 60 days.

You are entitled to a FREE CREDIT REPORT every 12 months.  Just go to or call 1-877-322-8228.

Carefully check all of information on all 3 reports.

Make sure you name, social security number, address, etc. are correct.

What you are looking for is accounts that you know (and can prove) that you have paid off.

Also, depending on your state's statute of limitations, negative information in the past (charge offs, accounts that you were late paying often, etc.) can be removed after a certain number of years.

For example, if you live in Oregon, the statute of limitations is 6 years on most accounts.

But, the biggest thing you are looking for is for accounts that you have paid off and are still showing a balance or may have been turned over to a collection agency.

Make a copy of your the page of the credit report showing the account you wish to dispute.

  • Circle the account.

Gather the proof of payment:

  • Letter or account statement with $0 balance
  • Copies of check and/or money order you used (you may have to contact your bank or go on line)
  • Letter of satisfaction if you paid off a judgment


Now, you are going to write a letter with this information to EACH OF THE 3 CREDIT REPORTING AGENCIES.

Yes, you can go on line and in many cases this works best, but somehow I think the "paper trail" of a letter with proof is more effective.

If you do not get a reply within 45 days, make sure to follow up!  Don't GIVE UP!

This is where I think it may be a good idea to hire a professional, ethical credit repair company to do this for you.

Yes, it will cost you some money, but there is a lot of time and effort that will go into challenging several items and you may not want to spend the time.

Check with your state's attorney general's office for a list of good, reliable credit repair companies.

If you live in Oregon, click here for a list of registered companies.

Comment on the subject of Credit Report Disputes:

Recently, I had written a blog about this subject and received a comment from a Credit Repair Company owner.

The blog was titled "Best Options for Credit Card Debt Relief" in which I listed and explained several ways to help get debt.

He commented and asked the question why I did not explain how to "fight for non payment of a credit card" rather than file for bankruptcy.

I understand and apprecitate the comment, but in my opinion, if you or I agree to repay a debt by taking out credit, then we have given our word...made a promise to repay and should do so if at all possible.

I don't think it is right to try an find a loophole such as they fact that a debt collector (as much as I don't like most of them) can't provide sufficient paper work to prove that the debt is legitimate in order to get out of paying a debt you know you owe.

On the other hand, I've had cases where after a creditor or collector agreed to accept less than the full balance due to the severe financial hardship of the consumer, the remaining balance showed up at another collection agency later.

Of course, in that case, you should (and we successfully did) dispute the claim.

I understand that there are many circumstances that happen that may make repayment impossible.

In those cases, if a Debt Management Program or a Debt Settlement Program can help, then a person should take advantage of such programs.

If things are so dire that neither program can help, then Bankruptcy may or should be the only option.


  • Order a FREE Credit Report
  • Check for errors
  • Gather proof of payment
  • Write letters
  • Follow up! Follow up! Follow up!

If all of this sounds like TOO MUCH, we can help:





Tags: dispute errors on your credit report, credit repair, credit report, debt relief in Portland Oregon, credit report dispute, credit repair scams, credit card debt relief oregon, Equifax, Experian, TransUnion, credit reporting companies

How to Avoid Bankruptcy Using Debt Settlement


how to avoid bankruptcy with debt settlementOne 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.





Tags: debt collection, credit card debt, debt settlement, Bankruptcy, debt relief in Portland Oregon, debt management

When is Bankruptcy the Best Option?

when is bankruptcy the best optionWhen you have so much debt that you are not able to keep up with the minimum payments, your options are limited:

  • Debt Management (or credit counseling) Program
  • Debt Settlement Plan
  • Bankruptcy

When is bankruptcy the best option?

Let me briefly explain how the first two options work:


A Debt Management Program is a program designed for those who have substantial unsecured debt (mainly credit cards) and realize that even though they are making the required minimum payments, the balances are barely going down!

The average person will take 10-15 years (some experts estimate longer) to repay credit card debt.

And when and if it is repaid, the average consumer will end up paying back 3-4 times the original amount that they borrowed!

Think about that... If you have say, $20,000 of credit card debt and are just barely making the minimum payments, you could end up paying back $60,000 to $80,000!

In a Debt Management Program, you will have:

  • One low monthly payment
  • Reduced or sometimes even 0% interest rates!
  • Waived late fees (usuallyl)
  • Eliminated your debt in about 4-5 years, saving thousands of dollars in interest and fees!

What if you cannot afford the typical 2.5% payment required of a Debt Management Program?

If you cannot afford the payment of a Debt Management Program, then you should consider a DEBT SETTLEMENT PROGRAM.

In a Debt Settlement Program, you will have:

  • One low monthly payment (determined by your financial situation)
  • Debts negotiated at approximately 50% of the balance
  • Eliminated your debt in just 3-5 years, depending on an individual's circumstances

What if you cannot afford the reduced monthly payment of a Debt Settlement Program?

If you cannot afford the payment required of a Debt Management Program or a Debt Settlement Program, bankruptcy may be your best option.

There are basically 3 areas to examine in order to deteremine if bankrutpcy is the best option:

  • Financial
  • Ethical
  • Legal

By the time you are considering bankruptcy, you should have already explored a Debt Management Program and a Debt Settlement Program, and determined that you cannot afford either of the reduced monthly payments. You have explored the FINANCIAL aspect of determining when bankruptcy is the best option.

But what about the the ETHICAL aspect of bankruptcy?

In most cases, getting to the point of bankruptcy is not your fault.  Maybe you:

  • Lost your job
  • Lost a spouse or loved one
  • Sufferred a major illness or injury
  • Went through a terrible divorce
  • Or, many other reason too numerous to list

The point is, most people do not get to the point of bankruptcy from just spending too much.

No matter how you look at it, bankruptcy is basically saying, "I cannot keep my promise to repay my debts." It an tremendously emotional decision, and one that can have lingering effects for years.

Before you seek a bankruptcy attorney's counsel, ask yourself if there is any way you can repay your debts WITHOUT going bankrupt?  Can you:

  • Ask for help from friends or family
  • Get a second job
  • Make cost saving/budget cuts or even create a crisis budget
  • Sell some of your "toys" (extra car, boat, RV...)
So now that we've looked at the FINANCIAL and ETHICAL reasons for seeking bankruptcy, let's briefly discuss the LEGALaspect.

I am not an attorney, so I am not goint to give any legal advice. To explore the LEGAL aspects of filing bankruptcy and to see if you qualify for either Chapter 7 or Chapter 13 bankruptcy, you need to seek the help of a qualified bankruptcy attorney.

What's the difference between a Chapter 7 and Chapter 13?  CLICK HERE to find out more.

There are many factors to consider when determining if bankruptcy is the best option. We can help you make the best choice with a FREE no obligation consultation with one of our Debt Solutions Specialists.  Click on the link below or simply give us a call at 1-877-492-4109


 when is bankruptcy the best option




Tags: credit card debt, Bankruptcy, debt relief in Portland Oregon, debt management vs debt settlement, chapter 7 bankruptcy, chapter 13 bankrutpcy, bankruptcy attorney, unsecured debt