Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Debt Relief

Debt Relief

March 13, 2006

Debt collection agencies are hired by IRS

Debt collection agency is at Internal Revenue Service's disposal. The IRS outsourced debt collection services to three agencies awarding them with initial 2 year contracts.
This is the first phase of debt collection outsourcing, the second one is planned for 2008, with 10 more contacts for grabs.
Here are consumer safeguards that IRS put in place and any debt collection agency must comply with.

Posted at 11:56 AM

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February 08, 2006

Debt consolidation - is not the debt relief you want

Debt consolidation is not going to lead to debt relief in majority of cases - "there are only two ways to get a lower payment - either lower the interest rate or lengthen the term of the debt. So, you stay in debt just as long or even longer."
I couldn't say it any better, this is the real debt relief.

Posted at 11:20 AM

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January 28, 2006

Debt collectors can be very abusive

Few good points on bad debt collectors, like there are good ones, right? Well our view is that once you borrow monies, you must repay them.

And the lender has a right to collect debt, in a rather polite way though. Read more on
debt collection,
debt collection time limits,
and here is often requested debt collection settlement letter.

Also, statute of limitation for debts and statute of limitation for judgments.

Posted at 08:34 AM

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January 09, 2006

Debt collection agency harasses daughter for her late father sins

Q: My father died with around $11,000 in debt, mostly credit cards and small unsecured loan he took just months before his death. None of it is related to me in any way, I never cosigned for him or had a joint account, but I've been getting several calls each months from collection agencies. I was nice at first, trying to explain that I have nothing to do with that debt and whatever little he left is gone. But those slime balls won't leave me alone and keep on calling. I didn't even know how the heck they found me, until I read about skip-tracers on your site. I recalled suddenly two strange phone calls in August, and then debt collectors started calling.
Now I tell them that dad left me a small fortune, just to piss them off, and they are not going to get any of it. My husband is getting really mad when they call. What can I do to get rid of those wackos?

A: We feel your pain. Even if your father left any monies, they are yours, period. To get those collectors of your back, tell them that even Stalin said - "Son (in your case a daughter) isn't responsible for the father's crimes". On the serious note, send the most recent collection agency a certified letter with return receipt required, explaining that you father past away with nothing left, and you have nothing to do with his debt. Tell that their practice is in violation with the Fair Debt Collection Practices Act, and if they don't stop, the next letter will be from your lawyer. And if they call you again, get a lawyer to write another letter. It shouldn't cost more than few hundred dollars. Here is the FTC complaint number if you want to try it as well: 1-877-FTC-HELP (1-877-382-4357)

Posted at 03:06 PM

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December 05, 2005

Tough times for many middle class folks

"Crunch Time for the Middle Class" that illustrates need to debt relief, how many find themselves in similar situation?

Posted at 04:34 PM

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September 20, 2005

Debt management advice from FTC

FTC recently came out with some timely debt management advice as more people will have to seek debt consolidation and credit counseling services because of the coming changes in bankruptcy laws.

While FTC tips on debt management are certainly wise and useful, I found them somewhat trivial. I would strongly recommend "do it yourself" strategy. It is amazing what you can achieve with some solid financial discipline. And I do stress "solid".

Read all you need about debt management program and think it thru very carefully. Then get few basic and simple ideas from Debt Free page and see what suits your most. I certainly hope you opt for the latter.

Don't pay to someone else, because no matter how nice they claim to be, you will end up putting your hard earned cash in their pockets.

Here is FTC article.

Posted at 01:18 PM

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August 03, 2005

Debt consolidation is pushed by large banks

Debt consolidation is often associated with relatively small shops. Debt consolidation industry has been tainted but several large scandals that ended up in lawsuits and some companies were shutdown for good. The most infamous case was with one of the largest debt consolidation/credit counseling outfits, Ameridebt, but there were smaller companies including Franklin Credit Services, FirstPlus Financial Group and others.

Now, according to Bloomberg several customers are accusing Wells Fargo, the fifth largest bank in the country in charging humongous fees and sky high interest rates on home loans.

One lady "said that Wells Fargo had fleeced her family by charging $8,400 in fees and an 11.7 percent interest rate to refinance a $75,300 mortgage." Later same lady stated "Wells refunded about $8,000 in fees".

If that is not bad enough, others accused Wells Fargo's loan officers in pushing mortgage closing costs so high that they "raised the principal more than 10 percent." But wait there is more to that, according to the story, "The company uses telemarketers and direct-mail advertising to reach borrowers. When shoppers use zero-interest, 12-month term financing to buy furniture or home entertainment systems from retailers, Wells often buys those loans wholesale. It then offers those new customers debt-consolidation plans."

All of this is likely the reason why "in the past five years, Wells's earnings per share have jumped 76 percent, to $4.15 in 2004 from 2.36 in 2000, compared with a 17 percent drop in EPS at Bank of America.", no?

Posted at 11:29 PM

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July 14, 2005

Debt consolidation - do it smart

Majority of the clients have done some smart debt consolidation lately. Around 46% of home refinancing done by my office went to pay off the high interest credit card balances and other unsecured loans.

Many folks has taken advantage of recent dip in interest rates and use the cash out money to put additions to their homes. Some are buying investment properties.

Such a debt consolidation is very good move indeed as long as this doesn't become a habit. If you do it continuously, you can easily deplete all the equity in your home. Then the bank is closed for good.

Posted at 12:10 PM

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