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Debt Settlement vs. Debt Management |
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Written by Administrator
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Tuesday, 20 April 2010 08:50 |
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A great video from Cambridge Credit that compares debt settlement and debt management agencies: |
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Last Updated ( Tuesday, 20 April 2010 08:56 )
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Record High Consumer Debt |
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Written by Administrator
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Thursday, 24 July 2008 05:35 |
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The average American household bears thousands of dollars in debt. We spend more than we earn, and then find ourselves in trouble. Trish Regan reports. |
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Consumer Credit Counselling Services |
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Written by Administrator
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Saturday, 19 July 2008 11:16 |
What Consumer Credit Counseling Services (CCCS) does is negotiate your debts and payments with your creditors, reducing some of them and getting creditors to lower the minimum monthly payment in other cases. CCCS generally is not recommended unless you are deeply in debt. Although CCCS may be helpful in pulling you out of debt as painlessly as possible, it can have the bad side effect of ruining your credit.
Here’s how CCCS works:
- Consumer Credit Counseling Services talks to you to determine how much you can afford to pay each month.
- They negotiate with your creditors, getting them to accept lower monthly payments until all your debts are paid.
- You must sign an agreement to not obtain any new debt until the current debt is paid off.
- You make a single monthly payment to CCCS who pays your creditors.
CCCS usually does not get the creditor to agree to report you as paying on time, and even if they do, they do not get this agreement in enforceable form (in writing). If your creditors report you late, your credit report may show 30-day, 60- day, and 90-day+ lates, essentially ruining your credit. Although you will have a good reason why your credit rating looks this way, it will fall on deaf ears. |
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Last Updated ( Wednesday, 23 July 2008 06:04 )
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Written by Administrator
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Saturday, 19 July 2008 11:13 |
You have a number of important rights, including:
• The right to know what your credit records contain.
• The right to be told by a credit bureau the nature, substance and sources (except investigative sources) of the information (except medical) collected about you.
• The right to know the name and address of the credit bureau responsible for preparing a credit report used to deny you credit, insurance or employment, or to increase the cost of your insurance or credit.
• The right to a free copy of your credit report if you are denied credit and the denial is due at least in part to credit record information. (Requests for a free copy must be made within 30 days of your receipt of the notification of denial.)
• The right to review your credit report in person at the credit bureau, by phone or by mail.
• The right to take someone with you to review your file if you visit a credit bureau in person.
• The right to have investigated within a reasonable period of time any information in your credit record that you dispute. (if the credit bureau deems your request frivolous or irrelevant," the law says that the credit bureau need not investigate.)
• The right to have inaccurate information deleted from your credit record if a credit bureau investigation finds the information to be erroneous.
• The right to have information deleted if the credit bureau cannot verify it through its investigation.
• The right to have the credit bureau notify-at no cost to you those you name who previously reviewed the incorrect or incomplete information in your credit file that the information has been removed or changed.
• The right to know who has received a copy of your credit report over the past six months for credit-granting purposes.
• The right to know the names of everyone who has seen your credit record over the last two years for employment purposes.
• The right to include a brief written statement that will become a permanent part of your credit record explaining your side of any dispute that cannot be resolved with a credit bureau. (You may ask that the credit reporting agency share your written statement with certain businesses. The agency must do so without charge if you make your request within 30 days of being denied credit.)
• The right to have negative credit-related information deleted from your credit record after seven years.
• The right to have a bankruptcy deleted after ten years.
• The right to sue a credit bureau for damages if it willfully and negligently violates the law. (if you are successful in your lawsuit, you may collect attorney fees and court costs as well.)
• The right to be notified by a company that it has requested an investigative report on you.
• The right to request from a company pursuing an investigative report more information about the nature and the scope of the investigation.
• The right to know the nature and the substance of the investigative report but not the sources. |
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Last Updated ( Saturday, 19 July 2008 11:15 )
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Credit and Debt Counseling and repair Agencies |
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Written by Administrator
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Saturday, 19 July 2008 11:03 |
Credit and debt counseling agencies are organizations funded primarily by major creditors, such as department stores, credit card companies and banks, who can work with you to help you repay your debts and improve your financial picture.
Many are nonprofit companies, but some are not. To use a credit or debt counseling agency to help you pay your debts, you must have some disposable income. A counselor contacts your creditors to let them know that you’ve sought assistance and need more time to pay. Based on your income and debts, the counselor, with your creditors, decides on how much you pay. You then make one payment each month to the counseling agency, which in turn pays your creditors. The agency asks the creditors to return a small percentage of the money to fund its work. This arrangement is generally referred
to as a debt management program.
Some creditors will make overtures to help you when you’re on a debt management program. But few creditors will make interest concessions, such as waiving a portion of the accumulated interest to help you repay the principal. More likely, you’ll get late fees dropped and the opportunity to reinstate your credit if you successfully complete a debt management program.
Participating in a credit or debt counselling agency’s debt management program is a little bit like filing for Chapter 13 bankruptcy.
Working with a credit or debt counselling agency has one advantage: no bankruptcy will appear on your credit record. But a debt management program also has two disadvantages when compared to Chapter 13 bankruptcy.
First, if you miss a payment, Chapter 13 protects you from creditors who would otherwise start collection actions. A debt management program has no such protection and any one creditor can pull the plug on your plan. Also, a debt management program plan usually requires that your debts be paid in full. In Chapter 13 bankruptcy, you’re required to pay the value of your nonexempt property, which can mean that you pay only a small fraction of your unsecured debts.
The combination of high consumer debt and easy access to information (the Internet) has led to an explosion in the number of credit and debt counseling agencies ready to offer you help. Some provide limited services, such as budgeting and debt repayment, while others offer a range of services, from debt counseling to financial planning.
When choosing a credit and debt counselling agency, look for a company that is truly a nonprofit. Many for-profit outfits use names that sound like a nonprofit, such as “foundation,” to confuse you.
And your inquiry shouldn’t stop there. Many of the unscrupulous credit and debt counseling companies have nonprofit status. These companies often try to get you to pay “voluntary contributions” up front or pay other fees. At a minimum, always ask about fees before agreeing to give your business to a particular counselor. |
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Last Updated ( Saturday, 19 July 2008 11:07 )
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STEPS TO REPAIRING YOUR CREDIT |
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Written by Administrator
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Friday, 18 July 2008 11:42 |
There are 10 easy steps to repairing your credit, but you must have patience and persistence. The credit bureaus are not always greatly cooperative, or fast moving.
1. GET YOUR CREDIT REPORT.
Request them from all three of the credit reporting agencies—Equifax, Experian and TransUnion.
2. ANALYZE YOUR CREDIT REPORT.
Analyze your credit
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Last Updated ( Friday, 18 July 2008 12:45 )
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Read more...
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Ten Greatest Myths About Your Credit |
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Written by Administrator
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Friday, 18 July 2008 11:36 |
1. Credit Bureaus are empowered with some kind of governmental authority.
Credit bureaus have no legal authority at all, they are simply private companies who are in the business of selling credit information.
The credit bureaus are required by law to keep derogatory items on your credit report for 7 to 10 years.
There is no law that the credit bureaus report anything on you at all. Just the opposite is true! Credit bureaus are required by law to automatically remove all derogatory items older than 7 years or in the case of a bankruptcy, 10 years.
2. It is impossible to get a bankruptcy off credit report.
Bankruptcies come off just like any other derogatory that is incorrectly reported, obsolete, erroneous, misleading, incomplete, or that cannot be verified. Remember, the nature of the item has nothing to do with its removal under the Fair Credit Reporting Act.
3. The information on your credit report cannot be changed.
The opposite is true under the Fair Credit Reporting Act; both the federal and various state laws REQUIRE that items be removed if they are not 100% accurate ore cannot be verified in a timely manner.
It is illegal or immoral to have the information on your credit report altered or removed.
Not only is it not illegal or immoral, but it is what the Fair Credit Reporting Act is all about. It was enacted by congress for the very purpose of protecting consumers from the intrusion of the credit bureaus into our lives.
4. Paying a past due debt removes it from your credit report.
Just because you pay an old debt does not change or erase the fact that at one time you were not paying on it as you agreed. Can this record be changed? Absolutely!
Inquiries are not derogatory and will not affect your credit standing.
Anything that erodes your financial credibility is damaging to your credit standing. In the case of inquiries, one or two is not too bad, but any more than that and they begin to tell a story of their own. Any prospective credit grantor will look at your credit report and think that you are desperate for credit.
5. If you get a derogatory item removed, it will just come back.
Not if it is removed legally. When it is removed with cause under the Fair Credit reporting Act it cannot legally be placed back on your credit report. The same law that required its removal prohibits it from being placed back on.
6. The past equals the future.
This is the biggest myth of all. The concept that once bad, always bad, or at least for 7 years is totally false. Anybody can run into hard times or an emergency situation now and then, but that doesn’t automatically mean that they are a poor credit risk for a magical 7 years. The simple truth is, no credit report can predict the future.
7. I can't repair my credit report myself.
Yes, you can! And you will find all of the information you need to do it right here! The simple truth is you don’t have to live with bad credit or pay thousands of dollars to have it corrected.
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Last Updated ( Friday, 18 July 2008 11:42 )
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Debt Repair and Relief
When you have finally concertized an action plan to get rid of your debt for good, it is important to come up with an effective debt settlement letter that is able to summarize your debt repayment plans to a creditor. If this is your first time to write a