Net-Debt Settlement

noreply@blogger.com (NetDebt) — Mon, 21 Sep 2009 20:02:00 +0000

Life Insurance Settlement Creates Secondary Market.

noreply@blogger.com (NetDebt) — Fri, 18 Sep 2009 23:49:00 +0000

Think of a brave new world where buyers are ready and willing to buy your vehicle at a price substantially more than its trade-in value and you get to choose the highest bidder. No marketing, no bargaining, no expense to you. Fiction? I don't think so. This world exists,not for cars, but for life insurance policyholders intended for lapse or surrender. These life policy owners can receive a settlement before death.

The life settlement industry has created a securitized secondary market for acquiring insurance policies from qualifying life insurance policyholders, who receive an offer guaranteed to exceed the cash value of the policy. In 2002, life insurance settlement providers paid approximately $340 million to buy policies with an aggregate cash value of $94 million.

Life Insurance Policyholders who qualify for life settlements are in general older than sixty five years of age; have deteriorating health, but are not terminally ill; and have “ascertainable and limited” life expectancies between two and fifteen years. Qualifying policies are at least two years old, pay death benefits between $100,000 and $5 million and are issued by a life insurance company with an “A” rating or higher.

THE BIRTH OF AN INDUSTRY

Relatively new, the life insurance settlement industry evolved from “viatical” settlements, which catered to the needs of terminally ill life insurance holders. Viatical life settlements enable an insured individual to receive benefits, before death, to pay for the high costs of care. Life insurance settlements, also known as senior life settlements, do not involve a terminally ill policy holder (less than 24-month life expectancy) but a determinable life expectancy based upon the policyholders health, age, and lifestyle.

The policy’s market value is the net present value of the benefit at death, considering the policy’s duration and carrying costs. Other factors affecting the market value include the type of life policy, the policy’s cash value and any loans against the policy.

A life settlement event creates a taxable event with two tiers. The first tier is the difference between the cost basis and cash surrender value, most likely taxed as ordinary income. The second tier is the excess of settlement proceeds over the surrender value.

The Internal Revenue Service has not yet provided specific guidance, however, whether this money is considered to qualify as a long-term capital gain. The treatment of the tax implications of viatical settlement is markedly different. The IRS considers these tax-exempt accelerated death benefits.

WHEN TO BUY OR SELL LIFE INSURANCE?

Life settlements are a viable option when policy premiums are no longer affordable. Recent declines in short-term interest rates have hurt the free cash flow of senior citizens living on a fixed-income. With life settlements, the burden of payments disappear and policyholders can receive cash up front.

Perhaps the senior has outlived all beneficiaries and the inclusion of life insurance would create a undesirable taxable estate. What if the senior citizen, due to health reasons, does not qualify for long-term care insurance. Life Settlement proceeds could be used to fund long term care.

From a business perspective, life insurance settlements should be considered when a entity is for sale or the business owner is retiring. If your client is a non profit, or charity, it may make sense to consider selling donated life policies to realize cash today and eliminate future cash outflows
Why do individuals buy life insurance policies?

Most life insurance settlement providers are backed by well-known financial institutions that view insurance policies as just one asset in a balanced investment portfolio. These financial conglomerates] rely on actuarial and other quantitative data to buy a profitable policy that will produce a expected rate of return at the policy maturity. These insurance policies are held in a blind trust that may be used as collateral for a bond offering in a process known as secondary market securitization.

FIDUCIARY PITFALLS

Life insurance products are acquired] for a host of reasons and should be a part of every estate and financial plan. As with any financial vehicle, these policies should be reviewed frequently. Usually they are not.

A good insurance policy at the time of purchase does not mean you have a good policy years later. In today’s low short term interest rate environment, many policies written in an environment when rates were substantially higher might require replacement?

Technorati

noreply@blogger.com (NetDebt) — Wed, 09 Sep 2009 18:01:00 +0000

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TASC Board Members to Discuss Debt Settlement at Financial Services Collections & Credit Risk Conference

noreply@blogger.com (NetDebt) — Wed, 26 Aug 2009 16:45:00 +0000

Dave Leuthold, Wesley Young and Teresa Schumann-Dodson will lead four-part panel

Understanding the Debt Settlement Industry and Leveraging Debt Settlement Accounts to Increase Recoveries in a Distressed Economy
We're looking forward to explaining how debt settlement remains not only a reliable option for consumers in debt, but also for creditors as well
For example, our industry returned $2.2 billion last year to creditors.

Madison, WI (PRWEB) August 26, 2009 -- The Association of Settlement Companies today announced three of its board of directors will lead a four-part workshop on debt settlement at the Source Media Financial Services Collections & Credit Risk Conference, held Oct. 18-20 at Caesars Palace in Las Vegas.

Vice President Dave Leuthold, Legislative Director Wesley Young and Executive Board Member Teresa Schumann-Dodson will present on Sunday "Understanding the Debt Settlement Industry and Leveraging Debt Settlement Accounts to Increase Recoveries in a Distressed Economy," split up as follows:

* Schumann-Dodson will give an overview on the debt settlement industry in part one;
* Leuthold will explain how TASC is working to protect consumers through self-regulation and governance of debt settlement companies in part two;
* Young will provide a state and federal legislative update in part three; and
* All three will be joined by four others to discuss leveraging debt settlement as a recovery channel in part four.

"We're looking forward to explaining how debt settlement remains not only a reliable option for consumers in debt, but also for creditors as well," Leuthold said. "For example, our industry returned $2.2 billion last year to creditors."

More information on the conference, which is put on by Source Media, can be found at sourcemediaconferences.com.

About The Association of Settlement Companies
The Association of Settlement Companies (TASC) promotes fair business practices, consumer protection and industry standards for the debt settlement industry. TASC, founded in 2005, serves to protect consumers through an organization seal that represents best practices and standards of reputable companies. The organization also protects its member companies through lobbying efforts at the state and national levels, as well as awareness initiatives to educate consumers on debt settlement as a financial solution. All TASC member companies pledge compliance to strict association bylaws governing business practices and ethics. For more information, visit tascsite.org.

Major Debt Problems in America

noreply@blogger.com (NetDebt) — Wed, 12 Aug 2009 17:19:00 +0000

noreply@blogger.com (NetDebt) — Wed, 29 Jul 2009 23:30:00 +0000

If you have more than 10K in credit card debt you can't ignore this reality. Is this happening to you?

http://ping.fm/rqZOX

noreply@blogger.com (NetDebt) — Mon, 27 Jul 2009 16:35:00 +0000

NYTimes.com - When Debtors Decide to Default

http://ping.fm/ClUGr

noreply@blogger.com (NetDebt) — Thu, 16 Jul 2009 00:06:00 +0000

http://ping.fm/cY604

The Obama Administration Details its Proposed Financial Regulatory Reforms

noreply@blogger.com (NetDebt) — Wed, 15 Jul 2009 15:53:00 +0000

Below is a summary of what the Obama Administration plans to do about Consumer protection and Financial Abuse.

If you are too busy or lazy to read the entire thing I will summarize it. Its basically the Golden Rule you learned on the playground in Elementary school. Do unto others as you you would have them do to you.

The golden rule is endorsed by all the great world religions; Jesus, Hillel, and Confucius used it to summarize their ethical teachings. And for many centuries the idea has been influential among people of very diverse cultures. These facts suggest that the golden rule may be an important moral truth.

Tell the truth and disclose everything in a clear and simple manner.

All this is based on the Ethic of Reciprocity.

The golden rule is an ethical code that states one has a right to just treatment, and a responsibility to ensure justice for others. Reciprocity is arguably the most essential basis for the modern concept of human rights, though it has its critics. A key element of the golden rule is that a person attempting to live by this rule treats all people, not just members of his or her in-group, with consideration.

III. Protect Consumers and Investors from Financial Abuse

A. A new federal agency is recommended that is devoted to consumer protection in financial services.

The most extensive proposal offered to protect consumers is the creation of a new Consumer Financial Protection Agency (CFPA). This agency will be dedicated to protecting consumers in the financial products and services markets, except for investment products and services already regulated by the SEC or CFTC. The agency's creation is supported by the assertion that consumer protection gives the public confidence that financial markets are fair and enables policy makers and regulators to maintain stability in regulation.

The proposal notes that the Federal Trade Commission (FTC) has a clear mission to protect consumers, but that it lacks jurisdiction over the banking sector and has limited tools and resources to promote robust compliance of nonbank institutions.

The proposal describes several characteristics of the CFPA.

First, it states that the CFPA should have broad jurisdiction to protect consumers in consumer financial products and services such as credit, savings, and payment products.

Second, the CFPA should be an independent agency with stable and robust funding.

Third, the agency should have sole rule-making authority for consumer financial protection statutes, as well as the ability to fill gaps through rule-making.

Fourth, the CFPA should have supervisory and enforcement authority and jurisdiction over all persons covered by the statutes that it implements, including both insured depositories and the range of other firms not previously subject to comprehensive federal supervision, and it should work with the Department of Justice to enforce the statutes under its jurisdiction in federal court.

Fifth, the agency should pursue measures to promote effective regulation, including conducting periodic reviews of regulations, soliciting advice of an outside advisory council, and coordination with the Council.

Sixth, the CFPA's rules should not preempt state laws, as states should have the ability to adopt and enforce stricter laws for institutions of all types.

Finally, the new federal agency should have a wide variety of tools to enable it to perform its functions effectively.

The tools that should be utilized by the CFPA are the authority to conduct research and collect data, to collect and track complaints about consumer financial services, to provide financial education to consumers, and to promote community development investment and fair and impartial access to credit. The proposal goes further by stating that the Federal Trade Commission should be given better tools to protect consumers. Even though the CFPA is to have primary authority over financial products and services protection, the Administration believes that the FTC should retain backup authority with the CFPA for the statutes for which the FTC currently has jurisdiction. The proposal suggests that the FTC should retain authority for dealing with fraud in the financial marketplace, including the sale of services like advance fee loans, credit repair, debt negotiation, and foreclosure rescue/loan modification fraud; however, the proposal states that the FTC should also provide such authority to the CFPA. Finally, the proposal provides that the FTC should also remain the lead federal consumer protection agency on matters of data security, with front-end privacy protection on financial issues moved to the CFPA.

B. Reforms of consumer protection should be based on principles of transparency, simplicity, fairness, accountability, and access for all.

To satisfy the principle of transparency, the proposal suggests a new proactive approach to disclosure and authorize the CFPA to require that all disclosures and other communications with consumers be reasonable. To be reasonable, the proposal states that the communications should be balanced in their presentation of benefits, and clear and conspicuous in their identification of costs, penalties, and risks. In regard to simplification, the proposal states that the regulator should be authorized to define standards for products that are simpler and have straightforward pricing. The proposal satisfies the principle of fairness by requiring the CFPA to place tailored restrictions on product terms and provider practices. The proposal also authorizes the CFPA to impose appropriate duties of care on financial intermediaries. Lastly, the proposal seeks to assure access by stating that the Agency should enforce fair lending laws and the Community Reinvestment Act and otherwise seek to ensure that underserved consumers and communities have access to prudent financial services, lending, and investment.

Recommended consumer protections include:

Promoting concise and clear information for consumers.

Protecting consumers from unfair and deceptive practices.

Creating higher standards and level playing field across bank and non-bank firms.

Stronger supervision and compliance examinations.

Creating standards for "plain vanilla" products with straight forward pricing, with alternative products subject to greater scrutiny.

Banning unfair terms and practices and imposing heightened duties of care on financial intermediaries.

C. The framework for investor protection should also be strengthened by focusing on principles of transparency, fairness, and accountability.

In light of the recent investment scandals such as the Madoff Ponzi scheme, the proposal also seeks to make the investment market a more secure place for investors. The proposal states that this goal has already been undertaken by the SEC in their current efforts to strengthen and streamline its enforcement process and to expand resources for enforcement. However, the proposal suggests that further measures are necessary to ensure investor protection; these measures should focus on the principles of transparency, fairness, and accountability.

To adequately satisfy these principles, the proposal suggests expanded authority, new tools, and a coordinating council.

First, the proposal asserts that the SEC should be given expanded authority to promote transparency in disclosures to investors.

Second, the SEC should be given new tools to promote fair treatment of investors such as the establishment of a fiduciary duty for broker-dealers offering investment advice.

Third, the proposal states that financial firms and public companies should be accountable to their clients and investors. This may be accomplished by expanding protections for whistleblowers, expanding sanctions available in enforcement actions, and requiring non-binding shareholder votes on executive compensation packages.

Fourth, the proposal suggests that to address potential gaps in consumer and investor protection and to promote best practices across different markets, a coordinating council should be created. This council should include the heads of the SEC, FTC, the Department of Justice, and the CFPA or their designees, and other state and federal agencies. These practices, according to the proposal, will establish a system that promotes the principles of transparency, simplicity, fairness, and accountability.

Collection Agencies are Growing Revenue - Big Surprise?

noreply@blogger.com (NetDebt) — Mon, 06 Jul 2009 20:22:00 +0000

Check out this CNBC Video from This morning about the Collection company Portfolio Recovery Associates who is reporting double digit revenue growth, and big surprise, and its stock is soaring. Steven Fredrickson, the company's CEO, tells CNBC how he plans to keep up the momentum.

DO I need to consolidate all accounts in Debt Settlement?

noreply@blogger.com (NetDebt) — Mon, 06 Jul 2009 19:54:00 +0000

With online debt-settlement you can choose what accounts you want to include in the program. You should be aware that some accounts left out of the program might be closed if the creditors discover that you are in debt settlement. It is also advised to have at least one account left open for emergency money needs.

Bank of America accused of anti-consumer practices

noreply@blogger.com (NetDebt) — Fri, 03 Jul 2009 18:50:00 +0000

By Jonathan Stempel

NEW YORK (Reuters) - Consumer and labor groups demanded Bank of America Corp and other lenders reform their sales practices so that workers under pressure to meet sales quotas do not saddle customers with costly and unnecessary products.

The whistleblowing campaign was announced Tuesday as the U.S. Treasury Department unveiled legislation to create a Consumer Financial Protection Agency, as part of the Obama administration financial regulation overhaul.

People, who said they were former Bank of America employees, alleged that their supervisors drove them to burden consumers with needless debt and fees, to fatten the bank's earnings and the paychecks of senior executives, and threatened to retaliate if they complained. Some complained their salaries had been too low and that they had to hit quotas to earn needed bonuses.

"This is the kind of information that really needs to get out," said Representative Keith Ellison, a Minnesota Democrat who sits on the House Financial Services Committee. "Without a strong whistleblower law, we simply are not doing the things we need to do in order to manage risk properly."

He suggested that lending standards could be compromised by "the urgency to sell, sell, sell, sell, sell."

Groups conducting the campaign include the Service Employees International Union, which is trying to organize Bank of America workers; the National Association of Consumer Advocates, and the U.S. Public Interest Research Group.

Bank of America spokeswoman Anne Pace rejected the allegations, saying the SEIU misrepresented the largest U.S. bank's relationship with its customers and associates.

She said the Charlotte, North Carolina-based bank is "pro-associate and believes that managers are well-equipped to respond to associates' needs," and is committed to ensuring that customer fees are "transparent and predictable."

Christopher Feener, who said he used to work in the bank's credit card unit, was among the former workers who spoke out.

He complained that the bank regularly violated the Fair Debt Collection Practices Act, and sometimes pushed workers to falsely threaten legal action against customers. He said his team was sometimes pushed to call customers' neighbors about delinquent accounts, "to embarrass the customer and actually encourage the neighbor to bring over a message."

Shares of Bank of America rose 5 cents to $13.24 in early afternoon trading on the New York Stock Exchange.

Source: http://digg.com/d1vJLc

The New American Dream

noreply@blogger.com (NetDebt) — Fri, 03 Jul 2009 16:37:00 +0000

What Does Debt Settlement Cost?

noreply@blogger.com (NetDebt) — Tue, 30 Jun 2009 21:24:00 +0000

You can find more Credit C ard Debt Settlement Videos on Youtube.com

Debt Settlement Programs - Video Explination

noreply@blogger.com (NetDebt) — Wed, 24 Jun 2009 18:13:00 +0000

Have you every been offered a Debt Relief Option where a Company claims to be able to Cut your debt in Half?

The recent financial turmoil in the global markets has caused hardship everywhere and often it trickles down to personal credit card debt. People are loosing their jobs, and running up credit card debt to cover their monthly bills.

Governments, and Corporations are getting bailed out left and right and now so are individual consumers. The collapse of the mortgage industry had left many Mortgage Brokers unemployed. Many of them have moved into the Debt Consolidation, Debt Settlement, Debt Management and Debt Relief Industry's.

There are a few options for those in financial distress.

1. Bankruptcy Chapter 7 - If your lucky you can get Lucky Chapter7
2. Bankruptcy Chapter 13- The most common form of Bankruptcy.
3. Debt Settlement - Fastest way out of Debt but has a few downside risks
4. Debt Management - Lower you interest rates and get out of debt with less downside.

If you are curious about what exactly a Debt Settlement Program is View this video.

Credit Card Debt Video

noreply@blogger.com (NetDebt) — Mon, 22 Jun 2009 21:53:00 +0000

I got this video from the http://www.youtube.com/user/DebtProfessor

New Netdebt Weebly Site

noreply@blogger.com (NetDebt) — Fri, 19 Jun 2009 22:14:00 +0000

We just created a new debt Settlement Solution website for netdebt.com on Weebly in 30 minutes. Anyone can create their own high quality website with very little tech knowledge.

http://netdebt.weebly.com/

Check out this video about how to create your own site.

Tahoe Whitewater River Rafting

noreply@blogger.com (NetDebt) — Fri, 19 Jun 2009 17:07:00 +0000

If you are looking for a summer adventure in Northern California check out Whitewater rafting in the Lake Tahoe area. Irie Rafting guides rafting adventures on the Yuba River, American River, and the Truckee River. They offer trips tailored to your experience level. Class III, IV, and V day trips and overnight camping trips. You can also check out their new Tahoe River Rafting Blog

California whitewater rafting includes many options for half-day, full-day, and multi-day river trips. The western foothills of the Sierra Nevada mountain range offer steep and technical runs for the advanced and adventurous boater, whereas the character of the eastern slope rivers is more moderate and continuous. Lake Tahoe Central Adventures, a Swayback Inc. company, offers year round adventures with Truckee Whitewater Adventures, I.R.I.E. Rafting Company, Pacific Crest Snowcats, and Alaska Backcountry Adventures. Come explore your world with us!

Single Day Trips, introductory Class II-III rivers

Lower Truckee River Gorge Run
This half day trip is offered twice daily and is great for families and groups. This run begins with mellow class two boulder gardens and pools to swim in and progressively increases in intensity as you explore eight miles of river. Half way down this run the rapids become larger and closer together until we get to the top of the Floriston Gorge. This river narrows and gets steeper an descends its last mile through a series of several class III and III+ rapids such as Jaws Rapid and Bronco Rapid, which is a quarter mile long!

Single Day Class IV-V River Trips

Middle Fork of the American River
This run starts with a bang within seconds of getting in the boat with several class III rapids that will get you ready for The Class V Rapid Tunnel Chute, named for the tunnel through a rock that we will float through at the bottom of this exciting rapid. Your day continues with several class IV rapids as we raft deep into the wilderness. The middle section of this run mellows out and allows for swimming and relaxing before dropping into a second set of class four rapids to the end of the run. This is a strenuous one day and can be improved by making it a two day wilderness camping trip.

Wilderness Camping River Trips

Wilderness Trips offer the beauty of the river through all the stages of day and night and allow for a person to relax into the rejuvenating river pace in which a person becomes a human being, rather than a human doing. Delicious meals are prepared riverside for you and your friends and family, this is an experience not to be missed. Many of these trips are available as one day trips, but they are all recommended as multiple day camping adventures.

East Fork of the Carson River Two Day Trip
This is a two day class II run that is best in the springtime (May and June). Starting high in the Sierra Nevada mountains a contact gradient draws the raft down through sweeping turns and rippling rapids for 21 miles of wilderness solitude. This is a great trip for families and groups. The largest rapid, sidewinder is a fun and yet straightforward rapid, exciting for first timers. The highlight of this run is a beautiful natural hot spring on the bank of the river about half way down the run. After camping at the hot spring we continue to explore the eastern side of the Sierra Nevada until we reach the Great Basin in Nevada.

Wilderness Camping Trips, Class IV-V

Middle Fork American Two Day Trip
This run starts with a bang within seconds of getting in the boat with several class III rapids that will get you ready for The Class V Rapid Tunnel Chute, named for the tunnel through a rock that we will float through at the bottom of this exciting rapid. Your day continues with several class IV rapids as we raft deep into the wilderness. The middle section of this run mellows out and allows for swimming and relaxing before we pull over in the wilderness of the middle fork canyon to camp. Delicious food will be prepared for you and your friends and family on the riverbank. The second day starts relaxed in the calm middle portion of the run before dropping into a second set of class four rapids to the end of the run. This run is available as a strenuous one day trip, but the pace of the two day camping trip makes it perfect.

Debt Settlement Acceptable and Unacceptable Debts

noreply@blogger.com (NetDebt) — Thu, 18 Jun 2009 18:59:00 +0000

Unacceptable Debt

Student Loans -

Stafford, Federal Plus and Federal Perkins are all included.

Private student loans, tuition coverage programs (I.e. MMI, Devry, ITT, etc…)

Secured loans -

Mortgages, Home Equity Loans.

Car notes, Vehicle Finance Cards. (i.e. Yamaha, Honda cards)

(If client is unsure as to whether or not the account is secured, ask to see the original contract)

Some Personal Loans -

CitiFinancial / Cit Flex – Arbitration clause that restricts our ability to work with creditors.

Beneficial / HSBC – Client must list assets on app. The creditor will look to secure those assets.

American General – Both of the above apply.

Military Cards - Military Star Cards, Pioneer Cards, USAA Cards, Military Exchange.

Navy Federal Credit Union – Will not settle

Payday Loans / Cash Advances - Cash Call, Check into cash, Etc…

Accounts with legal action executed - Summons of complaints, Judgments, Liens, Garnishments, Bankruptcy.

Bank Overdraft Fees –

IRS / Federal or State Tax Debt -

Acceptable Debt

Credit Cards - Min balance of $500 for individual accounts / $7,000 for the total debt amount.

Collection accounts - Accounts with an attorney’s office are acceptable if no legal action has been executed.

Department Store Accounts –

Gas Cards –

Utilities – Make sure client is aware their utilities will be shot off due to nonpayment

Auto Repossession balances –

Unsecured Personal Loans – Unless specified above

Medical Bills –

Business accounts – Must be unsecured, Clients name must be on the card, and business must be closed.

Credit Bailout: Issuers Slashing Card Balances NY Times Article

noreply@blogger.com (NetDebt) — Tue, 16 Jun 2009 15:48:00 +0000

The banks were bailed out last fall, the automobile companies last winter. For Edward McClelland, a writer in Chicago, deliverance finally arrived a few days ago.

Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even.

It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.

As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed.

The practice started last fall as the economy worsened. But in recent months, with unemployment topping 9 percent and more people having trouble paying their bills, experts say this approach has risen drastically.

They say many credit card issuers have revised internal guidelines to give front-line employees the power to cut deals with consumers. The workers do not even have to wait for customers to call and ask for a break.

“Now it’s the card company calling you and saying, ‘Let’s talk turkey,’ ” said David Robertson, publisher of the credit industry journal The Nilson Report.

Only a few creditors are willing to confirm the practice. Bank of America and American Express say they decide on a case-by-case basis whether to accept less than the full balance. Other card companies refuse to discuss the subject, but their trade group, the American Bankers Association, acknowledges that settlements are becoming more common.

The shift comes as the financial services industry finds itself losing some of its legendary power. A credit card reform bill that makes it harder to raise rates on existing balances and prevents certain automatic fees flew through Congress and was signed by President Obama in late May.

Borrowers still have a crushing amount of debt to deal with, however.

Revolving credit, a close approximation of credit card debt, totaled $939.6 billion in March. The Federal Reserve reported that 6.5 percent of credit card debt was at least 30 days past due in the first quarter, the highest percentage since it began tracking the number in 1991. The amount being written off was also at peak levels.

After a balance has been delinquent for six months, regulations require the card company to reduce the value of the debt on its books to zero. If a borrower has not paid by this point, chances are he never will.

“The creditors would rather have a piece of something now instead of absolutely nothing down the road,” said Adam K. Levin, the founder of the consumer education Web site Credit.com.

Banks and credit card companies are discussing new programs that would, for the first time, allow credit counselors to invoke reductions of principal as a routine part of their strategy, said Jeffrey S. Tenenbaum, a lawyer for many counseling agencies. In the past, counselors could persuade card issuers to adjust interest rates and modify late fees, but the balance was untouchable.

An example of how quickly the card companies are shifting their approach is in the behavior of HSBC, a major issuer, toward Mr. McClelland.

He was paying fitfully on his card, which was canceled for delinquency. In April, HSBC offered him full settlement at 20 percent off. He declined. A few weeks later, it agreed to let him pay half.

Traditionally, the creditors could play tough with any accounts that became delinquent because the cardholders had assets. The creditors could sue or place a lien on a cardholder’s house.

As the recession grinds on, though, many cardholders have less to lose. Mr. McClelland, 42, is a renter. Since he is self-employed, he has no wages to garnish. But he did not want to feel like a deadbeat.

“Having this over and done with was appealing,” he said. He raised the agreed-upon $2,743 and sent it off electronically last week. He has spared himself the prospect of years of collection calls.

HSBC said it did not comment on individual cardholders and would not discuss its policy toward settlements. “Every customer situation is unique,” said a spokeswoman, Cindy Savio.

The card companies, perhaps understandably, do not want to promote the idea that settlements have become merely a matter of asking nicely. The creditors also point out that a delinquency, like a foreclosure, destroys a credit record.

And there can be a Catch-22: those with the fewest assets are the likeliest to receive a settlement offer, but they are also the least able to come up with the cash for that final negotiated payment. Some creditors, though, are helpfully letting people stretch this out over months.

Still, a line has been crossed, credit experts say.

“Even in the early stages of delinquency, settlements can be dramatic,” said Carmine Dorio, a longtime industry executive who ran collection departments for Citibank, Bank of America and Washington Mutual.

During the boom, nonpayers were treated more harshly because, paradoxically, their debt was more valuable. Collection agencies were eager to buy bundles of old debt from the card companies for as much as 15 cents on the dollar. In a healthy economy, even the hopelessly indebted can pay something.

In this recession, where collection agencies have little hope of collecting from the unemployed, that business model is suffering. Experts say 5 cents on the dollar is now the most a card company can hope to get for its past-due accounts.

Another factor undermining the card companies is the rise of debt settlement firms. These are profit-making companies that charge fees, nearly always in advance, to bargain with creditors on a consumer’s behalf.

Settlement companies are under fire from regulators, who say they promise much and deliver little. But their ubiquitous ads, which make a settlement seem not only easy but also a moral victory over shamelessly gouging card companies, have done much to spread the idea.

Although there are few independent statistics on the settlement industry, there is no doubt that some generous deals are being done.

Consider Bedros Alikcioglu, a gas station owner in Newport Beach, Calif. He owed $112,000 on four cards and was paying $3,000 a month in interest and late fees. “It was so hard to earn that money, and paying it to nowhere didn’t make sense anymore,” said Mr. Alikcioglu, 75.

He signed up with a debt settlement company named Hope Financial, which negotiated deals with his creditors to settle for about 35 percent of his balance. Hope Financial is charging Mr. Alikcioglu about 12 percent of his original debt.

“I did not want to leave the legacy of bankruptcy,” Mr. Alikcioglu said. “I am now at peace.”

What is a foreclosure rescue scam?

noreply@blogger.com (NetDebt) — Fri, 05 Jun 2009 18:36:00 +0000

Source: This Article was found on

http://www.nfcc.org/Housing/ForeclosureRescueScams.cfm

What is a foreclosure rescue scam?

Rising foreclosure rates have led to a growing number of scam artists offering to "rescue" homeowners in financial distress. They use a wide variety of scams and target people of all ages in virtually every community across the country. Anyone can become a victim.

Foreclosure rescue scams usually revolve around heavily promoted deals supposedly designed to save the homes of people facing foreclosure - those who have fallen behind on their mortgage payments. They proclaim to "save your home" or "pay your mortgage," but in reality generate a quick profit for the scam artist or strip away the value of your home with no benefit to you. Scam artists can evict you from your own home and then sell it on the open market.

How does a foreclosure rescue scam work?

The "rescuer" identifies distressed homeowners through public foreclosure notices in newspapers, via the Internet, or at government offices. The "rescuer" then contacts the homeowner by phone, personal visit, card or flyer left at the door, or advertising. The initial contact typically centers on a message that tells homeowners that they can stay in their house easily, get a "fresh start," keep their credit rating or receive instant cash.

During the first meeting, the homeowner is often told to stop all contact with lenders, credit counselors or lawyers and let the "rescuer" handle all the details. This cuts off the homeowner's access to legitimate financial solutions.

The scam artist generally looks to make a quick profit through fees or direct mortgage payments that are never passed on to the lender. Sometimes the scammer assumes ownership of the property by deceiving the homeowner.

Once it is too late to save the home, the "rescuer" either takes the property or the owner loses the home to foreclosure after it has been drained of equity through fees and charges.

What are some of the most common scams?

The Bait and Switch: The homeowner is purposely deceived and therefore does not understand that he is selling the house in exchange for a "rescue."

Many believe they are signing documents for a new loan or other financial arrangement that would allow them to retain ownership by paying off mortgage payments that are past due.

The False Intermediary: The "rescuer" charges an upfront fee or very high fees to "save" the house by negotiating with the lender or promising to quickly find a buyer for the house. The scammer usually seals the homeowner off from legitimate help or legal relief by telling the owner that he should not talk to the lender, seek out credit counseling or legal advice. Once the fees are paid, he vanishes with a quick and easy profit.

The homeowner is usually left without enough help to save the home and with little or no time left to prevent foreclosure.

Sometimes, the scammer will insist that a homeowner make all mortgage payments directly to him while he negotiates with the lender. He may collect a few months' worth of payments before disappearing.

The Bogus Rent-to-Buy Scheme: The homeowner surrenders ownership of the house thinking he will be able to pay rent and then buy it back over a few years. The terms of the buy-back deal are usually stacked against the homeowner, with the resale price well above market value. Sometimes, the scam artist hikes rental fees very significantly over time.

Once the former homeowner misses rent payments, the family is evicted, leaving the "rescuer" free to sell the house.

Even if the former homeowner is able to pay the rent, the terms of the buy-back are so burdensome that he ends up losing possession of the house and the scam artists keep all or most of the equity.

How can you know if a company is legitimate?

Legitimate companies will sit down with a homeowner and collect documentation. Their representatives will explain the offer and the process in as much detail as you need to make an informed decision. All promises and agreements will be in writing. Their representatives will not object to your desire to consult a lawyer, credit or housing counselor, family member, friend or other expert resource.

Most legitimate companies will not solicit your business through high-pressure direct marketing, nor will they make promises up front to save your home, offer immediate cash or save your credit rating.

Before you sign any contracts, you should contact your lender, a credit or housing counselor, or a lawyer. You can also check out many companies at www.bbb.org.

What are the red flags to keep in mind?

Homeowners should proceed with extreme caution if an individual or company:

Calls itself a "mortgage consultant" or "foreclosure service."
Contacts people whose homes are listed for foreclosure, including anyone who uses flyers or solicits for business door-to-door, by phone, or email.
Encourages you to lease your home so you can buy it back over time.
Collects a fee before providing any services to you.
Instructs you to cease all contact with your lender, credit or housing counselors, lawyer or other legitimate experts.
Tells you to make your mortgage payments directly to him or his company (not the lender).
Requires that you transfer your property deed or title to him or his company.
Makes a promise that seems too good to be true, for example, instant cash with "no strings attached".
Tells you that as part of the deal you will need to move out of your house for some period of time for remodeling or other reasons.
Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.

For additional information, you can see the U.S. Department of Justice U.S Trustee Program's list of warning signs at www.usdoj.gov/ust/eo/public_affairs/factsheet/docs/fs06.htm

What should a homeowner NEVER DO?

Don't be pressured to sign a contract. Take your time to review all documents thoroughly, preferably with a lawyer who is representing your interests only.
Don't send or give your mortgage payments to someone other than your lender, even if he promises to make the payments for you.
Don't sign away ownership of your house to anyone without advice from a credit or housing counselor or lawyer.
Don't rely on verbal agreements - they mean nothing. Get all promises in writing and keep copies of all documents,
Don't sign anything containing blank lines or spaces. Scammers can add information later without your knowledge or approval.
If you do not speak English, use your own translator. Don't depend on someone who is provided by the "rescuer."
Don't fall for promises that are often used to lure homeowners into scams. For example:

Claims to save your credit rating
Promises of instant cash
Guarantees that a buyer will be found within a certain number of days
Help in filing for bankruptcy to "stop the foreclosure"
Offers of free rent or gifts

10 lies that got you (and keep you) in credit card debt

noreply@blogger.com (NetDebt) — Fri, 05 Jun 2009 17:49:00 +0000

We found this blog post on Digg

This post comes from partner blog The Dough Roller.

While we don't have any credit card debt now, except for 0% APR balance transfers, there was a time when we did. While we never let our credit cards get completely out of control, we did build up several thousand dollars on our credit cards when I first got out of college.

So having gotten into card debt and then climbed out of it, we've learned many of the causes of this financial pain. The fact is, we can talk ourselves into using our credit cards in ways that will hurt our finances down the road.

So here are 10 lies we tell ourselves that get us in credit card debt and keep us there.

It's an emergency. Often we go into debt by convincing ourselves that we have an emergency. Certainly there are times when a true emergency arises. Medical expenses are a good example of a real crisis. But many times what we call an emergency isn't really an emergency. Whether it's a second car that needs repair, or even our child's college education, we can often go without addressing what at first seems like an urgent expense. If life or liberty isn't at stake, it's probably not a true emergency.

We deserve it. This one has snagged us more than once. After working so hard to save money and spend wisely, sometimes we let our guard down under the guise of a reward. Perhaps you've had a hard week at work, and spending $150 on a fancy dinner that you can't really afford seems like a good idea and something you've earned. The problem is that it's like taking one step forward, two steps back. The "reward" just digs you deeper and deeper into debt.

We all need a break now and again. But if you are fighting credit card debt, don't go into more debt as a reward. Find some other way to reward yourself that doesn't make your financial problems more severe.

It's a bargain. Bargains are great, but they shouldn't be used as an excuse to spend more than we have. Great deals also shouldn't be used to buy more than we need. The one thing I've learned is that great deals generally come and go pretty regularly. Regardless, it's not a great deal if you spend a ton of money on credit card interest paying off the debt over months or even years.

It's not much money. It's so easy to spend money we don't have if we spend it in small amounts. Here's a factoid: Last year the Bush stimulus bill sent out stimulus payments to those taxpayers who qualified. Under the 2009 stimulus plan, payments will not be sent in lump-sum checks. Instead, those taxpayers who qualify for a stimulus payment will see their take-home pay increased each month by about $7 to $13. Why? Because we are more likely to spend an extra $10 or so each month than we are a lump-sum $400 to $800.

The same is true with "small" credit card debt. Enough small charges on the card over time can grow into a mountain of debt. If you are fighting your way out of credit card debt, there is no such thing as a small credit card charge.

The payment is small. Let's be honest. How many have justified a purchase based on the monthly finance cost? We all do that when we buy a home, asking ourselves if we can afford the payments. But with credit cards, it can be a real problem. Because most cards calculate the monthly payment at about 2% of the outstanding balance, payments are extremely small compared with the amount owed.

For example, you can nab a $1,000 TV and pay "only" about $20 to $30 a month for it. The small credit card payments have probably caused more financial turmoil for many consumers than any other factor. Remember, the payment may be small and manageable at first, but buy enough on credit and the payments grow substantially. On top of that, you still have to pay back the borrowed amount with interest.

The card rewards make it worth it. We take advantage of many travel reward credit card offers and cash-back rewards. But if the allure of these awards is putting you deeper and deeper into debt, they just aren't worth it. If you pay off your card each month, the rewards are great. But if you don't, stay away from them. In fact, if the rewards are tempting you into credit card debt, get a card without rewards or just use your debit card.

Offers of 0% APR on purchases. The 0% APR and low-interest credit cards can be like a drug dealer giving away his product for free -- at first. Once you're hooked, prices go up, way up. In the case of credit cards, once the 0% APR introductory rate expires, interest rates can easily soar into the double digits. To avoid this, I've often turned down 0% APR deals, particularly those offered by furniture stores and other retailers. If you are going to use a 0% APR deal on purchases, make sure you can pay off the balance in full before the offer expires.

Offers of 0% APR on balance transfers. We've saved a ton of money with balance-transfer credit cards. We transferred home-equity debt from a home remodeling to 0% APR cards and have saved literally thousands of dollars in interest. But we also make sure to pay off the balance transfer before the 0% APR rate expires. We also make sure not to use the card for anything else while we still have a balance on the transfer deal.

Balance-transfer offers can be great, but just like 0% APR purchase offers, make sure you can pay off the debt before the 0% APR offer expires.

It's for my business. A business credit card, particularly for small companies, can serve many important roles. Business cards can be used by employees to easily track their expenses. They can also help keep your business expenses separate from personal expenses, which is particularly important at tax time. But like all credit cards, business cards can also cause you to spend more than you should. It's easy to justify the expense as necessary when you may be able to do without. All small-business owners have to decide for themselves, of course, just how necessary an expense is, but with business credit cards, it can be easy to spend more than you should.

I'll pay it off after graduation. This is perhaps the most insidious credit card lie of all. Study after study shows that the outstanding credit card balance for college students increases as they near graduation. There are a lot of reasons for this, but one reason is that they convince themselves that they can handle the debt once they graduate and get a job. The problem is that they start out in the workforce already in the hole. Credit card debt of $10,000 or more is not uncommon for college graduates. Add to that school loans, and debt can be overwhelming even before they get started.

So if you are a high school or college student, avoid revolving credit card debt like the plague.

Inconvenient Debt Video

noreply@blogger.com (NetDebt) — Thu, 04 Jun 2009 20:55:00 +0000

Loan Modification Site For Sale

noreply@blogger.com (NetDebt) — Thu, 04 Jun 2009 20:51:00 +0000

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The Credit Card Companies Dirty Secret

noreply@blogger.com (NetDebt) — Tue, 02 Jun 2009 21:17:00 +0000

This Frontline Video is from 2004, but it could not be more relevant today with Banks Being Bailed out, Bank Failures, Lawsuits and New Legislation.

In "Secret History of the Credit Card," FRONTLINE® and The New York Times join forces to investigate an industry few Americans fully understand. In this one-hour report, correspondent Lowell Bergman uncovers the techniques used by the industry to earn record profits and get consumers to take on more debt.

"The almost magical convenience of plastic money is critical to our famously compulsive consumer economy," Bergman says. "With more than 641 million credit cards in circulation and accounting for an estimated $1.5 trillion of consumer spending, the U.S. economy has clearly gone plastic."

Millions of American families use their personal, general-purpose credit cards such as Visa, Mastercard, American Express and Discover to make ends meet; credit cards have been a discreet lifeline for families in financial straits.

But other consumers, like actor and author Ben Stein, use plastic purely for convenience. While it would appear that Stein -- who says he charges a small fortune every month on his credit cards -- is the ideal customer, in reality, he is what some in the industry call a "deadbeat." That's because he pays his balance in full every month.

The industry's most profitable customers, the ones being sought by creative marketing tactics, are the "revolvers:" the estimated 115 million Americans who carry monthly credit card debt.

Ed Yingling, incoming president of the American Bankers Association, tells FRONTLINE that revolvers are "the sweet spot" of the banking industry. This "sweet spot" continues to grow as the average credit card debt among American households has more than doubled over the past decade. Today, the average family owes roughly $8,000 on their credit cards. This debt has helped generate record profits for the credit card industry -- last year, more than $30 billion before taxes.

Some experts say the profitability of credit cards really began twenty-five years ago, when the banking industry successfully eliminated a critical restriction: the limit on the interest rate a lender can charge a borrower. Deregulation, coupled with a revolution in technology that enables the almost real-time tracking of personal financial information and the emergence of nationwide banking, has facilitated the widening availability of credit cards across the economic spectrum. But for some, the cost of credit is often far greater than it appears.

According to Harvard Law Professor Elizabeth Warren, the credit card companies are misleading consumers and making up their own rules. "These guys have figured out the best way to compete is to put a smiley face in your commercials, a low introductory rate, and hire a team of MBAs to lay traps in the fine print," Warren tells FRONTLINE.

Warren and other critics say that a growing share of the industry's revenues come from what they call deceptive tactics, such as "default" terms spelled out in the fine print of cardholder agreements -- the terms and conditions of which can be changed at any time for any reason with 15 days' notice.

Penalty fees and rates are sometimes triggered by just a single lapse -- a payment that arrives a couple of days or even hours late, a charge that exceeds the credit line by a few dollars, or a loan from another creditor which renders the cardholder "overextended" as defined by the nation's three all-powerful credit bureaus. This flurry of unexpected fees and rate hikes come just when consumers can least afford them.

"[Banks are] raising interest rates, adding new fees, making the due date for your payment a holiday or a Sunday on the hopes that maybe you'll trip up and get a payment in late," says Robert McKinley, founder and chairman of Cardweb.com and Ram Research, a payment card research firm. "It's become a very anti-consumer marketplace."

Banking Association spokesman Yingling defends industry practices. Because the credit card business is basically unsecured lending, he says, the risks associated with the business must be offset.

But that's of little consolation to consumers who may be in trouble. According to the Better Business Bureau, credit card and banking companies are the subject of a record numbers of complaints. "It's not an accident that the banking and credit card business generates more complaints nationally, across the country, than any other industry…Out of one thousand industries that we track, they are number one," says Pat Wallace, head of the San Francisco Bay Area Better Business Bureau. "There are irritated, unhappy, dissatisfied customers in this industry."

As Professor Warren sees it, the industry is operating without fear of penalty. "There's no regulator, and there's no customer who can bring this industry to heel," Warren says.