Authorities say a Texas couple has been charged with wire fraud for swindling $13,000 from a north Mississippi couple while purporting to work as a debt settlement company.

Mississippi Attorney General Jim Hood said 50-year-old John Clune and 44-year-old Monica Clune are from Farmer’s Branch, Texas. Both were charged Thursday on five counts.

Hood said Friday in a news release that the couple worked under the business name “A Different Debt Company,” which claims to act as an advocate for people dealing with creditors.

Hood said the Clunes had no intent of assisting the victims with their debt.

Hood spokeswoman Jan Schaefer said the Clunes worked out of a Texas office. She doesn’t know if the couple has a lawyer and no business listing was available.

Source

@GetOutOfDebtGuy

Source: Couple Posed as Bogus Debt Settlement Company to Steal Money

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Debbie wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

My house is paid off and has been for about 14 years. My husband and I are in debt deep. He is not able to work and does not draw disability or anything. He applied once about 2 years ago, was denied and has tried to hold down jobs since but he can’t and doesn’t want to give up and apply again(a pride thing ,I guess).

Our marriage is on the rocks, the house is mine (Pre-nups in place). I can’t pay my bills. I co-signed for my nephew a car, he lost his job, I got the car back in 2006, Traded it and my truck for one vehicle to get one payment and one full coverage insurance on the vehicle. That said, I am Stuck with a $140.15 a WEEK payment (payoff about $24,000 ‘06 Ford Escape) through my Credit Union and I have another loan there of $38.03 a WEEK Payment (payoff about $2300 Unsecured).

I also have 3 credit card payments min. payments total $100.00 a month. My total net income is $1660 a month. These bills are in my name.

My husband’s bills total about $600 a month (car payment, and credit cards, and a secured loan of about $800.00) He had bad credit when we met and I helped him build it back up (He had filed bankruptcy with a previous spouse in 1996), now I am in a bad bind with my bills and his.

I am 3 weeks behind on my vehicle payment .I have NEVER been late on a payment before in my life this is depressing me,making me want to give up, and terrifying me all at the same time. He is one payment behind on his car and one payment behind on his loan payment. I panic when I EVEN THINK about refinancing the house because if I lose my job (which is possible with a new company taking over next month) and I can’t make the payments I WILL LOSE MY HOME! I can’t go on like this. I have tried as hard and as long as I can to “hang in there”. What should I do? What can I do? Is there any hope for me? I don’t know what to do, I have Never been in a situation like this before, I don’t even know my options, if there is any.

What should I do in my situation, Is bankruptcy a option?

Debbie”

Dear Debbie,

First, let me assure you that there is always a solution for every financial problem. They might now be the most enjoyable and sometimes it means selecting for the least objectionable, but there is always a solution.

While the house is paid for in full it is actually more of a security blanket for you. Having no mortgage on the house gives you a feeling of security and comfort. But at the end of the day it is just that, “the feeling of.” The house was placed at risk the moment the debts began building.

Most important for me right now is the marriage. I think this is the moment that you need to take a good and close look at what you want to do with the marriage. If you think you are better off leaving your husband, do it now. Let’s get all the messy stuff over at one time so you can move forward with your life.

By the way, just because he was turned down for disability doesn’t mean he wasn’t eligible. He needs to fight that with a disability lawyer to get benefits. However, it may now be too late.

If you do decide that now is the time to split, he moved out, and you were no longer covering his bills, you may find that you have enough to cover your bills and get caught up again. If that’s the case, your problem could be resolved without you selling the house to pay off your debts.

If he stays and you remain on the path you are on right now then selling the house, using the proceeds to get debt free, and renting may be a viable option for you.

So what do you think? Is it time to visit a local divorce lawyer for a free consultation?

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Source: My House is Paid Off. My Husband and I Are in Deep Debt. – Debbie

Originally posted 2009-09-15 08:19:14.

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Sara wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

My husband got very sick several years ago before we were married and during the time he was unable to manage anything his car was repossessed and he did not make payments on his credit cards and other loans.

A year ago we got enough money together to pay and/or settle all of his debts. Some with the original creditors and some with collections agencies. I am trying to help him improve his credit score so that maybe we can buy a house.

Right now on his credit report there are a couple of collections agencies that I don’t recognize reporting small “amount past due”s as reported in 2006 AND some of his major debts are still showing as having amounts past due even though the account statuses are paid/transferred/settled (respectively) with notes that these balances are charge off amounts.

Is there anything we can do about either/both of these situations to improve his credit? Or is it just a matter of time?

Sara”

Dear Sara,

Wow, thank you for writing. This is a situation that needs some attention before you get surprised latter on.

When you settle debts it is not unusual for a creditor to come back ten years latter and say “We don’t have any record of that.” So the fact that some accounts have not been properly updated on the credit report makes me worry.

Make sure you keep all your records about the settlements for the next several decades. Specifically you want some documentation that shows the account was considered paid or satisfied by the creditors.

Make sure that you are looking at a three bureau consolidated credit report to see the full information that is being reported across all three credit bureaus. They don’t report the same information.

Next, for any account that you settled that is not showing as paid or settled, you MUST dispute that information with the individual credit bureaus listing it. If that information is not correct then it must be updated to be accurate.

When a debt is settled it is typically divided up on the credit report to show the amount of the settlement as paid and the amount of debt forgiven as uncollectible. That negative credit half of the settled debt will remain on the credit report for seven years.

Big hug.

@GetOutOfDebtGuy

Source: The Credit Report is Not Showing The Debts That I Settled. – Sara

Originally posted 2009-06-05 06:37:21.

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Chadra wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

My mom is 56 years old and disabled and has credit card debt she cant afford to get a lawyer to file bankruptcy is there any way she can file for free and eliminate this debt.

Chandra”

Dear Chandra,

Many people are surprised that there are fees involved to go bankrupt and not just for a bankruptcy lawyer. As ironic as it sounds, you do need money to go bankrupt at least to pay the fees levied by the bankruptcy court. But there is a way to go bankrupt for free.

However, many people don’t know that the bankruptcy court may agree that the fee for filing bankruptcy can be paid in four installments.

A voluntary petition by an individual shall be accepted for filing if accompanied by the debtor’s signed application stating that the debtor is unable to pay the filing fee except in installments. The application shall state the proposed terms of the installments and that until the filing fee is paid in full, the debtor will not make any additional payment or transfer any additional property to an attorney or any other person for services in connection with the case.

The clerk shall enter, on behalf of the judge to whom the case is assigned, an order granting leave to pay the filing fees providing the following terms of the agreement have been met:

1. the full filing fee shall be paid in four equal installment payments;

2. the first installment payment is to be paid within 30 days, and at least half of the filing fee must be paid within 60 days of the filing of the petition;
3. the final installment payment shall be payable not later than 120 days after filing the petition.

While that approach does not allow you to file bankruptcy for free, it does allow you to file and to lessen the cost of filing by spreading it out over several months.

If your mother’s income is less than 150% of the poverty level in her area she may be eligible for a complete waiver of Chapter 7 bankruptcy filing fees by filing out this form and submitting it with her bankruptcy petition. For federal poverty level information, click here.

But there is yet another hurdle, before you mom can go bankrupt she needs to complete a debtor education course from a credit counseling group. Typically there is a charge for this course but groups like Hummingbird Credit Counseling will waive the fee as long as the bankruptcy court agrees to waive their fee.

The necessary bankruptcy forms and instructions are available online for free as well. They can be completed online, printed out and submitted to the court.

How to File Bankruptcy for Free

So if the income is less than or equal to 150% of the federal poverty guidelines here is the process of filing bankruptcy for free.

1. Complete the waiver of bankruptcy petition filing fees.
2. Complete Chapter 7 bankruptcy forms.
3. File the waiver and bankruptcy petition with the court.
4. If the court allow the bankruptcy fees to be waived, show the proof of this to the credit counseling group to be eligible for a free certificate for the bankruptcy to go forward.

Big hug.

@GetOutOfDebtGuy

Source: Chandra Wants to Know How to File Bankruptcy For Free

Originally posted 2008-12-22 13:07:44.

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“Dear Steve,

Hi my name is Glanda, i go to school. i got myself in a debt that i cant even pay back. how can i try to pay back slowly? i really need help with that. i dont even work anymore. iam really confuesed with this pls help me. iam willin to listen to any advise you give me just to get out because this not gettin any better but worst everyday. pls reply me back as soon as possible pls bye

Glanda”

Dear Glanda,

So you want to know the magic answer for breaking out of debt without any pain. I’ll tell you the honest truth, there is no way to do that.

Digging your way out of debt will involve the pain of legal intervention like a petition for bankruptcy in Canada with the help of a bankruptcy trustee or for you to work harder and earn more to repay your debt.

If you want to avoid bankruptcy then you may have to make the difficult decision that you will need to put aside whatever it is that you are doing now that occupies your days, like school. That might mean dropping out of school in order to get a full-time job to make more money.

As you can see the options are really between two polar opposite choices but that’s the way life goes sometimes. Sometimes the choices we have to make are between the lesser of two evils rather than two perfect options.

So how much debt do you owe and what kind of debt is it?

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I Live in Canada. I Go to School. My Debt Gets Worse Each Day. – Glanda

Originally posted 2009-11-06 15:08:27.

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Janet wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

I am 66 married hubby is 55 & on disability – I have been fighting depression all my life – I work part time but hours are being cut – company may go under – no jobs out there for the elderly – we are 105000.00 in debt of cc & loan- can’t pay them anymore – tried calling the cc & loan for a better repayment plan they were no help – seeing a lawyer about bankruptcy – I am getting calls fron a 800 # but when I answer no one is there so I hang up – I presume it is from the loan company – why can’t they just be on the other end – I will answer even though it does no good.

I am paying some of these bills even though it is a hardship should I just quit paying them all? Also should I tell them when they do call that I will be filing for bankruptcy?

I love your site & thank you for being such a caring person in this time of need

Janet”

Dear Janet,

Honestly, it sounds like bankruptcy is the route that is best for your situation. If you have not already met with a local bankruptcy attorney, click here for a free bankruptcy consultation.

Since bankruptcy is in your near future, and if you agree that it is, yes, stop making any further payments to your credit card companies. You’ll have to discuss stopping any additional payments with your bankruptcy attorney since I don’t know what else you are paying.

If the collection pressure is too much for you, then you might want to read How to Hide From Debt Collection, the Debt Collector, and Creditors and follow that advice while you get things sorted out.

I feel strongly that you need to move ahead with your bankruptcy as quickly as possible for several reasons. You’re right, you’re age does not make it easier to find a job, additional payments are not going to dig you out of this hole, and your history of depression only makes it harder to take action.

Depression and debt go hand in hand. I’m not sure which comes first but I do know that untreated depression only makes life with debt, so much worse and harder than it has to be. Please make sure you are seeking help for your depression. Between that and your bankruptcy you will be able to love a beautiful sunrise again and fill your life with hope, rather than despair.

Big hug.

@GetOutOfDebtGuy

Source: Should I Just Stop Paying My Bills? – Janet

Originally posted 2009-02-02 13:13:43.

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Scammer comes clean.

In 2005, Anna Aayala was dining at a San Jose Wendy’s restaurant when she claimed she chomped down on a partially-cooked segment of human finger. The fast food chain suffered an estimated $21 million in lost business.

Her husband, Jaime Plascencia, got the severed finger from a co-worker, who lost it in an industrial accident. Both Ayala and Plascencia pleaded guilty. Aayala was sentenced to nine years in prison but was released after four years on good behavior. There’s one condition to her release: She’s not allowed to step foot back in the place that made her famous. – Source.

See the television interview where she admits it was all a scam and she cooked the finger before she took it to Wendy’s.

@GetOutOfDebtGuy

Source: Woman Finally Admits She Cooked Finger and Put It In Her Wendy’s Chilli

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Dena wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

My husband bought a 07 Chevy truck he went to the bank with $9,000.00 cash money, he purchased a 07 Cheey Silverado with low mileage, which we have discussed however, when he visited the loan officer at the Bank she gave him a high interest rate with a Bank that would finance him because HE DIDN’T HAVE ANY CREDIT HISTORY. He used this truck or work and he works as a Framing Contractor, this loan is too much, I told him they saw him coming, he paid the $9,500 down payment for a 18,000 loan, and his payments are too much, is there any way we can get this interest rate lowered at the Bank.

If I had been with him I wouldn’t have accepted that offer, he let the Car Loan Officer at Dealership push him in to this saying he didn’t have bad credit just no credit and he’s stuck paying 5 years for a $9,000 dollar loan. Ridiculous. anyway, is there hope for our economy when people can just tell you these things when you talk about financing and they get paid so much for that control.

Please tell us he can get thiis Bank to lower his interest rate. I am so angry, he used this truck everyday and he works so hard for his momey, and he saves his money I did want him to get a good vehicle one that is ready to go when he needs it and one he can tansport his trailer and crew to jobs. Can we get this Bank to Lower this OUTRAGEOUS RATE THEY ARE THIEVES. SOME REGULATIONS SHOULD BE ON BANKS AS SOON AS POSSIBLE, THIS IS NOT THE AMERICAN WAY. SORRY, BUT NO WONDER PEOPLE ARE LOSING THEIR SHIRTS, I’VE STRESSED PAY CASH FOR EVERYTHING SINCE WE’VE BEEN MARRIED AND WE DO, BUT HE DESERVES A NEW TRUCK LIKE EVERYBODY ELSE, HE HAS IT AND HS’S A GOOD, MAN HE SHOULDN’T BE PUNISHED FOR THIIS QUALITY. THANK YOU,

How do we get our Automobile/Truck Loan lower at bank?

Dena”

Dear Dena,

Well it sure sounds like you should have been with him that day. It seems like the lamb was lead to slaughter without a shepherd nearby for protection.

The only way out of this mess at this point is to refinance the loan with a different bank. There is nothing preventing you from paying off the first loan and replacing it. Try local credit unions, your insurance agent, and maybe some online places as well.

You’ll probably have to apply for the loan jointly to include your credit if you have any. The problem he ran in to is common. unfortunately living on a cash basis creates a problem where no credit is worse than bad credit. Without any credit history at all there is nothing to score him on so the system spits out a rejection.

Lenders these days lend on numbers. That number is your credit score and this is why having credit, even a bit, and using it responsibly is critical. No credit also leads to higher cost truck insurance as well since most insurance companies use credit scores as the basis of determining rates.

Next time, please go with him. You can’t trust lenders to do the right thing for you when they are too busy doing the right thing for themselves.

Big hug.

@GetOutOfDebtGuy

Source: My Husband Deserves a New Truck. How Do We Get the Bank to Lower the Rates? – Dena

Originally posted 2009-02-09 22:01:15.

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Here is an interesting excerpt from an interview with Elizabeth Warren, Esq.

FC: I understand that at one point you pursued an entrepreneurial path to reform the consumer financial products market.

EW: The short version is that I studied the economics of the middle class and I began to see that credit products were becoming increasingly dangerous. Families didn't know how much they were spending on credit and comparison among the products was practically impossible because of all the incomprehensible fine print. It wasn't the products that were priced the best that survived. Instead, the ones that were most loaded with tricks and traps provided the most revenue.

So I thought at first that my academic research will be enough. I will publish a law review article and surely the world will change–that didn't happen. So I wrote a couple of popular books about it–The Two Income Trap and All Your Worth. But it still didn't change the world.

The PEW Charitable Trust then got in touch with me and asked what ideas I was working on. And I told them: I'd like to build a private, market-based solution. I want to build an Underwriter's Laboratory to certify credit cards.

The whole idea behind the current model is, "I will hold something shiny in front of your eye, 3.9% financing, and the way I'm going to make money is on tricks and traps that I've buried in the fine print: $29 there, $49 there, triple interest rate, double cycle billing, over and over and over … ."

So the idea was to take an independent group that will say here's a clean, clear industry credit card. It was called the Clean Card. So Pew said, we love this. They took me out to San Francisco to meet with the head of a very fancy bank consulting group. We put together a proposal and many of the executives we met with just loved it.

They loved it at the first meeting and at the second meeting. It was almost as if you could see the CEOs thinking, "I'll have my picture on the cover of Business Week for transforming this market."

They were saying, "We want to be part of this! We want to be the first movers, we want to be America's Credit Card." Then we come back for the 3rd meeting after the numbers guys have taken a closer look, and they say, "We can't do this." As one VP put it, if people really understood how much a credit card cost, they wouldn't use it and the bank would lose too much market share.

And one of the issuers took me aside and said, "We get that our business model is unsustainable over the long haul, but no one of us can jump first. We all have to move together. If we all move together, we'll be fine competitively, but if one of us moves and we lose market share, then the ones who issue the dirty cards will control this market." So it was literally on the plane on the way home from the meeting with the issuer that I realized how broken the market is and started thinking about a new agency in Washington.

via It’s Banks vs. Families, Who Will Come Out on Top? Q&A With Elizabeth Warren | Green Day | Fast Company.

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“Dear Steve,

I owe $30,000 in credit card debt on two cards. One card there is 9.99% rate, the other is interest free until Dec. ‘10 (after that the rate states 9.99% but is subject to change) I can make the minimum payments but not much else right now until my balances decrease. I have been using the snowball approach to debt elimination and I feel good about the results and just have to stay away from using the cards as much as possible. And I will continue to pay beyond the minimum payments as much as I can until the balances are paid off. I am also putting money into an emergency fund (thank you, your advise to others has helped me get a better understanding of right & wrong!)

My dilemma is whether to pay a portion of my debt with a portion of a mutual fund ($5000) or continue to just pay off as much as I can without touching the mutual fund. I have already reduced the amount I contribute to my 401K by over half to help pay off the credit card balances. (Not happy about that, but again, after reading your advice I know not to withdraw from my 401K!) Is the big question will the market out perform the 10% in interest I will be paying if I decide to try to pay off the balances without touching the mutual fund, with the realization that I will have to pay taxes on any gains I have had on the fund or is there more to it? I’m struggling to find the best approach to continuing to save for the future and eliminating this debt as quickly as I can. From the research I have done, it seems to be a pretty close debate either way which is why I’m probably struggling with this. I just don’t want to make a major error either way. Any advise would be greatly appreciated!

JJ”

Dear JJ,

Since the mutual fund is not in a protected retirement plan and you are aware of the potential tax implications from taking the money out and you are already on a good plan, I think the answer here comes down to what will make you feel best and more confident.

You may get tremendous satisfaction out of paying whatever taxes may be due on the profits from the mutual fund and reducing your debt and that’s fine. You may also feel better knowing you’ve got some cash saved in the market and growing and that’s fine also.

Unfortunately you’ve reached an area where the best decision is not one that is purely numerical but also involves how you feel about it as well. So how do you feel about it. All things being equal would you rather cash out or let it ride?

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: Should I Payoff Part of My Debt With My Mutual Fund. – JJ

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“Dear Steve,

I have 11000 in credit card debt. I am able to make the minimum payments. The minimun is 416 a month. After all other bills I am left with about 150 per month. I have looked into debt consoltdation companies but I am not sure which one I can trust. I am considering Debt Options( www.123bedebtfree.com). The problem is they can only save me about $50.00 a month which is not alot.

Do you know if Debt Options is a good company? Do you have any other suggestions for me besides bankrupty?

Karen”

Dear Karen,

It appears that Debt Options operating at 123bedebtfree.com is The Credit Counseling Foundation. I was able to confirm that The Credit Counseling Foundation owns the domain name and the registered address of the domain name is the same as TCCF.

The Credit Counseling Foundation in Florida came up in a previous review I had written, Option One Financial Group Review. You might want to read through that review.

With $150 left after all other bills I’d be hard pressed to say that a debt consolidation or debt management plan is in your best interest at all. If you are cutting things that thin and you don’t have cash saved in an emergency fund and you are not currently saving money you have no business enrolling in a debt repayment plan that is most likely going to end unsuccessfully. See The Truth About The Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

What’s wrong with bankruptcy if it will eliminate your debt, help you to avoid collection activity and lawsuits?

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I Was Thinking of Using Debt Options 123debtfree.com. – Karen

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I first went to this company, The Achievable, for help with credit card debt. I had, emphasis on the HAD, great credit but I had racked up some debt and wanted to get out of it with lower interest rates. I called an ad that I had heard on the radio and got a really nice guy named Brian. He set me up on a debt consolodation program that was to have lowered the interest and paid the debt back in 4 years, I was thrilled. I was promised that all of my creditors would participate and I would get the lower interest. That was not the case and Navy Federal Credit Union was put out by the whole ordeal and did not lower my interest rate and because they didn't get a payment for a month they raised my rate. When I called to complain, I was told that I had to be patient, the program works. I went on this way for a few months buyt my creditors started calling again and said they didn't get paid.

I called customer service and was informed that the company, Allegro law was in some type of receivership and that the cards would eventually get their money. At this point my credit was ruined. I called Brian for help and he told me about a new program through Vortex Debt Group that would take care of the debt in 3 years once and for all. I tool the bait. What a major mistake. I am now being sued by all of my cards and they told me they rarely settled for less than 75% of the debt. I called for a refund and was told that out of the $4800 I had already paid, that I would get back about $750, the fees came our first. What a rip off this company is and now I am filing for bankruptcy. DO NOT DO ANY BUSINESS WITH THESE RIP OFFS! I am out thousands and ruined for years due to thier lies and empty promises. To top it off I still can't get my money. I wonder if they are being sued again. Please blog if you know anything about them and if they're being sued. 

I did go to BBB and filed a report. here is the website. www.bbb.org. Put in thier zip 32940 and the name of the company.

via Ripoff Report: Vortex Debt Group The Achievable, Allegro Law, Americorp DO NOT DO BUSINESS WIT THESE PEOPLE< THEY WILL TAKE YOU Melbourne, Florida.

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Amanda wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

College student living on my own – going into debt, don’t have a job and can’t make minimum payments.

I moved out in August 2008, to go to CMU. I got an apartment, which cost $419/month, plus electric bill. I couldn’t find a job up here, so we had to take out student loans.

My mom started to budget my money, for $50/week, and then she’d put my rent money in when it was due. I stupidly thought that $50/week wasn’t enough, and ended up applying for a bunch of credit cards. I was approved for almost all of them. Never having any credit/bill paying experience, I racked up all my credit cards, and slowly I was unable to make the minimum payments anymore, which then caused me to have late fees, and over the limit fees.

All of my credit cards are over their limit, and the minimum payment is over $100. One of them is at $700. Thankfully, I’m moving back home May 6th, and I’m going to start working May 10th, but my job doesn’t offer many hours, and I wont get a paycheck until after 2 weeks of the 10th.

I don’t know how much longer I can put off not paying my credit cards before they try to take me to court. My parents have no idea I have so many credit cards, and how far in debt I am.

My mom is constantly scolding me about spending money, and paying my one credit card that she thinks I have, on time. I just don’t know what to do anymore. My credit is already ruined, at a score of 50-something.

I’m constantly crying over my money situation, and lose sleep at night. I’m always getting phone calls from my credit card companies. I never thought this would happen to me, and I regret EVER opening a credit card.

I want to tell my parents, but I know they are going to KILL me, and money is already kind of tight for them, my mom just had to get a second job, so she works 12 hour shifts. I don’t want to bring them into debt either because of my stupid decisions, but I also don’t want my future to be ruined.

Amanda”

Dear Amanda,

What you see as a curse and blight, I see as a blessing in disguise. The lessons that you will learn from this unfortunate collision with credit card debt will serve you well for the rest of your life. As I always say, “There is no sense wasting a perfectly good mistake.” And I think you can turn this tragedy into a positive for you.

You mentioned that you were at CMU. If that’s Central Michigan University, I’ve been there. If you are at Carnegie Mellon University, I’ve not been there but always regretted not going to a party I was invited to there years ago. Everyone had an amazing time and they told me that they did over and over.

So let’s look at the facts here. You took out a bunch of easy credit, you are way in over your head, you don’t have any probable way to pay this back and your credit score sucks. The good news is that you’ve got nowhere to go but up!

My opinion is that you should do your homework first here and then be open and honest with your mother. I would suggest that you go and talk to a local bankruptcy attorney after you move home. You can generally schedule a free bankruptcy consultation and sit down with the attorney and get all your questions answered. Bankruptcy is probably the most logical solution for you.

Once you get the facts about what bankruptcy means for you, go an talk with your mother. She’s going to be disappointed and upset, I get that, but trust me, she’ll get over it.

You need to face this situation yourself and not allow the Bank of Mom and Dad to bail you out. It sounds like she’s doing all she can to keep her own head above water.

Now that you’ve reached adulthood, you are going to have to learn that sometimes you’ve just got to suck it up, face hard decisions, take action, and that it is the responsible thing to do.

If your mother has a problem with any of this, tell her to contact me. I’ll help her to understand that this is not the end of the world for you and that this is probably a more valuable lesson that will serve you in the long run, more than your college degree. Hey look at it this way, you just got a Masters degree in what not to do.

Big hug.

@GetOutOfDebtGuy

Source: I’m a College Student, Living on My Own, Don’t Have a Job, and Can’t Make Payments. – Amanda

Originally posted 2009-04-15 12:42:18.

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Robin wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

Steve; I came through a divorce with $57,000 in debt, but I had decent job and this was not a huge problem but then I became disabled, couldn’t continue working and of course got behind in my payments. My mother know how stressed I was about my financial situation and allowed me to do a balance transfer to a credit card she had with Chase at a 2.9 APR which saved me a lot of money per month BUT then they raised the minimum payment AND interest rate so now I am back to square one but since the bill is now in my elderly mothers name I am really freaking out because she has perfect credit.

I am now on social security and draw $900 per month, $88 of that comes out for my health insurance, I have two children at home, very little help from their father and I am at my wits end.

How can I work this and relieve stress for me so I can breathe again. Living everyday feeling like I am having a heart attack has caused me other health problems and I am now having to see a counselor for depression, this is taking its toll on my family and I need help. Thank you for your help.

I’m an authorized user on my mothers card, owe $57,000 became permantly disabled and hopeless. I need some advise before they are cashing in my life insurance to pay off my debt :( I would love to become your poster child if you can help me dig out of this situation so I can get my life back.

Robin”

Dear Robin

Well if I could turn back the clock I’d love to see that balance transfer never happen.

On the rest of the debt you need to do two things.

1. Consult with a local bankruptcy attorney and go bankrupt. There is no expectation you will be able to repay the debt and just turning your back on it is not a solution either.
2. Pursue the father for child support. You owe it to the kids and let the court do the work.

The depression is exacerbated by the financial problems so if we address the debt then you will start to feel better faster.

The Chase balance transfer debt is now in your mothers name and she can either pay it off or you can make payments to her for it. There is no easy fix for this since she assumed responsibility for the debt by transferring it to her account.

I honestly know you are stressed to near heart attack and depressed but you’ve got to trust me and follow this plan. If you do, the days will get brighter, you will sleep well again and where you see only doom and gloom now, you will begin to see a brand new day.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Source: I’m a Divorced Single Mother and Trying to Make it on Social Security. – Robin

Originally posted 2009-09-16 14:19:39.

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CCB told me they could remove negative items from my credit report, and have my credit score above 700 in 3 to 6 moths. Their fee is $49.95 a month, and they charge $30 to pull your credit….It has now been OVER 14 months and OVER $750 they have taken from me and NOT 1 SINGLE ITEM HAS BEEN REMOVED FROM MY CREDIT REPORT!!!

I called Rick frustrated and angry, and he says the same thing each time I call, "It can take longer than we think, just stay with us for another round of letters (3 months per round!) and we should get these items removed.

Well Rick, thanks for feeding me lies for over a year.

I called and said I wanted my money back, he has not removed 1 item. He said he would work the next 3 months for free, to try and get some results, THEN CHARGED ME THE VERY NEXT DAY $49.95. the nerve! And never refunded my money.

I am sick of the lies, and most of all wasting my time and money. Citizens Credit Bureau is a scam and a ripoff. They will tell you exactly what you want to hear to take your money, then not deliver at all. Don&apos;t believe anything they say.

Now my credit card company is disputing 5 charges, (because they say they can only go back 120 days) what about the other $350 they took of mine?)

via Ripoff Report: Citizens Credit Bureau /CCBS 435-637-5520 UT CCB will lie to you and say “yes we will get your credit score above 700 in 3 to 6 months” 14 months later not 1 single negative item is off my credit report! Price, Utah.

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“Dear Steve,

My wife has been ill for the past six months she had a heart attack in Nov 6th.I had to take a 25%pay cut my company kept me but took the pay away,I was upside down in my truck the payments are 368.00 per month is is possible to get the payment lowered

My wife has a 2005 ford and I have a 2001 Dodge truck her payment are 498 and mine are 368 per month .who can help us get these lowered

Mike”

Dear Mike,

Your options are going to be to possibly renegotiate the loan with the lender or to refinance the loan. One place to look for an unsecured fixed rate loan to pay off the truck would be LendingClub.com.

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: Who Can Help Me Get My Truck Payment Lowered? – Mike

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“Dear Steve,

I just bought a home with a fha loan. the previous owner had renters in the home per our contract they had 60 days to vacate the home. I just found out I will be losing hours from work but will not be laid off, can i keep the renters in the house so i do not default on my loan after the renters move out?

Trixey”

Dear Trixey,

This is a very easy issue to resolve, ask your lender.

But it is my understanding that FHA loans must be owner occupied. “Our security instruments require a borrower to establish bona fide occupancy in the home as the borrower’s principal residence within 60 days after signing the security instrument with continued occupancy for at least one year.” – Source

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I Just Bought a Home With FHA Financing. Can I Have Renters in the House? – Trixey

Originally posted 2009-10-05 08:58:24.

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• No Related Post

Cameron wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

My income is from social security disability and a part-time job. My disability involves major depression and anxiety, and has been a life-long struggle. I am receiving treatment, which is why I am able to work part-time. I owe about $12,000 unsecured debt and $90,000 secured ( first and second mortgages and a personal loan with my car used as collateral.

I have two of those payday loans which I have to pay off and then renew them each month, which costs around $100 per month for the interest. I can’t pay all the bills for this debt. I’ve struggled for many months and just can’t do it anymore.

My income is enough to live on but not much more. I see no way out. I’ve sometimes considered ending my life because I can’t deal with this stress anymore. My understanding is that most people who go into bankruptcy owe much more than I do.

What do I do? Is chapter 7 reasonable considering the amount of my debt? I’m terrified that I’ll lose my house, and it’s the only asset I have. Is there a way out of this?

I don’t have money to pay a bankruptcy attorney. I’ve called several, and they want payment up front. They will not consider a payment plan. Should I file bankruptcy? Is there any resource that provides a list of bankruptcy attorneys who will take payment in three or four installments? Please help. I’m really lost.

Cameron”

Dear Cameron,

The amount of debt really isn’t the deciding factor. Determining if bankruptcy is the appropriate answer in your situation is.

From what you’ve said it sounds like bankruptcy is a logical approach to your situation, and worth pursuing.

Your money troubles are only adding to your emotional state and not in a good way. Studies show that people with money troubles suffer from clinical depression and in your case, you already brought that to the party.

If you’ve called three bankruptcy attorneys and they won’t take installment payments for bankruptcy, call ten. I know there are bankruptcy lawyers out there that will accept installments because a sister of an old friend of mine just went bankrupt in Arizona and her attorney took installments.

Big hug.

@GetOutOfDebtGuy

Source: Is it True That Most People That Go Into Bankruptcy Have More Debt Than I Do? – Cameron

Originally posted 2009-05-25 10:42:08.

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“Dear Steve,

My wife signed me up for Express Debt Settlement Holdings Inc without my signature or knowledge in Sept.. By the time I found out it was past the 30 days to cancel. I started expressing concerns to the number she had for the person who claimed to be in charge of our account but he was just a sign up person for Coastal Credit Solutions..

He told me many lies and claimed they would soon have enough money in my account to make a settlement. Well we got served with a summons by one of our creditors the end of Feb. I started checking and found out they had taken all the money out of my Noteworld account for fees and hadn’t contacted a single creditor.

Well I went on the attack big time. I started calling all the parties (Coastal, Express, Noteworld, and Simon and Bocksch Law firm and emailing them with my concerns. I filed complaints with BBB and Attor Gen in MN, FL: and US. I contacted TASC and went to my bank and put a stop order on my auto debit and they put a reversal on the Feb and Jan payments. I pointed out that the contract my wife signed didn’t have the correct numbers for Express or Noteworld and was probably invalid.

I pointed out that MN has very strict laws on such companies and express might not be legal in MN. And that the Florida Att Gen was suing 2 companies with practices like this. I rattled the cages hard for a week and wham noteworld reversed the last 2 payments and Express is offering a full refund but my wife needs to sign a release.

If she sign this release saying she won’t sue or bad mouth them etc. , does that bind me from staying on the attack against them and other bad debt settlement companies?

Kevin”

Dear Kevin,

There are only a few companies licensed in MN to do debt settlement and none of the players you mentioned are licensed. They were apparently operating illegally. At the time I am writing this the only licensed debt settlement companies in Minnesota are New Era Group, Pacific Debt, and Freedom Debt Relief. Click here for the list.

It sounds like they want your wife to sign a wavier based on her account but you are the victim here and she can’t waive your rights.

There are a number of lawyers in Minnesota that specialize in consumer fraud cases and you should contact one of them before your wife signs anything. You may be able to sue all the players and recover additional funds. For a list of attorneys, click here.

What did TASC say, if anything, and were they helpful in resolving this issue at all?

I want you to keep me posted on this situation as it moves forward. Please keep me posted by posting updates in the comment section below.

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I Was Scammed by Express Debt Settlement Holdings, Coastal Credit Solutions, Simon and Bocksch, and Noteworld. – Kevin

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“Dear Steve,

I am currently being sued by my credit cards for debts incurred prior to my divorce. During the divorce I gave the franchises to my ex although they were bought with a second mortgage on my house.

He is paying the second as required by the divorce papers but is paying late, once he missed 3 mos in a row. He is further ruining what little of my credit remains. I cannot get the house refinanced due to poor credit score so I have no way to pay off the credit card debt. I cannot claim bankruptcy because of the large amount of equity in the home.. I tried selling the home- bad market- no buyers.. I am frustrated and depressed. I have money in equity and no way to access it and every avenue seems to have been blocked. I dont know which way to turn… Do you have any ideas I havent already tried? Please help!

Is there any way to access my equity with such poor credit? (500-600) Was I given bad advice by bankruptcy attorney? I just need to know if there actually is a solution available without giving up the equity it took years to build. Thank you.

Sheri”

Dear Sheri,

This is a far too common problem faced by divorced couples. When you get divorced you legally divorce your spouse but not your creditors. Even though a divorce document may say that the ex is supposed to pay a specific debt, if they don’t it’s your credit that is damaged. Ultimately the debt is your responsibility.

If he isn’t paying it your option is to take your ex-husband back to court, at your expense, and try to force him to pay.

Equity on paper is not currency unless it is transformed to cash by a buyer or lender. Since the house won’t sell that tells me it is either not priced to sell at a fire sale sales price or there are no well qualified buyers in your market.

Why wouldn’t a Chapter 13 bankruptcy work for you? Were you trying to do a Chapter 7?

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: My Ex-Husband is Not Paying My Debt Like He Promised in the Divorce. – Sheri

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“Dear Steve,

I’m trying to pay off debts but they appear to keep poping up.

Steve, what is the best way to clear up your credit and score is to pay off every delinquent debt you have or to pay off one of these so called attorneys to contest the debt and see what happens?

James”

Dear James,

The types of credit repair scams you mention are under investigation by a number of agencies.

If you have a delinquent debt you owe the best thing to do is pay it off and once all the old negative debts are satisfied you can concentrate on rebuilding your credit easily with new good credit. If you have some open credit card accounts they can help you do this is you concentrate on paying your bills on time and letting some time pass.

The credit repair scam that most try to sell is the dispute the debt approach. The debt comes back on latter when the creditor dumps the information back to the credit bureaus again. The only reason the debt may have been removed initially was because the credit bureau did not get it investigated quickly enough but it will come back.

My advice is to deal with it properly and then you don’t have to keep looking over your shoulder waiting for it to appear again, and it will.

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: What’s The Best Way to Clear Up My Credit? – James

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I’ve written a lot about the Hess Kennedy debt settlement scam and I even interviewed Daniel Stemer who is mentioned in this article but this recent piece by John Pacenti gives of the latest of the curse that is Hess Kennedy. Even former Hess Kennedy sales referral agents, The Credit Exchange may be on the ropes now as well. Anyway, here is the article by John.

Former Receiver Pleads Guilty to $2.6 Million Fraud, Faces up to 14 Years

Lewis Freeman made some desperate phone calls to friends and family last August.

He needed $1 million.

The attorney-accountant had to hustle to make up for a shortfall in a fraud case in which his Miami firm had been appointed receiver. Freeman had stolen $1.5 million from the receivership of Hess Kennedy, a debt settlement firm closed down by the Florida attorney general’s office. It turned out he had been moving money around from his court-supervised accounts for more than a decade, while pilfering $2.6 million from creditors and victims of fraud.

But then the Hess Kennedy marker came due.

“The scheme fell apart when several courts asked him to make distributions on fiduciary matters, and Freeman was unable to do so because he stole too much money,” Assistant U.S. Attorney Andrew Levi told U.S. District Judge Paul C. Huck.

Levi’s recitation came just prior to Freeman — once one of the most trusted and respected professionals in the South Florida legal community — pleading guilty Wednesday to wire fraud conspiracy.

Huck allowed Freeman to remain free on bond and set a May 19 sentencing date. The 60-year-old Freeman faces 10 to 14 years in prison under federal guidelines. Federal prosecutors said, in total, Freeman moved $6 million in 162 checks among accounts to hide his thefts over the years. “Freeman used the funds he misappropriated to support a lifestyle that was well above his means,” Levi told Huck. “This included paying for expensive clothing, lavish vacations and extravagant home renovations and redecorating.”

The money also was used to promote Freeman’s status in the community through charitable donations, Levi said.

Freeman defrauded up to 250 clients with the help of at least two employees, moving relatively small amounts of money to cover shortfalls in other accounts, prosecutors charged. He also falsified financial reports by omitting checks destined for him, which inflated account balances. The bogus reports ended up being submitted to judges who appointed him.

“Freeman was supposed to safeguard the assets of others,” Levi said. “Instead, Freeman engaged in a scheme to misappropriate funds.”

Joseph DeMaria, a partner with Tew Cardenas in Miami, and Robert Josefsberg, a partner at Podhurst Orseck in Miami, are representing Freeman.

DeMaria said his client is “doing everything right” by accepting responsibility and giving up his law and accounting licenses. Freeman was still listed as eligible to practice Wednesday on the Florida Bar Web site.

“Lew is filled with great remorse. He knows he has disappointed many people, and is painfully aware of the hurt which his family and friends are now feeling,” DeMaria said. “The misconduct that led to today’s guilty plea does not represent the complete story, nor does it speak to the man as a whole.” Freeman cultivated his image carefully; he was well-dressed, often with a joke at the ready. He was trusted by judges who appointed him to high-profile cases when a receiver or trustee was needed to take over a business that ran aground due to bad finances or fraud.

Freeman was responsible for collecting money he could track down to pay creditors or fraud victims.

But Levi said Freeman started stealing in the mid-1990s by taking $700,000 from a client’s retirement account.

He covered his tracks by moving money from his receiverships into a brokerage account. The prosecutor said it’s impossible to know how much money was lost by the client because it was supposed to be invested in the stock market.

Freeman often boasted of his work as receiver in the Unique Gems fraud, a bead jewelry assembly scheme with a buy-in fee of as much as $3,000 that took him to Liechtenstein to recover money. But Levi said Freeman stole $1 million from the victims by cutting 76 unauthorized checks in 1997. The government was ready to prove at trial that Freeman stole from at least four other receiverships, including Power Professional Resources Systems. In that case, Levi said Freeman wrote himself 22 unauthorized checks for about $2 million over seven years, slowly draining the account. Employee co-conspirators helped their boss embezzle money or cover up the thefts are expected to be charged, according to the criminal information filed last month. Both are expected to face charges

Everything came crashing down on Freeman in August.

The Internal Revenue Service also said he owed $4.5 million for allegedly promoting a pre-tax employee parking deduction program with employers. The IRS maintains the parking program was a tax dodge used by nearly 5,000 taxpayers.

And Freeman was scrambling to make up for the missing money in the Hess Kennedy receivership. He turned to friends and family to loan him $1 million. “Ultimately, this was not enough to make up for all the deficiencies his theft had created,” Levi told the court.

Daniel Stermer, one of Freeman’s top accountants, had been appointed receiver in the Hess Kennedy case that has more than $100 million in claims. Levi would not answer questions regarding Stermer, who could not be reached for comment.

Freeman appeared congenial, as usual, in court, wearing a subdued gray pinstripe suit. Even under dire circumstances, he displayed his sense of humor when the judge asked if he had adequate representation.

“I got to give them a plug, your honor,” Freeman said. He shook Levi’s hand after the proceedings.

No family and only one friend was in the gallery to see Freeman plead guilty. The self-described friend, who wouldn’t identify himself, went up to Levi afterwards and said, “Please have mercy on him.”

Source

@GetOutOfDebtGuy

Source: Lawyer Tumbles Down a Rat Hole After He Stole $1.5 Million From Hess Kennedy Receivership

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• I Was Referred by The Achievable to Allegro Law for Debt Settlement Services. – Ashish (5)

“Dear Steve,

Married couple, I am a CA State Employee who had a reduction of pay of approx. $700.00 a month. We have two car payments and a mortguage, in addition we have credit cards debt of approx. $25,000. THe payments of the credit debt is approx 1,4000 a month and seems that we are living paycheck to paycheck and we hate it.

We would like to reduce our credit debt but because of paycut we are only paying minimum payments. I did contact B of A on one of the credit cards and they reduced the finance rate on one card to 7% and they told me that the account will reflect closed by customer. How can we reduce our interest rate and get out of financial debt without any affects on our credit? I hate the situation we are currently in. We need help,

Martha”

Dear Martha,

If you can afford at least your regular monthly credit card payments but want an interest reduction then a debt management plan is the best bet. However, while your credit report won’t reflect you are in a debt management plan, the cards included will be closed by the creditor and that could impact your credit score.

But while the credit report and credit score are important, that’s not the real problem is it? The real problem is that the reduction in pay has left you at the breaking point each month and all it will take is one unexpected expense to throw you under the bus and all your credit will come tumbling down.

You should explore the debt management solution but after looking into it, if the payment seems to high to sustain for a long period of time, come back, let’s talk about other more drastic options.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: California State Employee is Suffering From Pay Cut Disease. – Martha

Originally posted 2009-11-06 21:53:31.

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• Is CCCS Right for Us or is There a Better Alternative? – Shawn (1)
• I Want to Get Out of Debt Without Ruining Our Credit. – Melissa (2)

It’s interesting that the banking community doesn’t want consumers to walk away from their homes when the house has lost so much value that the home is now worth less than the mortgage. But this would be the very same banking community that made these unrealistic and dubious loans to begin with during the high flying mortgage days.

More consumers are learning that it might just make good business sense to walk away from a home they can’t sell and the bank won’t allow them to sell at a loss.

@GetOutOfDebtGuy

Source: Walking Away From Your Home Might Be The Best Thing to Do for You

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Margaret wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

I have 2 unsecured credit cards that i have not paid on in a while. I want to rebuild my credit to buy a house in the next year. However, so much fees have been added to the cards I’m not sure how to even start getting them paid off. I would love to put them together in a loan with reasonable interest and have them paid off in a year. The total debt is approx. 5000 dollars.

How can I get the fees off the cards I have not been paying on?

Margaret”

Dear Margaret,

Forget the loan route. No legit lender is going to give you a loan to pay off this mess. Most will ask you for some up-front fee and promise you a loan and then just take your money.

The best way to pay these off for less than the full balance is to have at least 60% of the balance as cash-in-hand and then contact the creditor and see if they would be willing to settle the debt for less than the amount owed.

The downside to this approach is that the amount of debt forgiven will be a tax liability to you and you will have to pay income tax on that forgiven debt just as if you earned it. Also, the amount of debt forgiven will still show up as a bad credit history on your credit report.

It sounds like you don’t have any extra cash laying around to pay these creditors so I doubt you have cash to settle these debts right ow. Just don’t fall for the promises of a debt settlement company to allow you to make small payments to them to save up money to settle your debts.

Save the money yourself. Open a boring old savings account and save up at least $3,000 yourself before you contact the creditors to settle.

Big hug.

@GetOutOfDebtGuy

Source: I Haven’t Paid Two Credit Cards in a While. How Can I Get Them to Eliminate Fees They Charged? – Margaret

Originally posted 2009-06-11 08:21:48.

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Angela wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty. If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help.

“Dear Steve,

I have been working with a debt service for about 4 months now. I am currently over $13,000.00 in debt. I received a letter from a collection agency and i’m worried.

Should I have contacted the credit card company before working with the debt service organization? Would it help if i contact the card company now and told them i was working with the debt service company?

Angela”

Dear Angela,

There are two types of companies that could be labeled as offering debt services. I assume that you are talking about a company that offers either debt management (credit counseling) or debt settlement services.

It is important to know that no credit counseling or debt settlement company has any authority at all to alter your legally binding agreement with your creditors for the credit extended to you. So you can’t simply rest easy thinking that a debt service company is going to wave a magic wand and make things all better.

If you are now being contacted by a collection company regarding a debt that you included in a program offered by a debt service company, there are a few reasons why this can happen.

• The original creditor was notified but failed to note it in their computer system.
• The original creditor was not notified.
• The original creditor was already in the process of sending your account out to a collection company when you enrolled with the debt service company.
• The original creditor no longer owns the debt and has sold it off to a collection company.
• The original creditor refuses to work with a debt service company.

The reason why you were contacted is not as critical as it is for you to contact your debt services company and let them know that you are being contacted by this collection company. The debt service company should be able to help you understand exactly why.

While it does not hurt to contact your creditors to tell them you are working with a debt management or credit counseling company, it isn’t all that helpful either. The chances of it getting noted in the system so the right folks see it, is slim. You are better off telling the creditor when they call.

Big hug.

@GetOutOfDebtGuy

Source: Angela is Worried After Working With a Debt Service Organization

Originally posted 2008-12-18 12:36:00.

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Florida Attorney General Bill McCollum issued a consumer advisory warning Floridians about scams related to credit and debt issues. Companies offering credit repair solutions or debt settlement were among the top concerns reported to the Attorney General’s Office last year. The Attorney General noted that, given the current economic climate, disreputable companies will likely continue to prey on consumer’s credit and debt concerns.

“Consumers who are seeking legitimate assistance are being deceived and often required to pay substantial up-front fees that put them even further in debt,” said Attorney General McCollum. “My office is working hard to deter these companies from engaging in deceptive business.”

Credit repair schemes usually involve claims to improve credit scores or eliminate bad credit and are sometimes part of other operations claiming to negotiate or erase debt. Consumers need to be cautious of firms offering credit relief, including debt management, credit counseling and credit card rate reduction services.

Debt settlement scammers promise they can pay off consumers’ debts for a fraction of the amount owed, but instead collected large up-front fees and leave customers with little or no money to pay creditors. Consumers should avoid companies that make outrageous promises and collect up-front fees before providing services.

Debt collectors are another area of concern for consumers who are struggling with credit and debt issues. These companies often harass or even threaten consumers in an effort to collect money owed. Debt collectors are legally prohibited from misleading consumers or threatening them to collect payments. They are also prohibited from calling after 9:00 p.m. and may not contact consumers at work if they know the consumers’ employers disapprove.

The Attorney General has been working closely with the Florida Senate to address several of these issues, and Senate Bill 1702, a proposal by the Senate Banking and Insurance Committee, is scheduled for hearing next week. The legislation includes the Attorney General’s suggested language for expanding the Office of the Attorney General’s authority to pursue debt collectors. Specifically, the bill will make certain debt collector practices a violation of the Florida Deceptive and Unfair Trade Practices Act (F.S. Ch. 501 Part II), providing a clear basis for pursuing civil litigation. This new tool would give the Attorney General enforcement authority over all entities covered under the act and provide for stricter penalties and broader relief for consumers. The bill also includes provisions for addressing credit relief and debt settlement scams.

@GetOutOfDebtGuy

Source: Attorney General Warns Consumers About Credit Repair and Debt Settlement Scams

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“Dear Steve,

I have 80,000 in credit card debt from my small business. I am behind on payments and struggling to keep up. They’re four cards maxed out, no cash to purchase inventory. Not sure what to do? Consolidation loans semm to be a scam? Any advice on what to do?

Kristan”

Dear Kristin,

It seems like the real issue is the business is not generating enough money to properly care for itself. If the $80K was borrowed to pay for previous inventory and the revenue from those sales was spent then the business is not sustainable like that.

If you are already behind and you have personally guaranteed this debt then the chance of getting a legit and expeditious business loan are slim. The fastest legit lending source I have seen is the peer-to-peer lending network LendingClub.com. Otherwise, an SBA loan is going to need to review your finances and take three to six months.

Now is the time to evaluate if your business is sustainable at all. You may also have to consider that the debt hole you’ve been digging is so deep that even if things turn around it will be too deep to dig yourself out of.

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: My Credit Cards Are Maxed Out From My Business

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“Dear Steve,

I have been unemployed since Jan 5th 2009. My UEI covers my hard bills, rent , car loan, car ins, untilities, a little food. I have used my savings to pay my credit bills thinking I would find a job. I have run out of my savings and have made poor mistakes that way I beleive. I have now gotten rid of luxury items such as cable and live of a very small food budget of basically rice and bean, no joke… and can afford to pay three of my card minimums that way

So my question is… out of the 6 cards I have I can afford to pay the minimum on three but the others I want to close and set up a payment shedule to pay the balance. I believe if the minimum was cut in half I could afford it but if not then I will suffer late fees.
1. Will the card companies simply send it to collections and I will hve to set up payment that way or will they sell the debt and I pay that way.
2. If Im paying a collector timley and have not defaulted but set it up does that show on my credit negatively

Marco”

Dear Marco,

Unemployment is not designed to help you pay your bills. It is designed to help you get by while you look for another job. Unemployment benefits will expire at some point as well.

Paying your credit card bills from your savings would be a mistake. Without any new job and replacement income before you know it the savings will be drained and the debt will still exist.

If you have credit cards that have already been sent to collections, your credit is already shot. At this point, without any job on the horizon you are better off talking to a bankruptcy attorney and to stop paying the collection company or creditors. Click here to find a local bankruptcy attorney to talk to for free.

I know you want to do the right thing but the path you are on isn’t it.

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I’ve Been Unemployed and Now Can’t Afford My Minimum Payments. – Marco

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“Dear Steve,

When my wife divorced her last husband they had a large amount of debt. The house they lived in went to short-sale so the income that was supposed to pay off her debt didnt come in. She was making good payments up until the time she lost her job. She then went on disability and has been unable to work since. All of her debt is now in collections. She has offered what little money she can but they refuse to accept it… they want more. She has no income other than mine.

Our home is in my name only and we own only one car. If she gets sued by the creditors, what can they take from her? What options does she with no income other than disability and my income to avoid getting sued?

Matthew”

Dear Matthew,

Why put her through all this stress and dealing with one debt after another, lawsuits and nasty collectors? She needs to go bankrupt individually and close the door on that old debt. Eliminating that stress will help her to better deal with her medical condition and reduce the chance of residual depression over the financial problem.

Click here to find a local bankruptcy attorney and the both of you should go see them. Saying the creditors can’t go after you doesn’t resolve the problem. Bankruptcy does.

Big hug.

@GetOutOfDebtGuy

P.S. Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: My Wife is Getting Sued for Debt From Her Previous Marriage. – Matthew

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