Prioritizing Your Debt

So you finally got some extra money, and made the decision to spend it wisely, now the next logical question is where do you put it? Naturally, you want to put it towards improving your credit score, which will make your life a lot easier for you. Paying off your debts will improve your credit score, but which debt do you pay first? Consider your debts. You have two kinds. Secured debts, debts with assets backing them up, are debts that can result in your things being repossessed or taken back. These include your home and your cars.

Unsecured debts are those with no assets backing them up. If you fail to make a payment on your credit card, the bank isn’t going to come to your house and take back the shirt you bought at the mall. A debt collector might call, but the credit card company is not going to take away your place of residence or your transportation to work.

This means that your secured debts have to be your number one priority. Consider debts that if you don’t pay your wages can be garnished. These include IRS debts, any child support payments, and student loans. If you don’t pay these, your paycheck is at risk.

Any services that you need to continue using are important as well. If you aren’t paying your doctor bills, that one doctor is not going to see you again, which can be a real issue if you have to see that doctor on a regular basis. Once you have satisfied all of the urgent debts, you can start to really work on making headway with your credit cards.

Hopefully, your family and friends are the most understanding out of all of your creditors. Let them know you are totally committed to repay the debts but make them a lower priority. Work on your credit score primarily. This is because the higher your credit score, the lower your interest rates will be when you are paying back all of your creditors, and that’s all of them- credit card companies, auto lenders, and mortgage lenders. A high credit score can make a high payment as small as possible.

Mallory Megan works for Rapid Recovery Solution and writes about medical collection agencies

Two Powerful Prosecutors Go After Debt Collection Agencies

In recent news it was revealed that powerful prosecutors in Louisiana and Washington made announcements of actions they had obtained against debt collection agencies and their owners and managers.

Louisiana’s attorney general James Caldwell announced on Friday that his office had gotten a hold of injunctions against two collection agencies and their owners. On the same day, Rob McKenna, Washington’s Attorney General said that his office had settled charges with a collection company that had promised to stay on the straightened arrow. In a press release, Caldwell’s office said that in late December they had obtained an injunction against Bush and Kennedy, Inc, a Baton Rouge based collection agency. The order he won placed restrictions on the business, banning them from operating further, and specifically, ordered that two of the firm’s principals, Quay W. Pattott Jr, and William S. Fesguson were banned from conducting business together.

Late last week, a judge slammed Ferguson and Parrott with added injunctions as per the request of Caldwell’s office. Ferguson is banned from using unfair and deceptive practices and acts at his current place of business, Franklin, Grant and Associates Incorporated, a collection company based out of Metairie Louisiana. Parrott is completely restricted against conducting any new business at his new place of work, Metairie based Halsey and Associates, LLC.

McKenna’s Washington office said that Topco Financial Services Inc, a Washington based collection agency agreed not to threaten, harass or curse out debtors as part of a settlement. The collection agency has been ordered to pay around $38,000 in legal fees and penalties. An additional $82,000 in fees and penalties were suspended provided that the company agrees with the settlement terms.

As per the agreement, Topco is restricted from harassing, intimidating, threatening and embarrassing debtors, including using profanity. They are banned from implying that failure to pay a delinquent bill will result in suspension, a revocation, or impairment of the debtor’s driver’s license. They are no longer allowed to threaten debtors with impairment of their credit rating. However, the company is allowed to legally report debts to credit reporting agencies.

Mallory Megan works for a debt collection company. She also composes articles on business and finance, consumer spending and collection agencies.

Bill Collection Horror Stories Pt. 1

And you thought your debt collection agency was bad! A website recently made a list of bad debt collection experiences and these were among the worst of the collection. Karen Garrett, the public relations coordinator for Pittsburgh-based nonprofit Advantage Credit Counseling Service felt that she had heard it all until her agency received a call from a senior citizen late last year. She had called in tears and told Garrett that bill collectors had called her and told her that they had the police outside. If she did not pay, they were going to drag her to jail.

Debts are a civil matter, not a criminal one, and jail time is not even a retribution for failing to pay delinquent bills. “It’s extremely important for consumers to know that there is no such thing as debtor’s prison” Garrett says, rolling her eyes and smiling.

If bill collectors are making unlawful threats like physical violence, deportation and jail time, you can always report the harassment to the Federal Trade Commission or to your state attorney general’s office. The Federal Fair Debt Collection Practices Act prohibits bad behavior by third party collectors. These people do not follow the same rules as those who are collecting for the creditors directly. They are not allowed to call you at your place of employment if you ask them to stop, publish or threaten to publish your debt, reveal to anyone else that you may have a debt, harass you on the phone or use profanity. The laundry list continues.

They can’t use loss of child custody, deportation, illegal punishment like jail, or physical harm. They cannot call your home before eight AM or after 9 PM or even call at all if you have already written a request asking them to cease contact, or if you’ve hired a lawyer.

One older woman from New Jersey owed $12,000 in credit card debt after placing every day living expenses on her card. The bill collector called and informed her that they were going to take her home. She was also informed that they were not willing to take a penny less than the $12,000 she owed, and furthermore, they wanted it now. She tried to scrape up the money herself but couldn’t. “Debt collection companies are very intelligent when it comes to doing research. They will threaten targeted assets like a home or income source. But in many states, homes are protected from debt collection,

Mallory Megan works for a debt collection agency. She also writes stories on business, finance, consumer spending and collection agencies.

Ohio “Pay To Stay” Prison Program Miserable Failure

In the counties of Butler and Hamilton, Ohio, the sheriff’s departments attempted to collect money from inmates to pay for the cost of their stay at jail. An all around failure, the program stopped a few weeks ago after it cost taxpayers $69,000 to settle a federal lawsuit. The state auditor halted the program because it wasn’t generating any income.

Despite this fact, these counties are discussing reviving the program through collecting booking fees. Financial analysts remain dubious. Even in the best case scenarios, the policy may not be lucrative at all; most prisoners that end up in jail have no money.

Lawsuits were the issue that originally stopped the program. An Ohio jail nearby began charging booking fees at a hundred dollars and an additional $67.77 daily charge for every day held. But federal lawsuits against Hamilton and Butler counties sparked an end to “pay to stay” programs. The main issue at hand was determining who had to pay the fee.

Ohio law permits a county to charge prisoners for room and board, medical and dental treatment, property damage and a onetime booking fee. Inmates should be billed at the end of their stay, but the key provision of the law is that only convicted inmates could be charged. The District Judge stated that it was unconstitutional to take these fines from inmates who weren’t convicted yet.

Hamilton County was taken to court in 2000 and was ordered to return around one million dollars in prison fees and to pay $150,000 for an educational program for inmates. In 2001, Butler County was also sued. By 2003, the grand total of money that was returned to settle litigation was $63,846 to 2,431 prisoners. Additionally, the county was ordered to pay a $5,000 donation to the Legal aid Society after officials did not add the agreed upon ten percent interest on refund checks.

Although the plan to charge pay to stay fees to prisoners has failed, and has cost taxpayers more money than the program is worth, the Sheriff’s department still looks to extract more money from the jail. Charging booking fees, and taking in out of state prisoners are current considerations.

Mallory Megan works for Rapid Recovery Solution, a new york debt collection agency. Having trouble collecting money from small claims? collection agencies can help.

What If I Want A Debt Collector To Stop Calling Me?

A third party debt collector may call the debtor’s place of employment, but they are limited in what they can disclose. They are prohibited from informing an employer about a debt, or attempting to get a debtor fired. In general, a collection agent is restricted from discussing your debt with anyone but you and the credit bureaus, however in some states speaking with a debtor’s spouse is permitted.

While it may not be the best idea, according to the Fair Debt Collection Practices Act, a debtor can notify a debt collector in writing telling them that they want to stop further communication and the collection agent has to comply. The debt collector is usually permitted one more contact to inform the debtor how they intend to proceed with their case. While ceasing communication with debt collectors might seem relieving, it is essentially relinquishing control over your financial situation, and a debt collector is still fully capable of negatively marking your credit score or taking you to court.

The request to cease communication must be written, preferably citing the FDCPA and sent by Certified Mail, Return Receipt Requested. If a creditor was on the fence about whether or not to file a lawsuit against the debtor, the decision will usually be made right after this point, instead of being further delayed.

Again, just because the collection agent can no longer contact you anymore does not make the debt go away. After a consumer has sent a “cease and desist” notice to their debt collector, their debt will either be returned to the original creditor, passed on to another third party agency, or in rare instances, filed away simply as uncollected, all depending on the circumstances.

Try to keep in mind though, when the collection agent calls, they usually have the authority to offer you a repayment plan or a reduced amount to pay, which will absolve you of your debt so you don’t have to worry about it anymore, and make it easier for you to pay. Although they get a lot of bad press, most debt collectors are for the most part friendly and more than happy to work with you if you want to work out some sort of payment. It’s a win-win situation for both parties: your debt has been paid and the collector gets a nice commission check for the week to bring home.

Mallory Megan works for Rapid Recovery Solution and writes articles on national collection agencies Also published at What If I Want A Debt Collector To Stop Calling Me?.

How A Debt Consolidator Can Reduce Your Debt

A Debt consolidation program starts with evaluating your financial situation. This process involves an in depth analysis of your financial standing. That analysis will help you to evaluate whether it is better to file for bankruptcy or go for a debt consolidation program. A debt consolidation analysis will estimate the debtor’s potential savings through the program.

When a deal is made with the debt consolidation company and the debtor. The next step is for one of the counselors to get hold of the creditors and figure out a reduction in the interest rates and monthly payments at an amount that will be affordable to the debtor.

Through negotiations with the creditors, the debt consolidation company usually reduces or eliminates the interest charged. The balance owed to-wards the creditors is reduced and they can give the debtor a reduction in even the principal amount.

The Debt consolidation program will also aid the debtors by getting the creditors to halt the legal actions which they were bringing against the debtor which means they can no longer consume the debtor’s income nor can they take the debtor to court. Also this starts bringing up the credit rating of the debtor because now the debtor is repaying the debts under the new agreement.

With this process of debt alleviation , the debtor will no longer have to reply to embarrassing phone calls from his creditors. The debtor wont incur any bills or pay the creditors directly. The debt consolidation program will directly take hold over the creditors. The debtor will just be required to pay the debt consolidation company a single amount monthly according to the budget which was agreed upon with the debtors. So there is no need for any interaction with the creditors.

Most of the time these systems are free to the debtor because the fees are paid by the creditors, since they would rather get something in return than lose all the money that the debtor owes them. Also, programs like this work for those with good or bad credit. It is a great solution for debt reduction to use a debt services company or consolidator that uses this method.

Mallory Megan works for Rapid Recovery Solution and writes articles on national collection agencies

If I Am In Debt, Who Can A Bill Collector Contact About It?

The Fair Debt Collection Practice Act is a federal law full of rules and regulations that are designed to protect debtors from bill collectors who may utilize illegal strong arm tactics to collect money that is owed. The FDCPA seems to realize that one way many dishonest debt collectors may try to collect money is through embarrassment, and humiliation and therefore goes out of its way to provide a variety of rules designed to honor your privacy. Debt collectors have the ability to speak freely with credit bureaus and they have the authority to mark up your credit report.

But, if they have a list of creditor subscribers, they are expressly forbidden from sending out a list of its debtors to these businesses. They are also banned from advertising a debt that they intend to sell. In terms of third parties, debt collectors are not allowed to leave messages with third parties requesting that the consumer call them in regards to a debt. If a collections letter is being mailed out, they cannot indicate that the purpose of the letter is to collect a debt in anyway. Therefore, postcards are not permitted to be used by collection agencies.

Only if you reside at a shared address, or if you receive your mail at someone else’s address can a collector send you mail in care of another person. If you do share your address with others, the mail should have a “private” or “personal” label on it. It is crucial that collections letters do not give any appearance that allude to the fact that it is a collections bill.

A debt collector that is already aware of your name, telephone number and address and therefore can get in touch with you directly is never permitted to get in touch with your family members or friends. If they cannot find you and they do call your neighbors or family members, the debt collector has to identify themselves by name, but they can’t mention the fact that they are calling on behalf of a debt collection agency. They can’t let others know that you have a debt or speak to them about account details.

They are not permitted to contact the person more than once, and they cannot leave information about the debt on another person’s voicemail. Also, if they questioned, they have to disclose the name of the collection agency they represent but will not offer this information without first being asked.

If you are being contacted by a collector looking for your former roommate, relative or neighbor, the Fair Debt Collection Practice Act states that a bill collector can only contact you to find the location of the person in debt once. Only if the collector feels you have new information can they contact you again. If a collector contacts you repeatedly about a third party that can be considered harassment and you can file a complaint.

Mallory Megan works for Rapid Recovery Solution and writes articles on nationwide collection agencies.

How Will A Debt Settlement Program Affect Your Credit History? Pt. 2

In the last article I spoke about debt settlement programs and whether it pays to agree to one or not. Keeping all of this information I relayed to you in mind, if you decide that debt settlement is not the best option for you, there are four other main choices: stay delinquent, come up with extra cash to make payments, work with a credit counselor, or file for bankruptcy.

Staying in delinquency will simply make your credit score lower, and the longer you wait, the harder your score will be hit. Just one thirty day late payment can cause your score to drop by up to one hundred and ten points. Ninety days? You are currently three times as late with your card payment, and you are only getting later as more time passes by.

Coming up with extra cash to make your payments might just be worth your while. Take a close look at your finances and budget. Is there anything in your budget that can be adjusted, or anything you owe that can be sold? Use any extra money to pay your debt and prevent any further damage to your credit score. For a lot of us, budgeting isn’t as easy as that. If you need outside help, seek out a credit counselor. They will get to the bottom of the issue, and find a solution for you.

Also, you can also have the option to file for bankruptcy. This means that you won’t have to repay the debt, but filing will cause your credit to be hurt even more than a debt settlement, by as much as two hundred and forty points. If you are thinking about bankruptcy, have a consultation with a bankruptcy attorney to discuss the details.

All told, experts say that talking to a good credit counselor is the best choice. They can assist you when it comes to assessing your financial situation, offer possible alternative choices, and show you how not to make the same mistakes at any point in the future.

Rapid Recovery Solution is a medical debt collection agency.

The Skinny On Debt Collectors

Debt collectors, or bill and account collectors’ job is to try to collect payment on bills that are overdue. Many debt collectors are hired by third party collection companies. The creditor, or the business or company that is owed the debt, will often hire outside of the company; especially if their accounts receivable department is small.

Other collectors work straight for the original creditors; these people are known as in house collectors. Generally these are finance-based businesses like mortgage and credit card companies, health care providers or utility companies.

No matter what entity they work for, the goals of debt collectors are the same. First, they’re called upon to locate people or businesses that are in debt, and let them know that they are delinquent. Usually this will be over the phone, but sometimes they send letters.

When debtors (people in debt) move without leaving a forwarding address, bill collectors might check with telephone companies, the post office, credit bureaus and former neighbors to get the new address. This practice is called “skip tracing.” They will utilize computer systems to automatically track when companies or people change their contact information or addresses on any of their open accounts.

Once the bill collectors locate debtors they tell them about the delinquent accounts and request payment. If it’s needed, they will go over the terms of sale, or credit contracts. A good bill collector is a sneaky one. They’ll probably use their listening skills to try to figure out the cause of the delinquency.

Usually, they will have the authority to offer a repayment plan or some other aid to make it easier for people to pay off the money that they owe. Sometimes they are able to find solutions to the financial problem. They may even give useful advice or refer people to debt counselors.

Mallory Megan works for a debt collection agency. She also composes articles on business, finance, consumer spending and collection agencies.

Collection Industry Tries A Different Approach In A Rough Economy

The Collections industry’s tactics may be taking a turn for the….better? Keeping in mind the number of recent lawsuits against debt collection agencies, ACA International, the largest trade group of professional creditors and collectors, claims more and more collection companies are working towards training collectors to take a more of an empathetic position.

Empathy might just be the gameplan that can turn the industry around. Many people in debt are being called by various collections agencies, and if they do obtain money, they aren’t going to want to give it to the aggressive threatening collector, they will give it to the person they can work with.

As agencies are perfecting training courses to include advice on how to be gentler with consumers, there will be a change of focus that includes being put on coaching, mentoring and counseling debtors, rather than aggressively threatening them. Trainees are urged to reflect on their personal experiences with collectors or someone that they know has dealt with them.

One recent trend has been to suggest that debtors speak with their parents or grandparents about taking out a loan against their life insurance policies or reverse mortgage against their house. The bill collectors who utilize this technique claim that our grandparents remember the Great Depression. They might not want this generation to experience that kind of pain and may be more prone to take a loan against the life retirement account or the life insurance policy.

Collectors who adhere to this philosophy think that it is in actuality a positive thing. They claim that it doesn’t hurt anyone. If a person borrows against life insurance it might be preferable to borrowing against a 401(k) or a retirement plan. That is because the person will be counting on that money to live on.

Wrong or right, it would do the collections industry some good to evaluate its situation, and look for new innovative ways to collect in a suffering economy.

Mallory McGuinness works for a debt collection company. She also writes articles on business, finance, the credit industry and collection agencies.

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