Can I Remove a Judgment Myself?

So, one of your creditors had been threatening a judgment against you. Unfortunately, he tired of threatening the action and actually carried through with it. Now, he has been granted a court-ordered judgment against you.

The judgment has caused your credit score to free-fall. In point of fact, a judgment can stay on your credit report for 10-12 years. At the end of this period, if the judgment remains unpaid, it can often be renewed. Your credit history can even report a paid judgment for seven years!

So, you’re wondering how to go about removing the judgment. The first thing you need to know is that it is illegal for a credit reporting bureau to remove an accurate entry. The only types of entries which may be legally erased from a credit report are those which are false in nature or those which are disputed but which are not verified by the creditor within the mandated time period. The Fair Credit Reporting Act (FCRA) was enacted in order to allow consumers to dispute items which are negative in nature. Judgments and public records are included in the FCRA.

You will need to draft and submit a dispute letter to the appropriate credit reporting bureaus if you decide you would like to dispute a judgment which appears on your credit report. There are three major credit reporting bureaus. These three bureaus are TransUnion, Equifax, and Experian. To whom the credit reporting bureau will forward the dispute will depend upon what kind of debt is involved. For instance, a dispute for a car loan judgment could be forwarded to a loan company, bank, car dealership, etc.

However, with a judgment or public record, the credit reporting agency will forward the dispute to the governmental agency which maintains the record, normally located in the county courthouse of your resident county. Recording and verifying judgments is performed by county employees, not high-tech automated software programs. As it takes longer for a human to search legal records and verify a judgment or public record than clicking a computer key a few times, it is often the case that a judgment or public record request for verification is unable to be completed within the 30-day time limit. If this is the case, the credit reporting agency is legally required to remove the judgment entry from your credit history.

It is possible for you to move forward with credit repair on your own. However, if you do not have the time or if you just don’t enjoy wrangling with credit reporting agencies, you might consider speaking to a consumer rights attorney. The typical consumer rights attorney has tackled hundreds, and maybe even thousands, of similar cases.

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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.

On The Phone With A Debt Collector

If you owe money to a creditor, debt collection agencies can report your debt to credit bureaus, file suits against you, and should be taken very seriously. The best way to protect yourself and your finances is a methodical approach. First, know why you are being contacted. Know what the debt is from and exactly how much it costs.

Request the name of the the creditor,the person calling and the agency’s address and fax number. You have the authority to tell a collector over the phone that you want all future contact to be in writing. Follow up all requests with a written request.

Keep in mind if you tell the collector not to contact you at all it is entitled to call you once more to let you know how it plans to proceed. Another request that can be made is that you are the only person that should be contacted. It might be a good idea to keep a file including dates and details of phone conversations and when you send or receive letters.

If you do send any correspondence in writing to the collections company do this by Certified Mail, Return Receipt Requested. Utilizing this service guarantees that the letter reached the collector, giving you a signed receipt as proof. If you work out a re-payment plan over the phone, request the terms of the plan in writing. Any promise to remove or adjust credit history should also definitely be documented.

Make sure that you pay the right party; payments should be made out to the collections agency, not the creditor, unless you have been otherwise instructed to do so. Carefully look over the amount you are being asked to pay. Get to know how much interest, fees or charges that have been added.

If you feel like your bill collector is being abusive or hostile, make sure that you mention it to the agency and always keep this complaint on file. The last thing to remember is do not ignore a collector. Even if you feel that the debt is not yours; they will continue to call and it may mean more trouble and time in the long run.

Mallory Megan writes articles on business, finance, the credit industry and collection agencies.

Can I Avoid a Judgment?

The last resort for a creditor to obtain payment from a debtor is to try to obtain a court judgment. You actually agree to this when you take out a loan or apply for a credit card. The fine print in the document states that you agree to be sued if you don’t make your payments each month.

The main goal in a creditor’s lawsuit is to prove that you actually owe the debt. It is smart, if you really do owe the debt, to attempt to resolve any pending legal action quickly. It is often that a creditor may prefer a settlement to continuing with a legal action. To show good faith, it is helpful if you can provide an up-front partial cash payment.

You will want to know if the statute of limitations is still in effect. If not, the debt is no longer legally collectible. However, it is important to understand that the payment of even a small amount will reinstate your obligation to pay.

If the matter is being handled by an attorney for the creditor, consider calling the attorney and making an offer. No matter what you decide to offer, the attorney is bound legally to discuss your offer with the creditor.

You should do what you can to avoid going to court. Also, keep in mind that a settlement is always better than a court judgment. If your creditor is able to obtain a judgment, your credit report will reflect the judgment and the entry can remain on your credit report for up to ten years.

SHOW UP if you are forced to go to court! Many people who cannot reach a settlement with their creditor make the error of not attending the hearing. This, in turn, means that the creditor will be granted the judgment by default!

It is important to note that if you do appear, you should be prepared to present a defense and work toward a resolution of the matter. You will earn the respect of the judge and plaintiff creditor by doing so. This will require that you present a defense on your behalf.

You will receive a notice of judgment if the creditor is successful in his suit. The judgment will allow you 30 days in which to pay the debt in full. After the 30 days has run and if you still have not paid the debt, there are additional legal actions which the creditor may take. For instance, the creditor may be allowed to place a lien against your home or property. If a lien is placed against your home, the lien will have to be paid in full prior to the sale or refinance of your home.

The garnishment of wages is another legal remedy which is allowed in some states. Additionally, sometimes creditors are allowed to seize personal property to collect the debt.

The result of a judgment on your credit score will be far-reaching. Besides a loss of borrowing power, other areas of your life can be adversely affected. For instance, your chances of promotion or a new job opportunity may not materialize! It is wise to avoid a judgment at all costs.

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Attorney Generals Say To Collection Agencies “Enough is Enough!”

Almost everyone who has been in debt has received the dreaded phone call from a collections agency. But sometimes one phone call turns into twenty, and even worse, an agent may be aggressive and threatening on the phone.

While it may be true that collections agents are trying to collect a legitimate debt, more and more negative attention is being focused on unfair and aggressive policies that some companies have been using.

Some of the more threatening policies caught the eyes of James Caldwell, Louisiana attorney general and Washington attorney general Ron McKenna who have both pledged to make accounts receivable management firms and their owners take more accountability for their behavior.

Already, Caldwell has swiftly obtained injunctions on January 8th against two collection agencies that were not following proper procedure with the standards that have been set for obtaining debt.

On that very day McKenna also stated that his office had just come to an agreement with a collection agency that agreed to follow the new restrictions that have been established.

Some of the new boundaries that these collection agencies must comply with include more effective communication. This means that any harassment, intimidation, threats, profanity, or attempts to embarrass the debtor are now out of the question.

With these new settlements, these collection agencies under scrutiny will no longer be able to intimidate debtors through implications such as failing to pay a debt will result in a suspension of the debtor’s driver’s license.

Lastly, although it is lawful for these collection companies to report debts to credit reporting agencies, they are no longer allowed to threaten debtors with impairment of their credit rating.

Although collections agencies are justifiably trying to collect a legitimate debt, there are two issues to consider. People who owe money are just that people, who deserve to be treated with respect and dignity. More importantly, if a debtor is terrified of an aggressive collections agent who calls them constantly they very well might just stop picking up the calls, leaving themselves in debt, and the collection agencies with nothing.

Mallory McGuinness-Hickey works for debt collection agency Rapid Recovery Solution and does free lance writing about the business world.

Tax Liens 101

If you have never come face-to-face with a tax lien, let me explain what a tax lien is. A tax lien is a process whereby real or personal property has a lien placed against it in order to secure the payment of delinquent taxes. Taxes owing on the asset itself or taxes owed by a taxpayer will warrant a tax lien.

The most common form of tax lien is that placed on real property. Tax liens placed on real property differ from personal property tax liens in that real property tax liens attach to the home. So, if you decide to sell your home, that unpaid and delinquent tax remains with the house after the sale. The new owner will then be responsible for the payment of these overdue taxes.

The real property owner and mortgage lender will be served with a notice if taxes become delinquent on the property. A title search is invaluable if you are thinking of purchasing a piece of real estate. The existence of any tax liens will show up on a title search, thereby alerting you to the fact that there are unpaid taxes due.

When a property is sold which has outstanding taxes due, any lien against the property will normally be paid from the proceeds of the sale as a portion of the closing costs. If a tax lien is not detected prior to the sale, the delinquent tax will pass to the new owner.

As stated above, mortgage lenders and home owners will both be served a notice regarding the real property taxes when these taxes become delinquent. When this happens, often mortgage holders will pay the taxes and then turn around and bill the home owner for the amount paid. This is done because a government tax lien takes precedence over mortgage payments so the mortgage lender often feels it needs to protect its interests.

In the event this doesn’t happen, there are several different ways to make overdue tax payments in order to remove the lien from the property. The home owner can decide to pay the tax directly. Alternately, the home owner can decide to use an escrow account.

Normally, the home owner will have a length of time in which to pay the back taxes. If the taxes are not paid within this time period, the property can be seized, subsequently sold, and the proceeds used to pay the delinquent taxes.

Typically, federal procedures will dictate the process since most real property liens are federal in nature, such as liens for the payment of income tax or gift tax. If the tax lien is state mandated, the procedures will be determined by the state in which the real estate is located. To avoid this type of scenario, it is best to pay all taxes when they are due and to request a title search if you are considering a real estate purchase.

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Beating Credit Card Debt Collectors at Their Own Game

Most people would simply rather pay their credit card debts than deal with collection phone calls and collection attorney letters. But, what about those who cannot afford to make monthly minimum payments on their credit card debt? Many fall prey to the debt collection industry. Some, however, become educated consumers and use the law to force debt collectors to spend their time with other, less knowledgeable consumers.

Time is money for a credit card debt collector who is in the business of collecting unsecured consumer debt, most of which happens to be credit card debt. These consumer debt collectors and collection attorneys work on a percentage of what is collected. Most people think there is a debt collector for every debt, when the reality is there is only a debt collector for every easy-to-collect credit card debt.

Consumer debt collection has grown and prospered with the expansion of the credit card industry.

The Federal Reserve and Business Week report $133.7 billion of consumer debt in 1970 increased to $2.5 trillion of consumer debt in November 2007.

Each year debt collectors put more than $40 billion back into the U.S. economy, according to ACA International, a trade group for the debt collection industry.

There were 173 million credit cardholders in the United States in 2006, According to the U.S. Census Bureau.

4.75 percent of bank cards were delinquent in the first quarter of 2009, according to the American Banking Associate.

These statistics indicate debt collectors have millions of delinquent credit card accounts to collect from.

The Federal Reserve requires credit card companies to hold reserves for bad debts. The credit card companies profit from these debts after they are written off by selling them to junk debt buyers for no more than one penny on a dime, or 10 percent of their value. With that discount, junk debt buyers and their collection agencies and collection attorneys can be quite profitable by only collecting on 30 or 40 percent of the purchased accounts.

Debt collectors can make more money by pursuing delinquent credit card account holders who put up no resistance. Proper resistance to debt collection attempts usually causes debt collectors to look for less resistant targets. Effective resistance to credit card debt collectors relies on The Fair Debt Collection Practices Act (FDCPA).

The Fair Debt Collection Practices Act covers the behavior of collection agencies, junk debt buyers, and collection attorneys. The FDCPA treats attorneys as debts collectors, if they are collecting consumer debt. The consumer must be notified in writing by the debt collector of their right to dispute the debt and have it validated, according to the FDCPA. Copies of original documentation that verifies a debt are considered proper validation by the FDCPA. The FDCPA gives the consumer the right to tell the debt collector to stop collection activity until they have validated the debt.

Should the debt collector invest their time with those who properly dispute and request validation or those who put up no resistance?

Matt Highlander has researched credit counseling, debt settlement, debt collectors and collection attorneys. If you are seeking credit card debt relief, read Credit Card Debt Survival Guide