Not all Debt Settlement Companies are alike. In fact, most do not offer the personal and professional service you will need.  

Here are the most important things to look for:

Most people will experience a time in their lives when due to circumstances beyond their control, they fall victim to the easy access of credit card debt!

Just to name a few, these circumstances may include:

• Death of a spouse or loved one, cutting your income dramatically
• Trying to survive on a fixed income after retirement
• Too little income after a serious illness or disability
• Divorce
• Unemployment
• The ever increasing rise in the price of rent and products and services!

After helping people examine their options when faced with too much debt for almost 15 years now, I've noticed some common patterns that led to this situation:

There are certain things that you just have to have.... such as...

• Gas for the car
• Groceries
• Unexpected repair or replacement of a major appliance

So, you use the credit card, planning on paying it off as soon as your financial circumstances change.

But, when they don't or you can't, then your may be forced to use another credit card to help make the minimum payment on the first card.

Or, you may need help paying the utility bill or another necessary expense. (sound familiar?)

This should be the most obvious warning sign that your are in serious financial trouble!

What can you do now?

Although your options are limited, YOU DO HAVE OPTIONS:

Credit counseling or a Debt Management Program

If you qualify (it may be too late), a Debt Management Company will contact each of your creditors and arrange a repayment plan that may include a reduction in interest rates and possibly the minimum required payment.

The problem with the Credit Counseling or Debt Management Program is that if you could not keep up with the minimum required monthly payments before, you most likely will not be able to meet the minimum monthly payment required now.

So now what?

Debt Settlement

In a Debt Settlement Program, rather than continuing to "rob Peter to pay Paul" as they say, you stop using your credit cards.

Most likely, you have stopped making minimum payments, but if not, now you are going to.

You make a monthy deposit into an FICD Insured bank account that will be used to negotiate settlements with your creditors and/or debt collectors.

A professional, top ranked Debt Settlement Company will spend time going over your particular circumstances to determine the best program and course of action you need.

There are several very important factors that must be considered before enrolling with a Debt Settlement Company.  Such as

• How long has the company been in business?
• Are they registered with the state?
• Are they accredited with the Better Business Bureau?
• 
• What is their record of complaints?
• Can you speak with the same representative each time?
• Does the representative seem knowledgeable, patient and understanding?
• What about "testimonies"  from clients?
• Can you see some actual settlements?
• If you change your mind after enrollment, can you not only opt out, but also receive a refund of your net reserve account?

A qulified,BBB accredited Debt Settlement Company will provide ALL OF THE ABOVE!

If not....keep looking!

But, what if you cannot qualify for a Debt Settlement Progam?

It may be time to consider Bankruptcy.

Yes, I know it sounds terrible, but in the right situation, it may be the fresh start you need!

But, be careful when looking for a qualified bankruptcy attorney!  

Make sure that bankruptcy is their only specialty and that they are willing to meet with you for an initial consultation, FREE OF CHARGE!

Finally....

Dealing with the stress of a financial hardship requires information and help.

A qualified Debt Settlement Company may be just what you need, but you need to do a little homework first!

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Wage garnishment or a bank levy is a terrible situation to be in.  If you've been garnished, here are some things you can do to stop the garnishment:

We get calls each week from someone (we are in the Portland, Oregon area) that has been garnished or has been notified by their payroll office that they are going to be garnished.

As if things were not bad enough all ready, WHAT CAN YOU DO NOW?

Just to lay some groundwork...

A WAGE GARNISHMENT can only occur AFTER A JUDGMENT has been awarded to the plaintiff.

A lot of people are mistaken in thinking that just because one of your credit accounts has been charged off and assigned or sold to a collection agency, that they can come after your property.

THAT IS JUST NOT TRUE!

FIRST....

When you get behind on paying your credit accounts on time, there is a sequence of events or a time line that must take place.

You will get calls and/or letters from the original creditor trying to find out what's going on.  By-the-way, as long as your account is still with the original creditor, you can't do anything to stop them from calling.

But, once that account is charged off and transferred or sold to a debt collector, you can.  I show you how later.

NEXT...

Once the account is placed with a debt collector, you will start getting calls and/or letters from them.

If you have some funds and/or a little money left over to make a reasonable monthly payment, you may want to discuss this with the debt collector rather than just ignoring the calls.

You may be able to work out a SETTLEMENT, which is a reduction of the balance.

This settlement may have to be in a LUMP SUM or possibly in SEVERAL PAYMENTS.

To get an idea of what a SETTLEMENT AGREEMENT  looks like, click on the button:

But, if you do not have any additional funds and are sick and tired of the relentless calls, you can put a stop to it now:

If you cannot afford anything to put towards the debt you owe, and you are not taking their calls or responding to their letters, the debt collector may decide to FILE A CLAIM.

An attorney is retained to file the claim in your county's courthouse.

Once the claim is filed, you will receive a SUMMONS.  Although this can be a frightening experience, DON'T PANIC!

The summons will state that you the claim against you (you are the defendant) by the creditor or debt collector (this is the PLAINTIFF).

It will also state that if you want to contest the claim, ( called give an ANSWER), you must do so within a short time period (usually 20-30 days after receiving the summons).

If you can prove that you do not owe the debt, then you should give an answer to the court within the time specified. 

This costs a hundred dollars or more and must be in the correct legal documentation, so you may need an attorney also. 

RECAP.....

• You could not keep up with the payments due on some or all of your accounts. This may be due to a number of circumstances, but here you are.
• You can not work out a reasonable repayment plan or settlement with the original creditor, so you account is assigned or sold to a debt collector.
• You cannot afford a settlement with the debt collector and the debt collector files a claim and you receive a summons.

NOW WHAT??????

Most of the time the plaintiff will be awarded a DEFAULT JUDGMENT by the court.

Once the JUDGMENT has been entered, the plaintiff has the option of seeking a WRIT OF GARNISHMENT to get back what is now owed.

Additional interest, fees and court costs have now been awarded to the plaintiff as well!

If you are employed and receive a check (W-2 wages), then the writ of garnishment is presented to your employer and/or payroll department.

You may be notified, but you may just be shocked to see that your payroll check has been reduced by 25%!

(I'll give you some advice on what you may be able to do about this in a minute.)

If you receive income from commission or what is reported for tax purposes as 1099 INCOME, then the plaintiff may seek to get a bank levy on ONE OR ALL OF YOUR BANK ACCOUNTS!

This can really be DEVASTATING!

We have had people call us after their bank account(s) were depleted and they could not by groceries, pay rent, etc.!

The laws of your state (I am in Oregon and most of my clients reside here) will allow numerous EXEMPTIONS to wage garnishment and/or a bank levy.

Here are some of the "basic" exemptions (I give you a link to a more detailed list below):

• Exempt wages....If you earn less than $1,000 a month, most likely this is exempt.
• All Social Security Income
• Retirement Income (very important information below)
• VA benefits
• Any Public Assistance (welfare)
• Unemployment benefits
• Disability benefits
• Worker's compensation benefits
• Spousal or child support or any other support you receive for you or your dependents.
• Many "property" exemptions.

If you live in Oregon, you can get detailed information here:

Basic Exemptions from Wage Garnishments or Bank Levies

If you are retired and receive income from your 401(K), IRA, Pension, etc. as well as Social Security, those incomes are exempt from garnishment or levy, BUT BE AWARE!!!!!

Most people who are retired have their Social Security checks and any other retirement Income checks automatically deposited in their bank.

In May of 2011, a law was passed that protected Social Security and Retirement Funds from creditors, via garnishment/levy.

HOWEVER.... (THIS IS REALLY IMPORTANT!)

As long as your Social Security and/or "Retirement" income is deposited in a bank account that has NO OTHER FUNDS CO-MINGLED, then your bank will not "FREEZE" your account if they receive a writ of levy.

For example:

Let's say you are retired, receiving a modest Social Security check and a small Retirement check. Together, they are automatically deposited in you bank account.

The problem is that you just don't have enough money each month, so you take a part-time job earning $500 or so extra each month.

You deposited that extra $500 together with the other Retirement funds and not that account has CO-MINGLED FUNDS and if a writ of levy were presented to the bank, the banker would have no recourse but to freeze the account (you cannot withdraw ANY FUNDS) and would have to send the amount of the levy to the creditor!

Or.....

Let's say you took some of your retirement funds that are automatically deposited in you checking account and transferred them to a savings account.  Those funds in the savings account are now SUBJECT TO LEVY!

LESSON HERE....

If you are retired, and receive a summons and/or judgment, you need to sit down with your banker and make sure that you funds are protected from any future/possible levy.

FINALLY....

If you have been garnished, it may not be too late to put a stop to the garnishment.

Contact the attorney for the creditor/plaintiff to see if they would be willing to accept a reasonable repayment plan rather than continuing with the garnishment.

For most people, losing another 25% of their income when things were financially tough anyway, would cause them to seek BANKRUPTCY protection.

So, the creditor/plaintiff might be open to another option rather than wage garnishment.

We have been able to help many people, just like you to stop a garnishment, but time is critical.

If you would like help or advice, just let us know:

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If you are experiencing the stress that comes from having too much debt, take heart!  You have several options:

There are basically two types of debt:

Secured debt (home mortgage, equity line of credit, automobile, etc.), anything that represents collateral to the lender in the event you default on your loan.

Unsecured debt, such as:

• Credit Cards (Visa, Master Charge, etc.)
• Store Credit Cards (Home Depot, Kohl's, etc.)
• Medical bills (not covered by insurance)
• Private loans (bank, payday, personal)
• Private Student Loans not back by the Federal Government
• Old Apartment/Rental debt
• Deficiency balance still due after a repossession
• And, of course, there are many others

In this article, I'm basically addressing UNSECURED DEBT, although, is certain circumstances,  some of the options can apply to Secured Debt as well.

If you are experiencing a severe financial situation, most likely it was caused by something beyond your control, such as:

• Loss of employment
• Death of spouse, family member, or partner
• Illness or disability
• Divorce
• Insufficient income after retirement!

See if this sounds familiar...

The company you have worked for decides (or has no choice) but to downsize and layoff (I guess this is a "politically correct" word for GETTING FIRED).

You are one of the unlucky ones and find yourself (for the first time in years), facing the prospect of looking for a new job.

Sure, you will receive UNEMPLOYMENT BENEFITS for a time, but at some point, they will stop.

You had used some credit cards in the past, but the balances were relatively low and you were not only making the minimum payments, but also paying a little more to pay them off sooner than later.

As the job search continues, your unemployment benefits stop and you start dipping into whatever small savings you had. But soon, your starting to understand that you are in trouble!

You have a couple of job offers, but they are not going to pay you as much as you were getting before.

So, you really have no choice and decide to accept a lower paying job just to have some kind of income!  All the while, you are going to keep looking for a better paying job.

But, not only do you not find a better paying job, you have to start using some other credit cards to make up the difference just to get by!

Soon, your credit cards are starting to get "MAXED OUT", and you find yourself unable to keep up with the MINIMUM REQUIRED PAYMENTS! 

NOW WHAT????

When you start missing payments, the creditors will most likely send you a letter or perhaps call to see what is going on. 

Sometimes they seem almost understanding and willing to work with you, but often, they are very mean and demeaning to you!

After a couple of months of missing your minimum payments, you will start getting calls....LOTS OF CALLS, from your creditor.

Unfortunately, as long as the account is with the original creditor, you cannot do anything about the calls.

My advice is to answer once and try to explain that you are going through a rough time and fully intend to repay this debt.  After that, I would just ignore the calls as most of the agents calling are not going to be sympathetic to you anyway.

After 3-4 months of non-payment on your account, most likely the creditor will assign or sell your account to a DEBT COLLECTOR. 

At this point, here are you basic options:

At first, the debt collector may not offer anything else but FULL REPAYMENT (plus all the interest and fees added) on your account.

Of course, you can't do that (if you could have, you wouldn't have been in this situation)!!!!

The Debt Collector may start calling daily and even several times a day, but know you can put a stop to the calls!

The Fair Debt Collection Practices Act allows a consumer to put a stop to these annoying calls by simply writing a letter telling them to "cease and desist". 

Just click on the button below for a free, sample letter you can use:

But, just because the calls have stopped doesn't mean the debt is going to "go away"!

At some point, you may get letter offering a SETTLEMENT of your account for less than the balance.

Most of the time, these letters offer a savings of 25% -35% off the balance if you can pay that amount in a LUMP SUM within a short period of time!

If you can't take advantage of the "offer", then you may get a letter stating that your account is set to be turned over to their "LEGAL DEPARTMENT".  That sounds scary!

The last thing a Debt Collector wants to do is to have to resort to LEGAL OPTIONS  in order to get you to pay on this debt.

Although the letter stated that they could only offer a moderate reduction if you could make a lump sum payment, in fact, they most likely will be willing to accept a better reduction and even let you pay it out over several months!  Here are a few examples:

If the debt collector is unwilling to budge and/or accept a reasonable settlement with terms you can afford, then they may decide to go ahead and file a claim in order to get a judgment.

With a judgment, then they can apply for a WRIT OF GARNISHMENT, which would be sent to your employer.  Your employer would have no choice (although there are exceptions), but to obey the writ of garnishment and send them 25% of your net, take-home income!

Since that would be financially devastating, and you may would not be able to pay the mortgage or rent, utilities, buy groceries, etc.,  you may be forced to seek BANKRUPTCY PROTECTION!

In my opinion, bankruptcy should be your very last...there's nothing else you can do...option.

However, bankruptcy is not as bad or harmful as you may think!

Although your options of dealing with too much debt are limited, you owe it to yourself to get some advice and see what you can or cannot do, given your circumstances.

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It is much easier to PREVENT a WAGE GARNISHMENT than to STOP A WAGE GARNISHMENT! If it's already hard to pay bills with your take home pay, what would you do if that was cut by 25% more!

Here are some VERY IMPORTANT things you must know in advance.

I've been helping people deal with debt issues for almost 15 years now.

I've taken hundreds of calls from stressed-out, scared, "OMG, what am I going to do now?" people who had had their payroll check garnished!

The title of this blog is Preventing Wage Garnishment in Oregon, but it applies to all states.

OK, so how do you PREVENT a Wage Garnishment?

If you have just started to fall behind or have fallen behind on making the required payments on your credit cards or other unsecured debts, here is what normally happens BEFORE a wage garnishment begins:

• First, you get calls & letters from your original creditor
• Then, you get Calls & letters from a debt collector
• You may be issued a Summons
• You may get a Judgment awarded against you
  
• Finally, you may be Garnished

Let's walk through what you MUST DO in order to PREVENT A WAGE GARISHMENT:

Calls & letters from your original creditor(s)

When you are behind in making your monthly payments due to your creditors, those creditors will try  to help you get caught up and/or get a fresh start on repaying your debt.

Let's face, the creditors want to get repaid plus interest and fees, so at first (maybe the first 3 months or so you are behind), they will call and send letters.

Unfortunately, as long as your account is with the original creditor, they have the right to call you EVEN if you write a letter to stop calling.

Now, once they charge off or assign your account to another agency...debt collector, you can put a stop to those calls.  I'll show you how in just a minute.

I understand how stressful and possibly embarrassing it is to get calls like that, so at this point, rather than ignore them, try saying something like this:

"Yes I know that I am behind, and I fully intend to get caught up just as soon as possible.  But, please stop calling me."

Sometimes this works and the original creditor will reduce or even eliminate the calls. 

But, don't expect that to happen every time.

Sometimes they can be very rude!  In that case, don't waste your time trying to explain or arguie,  just hang up!

As to the letters....

You may get a letter offering you:

• Reduced payments for 6 months or so to allow you to get caught up...or,
• A settlement offer to reduce the balance you owe, if you can that amount in a lump sum or just a few months.

While I am not in favor of the first offer which is called a "Hardship Plan", sometimes the SETTLEMENT OFFER is not bad...if you have the funds to take advantage of it!

If the original creditor cannot get you into some kind of repayment plan or  "back on track" in 3-4 months, they most likely will charge off, transfer or sell you account to a debt collector.

Calls & letters from a debt collector

ISo, the calls and letters start again!  Lots of calls and letters!

But now, you can put a stop to those calls.  Here's how:

But again, just because the calls stop, the letters continue, so you are not "out of the woods" yet!

Depending on the type of debt collector your account has landed with, you may be able to get a settlement, whether in a lump sum payment or possibly a settlement paid out over several months.

Here are some actual debt settlements we have completed for our clients:

If your still not able to make REASONABLE payment toward a settlement, then the debt collector may decide to FILE A CLAIM and then you would get a SUMMONS.

Summons

If you have ever had a summons delivered to you at home or even at work, it is a very stressful and humiliating experience!

Although most of the time the summons is delivered, in person, by a person contracted by the debt collector, sometimes a summons may be delivered by a sheriff officer!

BUT....DON'T....FREAK....OUT!

• You are not going to jail!
• They are not going to take your TV or other "stuff".
• In about 99.9% of the time, you are never going to court.

So again....

DON'T....FREAK....OUT!

The SUMMONS will state who the PLAINTIFF is (that's the creditor or debt collector) and name you as the DEFENDANT.

It will also state what the amount of the claim is (how much you owe now, including interest, fees, etc.)

Then it will state something to the effect that you have"20 (or 30) days to give an ANSWER to the court at (address, etc.).

DOES THIS MEAN YOU HAVE TO GO TO COURT?

NO! NO! NO!

It means that if you KNOW FOR CERTAIN and HAVE PROOF that you do not owe this CLAIM, then you can file an ANSWER to the court in the allotted time (usually 20-30 days from receipt of the summons).

The ANSWER must be in the correct, legal document form and so you most likely will need an attorney to prepare it.  And, in addition to attorney fees, their is a hefty fee to file the ANSWER with the court!

So again, don't start down that road unless you know you can prove that the claim has no merit!

CAN A CREDITOR OR COLLECTOR GARNISH YOUR WAGES OR BANK ACCOUNT AT THIS POINT???

NO!

It is a misunderstanding that just because you are behind on your payments a creditor or collector can get a wage garnishment.  NOT TRUE!!!

Before that can happen, a JUDGMENT must be awarded by the court.

I'll explain more in just a minute...

OK, YOU GOT THE SUMMONS, YOU OWE THE DEBT....NOW WHAT?

This could be the most important point for you to take from this article...

DO NOT IGNORE THE SUMMONS !

I can't tell you the number of times a prospective client or even one of our current client calls and says that they have been garnished and admitted that they had received the summons, but just ignored it!

REALLY????   WHAT WERE THEY THINKING???

If a creditor or debt collector goes to the EXPENSE and TROUBLE OF FILING THE CLAIM and PAYING FOR IT TO BE DELIVERED, DON'T YOU THINK THEY ARE SERIOUS?

On the other hand....

In most cases, we have helped our clients AVOID GARNISHMENT by either negotiating a:

• SETTLEMENT, LUMP SUM OR TERM PAYMENTS on a reduced balance, or
• STIPULATED AGREEMENT

So, just because you have received a summons does not mean it's too late, but, we need to move fast to prevent a...

Judgment

Most of the time, a person who is in such a severe financial situation that they cannot keep up with their debts and these debts have gone to a debt collector and a settlement or repayment plan could not be arranged, a DEFAULT JUDGMENT will be granted by the court to the plaintiff (creditor or debt collector).

Now, once the JUDGMENT has been awarded, NOW, AND ONLY NOW, they (the plaintiff) can apply for a WRIT OF GARNISHMENT.

Most states allow for up to 25% of the "take home/after tax check" to be garnished (deducted) !!!!

There are EXEMPTIONS FROM WAGE GARNISHMENT.

Some include:

In Oregon, income under $218 after tax/take home income. In other words, if you bring home less than $915 per month, you cannot be garnished.

Other sources of income that are exempt from garnishment:

• Social Security
• Retirement
• Supplemental Security Income (SSI)
• Public assistance (welfare)
• Unemployment benefits
• Disability Income (other than SSI)
• Workers compensation
• Spousal and Child support

WARNING!!!   If you have a judgment against you and receive income from one or more of the sources above, you should make sure your bank understands that any garnishment request should be denied!

If you don't and the bank doesn't do it's "due fiduciary diligence" and transfers your funds, you can get them back, but it may take some time!

OK, if you were barely paying the bills before, and 25% is deducted from your check, what are you going to do now?

BANKRUPTCY

When I refer to "bankruptcy", I like to call it "BANKRUPTCY PROTECTION".

The bankruptcy laws in our country and your state, are there to PROTECT you from losing everything you have when a dire, financial crisis hits you!

Yes, I think a person should do everything possible to AVOID bankruptcy, but when all else fails, the you need to seek the help of a qualified bankruptcy attorney.

The bankruptcy attorney can not only advise you on what type of bankruptcy plan you qualify for, but they will put a stop to all calls and collection efforts by your creditors.

FINALLY . . .

If, or when, you face a financial hardship and you just can't keep up with the payments, you have options!

Do not...I repeat...DO NOT "hide your head in the sand"!

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Debt Settlement is an excellent option for dealing with debt.  But, after you have settled all of your debts, you need to do some work to make sure your credit report and score is being reported correctly!  Here's what you need to do....

We have been helping people deal with the stress of have too much debt for many years.  Once one of our clients has successfully completed the debt settlement program, they are not sure what they can do to improve their credit score. 

As an example, I received this email yesterday:

"I'm so glad we've finally wrapped everything up!  Do you have any advice for me, with regards to building back up my credit score?" 

It is very important to understand the "basics" of how your credit score is determined. 

According to the Fair Isaac Corporation, your score is determined from the following:

• Payment History (35%) 
• Amounts you Owe (30%)
• Length of Credit History (15%)
• Types of Credit Used (10%)
• New Credit (10%)

As you can see from the breakdown above, at least 65% of your credit score is determined by how you have handled credit (History) and how much outstanding credit you are carrying now.

Our credit reports are used by lenders, insurance companies, potential employers, etc. to get a snapshot of how you have dealt with and are dealing with credit and debt.

When someone enrolls in our Debt Settlement Program, they have usually gone through (or are going through) a very emotional and stressful time in regards to debt and debt management.

Once the balances and the subsequent "minimum payments required" get too large to manage, most people choose a debt settlement program rather than bankruptcy protection.

When accounts have been delinquent for 5-6 months, they are usually charged off and/or sold or turned over to a debt collection agency.  Most of the time, the debt collector will accept a settlement of 40% -60% of the balance, sometimes more or less, depending on circumstances.

Click below to see some actual settlements we have negotiated for our clients:

Once an account has been settled, the debt collector is supposed to report the settlement to the major credit bureaus, but many times they don't.

This is where spending a little time and effort can pay off tremendous benefits as regards to your credit score.

FIRST, you need a copy of your credit report to see what is being reported.

All of us can received a FREE COPY of our credit reports annually.

There are several companies you can find online that offer credit reporting services, but I've found the easiest to be:

www.annualcreditreport.com

Just follow the instructions and get a copy from all 3 of the Major Credit Reporting Agencies:

• Experian
• Equifax
• TransUnion

Once you have it or them printed, take some time to go over the report.  These reports are not that easy to understand, but with a little effort, you can determine what is being reported.

What you are looking for are ERRORS. 

Let's say, for example that you had your XYZ Credit Card account settled last year.

The balance was $14,875, but the debt collector, Atlas Collection Corp (not real)., accepted $7,000 to settle this account.

As you are checking your credit report, you see that the balance of$14,875 was charged off from XYZ Credit Card and the notation says that it has been "placed for collection" or something like that.

Several pages further back in your credit report, you see that Atlas Collection Corp. has the account and is reporting the balance at $14,875 (might be more or less, depending on additional interest and fees.)

Atlas Colletion Corp. never reported the settlement, or reported the settlement, but the Credit Reporting Agency never changed the reporting to read....

    Balance $0     "account settled-as-agreed" or in some cases, "settled-in-full"

As long as this account is showing a large, unpaid balance, your credit score will suffer!

Now what?

Time for you to go to work...

You are going to go online and open a DISPUTE with each credit reporting agency that is not reporting this account as $0 balance and/or "paid-as-agreed".

To do so, click on the links below and follow the instructions. 

Going on line is far easier and quicker than trying to send in by mail, but either way will work.

You will need to be able to show proof that the account was settled, so you will need:

• Copy of the Credit Report page showing the error (you want to circle the error and make it easy for the agent to see what you are disputing)
• Copy of the settlement agreement
• Copy of the cancelled check or check-by-phone or debit card you used from your bank statement
• Brief letter of explanation, such as:

John Doe

123 Street

City, State Zip

Social Security # (they have it anyway) xxx-xx-xxxx

I am opening this dispute to correct an error on my report.  I've included the page showing the error along with proof that it should be a $0 balance now.

I negotiated a settlement for this account and it was paid as agreed on X/XX/2015.

I've enclosed not only a copy of the settlement agreement, but also a copy of the cancelled check as proof of payment.

Please correct the error to reflect a $0 balance and that the account was paid-as-agreed.

Thank you,

_____________________________________ (sign here)

John Doe

Phone: 555-555-5555

Email:  JDoe@ internet.com

You will need to copy all of your documents and proofs in a .pdf format, not only for your records, but also to attach when you go online.

The credit bureaus should correct the error within 45 days. 

You can go back online, login and check the progress.

If they do not honor your dispute, then do it again.  DO NOT GIVE UP!

Most of the time, if you have demonstrated a legitimate error and have provided proof, the credit bureau(s) will make the correction.

As your credit report starts to reflect $0 balances, your credit score will increase.

If you would like more information, click below:

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I've heard this question hundreds of times over the years. 

The simple answer is "NO", but there's much more to it!

The very question shows a misunderstanding of how credit scores are determined and also how the collection process general plays out.

First of all, if you are a prospect for a debt settlement program, then your credit scores have already been damaged.

If you have had or are going through a severe financial hardship/challenge, then most likely you've either raked up too much debt to be able to make the minimum payments due, or you have fallen behind.

A legitimate, professional debt management company would take the time to go over your individual situation, explore and explain your various options and then (and only then) recommend the solution.

What I am saying is that even though there has been legislation over the past few years to help protect consumers from fraudulent debt settlement companies, there are still some out there...SO BE CAREFUL!

The question is..."Does Debt Settlement Hurt My Credit Score?".

Once you can't keep up with the minimum payments or have fallen behind to the point where some or all of your accounts are being turned over to collection agencies, your credit score has already taken a big hit!

Your credit score is determined by several factors:

• Payment History                             35%
• Amount of Debt                               30%
• Length of Credit History                  15%
• New Credit                                      10%
• Type of Credit                                  10%

As you can see, your payment history and the amount of debt you owe account for 65% of the factors in determining your score!

If you've been late or missed payments on a regular basis, your credit score is going to be hurt.

If you have "maxed out" most or all of your cards or accounts, then you are not a very good credit risk (in the eyes of a new lender and the credit bureaus) and therefore, you credit score will suffer.

My point is that if you are a prospect for debt settlement, then your credit score has already been declining.

Once you start (or have the help of a professional debt settlement company) negotiate settlements, your credit report will start showing ZERO BALANCES.

After some time, as you continue to "settle" and/or "pay off" those balances, your credit score will start to improve!

It may not seem reasonable or make sense, but if you understand a little about the mindset of a credit card company or other lenders, then you'll understand.

The credit card industry makes billions of dollars on consumers by offering credit cards to almost anyone!

Several years ago, they discovered that they made more profit from fees, such as:

• Late payment fees
• Over the Limit fees
• Annual fees

These "fees" actually made them more profit than the interest rates!

In a nutshell...THE CREDIT CARD INDUSTRY NOT ONLY WANTS TO EXTEND CREDIT, BUT DON'T REALLY WANT YOU TO EVER PAY OFF YOUR CARDS!

Carefully examine your credit card statement and you'll be in for a shock!

So, if a debt settlement program does not hurt your credit score, then why doesn't everyone that has debt choose debt settlement?

Because not everyone is a prospect for debt settlement!

If you have accumulated too much debt and are really having a hard time making the minimum payments, you may or may not be a prospect for debt settlement.

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You're already having a very hard time paying your bills and keeping up the rent!  Now you get the bad news that your wages are going to be garnished!  Now what?

I"ve been helping people deal with the stress of managing debt for a long time. 

It's one thing to be so tight in your budget that you are barely making ends meet and only able to pay the minimum payments on your credit cards and/or other debts you owe.

Today happens to be a Friday and for a lot of normal, hard working people, they are looking forward to getting their pay check and having a couple of days off from work!

But, when you open your payroll envelope, you get a shock!

After all of the taxes and other deductions are withheld from your check, the net/take home amount was going to barely cover the bills that are due (or over-due)!

Now, 25% (average amount that can be garnished) more is deducted.

OMG!!!

What can you do?

OK....take a breath...and let's go back a little while and see what happened.

We get calls almost every week from someone who has either been garnished or has just received a notice that they are going to be garnished.

We often hear,

"I had no idea this could happen!" or....

"I never received anything about this!"  or....

"I thought this bill was paid a long time ago because I haven't received anything in the mail or had any calls for over a year or so."

Well, I realize that is some rare cases, some of the above comments may be true, but most often, it is basically that the person had their 'head-in-the-sand" type of an belief as things were just so bad they didn't want to think about it!

I understand....been there...done that.

Here's what happened and why this garnishment happened:

When an account (just talking about normal, unsecured credit card type accounts) becomes delinquent, a process begins by the original creditor:

STATEMENTS

The next statement you get will show the PAST DUE amount and the "late fee charges" that have now been added to your balance.

Somewhere on the statement it will tell you that you need to get caught up and to call the customer service number if you need help.....or something like that.

Let's say you just cannot make any payment and don't want to talk to them about it.

CALLS AND LETTERS

Now you will start getting letters saying something like:

"Your account is SERIOUSLY past due and you need to do...... "

The letter may state that if you don't do "this or that", they may close and send your account to a debt collector or attorney for collection.

Now, 4 or 5 months have gone by and although you get a call and letter from the original creditor now and then, nothing really has happened.

DEBT COLLECTOR

When the original creditor is unable to get you to pay on the account, they will usually either "charge off" the account and transfer or sell to a debt collector.

I'm not going to get into how difficult it is to work with some debt collectors in this blog.  I've written numerous articles and blogs about "Dealing with Debt Collectors" that may be very helpful for you. 

The debt collectors job is simple....Get you to pay them money!

The Fair Debt Collection Practices Act is to protect consumers from illegal debt collection tactics.

Everyone should have a general knowledge about your rights, so take some time to check out a very good article:

The Fair Trade Commission, Debt Collectors and your Rights

Now that your account has been turned over to a debt collector, you can put a stop to the annoying and often harassing phone calls:

But, just because you get them to stop calling doesn't mean that your debt problem has gone away!

If the debt collector cannot get you to pay up, they may decide to file a claim in your local county court.

If this happens, you are going to receive a....

SUMMONS

The summons will state that a "claim" has been filed against you for the debt you owe with "so-in-so" creditor and that you have 20 (or 30) days in which to give an "ANSWER" in court......

NO, YOU DON'T HAVE TO GO TO COURT!  (unless you want to)

An "answer" is a legal response from you stating and explaining why you do not owe that debt and therefore are not subject to this claim/summons.

It is a legal document and not only will you need to hire an attorney, there is also a fee for filing the "answer", so make sure you can prove that you don't owe the debt first!

Most of the time an "answer" is not necessary, so now the "PLAINTIFF" (the debt collector or the party filing the claim) will wait a while (varies) before taking the next step.

DEFAULT JUDGMENT

If you don't respond to the summons, the plaintiff/debt collector may decide to send one of their legal representatives to court in order to awarded a judgment.

This is usually called a "default judgment" since you didn't contest the "claim", the debt collector/plaintiff wins by default.

Now what?

WAGE GARNISHMENT, BANK LEVY OR PROPERTY LIEN

OK, now things are serious....

With the default judgment, the plaintiff can now apply for of several options for getting something from you:

• a writ of wage garnishment
• a writ of garnishment/levy on your bank account(s)
• Lien placed on your property (usually your home)

Writ of wage garnishment

A legal document is sent to your employer.  The employer (by law) must withhold an average of 25% of your "after-tax" payroll check until the entire judgment awarded is paid!  There are exemptions, but unless you are making very little income, your in trouble!

Writ of garnishment/bank levy

Yes, with that default judgment, the plaintiff can find your bank or bank accounts and send the writ of garnishment/levy to the bank.

The bank is supposed to go back a couple of months and make sure that your account does not have funds that are from "exempt" sources like:

• Social Security
• Retirement income
• Disability income

Again, I'm not going to get into all of the exemptions in this blog, but you might want to check out:

Are Social Security benefits Protected From a Bank Levy?

But for this blog, you are employed (W-2 Income) and so they have the legal right to go after your income, bank account or other property (not exempt).

PROPERTY LIEN

Although a plaintiff can apply for a lien against certain property (not exempt), most often they will apply for a lien against your home, paid for or not.

This DOES NOT mean that you have to sell your house to pay the debt/judgment.

It means that when you sell or transfer the property (death or gift), this judgment must be paid!

Sure, this may make the plaintiff many years to collect, but that is an option for them.

FINALLY....

I think you can start to see that the best way to put a stop to a wage garnishment is to make every attempt at not letting your delinquent account become a judgment!

There are many OPTIONS that you can take advantage of to stop your account from every becoming a "judgment"!

But, since you have the wage garnishment happening (or about to happen), here's what you (or with help) need to do:

Contact the attorney who filed the writ of garnishment

In most cases, they are usually willing to set up some kind of repayment plan and stop the garnishment.

You will need to be able to show your financial hardship and make a "reasonable" payment each month!

They may want you to sign a "Stipulated Agreement" that will be filed with the court.

It basically says that as long as you make the payments agreed upon, they will not pursue further legal action.

If you have a very large amount of funds available, you may be able to make a SETTLEMENT OFFER to have the judgment satisfied and the writ of garnishment removed.

This offer will most likely need to be much larger than the normal settlements we negotiate for our clients, because they have leverage on you!

BANKRUPTCY

If you are unsuccessful at putting a stop to your garnishment (wage or bank), you may be forced to seek protection through bankruptcy.

Bankruptcy is a legal "tool", so to speak, that allows a person an avenue to get their lives back on track.

Make sure to contact an attorney whose practice deals with all aspects of bankruptcy!

It should be obvious that the way to stop a wage garnishment is to not let your accounts/debts ever get to that point!

We can show you various options of how to deal with your specific debt situation.

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There is a term being used by some credit repair and settlement companies called "Pay-to-Delete".  Does this really work or is it just a scam?

I've been helping people resolve credit issues for almost 15 years. I am not a "credit repair" specialist, but having been in and around this industry for a long time, I've seen a lot of things come and go.  Some good....some bad.  Not sure about this "pay-to-delete" idea, but here are my thoughts:

What does "Pay-to-Delete" mean?

When a person runs into trouble keeping up with the payments on their credit accounts, all kinds of things start to happen!

If you've ever been in that position, then you know that as soon as you are 30 days or so late, you will start getting letters and/or calls from your creditor.

If you are able to get back on track, then fine.  But if not, and your accounts start approaching 90 - 120 days late, then most likely you're account will be charged off, assigned or sold to a debt collection company.

Here's where things start to get serious!

Debt collectors earn money by getting you to pay....period.  If they cannot get the job done, then the account may be pulled and placed with another collector. 

So, it should not be a surprise if they are VERY AGRESSIVE in their collection efforts.

I've written many articles and blogs over the years on how to deal with agreesive and abusive debt collectors and while I'm not going to get into that in this blog, you might want more information, so click here:

"How to Stop Debt Collector Harrassment!"

When you have "past due" and "delinquent" accounts, you really only have a few options, such as:

• Debt Consolidation Loan (very hared to get when you are in this situation)
• Home Equity Loan (be careful...very dangerous!)
• Debt Management or Counseling Program (fine if you can afford the monthly payments)
• Debt Settlement Program (for those who cannot qualify for Debt Management)
• Bankruptcy (most people want to avoid unless there are not other options)

For the sake of this blog, let's focus on the Debt Settlement Program as this is where you might be introduced to the PAY-TO-DELETE idea.

In a Debt Settlement Program, the debt collection companies (and sometimes even the original creditor) may be willing to accept a reduced amount rather than the full balance due. This is called a "settlement".

Often, these settlements range from 30% -50%, depending on circumstances.

Once the settlement has been completed (according to the settlement agreement), the debt collector is supposed to report it to the major credit bureaus a $0 balance with a notation something like:

• "paid for less than full balance"
• "paid as agreed"
• "settled in full"

Although your credit report and score will start to improve with a $0 balance and the fact that you took care of this bad debt, the history of the action will still be reported for up to 7 years according to the Fair Credit Reporting Act.

The fact that you got yourself into credit/debt trouble and were not able to meet the payments/agreement you made with the creditor when issued credit are to be reported and thus, will negatively affect your credit score.

Yes, getting the account paid off via a settlement helps, but the history remains.

Here comes the new term...."PAY-TO-DELETE".

If that "history" could be deleted before the FCRA guideline of 7 years, it would help improve your credit score more quickly....or at least what the proponents of this method claim.

Rather than make a settlement offer of say, 50% of the balance to settle this account, you offer to pay 100% (or maybe a little less) if....(and here's the point....)

If the debt collector will agree to contact the major credit bureaus and have the account COMPLETELY REMOVED...just as if this had never happened.

Let's say you get an official agreement from the debt collector saying they will honor this "pay-to-delete" plan and it is signed and looks very "official" and "legal".

You make the payment (cashier's check to expedite the process) to the debt collector according to the agreement.

The agreement stated that within 15 days of receipt of the payment the debt collector would contact the major credit reporting bureaus to have the account removed.

You check your credit report after 20-30 days and guess what.....

The account was not removed!

Now what?

Of course, you contact the debt collector, but are told that the agent who made the agreement did not have the aurthority and therefore they will not honor the deal (or some other excuse).

Your recourse....

I suppose you could contact an attorney and file a lawsuit, but that is going to take a lot of money and time!  And, there is no guarantee that the attorney will be successful! 

• Maybe the "agreement" was not a "legal contract" after all.
• Maybe it is ILLEGAL for a Credit Bureau to remove an account, insinuating that the BAD DEBT never occurred!  This is a very "grey" area as far as honest credit history reporting goes. 

I'm using the word "maybe" because, not being an attorney, I just don't know.  But, in my opinion, the credit bureaus (FOR PROFIT companies) are in business to sell CORRECT credit information to lenders that accurately shows the person's credit history in order to determine if they should or should not loan the money.

Think about this....

Let's say I'm a car dealer, and I run a credit report on a prospective buyer.  The credit report comes back and looks good, but in reality, this prospect had had a couple of cars repossed in the last 3-4 years that are not being reported as they were removed via a "pay-to-delete" agreement.

The repossessed car(s) were sold at aucuion and the difference between the selling price and the total balance due at that time was awarded to the dealer/debt collector as a "deficientcy judgment".

The dealer/debt collector hires an attorney to go collect on the judgment and contacts the orginal owner.

The orignial owner offer a PAY-TO-DELETE deal.  The deal/agreement was struck between the debt collector and the origninal owner of the car, and the payment was made and the credit bureaus removed the history of this repossesion(s).

Am I getting an honest credit report?

Of COURSE I'M NOT!

But, based on the information contained in the credit report, I grant the loan for the car.

Later, the purchaser runs into financial trouble again and does not make the payments.

I'm forced to pay the legal and repossession fees to get the car. 

IS THAT RIGHT?    Don't think so....

In fact, I believe I would file a claim and sue the credit bureau for their FALSE CREDIT HISTORY REPORTING.

Would I win?

Don't know, but I think you can see my point.

A Pay-to-Delete agreement may be completly legal, fair and ethical.  But for now, until there is more proof, I'd be wary.

Rememeber the old addage....

If it sounds too good to be true, it probably is!

Debt Collectors...They call and call and call!!! Is there anything you can do to STOP THE CALLS?

If you have ever missed or gotten behind on credit accounts, then most likely, before long, you started getting calls, and calls, and calls!!!

As if the financial stress wasn't enough, now you got some, well, I'll be nice, debt collector agent calling to demand payment or making threats of this or that.

GOOD NEWS!

For the sake of this article, I'm talking about unsecured accounts such as:

• Credit cards
• Store credit cards
• Personal loans
• Pay-Day loans
• Medical bills
• Utility bills
• Private student loans

As long as the account is with the original creditor (Visa, Master Charge, Discover, etc.), then they (the creditor) has the right to call you about your account.

Somewhere in the fine print of the application you signed, (and probably couldn't read) there was language that you agreed to that they could contact you by phone/mail about your account.

But, once that account is about (varies) 3-4 months delinquent, then the original creditor may decide to charge off, assign or even sell to a debt collector.

Once this happens, then the debt collectors starts with the letters and calls....lots of calls, many times a day....VERY ANNOYING!

But I said I had GOOD NEWS, and I do.

The Federal Trade Commission (FTC) has a lot of very good information about debt collectors and their practices. 

A debt collector must conduct their business practices according to the law found in the FAIR DEBT COLLECTION PRACTICES ACT or the FDCPA.

They (debt collectors) are prohibited from:

• calling too early or late
• calling many, many times a day
• calling you at work (if your boss prohibits calls)
• making threats of legal action (if they do not follow through or intend to)
• using profane or threatening language ("Your going to go to jail!")
• calling and revealing your situation with family or friends

So, what should you do if you have believe you have been harassed by a debt collector?

The best thing you can do is to file a complaint with your state's attorney general's office.  Most likely you can go online to do this.

If the Attorney General's office gets enough complaints, they will start legal action against the debt collector.

"But, how do I stop all those calls?"

Again, the Fair Debt Collection Practices Act says that a consumer can demand that a debt collector stop the calls by simply sending a written request (sometime they'll take a fax).

To make it easier for you, here's all the information you will need:

One more thing....

Just because you have stopped the calls doesn't mean the debt collector is going to stop sending letters, reporting the "bad debt" on your credit report and possibly begin legal action to win a judgment.

If awarded a judgment, they may be able to get a WRIT OF GARNISHMENT or a BANK LEVY!

The best thing you can do is to negotiate with the debt collector for a reduced SETTLEMENT!

Dealing with debt collectors is not always easy or friendly:

• They are professionals who specialize in getting you to pay as much as possible!
• When you are "emotionally" involved, it is harder to negotiate.
• With little experience, many people end up paying way to much.

Yes, you can put a stop to the collection calls, but you'll still need to deal with the debt.

COULD YOU USE A LITTLE HELP OR ADVICE?

Debt settlement is an option that can not only help you not only pay off debt, but will also work to improve your credit score.

Studies have shown that 1 out of 5 of us have errors on our credit reports!

In fact, the Federal Trade Commission released a study recently that also reveals that many consumers who attempted to dispute those errors with the major credit reporting bureaus were unsuccessful.

Your credit report and more importantly, your credit score. is a reflection of all of the information that is being reported.  

That is why is so very important that you not only know what is being reported, but also to know what to do about inaccurate information.

Of course, you want to make sure that your personal information is correct, such as:

1. Your name with correct spelling
2. Social Security Number
3. Current address
4. Date of Birth

After that, inaccuracies on accounts, balances, etc. are common.

For example....

Let's say you went through a tough time, financially a couple of years ago.  If you were not able to keep up with your minimum payments on your credit cards, then one or more may have been turned over to a collection agency.

But, when things changed, you replied to one of the debt collector's letters or calls and paid the account off.

The debt collector should have reported it to the credit bureaus, but many times they don't.

So, when you go to get a loan and are denied, the credit report (if denied, the lender must provide you with a copy of the credit report they used and explain why) showed that account with an outstanding balance!

Now you have to contact the credit bureau and open a DISPUTE.

Many people just don't know that there are mistakes and inaccurate information being reported on their credit report and therefore, they are paying the price...literally!

If you find errors on your credit report, click on the button below and you will see exactly what to do:

Just a word about so-called "credit repair" companies...

While you should dispute any legitimate errors on your credit report, opening a frivolus dispute is not only dishonest, but also could get you into trouble!

Using a Credit Repair company to challenge or dispute legitimate errors is fine, beware of those types of companies who make outrageous claims, such as:

• “Credit problems? No problem!”
• “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”
• “We can erase your bad credit — 100% guaranteed.”
• “Create a new credit identity — legally.”

The Federal Trade Commission has a good article about this that you should check out:

"Credit Repair...How to Help Yourself"

But what about legitimate accounts that you forgot about or neglected to pay off?

If that account has been with a collection agency for more than a year or so, you should be able to negotiate a SETTLEMENT for less than the full balance.

Once the account has been settled, the debt collector should (there we go again!) report it to the credit bureaus as "settled-in-full" or "settled-as-agreed" and the balance should be $0.

Once you have taken care of old accounts via debt settlement, your credit report will start to improve as your debt-to-available credit ratio improves, and thus, you are a better credit risk.

Finally...

Yes, Debt Settlement is a great way to not only pay off old, outstanding accounts, but also a great way to improve your credit score!

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