I received a summons for a credit card I cannot afford to pay.  Can my Social Security check be garnished?

If you are retired or disabled and your only income is from Social Security, that income cannot be garnished!

Debt collectors prey on elderly or retired people by using scare tactics.  It is not unusual to hear one of our clients report:

I got a call today and the collector told me that if I didn't send them money today they would garnish my monthly check or take all of my money out of my bank account!

According to the Federal Trade Commission and the Fair Debt Collection Practices Act, many federal benefits are EXEMPT from garnishment including:

• SOCIAL SECURITY BENEFITS
• SUPPLEMENTAL SECURITY INCOME (SSI)
• VETERANS BENEFITS
• CIVIL SERVICE and FEDERAL RETIREMENT and DISABLILTY BENEFITS
• MILITARY ANNUITIES and SURVIVOR'S BENEFITS
• RAILROAD RETIREMENT, MERCHANT SEAMAN WAGES
• LONGSHOREMAN'S and HARBOR WORKER'S DEATH and DISABLITLY BENEFITS
• FOREIGN SERVICE RETIREMENT and DISABILITY BENEFITS
• FEDERAL EMERGENCY MANAGEMENT AGENCY FEDERAL DISASTER ASSISTANCE

But, in certain cases, such as delinquent taxes, alimony, child support or student loans, federal benefits may be garnished.

Be very careful about your bank account!

As long as the funds in your checking or savings account only came from retirement accounts (such as above) and ARE NOT CO-MINGLED with income you may earn in addition, then your account cannot be levied.

If you have another job, make sure to either just cash that check or open another bank account, preferably in another bank for those funds.

Since most debt collectors are professionals, trained to say anything in order to get you to send them money, you should consider the services of a DEBT MANAGMENT COMPANY.

They may be able to:

• Limit or stop the harassing calls
• Negotiate a reduced settlement help lower your payments and fees
• Help improve your credit score as debts are paid off
• GIVE YOU PEACE OF MIND!

Did you recieve a Summons?  If so, we can help you.  Request more information or give us a call for a FREE consultation!

1-877-492-4109

 photo by: alfcio

If you are delinquent on paying your credit cards, you no doubt have learned how ruthless collectors can be.

Is there anything you can do about it?

YES!

The Fair Debt Collection Practices Act (FDCPA) was created to supposedly protect consumers from the actions of collectors.

According to the FDCPA:

• A collector may contact you in person (rare), by phone, mail, fax, or email (rare). 
• They are not to call before 8 am or after 9 pm. 
• They may contact someone else (friend, family member, neighbor), but again, according to the FDCPA, only to find out where you live, what your phone number is, or where you work.  They are prohibited from telling anyone else that you own money, but the phone call speaks for itself.
• They are not to call you at work, but we know they do.
• They are not to harass you by calling many times a day, over and over.  But, they do so by using a computer dialer, which although is annoying, is not illegal as they have a “business” relationship with you.

Do they, the collectors, abide by the FDCPA?  Rarely.

If you feel your rights have been violated, you can:

• Report your problem to your state Attorney General’s office (www.naag.org) and the Federal Trade Commission (www.ftc.gov). 
• You have a right to sue a collector in a state or federal court within one year from the date you believe the law was violated.  Although this may be a lengthy and costly option, if you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages, employment or medical bills.  It may be in your best interest to seek the advice of an attorney if you decide to sue the collector.

One of the best things you can do to put an end to the harassment of collectors is to send them a cease and desist calling letter.

For a FREE REPORT on HOW TO STOP COLLECTION CALLS, click here.

If you would like more information about the FDCPA, click here.

It is one thing to "love thy neighbor", but it is quite another thing to share financial information with the folks next door.  However, we get calls from people all the time looking for help because their creditors have started calling their neighbors, parents, siblings etcetera. 

Can a debt collector legally call your neighbors?

Surprisinglygly, yes.  In some cases this practice is actually legal.  This is just another example of how collectors are getting more resourceful as more and more consumers become buried in debt. 

Federal law regulates only third-party bill collectors.  Calls to someone other than the debtor, such as a neighbor or family member, are allowed as long as collectors only verify the debtor's address, phone number or place of employment. 

What CAN'T debt collectors do?

Debt collection laws vary from state to state, but here are the basic rules that all collectors must follow.  These laws prohibit debt collectors from:

• Calling outside the hours of 8am and 9pm, threatening violence or using profane language
• Refusing to identify themselves, misrepresenting what is owed or falsely implying legal action has been taken
• Contacting debtors at work if it is possible to reach them at home in the evening
• calling more than once weekly at work or continuing to call the workplace if the debtor has told them not to

Are you being harrased by collection calls. If so, you may need the services of a professional debt relief agency.  Their solutions specialist can help you to determine whether you would benefit from a Debt Consolidation or Debt Settlement program.   

If you need help immediately, CALL NOW for assistance!

1-877-492-4109

Need help putting a stop to collection calls?  Try this:

Although it is OK and may be advisable to speak with the collector at least once, don't forget that these are trained professionals whose only job is to get money out of you!

Briefly explain your circumstances, but don't be surprised when they seem like they don't care...THEY DON'T!

Ask the collector for a mailing address or fax number.  You probably won't get it as they know you are going to mail or fax a written request for them to stop calling.

According to the FDCPA, once you have mailed or faxed such a letter, they collector may only contact you one more time or they are in violation of Federal laws from the FTC.

In the letter, simply state that at this time, financial circumstances beyond your control make it impossible to pay anything on this debt.

It is also a good idea to state that if things do not improve, you are going to seek bankruptcy protection from creditors.

Make a copy of the letter for your records and mail or fax. 

Although it will cost a little, it is better to send the letter by registered mail so that you have proof that it was received.

As long as your account is still with the original creditor (Visa, Master Card, Citi, etc.) it may take a few weeks for the creditor to process and as a result, you may still get calls.

The best advice is to ignore the calls. 

If you have caller ID (and if you don't, you need to get it), don't answer any calls from callers you don't know.

If you can turn your ringer off and let all calls go to voice mail, then you can screen your calls. DO NOT RETURN ANY CALLS TO A COLLCECTOR, REGARDLESS OF WHAT THEY SAY!

If you would like more information on how to stop collector calls, request  the FREE GUIDE.

The phone rings again and the debt collector tells you that unless you send money now...

The debt collection industry is a collection of professionals at one end and low-class, say anything-to-make-a buck low lifes at the other.

We get calls everyday from clients who are almost in tears after receiving a bad call from a collector.

Usually, the collector will tell you how much you owe and how its your responsibility to pay this bill, regardless of how hard things are.

Problem is, the collector usually goes beyond what the Fair Debt Collection Practice Act (FDCPA) states what they can and cannot do.

DID YOU KNOW???

Harassment is the single most prohibitive action. 

They cannot harass or use abusive language to you or any third party that may be helping you.

That a debt collector may not:

• Use threats of violence
• Publish a list of names of people who refuse to pay their debts
• Use obscene or profane language
• Make false statements, such as:
• You will be arrested if you don’t pay
• That they will seize, garnish, attach or sell your property without legal authority
• Threaten to take legal action if they don’t intend to do so 
• A creditor is not permitted to call you before 8am or after 9am
• Cannot contact you at work after you have requested them not to by mail or fax

If you feel the collector has violated your rights, you may contact your state Attorney General’s office (www.naag.org) and the Federal Trade Commission (www.ftc.gov).

To learn more about debt collection practices and your rights under the law, visit www.ftc.gov/credit and MyMoney.gov .

You have several alternatives to take care of your debt problem. Don't be intimidated by a collector. 

If you need help, you should contact a professional debt management company.

Too much debt, not enough money!  What can I do?

First, you need to find out exactly how much money you have coming in and how much is going out each month. 

Most people really don’t have a budget to keep track of their finances.

When you know exactly how much money you have (or how little), then and only then, can you decide which solution would be best for you.

OK, you need $500 just to make the minimum payments on your credit cards, but only have $350 or so after all other bills are paid. 

Does it really make  sense  to continue making the minimum payments required by each of your creditors?

Consumers do not understand that the Credit Card Industry does not want, nor expect you to ever fully repay your accounts! Billions of dollars of interest and fees are earned from people just like you, who only pay the minimum payment each month.

It is estimated that in takes the average consumer 15-20 years to repay a single account at a cost of 3-4 times the total amount charged! There’s got to be a better solution, and there is.

Debt Management (sometimes called Credit Counseling) programs? How do they work?

Most unsecured creditors will participate in a Debt Management Program (DMP). To determine if you qualify, information about your accounts will be entered into a national data base. 

You will need:

• Name of the creditor
• Account number
• Current Balance
• Interest Rate
• Payment

If you qualify you will have:

• One monthly payment disbursed to each of your creditors according to the accepted proposal.
• Lower over-all interest and fees allowing you to pay off these accounts in 48 months or so saving you thousands of dollars in interest and fees.

Although your credit score may decline slightly while you are in the program, once you have completed the program your scores will improve. For more information, visit www.myfico.com

No creditors are calling as they are receiving monthly payments according to the program.

But what  if after  completing the Household Budget Worksheet and examining the Debt Management Program you simply do not have enough left over at the end of the month?

Then, a Debt Settlement Program (DSP) may be your best solution.

Debt Settlement is a program designed for those  who are…

• Facing severe financial hardship due to circumstances beyond their control (loss or lower income due to unemployment, lay-offs, divorce, disability, insufficient retirement income, etc.)
• Have considered a Debt Management Program (above), but simply cannot qualify or afford the monthly payment required.
• Do not want to file for bankruptcy at this time.

How does a Debt Settlement Program work?

If you have fallen behind in making your minimum payments (or are about to), rather than continuing make payments, you will deposit an amount you can afford into a savings account or into an account set up by a qualified Debt Settlement Company. 

Once there is sufficient funds to make a settlement offer, the creditor is contacted and a settlement is negotiated.

Most creditors will accept a settlement, but there are some cases where a creditor may attempt to seek legal action in order to collect the full balance.

But, successful settlements can still be made in spite of a judgment, as creditors would rather accept a settlement offer than force you to consider bankruptcy.

For those of you who are self-employed, retired and/or receiving Social Security and/or Disability benefits or income from a pension or retirement plan, then you are most likely exempt from any legal action from a creditor.

Once you or a professional negotiator has arranged a settlement, the account is now listed on your credit report as “paid-as-agreed” or "settled-as-agreed" with a zero balance.

Debt Settlement can be a time-consuming venture and you may not get as good of a settlement as a professional debt settlement company.

It might be in your best interest to request a FREE Analysis from a qualified company.

Photo by Caston Corporate

A collector threatens you with a possible wage garnishment.

What can you do?

Let's say you receive a call from a collector, and he says that unless you send money right away, then they will start the litigation process to sue you.  A little scary, right?

Of course, that's why they do it! Their job is to collect money from you, and they will use most any tactic possible, especially intimidation.

I won't get into what the collector, legally can and cannot do in this article. You can read more about that in previous posts. Let's focus on what you can do to prevent this.

For more information, visit the FDCPA Guide for Consumers.

Tell the agent you need a couple of days to raise the cash (even if there is "no-way") and get a phone number to call back.  This will stall them from moving forward.

By the way, don't be surprised if they tell you they can't wait and that they need a down payment right now using check-by-phone or else they will start the litigation process.

Again... this is their way of trying to INTIMIDATE you.

Get their phone number and hang up the phone!

I am going to assume you do not have a large sum of cash to make a lump sum offer to settle.  (If you had a large sum, you probably wouldn't be in this situation!) It is very important that you know how much money you can afford each month before you make a repayment offer. 

Take the time to complete a detailed Budget so you can know exactly how much is coming in and how much is going out each month.

The goal is to arrange a settlement for less than the full amount paid out monthly with payments you can afford.  You may not get a huge reduction (maybe down to 75%-80%), but its worth asking.

Once an agreement has been negotiated, make sure you get the agreement in writing...PERIOD!  No written agreement...No deal! If you cannot get the agent to agree, ask for the supervisor.  You may not have any better luck, but it's worth a try.

Most creditors would much rather agree to a settlement repayment plan rather than being forced to go through the litigation proccess.

• DON'T be intimidated
• Know what you CAN afford to pay monthly
• Get the agreement IN WRITING
• Prevent any judgment/litigation

Hope this helps!

 Photo by Caston Corporate

I've been getting abusive calls from collectors and want to know: "What are the rules of Fair Debt Collection?"

The Federal Trade Commission (FTC), is the nation's consumer watchdog and enforces the Fair Debt Collection Practices Act (FDCPA). The FDCPA covers almost all debts, but doesn't cover debts incurred to run a business.

Can a collector contact me any time or place about my debts?

NO!  A collector my not contact you before 8am or after 9pm.  They may not contact you at work if they are told (verbally or in writing) that you're not allowed to get calls at your job.

I have told them to stop calling me both at work and home, but they ignore me. Is there anything I can do?

YES!  The FDCPA states that after consumer has requested the collector to stop calling, in writing, the collector must stop or be in violation.

How do I do that?

You need to write a letter and mail it by certified mail. To learn exactly how to do this, click below:

Can a collector contact anyone else about my debts?

A collector may only contact other people to find out your address, phone number and where you work, and they may only do that once!  They are not permitted to discuss your debt!

A collector was abusive and told me that if I didn't send them so much money by the end of the month I could go to jail!

First, no one goes to jail over an unpaid, unsecured debt! PERIOD! That type of language is not typical of collectors, but it does happens from time-to-time.

The FDCPA states that a collector MAY NOT:

• harass, opress, or abuse you or any third parties they contact.
• use threats of violence or harm.
• use obscene or profane language or
• Use the phone repeatedly (calling 10 times/day!) to annoy you
• falsely claim they are attorneys if they are not
• claim that you have committed a crime
• say that you could be or will be arrested if you don't pay
• say that they will seize, garnish, attache or sell your home or property if such action is prohibited by law (99% of the time it is!)
• send you anything like an official document from a court or government agency if it isn'ta government agency.

Is there a way to legally eliminate debt? 

Recently, a client contacted us after hearing that our programs were not recognized by the courts. So, let's address this question:

Can you legally eliminate debt through a Debt Management or Debt Settlement Program?

And the simple, honest answer is YES !

Unsecured debts, such as:

• Credit card
• personal loan or line of credit
• bank loans
• cash advance loans
• medical bills
• repossessions

...are granted to the consumer under a contract or agreement. The consumer agrees to receive the credit (money/funds/item) with a promise to repay according to the contract.

What happens if the consumer cannot or does not repay the debt?

The creditor can attempt to collect through using various methods within the guidelines of the Fair Debt Collection Practice Act.  In most cases, a settlement offer of the account for less than orignially agreed upon, will be made.

When the settlement is completed, either paid in lump sum or in a series of payments, the account is deemed to have been either:

• Paid-as-agreed or

• Settlement-as-agreed

Your credit report will report this debt to have been paid in the same way with a ZERO balance. 

The "court" does not consider a supplemental payment plan or settlement agreement to be illegal as the creditor has the right to modify the original agreement!

If the debt forgiven is over $600, the the creditor may report it to the IRS and you would receive a 1099-C indicating that you may be responsible for additional taxes on the amount forgiven.

However, if at the time of the settlement (forgiveness) you were basically insolvent, meaning your debts (all debts: mortgage, car, student loans, credit cards, loans, etc.) were more than your assets (and in about 99% of the time they were), then you would not be required to pay any tax on the amount forgiven.

In fact you or your tax preparer can file intructions with IRS 4681 and then file a simple form IRS 982.

So, yes, you can legally become debt-free through debt management or debt settlement.

It may be in your best interest to seek professional help.

Common Collection Practices

Although the Fair Debt Collection Practice Act (FDCPA) was passed in order to protect a consumer’s rights during the collection process, many collection agents violate the law and you should be aware of what a collector can and cannot do.

According to the FDCPA:

• A collector may contact you in person (rare), by phone, mail, fax, or email (rare). 
• They are not to call before 8 am or after 9 pm. 
• They may contact someone else (friend, family member, neighbor), but again, according to the FDCPA, only to find out where you live, what your phone number is, or where you work.  They are prohibited from telling anyone else that you own money, but the phone call speaks for itself.
• They are not to call you at work, but we know they do.
• They are not to harass you by calling many times a day, over and over.  But, they do so by using a computer dialer, which although is annoying, is not illegal as they have a “business” relationship with you. 

If you feel your rights have been violated, you can:

• Report your problem to your state Attorney General’s office and the Federal Trade Commission . 
• You have a right to sue a collector in a state or federal court within one year from the date you believe the law was violated.  Although this may be a lengthy and costly option, if you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages, employment or medical bills.  It may be in your best interest to seek the advice of an attorney if you decide to sue the collector.