https://litwiki.org/api.php?action=feedcontributions&feedformat=atom&user=Melia04 2026-04-10T08:38:25Z User contributions MediaWiki 1.43.0 https://litwiki.org/index.php?title=Debt_Relief:Proposal&diff=8240 2004-12-14T17:47:34Z

<p>Melia04: </p> <hr /> <div>[[Debt Relief|Debt Relief Home Page]]<br /> ==Introduction==<br /> Living in a capitalistic society can bring both joy and grief. The ability to choose between a $10 sweater and a $100 sweater is a privilege. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy and buy and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above ours means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: ''debt''. Debt can be controlled, but we all need to understand it and learn to avoid whenever possible. <br /> <br /> This report will address the aspects of debt from different perspectives. It will address getting into debt and options for getting out of debt. This report will be informative and can be used by thousands of people searching for an understanding of debt and a way out.<br /> <br /> ==Background==<br /> <br /> Americans give little consideration to the consequences of overspending. Being in debt is serious and there is help for those who need it. Loans are justifiable in many instances, but the funds to repay those loans must be available. <br /> Joe Smith, for example, has fallen into the ''debt trap''. Although Joe was already obligated to repay $60,000.00 in student loans, he had daily living expenses and owes approximately $13,000.00 in unsecured debt. Joe completed his education and is employed, but now finds that he cannot fulfill his obligation to repay the money he has borrowed on his $40,000.00 annual income. Joe is employed and he has to pay his bills or his creditors may refer his accounts to a collection agency. Collection agencies sue and garnish paychecks to get the money owed. Although Joe is way over his head in debt, he wants more. He wants a new (expensive) car and a house. Joe realizes that his paychecks can only stretch so far and that he needs help to manage his debt. Getting out of debt requires an understanding of debt, as well as, simple applications that can help in the process.<br /> <br /> ==Proposal== <br /> <br /> Debt Relief is intended to lead people in the right direction and to assist those plagued with poor money management. The information provided will cover topics such as financial planning, debt consolidation, credit reports, and bankruptcy. Realistic answers will be offered for questions asked when debt is overwhelming. Web sites will be listed to allow those interested to review the services offered. Information will be gathered from credit counseling services, financial planning institutions and collection agencies. Alternatives to debt will be discussed as well. In addition, an original survey will conducted on debt. The intent of &quot;Debt Relief&quot; is to inform the reader of the options available when there is a need to get out of debt and control spending.<br /> <br /> ==Tentative Schedule==<br /> <br /> ===Week 1: Oct. 26 &amp; 28===<br /> Research:<br /> * Reasons for getting into debt<br /> * Distinguish between “good” debt and “bad” debt<br /> * Statistical information about debt; the average American debt, the correlation between age and debt, the average number of years it takes to “get out” of debt., and any inferences about the direction the country, as a whole, is heading when it comes to debt<br /> <br /> ===Week 2: Nov. 2 &amp; 4===<br /> Research:<br /> * Debt relief agencies<br /> * The pros and cons<br /> * Consequences of getting involved with such an agency<br /> * Distinguish between a credible agency and a bogus one <br /> * Thing to consider when contemplating going to a debt relief program<br /> <br /> ===Week 3: Nov. 9 &amp; 11===<br /> Research:<br /> * Financial planning <br /> * Budgeting<br /> * Places that offer these services- private and public<br /> * Credit ratings: what do they mean<br /> <br /> ===Week 4: Nov. 16 &amp; 18===<br /> Research:<br /> * Alternatives to debt<br /> * Managing debt<br /> * Being “debt-free” as an option<br /> * Staying debt-free<br /> <br /> ===Week 5: Nov. 23 (the 25th is a holiday)===<br /> Research:<br /> * Options to becoming “debt free”<br /> * Bankruptcy<br /> * Improving your credit rate<br /> <br /> ===Week 6: Nov. 30 &amp; Dec. 2===<br /> * Revise and make corrections as needed.<br /> <br /> ===Week 7: Dec. 7 &amp; 9===<br /> * Turn in project.<br /> <br /> ==Teams and Responsibilities==<br /> <br /> There will be a total of three teams (A,B, and C). The three teams will have a specific task each week, but will rotate the weekly task between researcher, typist, and editor. This way, each team will have the opportunity to conduct each aspect of the project. Each team will have a “Team Leader”, which will be elected by the team members. There may be a different Team Leader each week if the team so desires. <br /> <br /> The task:<br /> * The researchers will look up each particular week’s topics which are outlined in the tentative schedule. <br /> * The typers will consist on extracting relevant information done by the researchers and typing it down to be turned in to the “editors”. <br /> * The editors will then organize the information and revising it for any possible errors; whether it be grammatical or informational. In addition, the editors will be responsible for turning in a hard copy of the work to the coordinators.<br /> * The Team Leader will be responsible for the team’s progress. <br /> * The coordinators will facilitate the process by offering advice, helping with any task, and being the liaison between the teams and the professor.<br /> <br /> The class has split into groups and has been assigned specific areas of research to include:<br /> <br /> * Statistical data<br /> * Debt Consolidation<br /> * Financial planning and budgeting<br /> * Bankruptcy<br /> * Credit counseling<br /> * Collection agencies<br /> <br /> ==Request For Authorization==<br /> <br /> Being in debt should never be taken lightly. Whether it be a small department store credit card to an outstanding home loan; essentially, both are the same- the balances need to be paid-off in order for those things to be yours. As prices rise, interest rise, and salaries stagger, it has never been so crucial to understanding what debt really means. In the mist of the depth of these statistics, however, there is hope. This report will be an informational tool as well as an applicable one. Being able to differentiate between a “good” debt and a “bad” debt can be the difference between buying the home of your dreams or renting an apartment. Should bankruptcy even be an option? Is there such a thing as being “debt-free” now a days? What is the best budgeting strategy for me? These and endless other questions can be answered in our report. This is why we are asking for authorization for our project. So that in the darkness of debt collector’s dinner time calls, there may be someone who may benefit from the information.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:_Survey_SAMPLE&diff=8417 2004-12-14T17:46:58Z

<p>Melia04: </p> <hr /> <div>[[Debt Relief|Debt Relief Home Page]]<br /> <br /> Debt Relief Survey<br /> Professional Communication<br /> ENGL 3106<br /> <br /> *We are conducting this survey to gather information about the financial debt problems of the average student. The data that we receive will be processed and our findings will be posted on a website that is being constructed to help students manage their debt. We do not want or need any information other than what is being asked for.<br /> Thank you for your time. <br /> <br /> <br /> 1. How old are you?<br /> (circle one)<br /> 18-21 22-25 26-30 30+<br /> <br /> <br /> 2. Sex: M F<br /> <br /> <br /> 3. What is your ethnic background?<br /> African-American American Indian Asian-American<br /> <br /> Caucasian Hispanic-American Other<br /> <br /> <br /> 3. Do you have any credit cards in your name?<br /> Yes No<br /> If yes, how many? __________ <br /> <br /> <br /> 4. Approximately how much total debt has been accumulated on those cards? <br /> (circle one)<br /> $0-500 $500-1000 $1000-1500 $1500-2000 $2000+<br /> <br /> <br /> 5. Do you have a car payment?<br /> Yes No <br /> If yes, approximately how much is it per month? __________<br /> <br /> <br /> 6. How much do you spend on miscellaneous or non-essential expenditures per week?<br /> $0 – 30 $30 – 70 $70 – 120 $120+<br /> <br /> <br /> <br /> <br /> <br /> 7. Do you rent an apartment or pay a mortgage on a house?<br /> Yes No<br /> If yes, approximately how much is it per month? __________<br /> <br /> <br /> 8. Do you have any dependents?<br /> Yes No If yes, then how many? ______<br /> <br /> <br /> <br /> 9. Are you currently employed?<br /> Yes No <br /> If yes, what is your approximate hourly wage?<br /> (circle one)<br /> Minimum wage-$7 $7-10 $10-15 $15+<br /> <br /> <br /> 10. Do you currently have any school loans? <br /> Yes No<br /> <br /> <br /> <br /> 11. Do you currently receive either the HOPE or the Pell Grant?<br /> Yes No<br /> <br /> <br /> 12. Do you plan to attend any post-graduate schooling <br /> (e.g. law school, medical school, technical school)?<br /> Yes No<br /> <br /> <br /> <br /> 13. Approximately how much debt do you anticipate having by the end of your education?<br /> ___________________________<br /> <br /> <br /> <br /> 14. Do you currently have or have recently had any major medical expenses?<br /> Yes No<br /> <br /> <br /> <br /> 15. Have you received any credit/debt management counseling or aid in the past?<br /> Yes No<br /> <br /> <br /> 16. If you knew about a website that gave practical information and options to help you manage your debt would you visit it?<br /> Yes No</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Proposal&diff=2419 2004-12-14T17:45:28Z

<p>Melia04: </p> <hr /> <div>[[Debt Relief|Debt Relief Page]]<br /> ==Introduction==<br /> Living in a capitalistic society can bring both joy and grief. The ability to choose between a $10 sweater and a $100 sweater is a privilege. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy and buy and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above ours means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: ''debt''. Debt can be controlled, but we all need to understand it and learn to avoid whenever possible. <br /> <br /> This report will address the aspects of debt from different perspectives. It will address getting into debt and options for getting out of debt. This report will be informative and can be used by thousands of people searching for an understanding of debt and a way out.<br /> <br /> ==Background==<br /> <br /> Americans give little consideration to the consequences of overspending. Being in debt is serious and there is help for those who need it. Loans are justifiable in many instances, but the funds to repay those loans must be available. <br /> Joe Smith, for example, has fallen into the ''debt trap''. Although Joe was already obligated to repay $60,000.00 in student loans, he had daily living expenses and owes approximately $13,000.00 in unsecured debt. Joe completed his education and is employed, but now finds that he cannot fulfill his obligation to repay the money he has borrowed on his $40,000.00 annual income. Joe is employed and he has to pay his bills or his creditors may refer his accounts to a collection agency. Collection agencies sue and garnish paychecks to get the money owed. Although Joe is way over his head in debt, he wants more. He wants a new (expensive) car and a house. Joe realizes that his paychecks can only stretch so far and that he needs help to manage his debt. Getting out of debt requires an understanding of debt, as well as, simple applications that can help in the process.<br /> <br /> ==Proposal== <br /> <br /> Debt Relief is intended to lead people in the right direction and to assist those plagued with poor money management. The information provided will cover topics such as financial planning, debt consolidation, credit reports, and bankruptcy. Realistic answers will be offered for questions asked when debt is overwhelming. Web sites will be listed to allow those interested to review the services offered. Information will be gathered from credit counseling services, financial planning institutions and collection agencies. Alternatives to debt will be discussed as well. In addition, an original survey will conducted on debt. The intent of &quot;Debt Relief&quot; is to inform the reader of the options available when there is a need to get out of debt and control spending.<br /> <br /> ==Tentative Schedule==<br /> <br /> ===Week 1: Oct. 26 &amp; 28===<br /> Research:<br /> * Reasons for getting into debt<br /> * Distinguish between “good” debt and “bad” debt<br /> * Statistical information about debt; the average American debt, the correlation between age and debt, the average number of years it takes to “get out” of debt., and any inferences about the direction the country, as a whole, is heading when it comes to debt<br /> <br /> ===Week 2: Nov. 2 &amp; 4===<br /> Research:<br /> * Debt relief agencies<br /> * The pros and cons<br /> * Consequences of getting involved with such an agency<br /> * Distinguish between a credible agency and a bogus one <br /> * Thing to consider when contemplating going to a debt relief program<br /> <br /> ===Week 3: Nov. 9 &amp; 11===<br /> Research:<br /> * Financial planning <br /> * Budgeting<br /> * Places that offer these services- private and public<br /> * Credit ratings: what do they mean<br /> <br /> ===Week 4: Nov. 16 &amp; 18===<br /> Research:<br /> * Alternatives to debt<br /> * Managing debt<br /> * Being “debt-free” as an option<br /> * Staying debt-free<br /> <br /> ===Week 5: Nov. 23 (the 25th is a holiday)===<br /> Research:<br /> * Options to becoming “debt free”<br /> * Bankruptcy<br /> * Improving your credit rate<br /> <br /> ===Week 6: Nov. 30 &amp; Dec. 2===<br /> * Revise and make corrections as needed.<br /> <br /> ===Week 7: Dec. 7 &amp; 9===<br /> * Turn in project.<br /> <br /> ==Teams and Responsibilities==<br /> <br /> There will be a total of three teams (A,B, and C). The three teams will have a specific task each week, but will rotate the weekly task between researcher, typist, and editor. This way, each team will have the opportunity to conduct each aspect of the project. Each team will have a “Team Leader”, which will be elected by the team members. There may be a different Team Leader each week if the team so desires. <br /> <br /> The task:<br /> * The researchers will look up each particular week’s topics which are outlined in the tentative schedule. <br /> * The typers will consist on extracting relevant information done by the researchers and typing it down to be turned in to the “editors”. <br /> * The editors will then organize the information and revising it for any possible errors; whether it be grammatical or informational. In addition, the editors will be responsible for turning in a hard copy of the work to the coordinators.<br /> * The Team Leader will be responsible for the team’s progress. <br /> * The coordinators will facilitate the process by offering advice, helping with any task, and being the liaison between the teams and the professor.<br /> <br /> The class has split into groups and has been assigned specific areas of research to include:<br /> <br /> * Statistical data<br /> * Debt Consolidation<br /> * Financial planning and budgeting<br /> * Bankruptcy<br /> * Credit counseling<br /> * Collection agencies<br /> <br /> ==Request For Authorization==<br /> <br /> Being in debt should never be taken lightly. Whether it be a small department store credit card to an outstanding home loan; essentially, both are the same- the balances need to be paid-off in order for those things to be yours. As prices rise, interest rise, and salaries stagger, it has never been so crucial to understanding what debt really means. In the mist of the depth of these statistics, however, there is hope. This report will be an informational tool as well as an applicable one. Being able to differentiate between a “good” debt and a “bad” debt can be the difference between buying the home of your dreams or renting an apartment. Should bankruptcy even be an option? Is there such a thing as being “debt-free” now a days? What is the best budgeting strategy for me? These and endless other questions can be answered in our report. This is why we are asking for authorization for our project. So that in the darkness of debt collector’s dinner time calls, there may be someone who may benefit from the information.</div>

Melia04 https://litwiki.org/index.php?title=Professional_Communication&diff=8410 2004-12-14T17:44:11Z

<p>Melia04: </p> <hr /> <div>[[Debt Relief|Debt Relief Home Page]]<br /> == General ==<br /> * [[Cover Letter]]<br /> * [[Résumé]]<br /> * [[Web Portfolio]]<br /> <br /> == Fall 2004 ==<br /> * [http://litmuse.maconstate.edu/article.php?story=20031230171635678 Syllabus]<br /> * [http://litmuse.maconstate.edu/article.php?story=2004101915180768 Project Assignment]<br /> * [[Debt Relief]]<br /> * [[Progress Report]]<br /> * [[Debt Relief:Proposal | Proposal]]<br /> <br /> <br /> ----<br /> [[Main_Page]] &gt; [[Class Pages]] &gt; Professional Communication<br /> [[Category:Course Documents]]</div>

Melia04 https://litwiki.org/index.php?title=Definitions_and_Common_Terms&diff=8418 2004-12-14T17:42:48Z

<p>Melia04: /* Definitions and Common Terms */</p> <hr /> <div>[[Debt Relief|Debt Relief Home Page]]<br /> <br /> ==Bankruptcy==<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> ==Beacon or Credit Score==<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable <br /> credit history. <br /> <br /> ==Credit Reports==<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> ==Debt==<br /> Liability; money owed <br /> <br /> ==Debt Consolidation==<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> ==Frozen Assets==<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> ==Frozen Interest==<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> ==Frozen Interest Rate==<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> ==Garnishee or Garnishment==<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> ==Insolvent==<br /> Unable to meet debts or discharge liabilities. <br /> <br /> ==Liens==<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> ==Liquidation==<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> ==Secured Credit==<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> ==Sue or suit==<br /> The creditor can take legal action to get the money owed <br /> <br /> ==Unsecured Credit Card<br /> A credit card where a security deposit is not required to open the credit account.</div>

Melia04 https://litwiki.org/index.php?title=Definitions_and_Common_Terms&diff=2415 2004-12-14T17:42:24Z

<p>Melia04: </p> <hr /> <div>==Definitions and Common Terms==<br /> [[Debt Relief|Debt Relief Home Page]]<br /> ==Bankruptcy==<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> ==Beacon or Credit Score==<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable <br /> credit history. <br /> <br /> ==Credit Reports==<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> ==Debt==<br /> Liability; money owed <br /> <br /> ==Debt Consolidation==<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> ==Frozen Assets==<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> ==Frozen Interest==<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> ==Frozen Interest Rate==<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> ==Garnishee or Garnishment==<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> ==Insolvent==<br /> Unable to meet debts or discharge liabilities. <br /> <br /> ==Liens==<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> ==Liquidation==<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> ==Secured Credit==<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> ==Sue or suit==<br /> The creditor can take legal action to get the money owed <br /> <br /> ==Unsecured Credit Card<br /> A credit card where a security deposit is not required to open the credit account.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2330 2004-12-09T18:23:52Z

<p>Melia04: /* Project Documents */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1) They help debtors to assess his/her debt situation.<br /> <br /> 2) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief: Survey SAMPLE|Survey SAMPLE]]<br /> * [[Debt Relief:Bibliography | Bibliography]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:_Survey_SAMPLE&diff=2418 2004-12-09T18:23:13Z

<p>Melia04: </p> <hr /> <div>Debt Relief Survey<br /> Professional Communication<br /> ENGL 3106<br /> <br /> *We are conducting this survey to gather information about the financial debt problems of the average student. The data that we receive will be processed and our findings will be posted on a website that is being constructed to help students manage their debt. We do not want or need any information other than what is being asked for.<br /> Thank you for your time. <br /> <br /> <br /> 1. How old are you?<br /> (circle one)<br /> 18-21 22-25 26-30 30+<br /> <br /> <br /> 2. Sex: M F<br /> <br /> <br /> 3. What is your ethnic background?<br /> African-American American Indian Asian-American<br /> <br /> Caucasian Hispanic-American Other<br /> <br /> <br /> 3. Do you have any credit cards in your name?<br /> Yes No<br /> If yes, how many? __________ <br /> <br /> <br /> 4. Approximately how much total debt has been accumulated on those cards? <br /> (circle one)<br /> $0-500 $500-1000 $1000-1500 $1500-2000 $2000+<br /> <br /> <br /> 5. Do you have a car payment?<br /> Yes No <br /> If yes, approximately how much is it per month? __________<br /> <br /> <br /> 6. How much do you spend on miscellaneous or non-essential expenditures per week?<br /> $0 – 30 $30 – 70 $70 – 120 $120+<br /> <br /> <br /> <br /> <br /> <br /> 7. Do you rent an apartment or pay a mortgage on a house?<br /> Yes No<br /> If yes, approximately how much is it per month? __________<br /> <br /> <br /> 8. Do you have any dependents?<br /> Yes No If yes, then how many? ______<br /> <br /> <br /> <br /> 9. Are you currently employed?<br /> Yes No <br /> If yes, what is your approximate hourly wage?<br /> (circle one)<br /> Minimum wage-$7 $7-10 $10-15 $15+<br /> <br /> <br /> 10. Do you currently have any school loans? <br /> Yes No<br /> <br /> <br /> <br /> 11. Do you currently receive either the HOPE or the Pell Grant?<br /> Yes No<br /> <br /> <br /> 12. Do you plan to attend any post-graduate schooling <br /> (e.g. law school, medical school, technical school)?<br /> Yes No<br /> <br /> <br /> <br /> 13. Approximately how much debt do you anticipate having by the end of your education?<br /> ___________________________<br /> <br /> <br /> <br /> 14. Do you currently have or have recently had any major medical expenses?<br /> Yes No<br /> <br /> <br /> <br /> 15. Have you received any credit/debt management counseling or aid in the past?<br /> Yes No<br /> <br /> <br /> 16. If you knew about a website that gave practical information and options to help you manage your debt would you visit it?<br /> Yes No</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2329 2004-12-09T18:22:16Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1) They help debtors to assess his/her debt situation.<br /> <br /> 2) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief: Survey SAMPLE|Survey SAMPLE]]<br /> * [[Debt Relief:Bibliography | Bibliography]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2328 2004-12-09T18:21:44Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1) They help debtors to assess his/her debt situation.<br /> <br /> 2) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief: Survery|Survery]]<br /> * [[Debt Relief:Bibliography | Bibliography]]</div>

Melia04 https://litwiki.org/index.php?title=Professional_Communication&diff=2416 2004-12-09T18:19:43Z

<p>Melia04: </p> <hr /> <div>== General ==<br /> * [[Cover Letter]]<br /> * [[Résumé]]<br /> * [[Web Portfolio]]<br /> <br /> == Fall 2004 ==<br /> * [http://litmuse.maconstate.edu/article.php?story=20031230171635678 Syllabus]<br /> * [http://litmuse.maconstate.edu/article.php?story=2004101915180768 Project Assignment]<br /> * [[Debt Relief]]<br /> * [[Progress Report]]<br /> * [[Debt Relief:Proposal | Proposal]]<br /> <br /> <br /> ----<br /> [[Main_Page]] &gt; [[Class Pages]] &gt; Professional Communication<br /> [[Category:Course Documents]]</div>

Melia04 https://litwiki.org/index.php?title=Professional_Communication&diff=2326 2004-12-09T18:18:33Z

<p>Melia04: </p> <hr /> <div></div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2327 2004-12-09T18:16:34Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1) They help debtors to assess his/her debt situation.<br /> <br /> 2) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]</div>

Melia04 https://litwiki.org/index.php?title=Project_Documents&diff=8411 2004-12-09T18:15:48Z

<p>Melia04: </p> <hr /> <div>== General ==<br /> * [[Cover Letter]]<br /> * [[Résumé]]<br /> * [[Web Portfolio]]<br /> <br /> == Fall 2004 ==<br /> * [http://litmuse.maconstate.edu/article.php?story=20031230171635678 Syllabus]<br /> * [http://litmuse.maconstate.edu/article.php?story=2004101915180768 Project Assignment]<br /> * [[Debt Relief]]<br /> * [[Progress Report]]<br /> * [[Debt Relief:Proposal | Proposal]]<br /> <br /> <br /> ----<br /> [[Main_Page]] &gt; [[Class Pages]] &gt; Professional Communication<br /> [[Category:Course Documents]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2324 2004-12-09T18:04:13Z

<p>Melia04: /* Debt Management */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1) They help debtors to assess his/her debt situation.<br /> <br /> 2) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2322 2004-12-09T17:58:23Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2321 2004-12-09T17:57:59Z

<p>Melia04: /* Definitions and Common Terms */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2320 2004-12-09T17:57:31Z

<p>Melia04: /* Definitions and Common Terms */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> <br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2319 2004-12-09T17:56:31Z

<p>Melia04: /* Definitions and Common Terms */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> <br /> Table of contents [showhide]Definitions and Common Terms<br /> <br /> 1.1 Bankruptcy<br /> <br /> 1.2 Beacon or Credit Score<br /> <br /> 1.3 Credit Reports<br /> <br /> 1.4 Debt<br /> <br /> 1.5 Debt Consolidation<br /> <br /> 1.6 Frozen Assets<br /> <br /> 1.7 Frozen Interest<br /> <br /> 1.8 Frozen Interest Rate<br /> <br /> 1.9 Garnishee or Garnishment<br /> <br /> 1.10 Insolvent<br /> <br /> 1.11 Liens<br /> <br /> 1.12 Liquidation<br /> <br /> 1.13 Secured Credit<br /> <br /> 1.14 Sue or suit<br /> <br /> 1.15 Unsecured Credit Card<br /> <br /> <br /> <br /> *'''Bankruptcy'''<br /> Bankruptcy is a court case. It is used when a person cannot pay his or her bills. It helps a person get a fresh financial start. All bankruptcy cases are handled in a federal court. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. It is wise to have an attorney help you decide whether bankruptcy is the best way for you to handle your situation. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are:''' Chapter 7 bankruptcy''' and '''Chapter 13 bankruptcy.''' <br /> <br /> *'''Chapter 7 bankruptcy'''<br /> Involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> *'''Chapter 13 bankruptcy'''<br /> Is a court-ordered and approved repayment plan to your creditors. <br /> <br /> *'''Beacon or Credit Score'''<br /> Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history. <br /> <br /> *'''Credit Reports'''<br /> Credit reports contain information about where you work, live, and your bill paying habits. Credit Reporting Agencies are companies that gather and sell information concerning your credit history to various businesses. This credit history is sold in the form of a credit report. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in credit reports. Under this act, Credit Reporting Agencies must furnish correct and complete information to businesses to use in evaluating your applications for credit, insurance or a job. <br /> <br /> *'''Debt'''<br /> Liability; money owed <br /> <br /> *'''Debt Consolidation'''<br /> The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. In most cases payments are lowered and interest rates are reduced. <br /> <br /> *'''Frozen Assets'''<br /> When someone can no longer have access to funds in a bank or other holding company. Selling of personal items is not permitted at this time either. <br /> <br /> *'''Frozen Interest'''<br /> When interest fees are no longer able to accrue on an account. <br /> <br /> *'''Frozen Interest Rate'''<br /> When an interest rate is no longer fluctuating between variable numbers. <br /> <br /> *'''Garnishee or Garnishment'''<br /> When a creditor can legally take money from a debtor's paycheck. <br /> <br /> *'''Insolvent'''<br /> Unable to meet debts or discharge liabilities. <br /> <br /> *'''Liens'''<br /> When the creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid. <br /> <br /> *'''Liquidation'''<br /> When a debtor may be legally ordered to sell all assets in order to settle debts. <br /> <br /> *'''Secured Credit'''<br /> Where a deposit is made to the credit supplying company to cover any expenses or purchases made with the credit. Often times calling it a savings account for credit. A limit is then placed on the credit issued for the amount of the deposit paid. <br /> <br /> *'''Sue or suit'''<br /> The creditor can take legal action to get the money owed <br /> <br /> *'''Unsecured Credit Card'''<br /> A credit card where a security deposit is not required to open the credit account.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2318 2004-12-09T17:42:08Z

<p>Melia04: </p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Definitions and Common Terms==<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]</div>

Melia04 https://litwiki.org/index.php?title=Project_Documents&diff=2323 2004-12-09T17:37:22Z

<p>Melia04: </p> <hr /> <div></div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2317 2004-12-09T17:36:48Z

<p>Melia04: /* Project Documents */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> * [[Professional Communication]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]</div>

Melia04 https://litwiki.org/index.php?title=Project_Documents&diff=2316 2004-12-09T17:35:29Z

<p>Melia04: Project Documents moved to Professional Communications</p> <hr /> <div>#REDIRECT [[Professional Communications]]<br /> </div>

Melia04 https://litwiki.org/index.php?title=Professional_Communication&diff=2325 2004-12-09T17:34:26Z

<p>Melia04: Professional Communication moved to Project Documents</p> <hr /> <div>#REDIRECT [[Project Documents]]<br /> </div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2315 2004-12-09T17:31:32Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2314 2004-12-09T17:27:02Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> * [[Debt Relief: Collection Laws|Collection Laws]]<br /> * [[Debt Relief: Debt Test|Debt Test]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2313 2004-12-09T17:26:28Z

<p>Melia04: /* Research Reports */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> 1)Evaluate where you stand with your debts.<br /> <br /> 2)Don't wait until you are in over your head.<br /> <br /> 3)Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> * [[Debt Relief: Collection Laws|Collection Laws]]<br /> * [[Debt Relief: Research Reports]]<br /> * [[Debt Relief: Debt Test|Debt Test]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2312 2004-12-09T17:20:58Z

<p>Melia04: /* Research Reports */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> *'''Debt Consolidation''' <br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation: <br /> <br /> Evaluate where you stand with your debts. <br /> Don't wait until you are in over your head. <br /> Be sure to understand how debt consolidation truly works.(Morris, 103) <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326)However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149) <br /> <br /> *'''Collection Agencies''' <br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu) <br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;. <br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money. <br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help. <br /> <br /> *'''Bankruptcy'''<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). <br /> <br /> Credit laws vary from state to state for filing and so does liquidation of assets over a period of time. <br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. <br /> <br /> Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies. <br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. <br /> <br /> Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> * [[Debt Relief: Collection Laws|Collection Laws]]<br /> * [[Debt Relief: Research Reports]]<br /> * [[Debt Relief: Debt Test|Debt Test]]</div>

Melia04 https://litwiki.org/index.php?title=Talk:Research_Reports&diff=8302 2004-12-09T17:12:47Z

<p>Melia04: Talk:Research Reports moved to Talk:Debt Relief: Research Reports</p> <hr /> <div>#redirect [[Talk:Debt Relief: Research Reports]]<br /> </div>

Melia04 https://litwiki.org/index.php?title=Research_Reports&diff=8301 2004-12-09T17:12:47Z

<p>Melia04: Research Reports moved to Debt Relief: Research Reports</p> <hr /> <div>#redirect [[Debt Relief: Research Reports]]<br /> </div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2311 2004-12-09T17:08:45Z

<p>Melia04: </p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> <br /> Credit counseling and debt management agencies give professional help to individuals who need assistance paying off debts. These agencies look at the client's debts, listen to needs, make recommendations, and create budgets. These companies have received bad press in the past, do research before selecting one. Make sure it is accredited with an institution, such as the Better Business Bureau. A debtor must also make sure to look at state laws, so that he/she is not overcharged for financial help.<br /> <br /> The steps most of these agencies take to help debtors eliminate debt are: <br /> <br /> 1.) They help debtors to assess his/her debt situation.<br /> <br /> 2.) Avoiding overspending and handling existing debts are other areas consultants help debtors with.<br /> <br /> 3.) The final steps are helping the client to build and maintain good credit.<br /> <br /> Most financial advisors agree that the most important step a person must take before seeking counsel is to change his/her money management skills. The debtor must change the way he thinks. The debtor must get rid himself of all financial anxieties or debt will probably happen again.<br /> <br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as [[Debt Relief:Bibliography#Experian | Experian]], [[Debt Relief:Bibliography#Trans Union | Trans Union]], and [[Debt Relief:Bibliography#Equifax | Equifax]]. Whether your credit is good or bad is determined by your [[Debt Relief:Definitions#Beacon or credit score |Beacon or credit score]]. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> *Apply for a [[Debt Relief:Definitions#secured card | secured card]] or deposit money in your checking account. <br /> *Apply for a department store or gasoline credit card and build small balances, '''but pay them off in full each month'''. <br /> *Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> *If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit card| unsecured credit]] cards on your own.<br /> <br /> For those who need assitance managing their credit there are a variety of choices and options out there. In an article by Hispanic magazine, financial author Julie Stav explains what a FICO score is, how credit bureaus calculate it, and steps on ways to improve your score. An article by U.S. News and World Report states the following steps to keep this score manageable:<br /> <br /> 1.) Pay bills on time.<br /> <br /> 2.) Pay down debt.<br /> <br /> 3.) Maintain long-term credit relationships.<br /> <br /> 4.) Do not apply for too many loans.<br /> <br /> A great self-help guide to consider is Repair Your Own Credit which instructs debtors how to repair their credit and how to reestablish credit. It also lists organizations that will either give people free assistance or charge a very low cost to help someone stay out of debt. In NEA Today, they also refer to some credit management agencies such as Equifax as well as warn people about credit repair clinic rip-offs saying they do not do anything that you cannot do yourself. The counselors at Credit Union Magazine suggest that bankruptcy be the last resort in certain circumstances.<br /> <br /> ==Credit Card Consolidation==<br /> Credit card agencies such as Visa, Discover, MasterCard, and American Express have departments that provide essentially the same services as debt consolidation and debt management companies; however, debt reduction and credit counseling are entirely different functions than what the credit card companies do best. Credit card companies typically prefer their card holders use specialized debt consolidation firms to help with debt consolidation. These firms take on a substantial burden of individual repayment agreements and terms as well as attendant paperwork. MasterCard for example, prefers their card holders use a debt management service. Therefore, Mastercard does not advertise a debt management department within their company. The Mastercard consolidations department will respond to requests for debt consolidation if a written request from the card holder is made to the proper department. <br /> <br /> Although trying to set up a debt management plan using services available through the various credit card companies may prove<br /> difficult, the small fees and inconvenience associated with debt management companies may be avoided.<br /> <br /> PBS' Frontline aired a comprehensive report on 11/23/04 named [[Debt Relief:Bibliography#Special Report | The History of the Credit Card]]. The report gives an in depth look at the credit card business and common practices unknown to many of us.<br /> <br /> When the topic of debt management and relief comes up, consolidation is usually one of the words that follows. Many experts agree that debt consolidation is a good idea when it seems a person is getting too deep in debt. Three things to consider before deciding on debt consolidation:<br /> <br /> # Evaluate where you stand with your debts.<br /> # Don't wait until you are in over your head.<br /> # Be sure to understand how debt consolidation truly works.(Morris, 103)<br /> <br /> Numerous experts also agree that a nonprofit company is the best way to go for premium terms. Also, no matter if they are for-profit or nonprofit, one should gain as much information as possible about the company before dealing with them. Futhermore, ensuring the institution you choose works with your creditors. Checking their status with the Better Business Bureau is a great idea. (Brown, 326) However, there are many different opinions on how to go about this. One common opinion is that only school loans should be consolidated, and this is only because of the enormous necessity of a college education. (Orman, 149)<br /> <br /> ==Credit Harrassment==<br /> '''Creditor Harassment: Know Your Rights With Creditors'''. <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can you protect yourself from harassment? Asking a collector to stop calling should be effective in most cases. However, a [[Debt Relief:Cease and Desist letter| Cease and Desist letter]] can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to <br /> a third party, such as a collection agency or attorney. <br /> <br /> The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumers who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when collecting debt<br /> * Obtain amounts greater or less than debt amount (unless state laws permit change)<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collects calls <br /> * Threaten to take property (unless done legally) <br /> <br /> What can you do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> ==Bankruptcy==<br /> <br /> '''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor exceeds his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimal fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC <br /> Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we inform the client of the best course of action.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.<br /> <br /> Bankruptcy is considered to be a &quot;major bomb&quot; in the world of credit. It should be the last resort in most cases for debt relief. Depending on the situation it is sometimes unavoidable. <br /> <br /> When selecting a bankruptcy attorney, research his/her background for work experience in this sensitive field of debt relief. There are two types of personal bankruptcies, Chapter thirteen and seven. Corporate bankruptcy is called Chapter eleven and can only be filed by businesses.(Leonard, Attorney Robin &quot;Bankruptcy&quot;. Berkley: Nolo Press, 1998). (Credit laws vary from state to state for filing and so does liquidation of assets over a period of time.)<br /> <br /> Initially, the person filing will get a sigh of relief from being overwhelmed. Later, credit agencies and other lenders will analyze his/her credit information with a fine tooth comb for at least &quot;ten&quot; years or longer. This a combination of an advantage but a disadvantage to debt relief. Lenders almost immediately view a person as a high - risk for credit due to having bad debt written off through bankruptcies.<br /> <br /> Chapter thirteen can be filed in a court with a trustee assigned and is considered a &quot;reorganization&quot; over a period of time to repay debt. The court trustee decides the total amount to be paid back and the time allotted for payment. The person's salary or income determines what will be allowed for the cost of living and the amount that will be disbursed to the creditors. No new debts can be accumulated without the court's permission (i.e., credit cards, loans). Upon closing, obligations are fulfilled and the person can begin on a new credit journey, but the on this new path the person needs to be aware the discharge will remain on the credit report for the next five to seven years. <br /> <br /> Chapter seven can be filed in a court and the person will walk away from most of the debt secured and unsecured. The person's salary is freed from the threat of garnishments and being sued by the creditors. The information stays on the credit report for the next ten years and creditors will be view the person as a higher - risk than if the person had filed a Chapter thirteen. <br /> <br /> When a person has filed for either bankruptcy it becomes public record information that can be viewed by anyone with acccess to public records documents. Again, bankruptcy needs to be considered as the very last option to debt relief.<br /> <br /> ==Collection Agencies==<br /> <br /> A Collection agency is not the same as a debt counseling service.<br /> Collections agencies are employed by creditors to recover money owed to them.<br /> <br /> Creditors wait from six months to two years before turning a bad account over to a collection agency.<br /> There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.<br /> <br /> The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections.<br /> <br /> * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills.<br /> * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. <br /> * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed.<br /> *Collection agencies charge a percentage of what is collected as a fee for the service.<br /> *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. <br /> *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled.<br /> <br /> Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.<br /> <br /> [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. <br /> Credit counseling is also recommended.<br /> <br /> A collection agency is a company that is contacted by the original lender to collect past due and defaulted accounts. (www.spu.edu)<br /> <br /> The Federal Trade Commission states that if you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, you will probably be contacted by a collection agency or a &quot;delinquent debt collector&quot;.<br /> <br /> Mike Ryan, President of NACM Southeast, wrote an article on &quot;Qualifying Your Collection Agency&quot;. You, as an owner in a business have to be careful of what collection agency you choose. You have to ask yourself these questions: What does the agency know about your business? Can you rely on them to handle your accounts honestly, ethically, and effectively? Does the agency understand you may do business with this client again in the future? (Ryan, Mike. 106.8) This is the kind of agency that can legimately collect your money.<br /> <br /> The FTC also gives a few tips on a fair debt collection. There is an act that requires that debt collectors treat you fairly and prohibits certain methods of debt collection. This is known as the Fair Debt Collection Practices Act. This does not mean that your debt will just go away. You still have to face this debt head on. This just protects your rights. <br /> <br /> You can avoid these agencies all together by simply managing your money right. Self-Help may be the Best Help.<br /> <br /> ==Research Reports==<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> * [[Debt Relief: Collection Laws|Collection Laws]]<br /> * [[Debt Relief: Research Reports]]<br /> * [[Debt Relief: Debt Test|Debt Test]]</div>

Melia04 https://litwiki.org/index.php?title=User:Melia04&diff=8218 2004-12-07T22:33:55Z

<p>Melia04: </p> <hr /> <div>Hello, my name is Shirmelia.<br /> <br /> <br /> •In-class Assignment for 12/2: Consider the work you have accomplished this semester: aspects of professional communication that you learned, improved upon, or those you might still need practice with. Log into the Wiki, then click on your login name at the top of the page. In this space, write a paragraph or two that discusses how you have grown as a writer this semester; what expectations in this class were met and those that were not; and your experiences on the Wiki with the course project. Consider aspects of the course you liked and those you didn't; offer some advice about how the course could be improved, if you have any. If time and consideration are taken, this assignment will count as extra-credit. <br /> <br /> '''Answer:''' As a writer this semester I feel that I have grown in the areas of writing memos, proposals, cover letters, negative letters, and persuasive letters. Before I enrolled in this course I had heard of these many different forms of writing, but I had never actually written them down on paper. Considering that this was my first time writing on the professional level, I feel that I did pretty well for a beginner. Overall, I still need a lot of practice and could use a lot more work on my writing skills. The most important thing that I take from this course is whether I am emailing a message to co-worker and/or friend that my message should be concise and professional.<br /> <br /> This semester the only expectation in my opinion that was not met was the usage of time. I know that their was nothing that could be done about this because this was a second session course rather than a full session course, so we were pressed for time. Overall, all the other expectations of this course was met, because all of the assignments that we set out to do listed on the class schedule were completed. If I knew what I know now back when I was registering, I would have taken this course as a full session course because it takes a lot of time to perfect you r writing skills.<br /> <br /> My experiences on the wiki at the beginning of this semester were scary. Coming into this course, I had never heard of wiki or knew what the definition of wiki was for that matter, but once I got over the fear of using a wiki and got comfortable with it my experiences with the wiki from then on were a wonderful experience. Now that I know what a wiki is, I visit other websites and look to compare and contrast their wiki websites to yours Dr. Lucas. If I might add, none of the other wiki websites are as easy to follow along or user friendly like yours Dr.Lucas.<br /> <br /> The only aspect of this course that I did not like and could stand for improvement is the class project. Do not get me wrong the class project is a good idea. I just feel that the class project is a good idea for a full session semester course and not a second session. I feel that their should be an alternative for first session and/or second sessions courses rather than do a class project. I cannot speak for the rest of my classmates, but personally, I felt overwhelmed doing this project. We had a short amount of time to process a lot of information and post it up on the litwiki. I just felt as though we were all being a bit rushed.</div>

Melia04 https://litwiki.org/index.php?title=User:Melia04&diff=2304 2004-12-03T00:16:43Z

<p>Melia04: </p> <hr /> <div>Hello, my name is Shirmelia.<br /> <br /> <br /> •In-class Assignment for 12/2: Consider the work you have accomplished this semester: aspects of professional communication that you learned, improved upon, or those you might still need practice with. Log into the Wiki, then click on your login name at the top of the page. In this space, write a paragraph or two that discusses how you have grown as a writer this semester; what expectations in this class were met and those that were not; and your experiences on the Wiki with the course project. Consider aspects of the course you liked and those you didn't; offer some advice about how the course could be improved, if you have any. If time and consideration are taken, this assignment will count as extra-credit. <br /> <br /> '''Answer:''' As a writer this semester I feel that I have grown in the areas of writing memos, proposals, cover letters, negative letters, and persuasive letters. Before I enrolled in this course I had heard of these many different forms of writing, but I had never actually written them down on paper. Considering that this was my first time writing on the professional level, I feel that I did pretty well for a beginner. Overall, I still need a lot of practice and could use a lot more work on my writing skills. The most important thing that I take from this course is whether I am emailing a message to co-worker and/or friend that my message should be concise and professional.<br /> <br /> This semester the only expectation in my opinion that was not met was the usage of time. I know that their was nothing that could be done about this because this was a second session course rather than a full session course, so we were pressed for time. Overall, all the other expectations of this course was met, because all of the assignments that we set out do listed on the class schedule were completed. If I knew what I know back when I was registering, I would have taken this course as a full session course because it takes a lot of time to perfect you r writing skills.<br /> <br /> My experiences on the wiki at the beginning of this semester were scary. Coming into this course, I had never heard of wiki or knew what the definition of wiki was for that matter, but once I got over the fear of using a wiki and got comfortable with it my experiences with the wiki from then on were a wonderful experience. Now that I know what a wiki is, I visit other websites and look to compare and contrast their wiki websites to yours Dr. Lucas. If I may add, none of the other wiki websites are as easy to follow along or user friendly like yours Dr.Lucas.<br /> <br /> The only aspect of this course that I did not like and could stand for improvement is the class project. Do not get me wrong the class project is a good idea. I just feel that the class project is a good idea for a full session semester course and not a second session. I feel that their should be an alternative for first session and/or second sessions courses rather than do a class project. I cannot speak for the rest of my classmates, but personally, I felt overwhelmed doing this project. We had a short amount of time to process a lot of information and post it up on the litwiki. I just felt as though we were all being a bit rushed.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2185 2004-12-01T00:21:49Z

<p>Melia04: /* Credit Harrassment */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above our means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | bankruptcy]], and more.<br /> <br /> ==Debt Management==<br /> '''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf. An [[Debt Relief: Interview#Interview | Interview]] was done with a local agency on debt management.<br /> ==Managing Your Credit==<br /> Specific criteria has to be met in order to obtain credit. Creditors solicit your credit history from credit reporting agencies such as Experian, Trans Union, and Equifax. Whether your credit is good or bad is determined by your Beacon or credit score. If your score is low, you are considered &quot;high risk&quot; and chances are your request for credit will be denied. The higher your credit score, the more likely you will receive approval. Each time you apply for credit, your score drops. If your credit score is low, there are steps you can take to help manage your credit and increase your score. <br /> <br /> Apply for a secured card or deposit money in your checking account. <br /> Apply for a department store or gasoline credit card and build small balances, but pay them off in full each month. <br /> Do not use your credit cards to purchase food. You will pay 10 times more in interest than what one meal would have cost if you had paid cash. <br /> If possible, consider transferring the balance of your credit card to a lower interest rate card. If you do this, immediately destroy the card with the high rate and close the account. <br /> Over time, your credit score will improve, and you will qualify for [[Debt Relief:Definitions#unsecured credit| unsecured credit]] cards on your own.<br /> <br /> ==Credit Harrassment==<br /> Creditor Harassment Know Your Rights With Creditors <br /> Are you being harassed by collection agencies? A creditor has the right to contact you when you fall past due on a debt owed to them. However, you have rights if you feel you are being treated unfairly by a debt collector. Your rights are protected under the [[Debt Relief:Fair Debt Collection Act|Fair Debt Collection Act]]. <br /> <br /> How can I protect myself from harassment? Asking a collector to stop calling should be effective in most cases. However, a Cease and Desist letter can be sent to third party collection agencies. The Cease and Desist letter will prevent a collection agency from calling you. Once the letter has been received, they may not contact you again except to say there will be no further contact or notify you that a specific action will be taken. <br /> <br /> Can I send a Cease and Desist letter to my creditor? You may not send a cease and desist if the debt is still owned by the original creditor, such as a bank or credit card. Cease and desist letters may only be sent to a third party, such as a collection agency or attorney. <br /> <br /> Fair Debt Collection Practices Act The Fair Debt Collection Practices Act protects debtors from unfair debt collection processes. The Act ensures you are treated fairly and prohibits certain methods of debt collection. The Collectors (both original and third party agencies) are unable to: <br /> * Harass, oppress, abuse, or publish lists of consumer who refuse payment <br /> * Use profane language <br /> * Repeatedly use the telephone to badger someone <br /> * Give false information <br /> * Imply they are attorneys, government representatives, or work for a credit bureau <br /> * Insinuate you have committed a crime<br /> * Falsely suggest they work for a credit bureau<br /> * Misinterpret the debt amount <br /> * Submit false information about you to anyone (including credit bureaus) <br /> * Indicate sent forms are from the court or government agency when they are not <br /> * Participate in unfair practices when Obtain amounts greater or less than debt amount (unless state laws permit change)collecting debt<br /> * Deposit a post-dated check prematurely <br /> * Use deception to make a debtor accept collect call <br /> * Threaten to take property (unless done legally) <br /> * Contact via postcard Tips for success <br /> * Address the letter to the collection agency, not the original creditor <br /> * Use the physical address for the agency, not a PO Box <br /> * Send the letter Certified Mail - Return Receipt to ensure they receive it <br /> * Keep a copy of the letter and receipt for your records<br /> <br /> What can I do if the law has been violated? A debtor has the right to sue a collector in a state or federal court within one year from the date of the violation. If a suit is favored by the debtor you may recover money for damages, court and attorney costs, plus an additional amount up to $1,000. A group of debtors can sue and recover funds for damages up to $500,000, or 1% of the collector’s net worth, whichever is less. Any problems or concerns can be reported to your state’s Attorney General’s office, the Federal Trade Commission, and/or the American Collectors Association or local State Bar Association. <br /> <br /> Please be advised, that while a creditor may not call and harass you anymore, they still have the right to pursue the debt. However unlikely, they may still file suit in an attempt to collect the debt. Although Cease and Desist is a valuable tool, it should only be used when absolutely necessary.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> * [[Debt Relief:Primary Research Results | Primary Research Results]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Debt Relief:Debt Consolidation | Debt Consolidation]]<br /> * [[Debt Relief:Collection Agency | Collection Agency]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief: Bankruptcy|Bankruptcy]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> * [[Debt Relief: Credit Card Companies Offers Consolidation| Credit Card Companies Offer Consolidation]]<br /> * [[Debt Relief: Collection Laws|Collection Laws]]<br /> * [[Debt Relief: Research Reports]]<br /> * [[Debt Relief: Debt Test|Debt Test]]<br /> *[[Debt Relief: Sample Cease and Desist Letter|Sample Cease and Desist Letter]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2095 2004-11-17T00:38:50Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world, debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above ours means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#Consolidation| debt consolidation]], credit reports to bankruptcy, and more.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Debt Relief:Debt Consolidation | Debt Consolidation]]<br /> * [[Debt Relief:Collection Agency | Collection Agency]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief: Bankruptcy|Bankruptcy]]<br /> * [[Debt Relief:Debt Management|Debt Management]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> *[[Debt Relief:Managing Your Credit|Managing Your Credit]]<br /> * [[Debt Relief: Credit Card Companies Offers Consolidation| Credit Card Companies Offer Consolidation]]<br /> * [[Debt Relief: Collection Laws|Collection Laws]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=2060 2004-11-17T00:24:44Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> [[Image:Debtrelief.jpg|right|Debt Relief]] <br /> In today's world debt is almost unavoidable. We have been brainwashed to think that more is better, regardless of what more is. Our society is largely commercialized. We are bombarded with subliminal messages, urging us to buy, buy, and buy; and many of us do just that. We buy without knowing how we are going to pay. We live above ours means trying to keep up with the neighbors. The cost of living increases but our income seems to stay the same. It is virtually impossible to avoid going into debt. In our diverse society, we have one basic commonality: [[Debt Relief:Definitions#Debt| debt]]. Debt can be controlled, but we all need to understand it and learn to avoid too much of it. <br /> <br /> The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#Consolidation| debt consolidation]], credit reports to bankruptcy, and more.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Debt Relief:Debt Consolidation | Debt Consolidation]]<br /> * [[Debt Relief:Collection Agency | Collection Agency]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief: Bankruptcy|Bankruptcy]]<br /> * [[Debt Relief:Debt Management|Debt Management]]<br /> * [[Debt Relief:Definitions|Definitions and Common Terms]]<br /> *[[Debt Relief:Managing Your Credit|Managing Your Credit]]<br /> * [[Debt Relief: Credit Card Companies Offers Consolidation| Credit Card Companies Offer Consolidation]]<br /> * [[Debt Relief: Collections Law|Collections Laws]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:_Bankruptcy&diff=2031 2004-11-16T23:44:04Z

<p>Melia04: </p> <hr /> <div>'''Bankruptcy''' occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor's exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are avaliable to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimial fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we notify the client's to inform them on whether or not they should file for bankruptcy.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3) Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4) How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Definitions&diff=2024 2004-11-16T18:48:26Z

<p>Melia04: /* Bankruptcy */</p> <hr /> <div>==Definitions and Common Terms==<br /> ===Bankruptcy===<br /> *Bankruptcy occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor's exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are: Chapter 7 bankruptcy and Chapter 13 bankruptcy.<br /> <br /> *'''Chapter 7 bankruptcy'''-involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> *'''Chapter 13 bankruptcy'''-is a court-ordered and approved repayment plan to your creditors.<br /> <br /> ===Consolidation===<br /> *The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. Consolidation is used in other circumstances as well.<br /> <br /> ===Garnishee or Garnishment===<br /> *A creditor can legally take money from a debtor's paycheck.<br /> <br /> ===Insolvent===<br /> * Unable to meet debts or discharge liabilities.<br /> <br /> ===Liens===<br /> *The creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid.<br /> <br /> ===Liquidation===<br /> * A debtor may be legally ordered to sell all assets in order to settle debts.<br /> <br /> ===Sue or suit===<br /> * The creditor can take legal action to get the money owed<br /> <br /> ===Beacon or Credit Score===<br /> * Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Definitions&diff=2021 2004-11-16T18:47:29Z

<p>Melia04: /* Bankruptcy */</p> <hr /> <div>==Definitions and Common Terms==<br /> ===Bankruptcy===<br /> *Bankruptcy occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor's exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. <br /> <br /> The two most common types of bankruptcy filed by individuals and businesses are: Chapter 7 bankruptcy and Chapter 13 bankruptcy.<br /> *'''Chapter 7'''-involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> *'''Chapter 13'''-is a court-ordered and approved repayment plan to your creditors.<br /> <br /> ===Consolidation===<br /> *The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. Consolidation is used in other circumstances as well.<br /> <br /> ===Garnishee or Garnishment===<br /> *A creditor can legally take money from a debtor's paycheck.<br /> <br /> ===Insolvent===<br /> * Unable to meet debts or discharge liabilities.<br /> <br /> ===Liens===<br /> *The creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid.<br /> <br /> ===Liquidation===<br /> * A debtor may be legally ordered to sell all assets in order to settle debts.<br /> <br /> ===Sue or suit===<br /> * The creditor can take legal action to get the money owed<br /> <br /> ===Beacon or Credit Score===<br /> * Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Definitions&diff=2020 2004-11-16T18:43:34Z

<p>Melia04: /* Bankruptcy */</p> <hr /> <div>==Definitions and Common Terms==<br /> ===Bankruptcy===<br /> *Bankruptcy occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor's exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. <br /> <br /> *Chapter 7-involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> <br /> *Chapter 13-is a court-ordered and approved repayment plan to your creditors.<br /> <br /> ===Consolidation===<br /> *The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. Consolidation is used in other circumstances as well.<br /> <br /> ===Garnishee or Garnishment===<br /> *A creditor can legally take money from a debtor's paycheck.<br /> <br /> ===Insolvent===<br /> * Unable to meet debts or discharge liabilities.<br /> <br /> ===Liens===<br /> *The creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid.<br /> <br /> ===Liquidation===<br /> * A debtor may be legally ordered to sell all assets in order to settle debts.<br /> <br /> ===Sue or suit===<br /> * The creditor can take legal action to get the money owed<br /> <br /> ===Beacon or Credit Score===<br /> * Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Definitions&diff=2018 2004-11-16T18:39:59Z

<p>Melia04: /* Bankruptcy */</p> <hr /> <div>==Definitions and Common Terms==<br /> ===Bankruptcy===<br /> *Bankruptcy occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor's exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. <br /> <br /> *Chapter 7-involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. <br /> <br /> <br /> *Chapter 13-<br /> <br /> ===Consolidation===<br /> *The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. Consolidation is used in other circumstances as well.<br /> <br /> ===Garnishee or Garnishment===<br /> *A creditor can legally take money from a debtor's paycheck.<br /> <br /> ===Insolvent===<br /> * Unable to meet debts or discharge liabilities.<br /> <br /> ===Liens===<br /> *The creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid.<br /> <br /> ===Liquidation===<br /> * A debtor may be legally ordered to sell all assets in order to settle debts.<br /> <br /> ===Sue or suit===<br /> * The creditor can take legal action to get the money owed<br /> <br /> ===Beacon or Credit Score===<br /> * Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Definitions&diff=2016 2004-11-16T18:39:13Z

<p>Melia04: /* Bankruptcy */</p> <hr /> <div>==Definitions and Common Terms==<br /> ===Bankruptcy===<br /> *Bankruptcy occurs when the federal system of statues and courts authorize insolvent individuals or businesses the ability to place their financial affairs under the bankruptcy court's control. When the debtor's exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy. <br /> <br /> *Chapter 7-<br /> <br /> *Chapter 13<br /> <br /> ===Consolidation===<br /> *The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. Consolidation is used in other circumstances as well.<br /> <br /> ===Garnishee or Garnishment===<br /> *A creditor can legally take money from a debtor's paycheck.<br /> <br /> ===Insolvent===<br /> * Unable to meet debts or discharge liabilities.<br /> <br /> ===Liens===<br /> *The creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid.<br /> <br /> ===Liquidation===<br /> * A debtor may be legally ordered to sell all assets in order to settle debts.<br /> <br /> ===Sue or suit===<br /> * The creditor can take legal action to get the money owed<br /> <br /> ===Beacon or Credit Score===<br /> * Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Definitions&diff=2015 2004-11-16T18:29:11Z

<p>Melia04: /* Bankruptcy */</p> <hr /> <div>==Definitions and Common Terms==<br /> ===Bankruptcy===<br /> *<br /> <br /> *Chapter 7<br /> *Chapter 13<br /> <br /> ===Consolidation===<br /> *The process of combining all debt into one sum and having only one payment. This may be helpful when there are multiple credit cards with high interest rates. Consolidation is used in other circumstances as well.<br /> <br /> ===Garnishee or Garnishment===<br /> *A creditor can legally take money from a debtor's paycheck.<br /> <br /> ===Insolvent===<br /> * Unable to meet debts or discharge liabilities.<br /> <br /> ===Liens===<br /> *The creditor can legally claim the property of the debtor by placing a lien on the property until the debt is paid.<br /> <br /> ===Liquidation===<br /> * A debtor may be legally ordered to sell all assets in order to settle debts.<br /> <br /> ===Sue or suit===<br /> * The creditor can take legal action to get the money owed<br /> <br /> ===Beacon or Credit Score===<br /> * Points kept on file by credit reporting agencies that indicate how much debt a person has; higher scores are ideal. Low scores indicate an unfavorable credit history.</div>

Melia04 https://litwiki.org/index.php?title=Progress_Report&diff=1914 2004-11-11T18:57:16Z

<p>Melia04: </p> <hr /> <div>Enter weekly progress reports here<br /> Hello my name is Miaona Jones.<br /> <br /> To the coordinators Amy &amp; Jefferson,<br /> Week of Nov. 9&amp;11- Group A--Mark, Mary, &amp; Shirmelia--the interview group started and completed the following pages:Collection Agency, Bankruptcy, &amp; Debt Management.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:Debt_Management&diff=2064 2004-11-11T18:49:40Z

<p>Melia04: </p> <hr /> <div>'''Debt Management''' is the process by which debts are consolidated into one '''lower monthly payment'''. This '''one payment''' will be an amount which the client '''can afford''', and will be apportioned amongst their creditors. Payments to creditors will be made on the client's behalf.<br /> <br /> The following questions were answered during an interview:<br /> <br /> 1. How will debt management help client's who are in debt?<br /> * Agencies negotiaite and administer monthly payments to each of their client's creditors. This means that a client will only have to make one lower monthly payment, and all their outstanding debts will be repaid from that payment. If their outgoings are currently more than they can afford, or even in excess of their income, this can be rectified. The one monthly payment will be affordable, and will take into account all income and expenses. Agencies also request that '''interest be frozen,''' to enable more speedy repayment of the debts. Remember, it is in the interest of everyone that debts are paid off as soon as possible!<br /> <br /> 2.How does debt consolidation work? <br /> * Most debt consolidation firms are nonprofit community organizations designed to assist clients-- they will take care of all the details, such as calling up creditors and negotiating over the phone. Because they are actually nonprofit organizations, they have more leverage than you do alone in negotiating better interest rates and lowering monthly payments.<br /> <br /> 3.Will the debt consolidation program affect an individual’s credit record? <br /> * Some CRA's (credit reporting agencies) do make a note on your credit report that your debts have been consolidated; however, most lenders do not see this as a negative because you are attempting to pay your debts. In some cases a creditor will re-age an account. This simply means that your accounts are placed under current status-- this may actually help your credit rating.<br /> <br /> 4. How much does debt consolidation cost? <br /> *If the organization is an actual nonprofit, the service is free. Your creditors will subsidize all or most of the debt consolidation services. The creditors know that it is better for them to work with you rather than for you to file for bankruptcy. Even thought the payments maybe smaller, they will at least be consistent and are better than receiving nothing. Also, it is worth noting that most of the debt consolidation services are nonprofit organizations. This means that the credit companies get certain tax breaks and can recoup some of the lost interest charges through tax write-of.<br /> <br /> 5. How long does it take to get relief from debt issues?<br /> * This process will be different for everyone. One cannot speculate as to how each creditor will respond. However, the discharge process on average, takes anywhere from 12-18 months to complete and possibly longer you have any additional summons or credit repair issues.<br /> <br /> 6. What if the debt is more than two years old; can it still be processed?<br /> * Absolutely! Time is not an issue.<br /> <br /> 7. Can a person go out and charge up all of their credit cards since they know that they can use this procedure to terminate all off the debt?<br /> * A person must decide for themselves in good conscience what to do in this case. However, charging up debt without intentions of paying can be considered by the courts as intent to commit fraud, which is a crime. Ideally, we would hope that people would use the knowledge learned to become financially free from the debt that already exists rather than accumulate more debt. We do not offer financial advice nor do we support the abuse of this education. All of our education is within 100% scope of the law.<br /> <br /> 8. Once the credit card has been alleviated, can a person still keep their credit cards?<br /> * Once a person has initiate a dispute or stop paying on an account for whatever reason; it is highly unlikely that the card company will allow them to keep the account open. However a person may keep existing cards, or obtain new cards with any other banks if they so choose. Possibly, the same bank used in the discharge process could offer you another card with them in the future.<br /> <br /> 9. Are all creditors willing to reduce interest rates?<br /> * Most credit card companies or other creditors have their own debt management programs. However, they will not do this on an individual basis.<br /> <br /> 10. How does debt consolidation differ from declaring bankruptcy?<br /> * The objective of bankruptcy is to absolve oneself of debts altogether. This financial strategy, however, has serious and long-term drawbacks which may negatively affect your life for decades. For example, applying for life insurance, purchasing a business, buying a home, applying for a job, etc. can all be negatively affected by a prior bankruptcy. Under a debt management plan, you commit to repaying your debt obligations.<br /> <br /> 11. What do companies usually charge, and how does a person pay for the service? <br /> * You may well be thinking &quot;If I can't afford to pay my debts, I can't afford to pay anybody to sort them out for me&quot;. The answer is, you can, because most companies fee becomes part of the amount you pay each month, and the cost of putting together an informal arrangement with your creditors is covered by the first monthly payment. <br /> <br /> 12. If a person is being called constantly by pushy and aggressive collection agencies can you stop collections agency harassment?<br /> *Yes, if collections agencies are still calling after the first few payments, we may use The Fair Credit Reporting Act, a Federal Law, to make them stop calling. If collection agencies are calling you at work and jeopardizing your job, they may not be in compliance with the law.<br /> <br /> 13. Can you consolidate things like a home loan mortgage or a car loan? <br /> * Probably not, most companies only work with unsecured debt. Unsecured debt is not backed or underwritten by an asset like a home or car.<br /> <br /> 14. Given the following scenario, can you say how long it would take you to collect the money that this person owes on just his college loan? How would your company collect from someone like this? How much would he have to pay per month to relieve him of this college loan debt?<br /> *After completing his graduate degree, Joe Smith realized that his financial debt was dire. While in graduate school, Joe took out almost $60,000 worth of student loans. He has a car, which costs $300.00 a month, two credit cards with total balance of $13,000.00. He wants to buy a house and the mortgage would be $700.00 a month. He spends about $300.00 a month on entertainment and about $1,000.00 a month on miscellaneous expenses. He owes just $1000.00 more on his car. Joe’s take home pay is roughly $2,500.00 a month. <br /> '''Answer:''' If Joe has a full time job—he would have to pay or be sued and garnished. If Joe works on a commission then all of his wages are subject to garnishment. Some student loans also accrue late fees or better known as interest—he would have to pay a lump sum down (like on the charge cards) or savings , then at least $500 a month for 6 months then when his car is paid off up this payment. Buying a house wouldn’t go at this time as far as I can see. '''HE OWES MORE THAN HE CAN PAY.'''</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief&diff=1921 2004-11-11T18:13:06Z

<p>Melia04: /* Resources */</p> <hr /> <div>== Introduction ==<br /> The following project is designed to help answer questions about debt. It covers the many aspects of debt; from differentiating good debt from bad debt to explaining the meaning of consolidating debt.<br /> <br /> == Project Documents ==<br /> <br /> * [[Debt Relief:Proposal | Proposal]]<br /> * [[Debt Relief:Primary Research Proposal | Primary Research Proposal]]<br /> * [[Debt Relief:Survey | Survey SAMPLE]]<br /> <br /> == Resources ==<br /> <br /> * [[Debt Relief:Bibliography | Bibliography]]<br /> * [[Debt Relief:Debt Consolidation | Debt Consolidation]]<br /> * [[Debt Relief:Collection Agency | Collection Agency]]<br /> * [[Professional Communication]]<br /> * [[Debt Relief: Bankruptcy|Bankruptcy]]<br /> * [[Debt Relief:Debt Management|Debt Management]]</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:_Bankruptcy&diff=1979 2004-11-11T18:10:44Z

<p>Melia04: </p> <hr /> <div>'''Bankruptcy''' occurs when the federal system of statues and courts that authorizes insolvent individuals and businesses to place his or her financial affairs under the bankruptcy court's control. When the debtor's debts exceed his or her ability to pay, the debtor may file a petition with the bankruptcy court for voluntary bankruptcy.<br /> <br /> There are two types of personal bankruptcy: '''Chapter 7''' and '''Chapter 13'''. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are avaliable to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimial fee for court and attorney costs. <br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> The following questions were answered during a telephone interview with Robert M. Matson from the law offices of Akin, Webster, &amp; Matson, PC Attorney at Law:<br /> <br /> 1) What is the process of filing for bankruptcy?<br /> * First, we invite all potential clients for a free consultation. Second, upon arriving for a free consultation, we tell the clients to bring in a list of their credits as well as the total amount of income he or she might receive. Finally, after going over the client's credit history and income, we notify the client's to inform them on whether or not they should file for bankruptcy.<br /> 2) How long does filing for bankruptcy stay on your credit report?<br /> * Filing for Chapter 7 bankruptcy stays on your credit report for ten years. Filing for Chapter 13 stays on your creit report for seven years or until you pay off your debt in full.<br /> 3)Does filing for bankruptcy make your credit bad?<br /> * Yes, because somewhere in the future for instance let's say you want to take out a loan. If the person you are trying to get a loan from pulls up your credit report and sees that you filed for bankruptcy in the past, this person may think that your are incapable of paying off the loan.<br /> 4)How do you determine the fee that you charge clients who file for bankruptcy?<br /> * The fee that clients are charged for filing for bankruptcy depends on the caseload and what type of bankruptcy the client is filing. In Chapter 7 bankruptcy cases the fee is based upon the client's assets. If the client has a large amount of assets, the higher the fee. If the client has a small amount of assets, the lower the fee. In Chapter 13 bankruptcy cases the judge determines the fee.<br /> 5) Are they any other forms of bankruptcy besides Chapter 7 and Chapter 13?<br /> *Yes, their is Chapter 11 and Chapter 12 bankruptcy;however, Chapter 7 and Chapter 13 are the two most common forms of filing for individual bankruptcy.<br /> * '''Chapter 11 bankruptcy:''' is the filing of bankruptcy by corporations and some individuals. This form of bankruptcy is rarely filed by individuals because it is rather expensive.<br /> * '''Chapter 12 bankruptcy:''' is the filing of bankruptcy by farmers.<br /> 6) What is the difference between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy besides, the obvious of Chapter 7 being a liquidation of all you assets and Chapter 13 being court-ordered?<br /> * In a '''Chapter 7 bankruptcy''' case the court appoints a trustee to handle the liquidation of your property. The trustee can sell or turn over your property to your creditors. The court then discharges your debts and you will become debt free. <br /> *In a '''Chapter 13 bankruptcy''' case you are allowed to keep your property. This form of bankruptcy allows you to use future income to pay back your debts over a three to five year period. Once you have completed payments under this form of bankruptcy, your debts will be discharged by the court.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.</div>

Melia04 https://litwiki.org/index.php?title=Progress_Report&diff=1913 2004-11-10T00:49:45Z

<p>Melia04: </p> <hr /> <div>Enter weekly progress reports here<br /> Hello my name is Miaona Jones.<br /> <br /> Week of Nov. 9&amp;11- Group A: Started a bankruptcy page &amp; credit collection page.</div>

Melia04 https://litwiki.org/index.php?title=Progress_Report&diff=1869 2004-11-10T00:49:09Z

<p>Melia04: </p> <hr /> <div>Enter weekly progress reports here<br /> Hello my name is Miaona Jones.<br /> Week of Nov. 9&amp;11- Group A: Started a bankruptcy page &amp; credit collection page.</div>

Melia04 https://litwiki.org/index.php?title=Debt_Relief:_Bankruptcy&diff=1906 2004-11-10T00:44:28Z

<p>Melia04: </p> <hr /> <div>There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy and Chapter 13 bankruptcy are legal proceedings that are avaliable to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay a minimial fee for court and attorney costs. <br /> <br /> What is Chapter 7 bankruptcy? What is Chapter 13 bankruptcy?<br /> <br /> *'''Chapter 7 bankruptcy:'''involves the liquidation of all your assets that are not exempt from the bankruptcy settlement.<br /> <br /> *'''Chapter 13 bankruptcy:'''is a court-ordered and approved repayment plan to your creditors.<br /> <br /> Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future.</div>

Melia04