How to Get Out of Debt With the Get Out of Debt Guy

The Franklin Group – Consumer Complaint – 5-25-2012

Consumer — Sat, 26 May 2012 00:15:05 +0000

Consumer Statement:

I contracted with the Franklin Group to help prepare my husband and my credit. Our bank account is drafted each month for $99. The first month we paid $199.00 down. The site they sent us to to order our report charged a monthly monitoring fee. I delcined. The case manager sent an application to my wife’s email supposedly for them to get a copy of our credit report for free by applying for credit. My wife completed the credit applications and paid money without my knowlege. We were told we would be automatically approved for $2000 credit from an online company to boost our credit score. This did not happen. After paying $35.00 to have our credit run we were to be contacted by a consultant who would go over our report and advise us how to proceed. It has been a two months without a return phone call or any contact from them. We have a contract with them for credit repair and all money paid is suspose to go to closing. If the credit is nev er repaired they can collect the money indefinately. They have not done anything they agreed to do in their contract except withdraw money from our bank.

Consumer Action Taken:

So far we have been calling them for almost two months. No one has returned our call. Today I called and got an 806 error message on each of their numbers.I checked the Better Business Bureau and they no longer have a rating because they are under review. I found this site when searching to see if others have been scammed like me.

Date This Problem Happened: May 28, 2012

State You Live in: Texas

Race/Ethnicity: Black or African American

Age Range: 21-35

Total Amount of Fee Paid: $496

Company Name: The Franklin Group

Company Address:

337 East Bay St.
Suite C
Jacksonville, Florida 32202

Company Telephone Number: 888-450-2226

Website of Company: franklin-fund.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Judgment to be Secured With Cash or Bond in Lloyd Ward Kansas Default Judgment Case

Steve Rhode — Fri, 25 May 2012 22:20:10 +0000

From How to Get Out of Debt

A tipster wrote to me and directed me to a previous case that was filed against Lloyd Ward in Texas as a foreign judgment.

Apparently the court in Texas has just ruled that Lloyd Ward, Lloyd Ward PC, Lloyd Ward & Associates and Lloyd Ward Group must deposit $119,000 in cash or bond “which is the amount that will secure the judgment creditor in any loss or damage occasioned by the delay on appeal. – Source

This case goes back to a case from Kansas in which Kelly Hawkins won a default judgment against the Ward entities named. You can read more about that case here.

A number of allegations came to light in that case, including the apparent ownership of a Texas law firm by non-attorneys Kevin Devoto and Lloyd Regner who are now duking it out in court themselves.

Ward’s representatives claimed the Kansas default judgment was void because the State of Kansas and the Kansas court lacked jurisdiction over any of the Defendants. It is also alleged that the Defendants have “never done business in Kansas.” – Source

A document filed in this case by Charles Branham, III Esq. basically called Ward unreliable in his claims that the Kansas default judgment should not be honored in Texas against him.

“It was undisputed that, despite Mr. Ward’s demonstrably false affidavit, that Mr. Ward and his law firms agreed to represent Kelly Hawkins in an attorney-client relationship. Supplemental Affidavit of Lloyd Ward dated March 30, 2012 stating “I have no business transactions with Kelly Hawkins” with letter from Lloyd Ward dated June 21, 2011 stating “Ms. Hawkins entered into an agreement with Lloyd Ward on April 16, 2010…” Moreover, Mr Ward acknowledges that the contract was between Mr. Hawkins and an entity which did not exist, Lloyd Ward Group, LLC. Mr. Ward further admitted that his website was an “interactive” website which included client logins and the ability to “Click here for a quote.” This website further touted Lloyd Ward & Associates as “the Premier Debt Negotiation Law Firm in the U.S.” – Source

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Secret Crush Escorts – Consumer Complaint – 5-25-2012

Consumer — Fri, 25 May 2012 19:40:29 +0000

From How to Get Out of Debt

Consumer Statement:

I saw this ad and made a inquiry

http://losangeles.backpage.com/FemaleEscorts/cute-easy-going-girl-27/22459175

I got a response and was told to fill out a form to schedule some time and was shown the Escort website and receive a email from her agency

http://personalserviceprovider.escortfiles.com/home

Once I scheduled my appointment I was told to pay a initial fee and the second I got to the location for the incall I was told I had to pay more and the girl Miley refused to see me otherwise. I was never refunded my money and I was never provided the services I paid for. Her Email was miley_pink08@yahoo.com

Consumer Action Taken:

I wrote both the Escort and the agency about this issue and no one has responded to me. I hope this will at least prevent others for falling for this trick.

Date This Problem Happened: May 24, 2012

State You Live in: California

Race/Ethnicity: Other

Age Range: 21-35

Total Amount of Fee Paid: $500

Company Name: Secret Crush Escorts

Company Address:

Company Telephone Number:

Website of Company:

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

CFPB Appears to Lay Ground Rules to Begin Enforcement in Debt Relief Industry

Steve Rhode — Fri, 25 May 2012 19:33:09 +0000

From How to Get Out of Debt

In a predatory move, the Consumer Financial Protection Bureau (CFPB) has issued a public request for comment over rules that could be used to regulate debt relief industry companies, both for-profit and not-for-profit.

The document, “Procedural Rules to Establish Supervisory Authority over Certain Nonbank Covered Persons Based on Risk Determination” has been put out for public comment.

Under this proposed rule the CFPB is not expressly mandated to cover debt relief companies but their mandate does allow them to have supervisory authority over any person or entity “that it “has reasonable cause to determine, by order, after notice . . . and a reasonable opportunity . . . to respond” that such covered person “is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services.” – Source

That seems to certainly cover the debt relief space since bad actors have been known to specifically engage in conduct that harms consumers. It would be a seemingly absolute stretch to say that debt relief providers do not offer “consumer financial products or services.”

The CFPB is proposing that when an entity is brought to their attention which they believe “is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services” they will contact the entity. Additionally, these rules can apply to “Any affiliate of a person described in subparagraph (1) of this paragraph if such affiliate acts as a service provider to such person.”

This contact will allow the entity a chance to respond in writing and orally.

A Notice is intended to afford a respondent the opportunity to evaluate the assertions set forth therein and to formulate an appropriate response. The Proposed Rule would provide a respondent with two opportunities to respond to a Notice— first in writing and then, if requested by a respondent, through a supplemental oral response generally to be conducted by telephone. Under the Proposed Rule, a respondent would be required to include with the written response records, documents, or other items supporting the arguments set forth in the response that a respondent wants the Bureau’s Assistant Director for Nonbank Supervision (Assistant Director) and the Bureau’s Director (Director) to consider. A supplemental oral response, if requested, would provide a respondent with the opportunity to present arguments to the Bureau’s Assistant Director or her or his designee.

Receiving a notice from the CFPB would not constitute of charges. The process would be informal and no discovery would be permitted. Notices would be delivered through the “U.S. Postal Service by Registered Mail, Certified Mail or Express Mail delivery, or by third-party commercial carrier, for overnight delivery and obtaining a confirmation of receipt.”

Entities that receive such a notice would be required to respond within 20 days of service of the notice. A failure to respond shall result in a waiver of an entities right to respond and trigger the final process which can result in a supervisory determination.

Companies that wish to respond to a notice from the CFPB shall “include all records, documents, or other items upon which a respondent relies; and (3) include an affidavit signed by the respondent attesting that the information contained in the response is true, accurate, and without any omission that would cause the response to be materially misleading.”

There is an interesting reference in the proposed rule that leads me to believe the CFPB may still intend to have people and entities register with the CFPB. “Notice may be served on a person currently registered with the Bureau by sending a copy of a Notice addressed to the most recent business address shown on the person’s registration form…”

Entities that are deemed to require supervision by the CFPB will fall under the following 12 U.S.C. 5514 process.

“The Bureau shall require reports and conduct examinations on a periodic basis of persons described in subsection (a)(1) for purposes of—
(A) assessing compliance with the requirements of Federal consumer financial law;
(B) obtaining information about the activities and compliance systems or procedures of such person; and
(C) detecting and assessing risks to consumers and to markets for consumer financial products and services.”

Companies found to be problematic may result in a referral by the CFPB to “Any Federal agency authorized to enforce a Federal consumer financial law described in paragraph (1) may recommend in writing to the Bureau that the Bureau initiate an enforcement proceeding, as the Bureau is authorized by that Federal law or by this title”

Parties interested in commenting can submit their comments on Docket No. CFPB-2012-0021 or RIN 3170-AA24 by going to http://www.regulations.gov.

You can read the full proposed rule here.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Bank of America to Credit Counseling Agencies – It’s Not Me, It’s You

Steve Rhode — Fri, 25 May 2012 18:49:10 +0000

From How to Get Out of Debt

A tipster recently emailed me saying that the inside scoop is that Bank of America is going to start working with fewer credit counseling agencies, or at least stop accepting DMP proposals.

Bank of America has been some interesting things recently. Most intriguing is their selected 75%-50 month repayment plan they are offering at 0% interest.

The plan works out to be a good deal for consumers, if they can get it. In fact it’s a better solution with Bank of America than either most debt settlement deals or credit counseling plans can offer.

While I have no confirmation on the plans by Bank of America to only focus on working with the ten or so of the largest agencies I think there is enough information floating about to make the whispers a plausible reality.

Insiders in the credit counseling world are saying that Bank of America has made it clear to some their intention is to eliminate working with a significant number of DMP providers and refuse to accept repayment proposals from many otherwise recognized 501(c)3 nonprofit credit counseling groups.

This will certainly impact credit counseling groups that will have to say, sorry Bank of America doesn’t work with us. The ones that Bank of America will accept proposals from will brag about that to consumers as evidence why consumers should work with them.

These whispers have been floating about for a year or so about this move but it just seems there is more emphasis behind this at this time. If it’s going to happen, it might be a move that’s close to being rolled out.

From a Bank of America point of view it seems to make logical sense. By paring down who they work with it would only mean needing to manage ten or so relationships. Besides, there may be some risk protection on their part to make sure the rumored demise of a number of credit counseling groups does not leave Bank of America stranded with proposals but to agency to manage them.

In the past year there have been a couple of examples of credit counseling groups, including nonprofit groups like UFS, that have gone out of business and left a mess for creditors and consumers to try to deal with.

A move by Bank of America to put this plan in place may result in a suit by some agencies against Bank of America but we’ll have to wait and see what really happens.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Lloyd Ward Sued by State Bar of Texas – Commission for Lawyer Discipline

Steve Rhode — Thu, 24 May 2012 21:23:27 +0000

From How to Get Out of Debt

Texas attorney Lloyd Ward, as part of Lloyd Ward & Associates, has beed sued by the State Bar of Texas, Commission for Lawyer Discipline over his alleged actions concerning debt settlement activities related to Debt RX USA and Silverleaf Debt Solutions.

The complaint, filed on May 23, 2012, alleges that in “June 2008, Michael Miles created Debt RX USA, LLC to operate as a debt settlement and negotiation company. On March 19, 2009, Miles hired Lloyd Ward to represent Debt RX as legal counsel.

Lloyd Ward subsequently prepared a Management Agreement between Lloyd Ward & Associates, PC and Miles which provided for Debt RX to manage the collection division of Lloyd Ward & Associates. Debt RX as manager was to receive 90 percent of the monthly net profits from this division. Lloyd Ward was to receive the remaining 10 percent of the net profits. The funds came from clients paying for debt settlement services.

In November 2009, Miles created Silverleaf Debt Solutions, LLC. Silverleaf and Lloyd Ward did not have a written agreement, but Lloyd Ward and Silverleaf did business together under the same terms as the agreement that Lloyd Ward had with Debt RX including the 90 percent / 10 percent fee split arrangement.

The 10 percent fee that Lloyd Ward received from both Debt RX and Silverleaf was for legal fees that Lloyd Ward incurred. When sending invoices for these legal services, Lloyd Ward addressed them to Debt RX and/or Miles-Silverleaf.

When entering into these agreements with Miles and both Debt RX and Silverleaf, Lloyd Ward failed to give them a reasonable opportunity to either seek the independent advice of counsel regarding the agreements or obtain their written consent. In addition, Lloyd Ward failed to furnish Miles and both Debt RX and Silverleaf with a conflict of interest waiver for signature.

Various lawsuits were subsequently filed against Lloyd Ward, Miles, Debt RX and Silverleaf. Lloyd Ward hired outside counsel to represent one or more parties without informing them of the lawsuit. In addition, the parties were not consulted regarding responsive pleadings that were filed including motions to dismiss.

Finally, Lloyd Ward misrepresented to Miles that there were tax issues involving Debt RX and Silverleaf. Lloyd Ward attempted to get Miles to sell Silverleaf stock to him to cure these alleged tax problems.” – Source

In the interest of disclosure, in October 2011 Lloyd Ward sued myself, my wife, this site and the Myvesta Foundation. The case is ongoing and there is nothing to report on that mater.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Lloyd Ward & Associates – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 18:20:21 +0000

From How to Get Out of Debt

Consumer Statement:

Contracted with Lloyd Ward and Associates in September 2010 to get out of credit card debt. They have taken my money b/c all the money that goes into your “savings” ends up going directly to them, provided no settlement offers to my creditors, have had lawsuits filed against me, a judgment and my wages garnished. I had to file bankruptcy to stop the garnishment and the bleeding from their taking my money and doing absoulely nothing.

Consumer Action Taken:

I had numerous conversations with it attempting to rectify this situation to no avail. I sent them a demand letter on May 2, 2012 (as stated in your “how to recover your money”) giving them until today, May 24, 2012 to refund $5,240.73. To date, I have heard nothing from them besides a phone call the day they received my demand telling me they needed a “verbal” statement that I was cancelling my services. I informed the represeentative to read my demand letter because it was very clear.

Date This Problem Happened: December 19, 2011

State You Live in: Louisiana

Race/Ethnicity: Black or African American

Age Range: 36-50

Total Amount of Fee Paid: $5,240.73

Company Name: Lloyd Ward & Associates

Company Address:

Company Telephone Number:

Website of Company: lloydwardandassociates.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Connecticut Goes After More Debt Relief Companies

Steve Rhode — Thu, 24 May 2012 17:21:46 +0000

From How to Get Out of Debt

New administrative actions have just been made public against more debt relief companies. Connecticut does not mess around.

The new entires made public include:

Alliance Mitigation Group

The company did not respond to administrative notices sent by the Consumer Credit Division of the Department of Banking. The company was hit with $11,795 in fines and is barred from Connecticut. – Source

Home Credit Law Center, United Processing Center

The State alleges:

Home Credit is a purported law firm with an office at 9854 National Boulevard, Suite 242, Los Angeles, California.
Brian R. Linnekens is a California attorney and President of Home Credit.
United Processing is a California corporation with an office at 14252 Culver Drive # 520, Irvine, California.
On March 4, 2011, a Connecticut resident received an e-mail from a representative of Consumer Mortgage Counseling Services of America (“CMCSOA”) describing the debt negotiation services offered by CMCSOA and Home Credit.
On March 8, 2011, the Connecticut resident and his wife (“Connecticut residents”) received another email from CMCSOA which stated, in part, that “as I said on the voicemail I left you, all the info you requested on HCLC is in the contract. Mr. Linnekens personally supervises all cases, but there is no negotiator assigned to your file until you formally become a client. Please get the contract and supporting docs back to me as soon as possible, and then we’ll hit the ground running”. Included with the e-mail was an application, which included a document entitled “Limited Power of Attorney & Borrower Authorization”, which would allow a borrower to appoint Home Credit and United Processing as the borrower’s true and lawful attorneys-in-fact to, among other things, “contact the above referenced lender regarding my existing mortgage loan for the purpose of negotiating a workout agreement or modification”.
On March 11, 2011, the Connecticut residents, while physically present in this state, entered into an agreement with Home Credit for debt negotiation services. The Purpose provision of the agreement states that “[c]lient hereby retains . . . [Home Credit] and its affiliates and Consultants to prepare a plan for helping the Client acquire and analyze proposed solutions that may help the Client improve their negotiations with their lender”.
On July 15, 2011, one of the Connecticut residents filed a complaint with the Commissioner in which the Connecticut resident stated that:
The company after receiving my information said they could get me into a loan modification program. They said that they could work with my mortgage company or a bank to get my monthly payments reduced. The cost was $4100.00 which was taken out in three installments from my wife’s checking account. They also told me not to talk to any staff from the mortgage company that they will take care of that.

The payment of $4,100 for such debt negotiation services was in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009.
At no time relevant hereto were Respondents licensed to engage or offer to engage in debt negotiation in this state, nor did Respondents qualify for an exemption from licensure.
At no time relevant hereto did Respondents perform or successfully complete the services specified in the agreement.
By letter dated October 3, 2011, Home Credit admitted that it had other Connecticut clients, and claims that it is not a debt negotiator.

A further hearing will be held on this matter and they have been issued a cease & desist notice in the meantime. – Source

Michael Lupolover, Law Offices of Michael Lupolover, Premier Consumtant Group, Premier Debt Solvers, Premier Debt Pro Servicing

According to State documents, Lupolover is also affiliated as a control person of the following entities: Creditors Relief LLC; Premier Debt Solutions Limited Liability Company; Premier Debt Solvers; Premier Debt Pro; Law Offices; Consumer Law Advocates PC; Debt Solutions Limited Liability Company; and Lupolover & Canty Professional Corporation.

The Commissioner alleges that from at least October 2009 to July 2011, Respondents were engaged in unlicensed debt negotiation activity in Connecticut, in violation of Section 36a-671(b) of the Connecticut General Statutes.

As of July 20, 2011, Respondents ceased and desisted from engaging or offering to engage in debt negotiation in this state.

Pursuant to a settlement agreement entered into on July 20, 2011, with the Office of Chief Disciplinary Counsel of the State of Connecticut Judicial Branch, Lupolover and Law Offices herein represent that they have either refunded or transferred to a duly licensed or exempt debt negotiator all fees paid by Connecticut clients of Law Offices for debt negotiation services. Such refunded fees totaled approximately $166,539.

Lupolover and Premier Debt Solvers herein represent that they have refunded all fees paid by Connecticut clients of Premier Debt Solvers for debt negotiation services. Such fees totaled approximately $11,741.

Lupolover and Premier Debt Pro herein represent that they have refunded all fees paid by Connecticut clients of Premier Debt Pro for debt negotiation services. Such fees totaled approximately $2,857.

A consent order was entered into on April 26, 2012. The entities must stop engaging or offering to engage in unlicensed debt negotiation activity in Connecticut and pay a $3,000 penalty. – Source

@GetOutOfDebtGuy

Prudential Law Group – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 17:02:53 +0000

From How to Get Out of Debt

Consumer Statement:

I LIVE ON SOCIAL SECURITY SALARY AND THIS COMPANY PRUDENTIAL LAW GROUP SEND A LETTER SAYING I PROBABLY
WILL QUALIFY FOR A LOWER MORTGAGE ON MY HOUSE.

THEY EXPLAINED TO ME THAT THEY WERE A LAW FORM AND THAT THEY COULD GET A LOWER MORTGAGES FOR APROX. $ 300.00 LESS PER MONTH AND IF THEY COULD NOT HELP THEY WOULD REFUND WHAT EVER MONEY I PAID THEM. I GAVE THEM 3 CHECKS FOR A VALUE OF $ 1165.00 FOR A TOTAL OF $ 3495.00. THEY WERE NOT ABLE LO LOWER MY MORTGAGES AND NOW NOBODY ANSWERS MY PHONE CALLS NOR MY E-MAILS. I WANT MY MONEY BACK.

Consumer Action Taken:

I CALLED SEVERAL TIMES TO THE PERSON THAT CONCTED ME FOR THE FIRST TIME (GREG KIKER) AND ALSO I TRIED TO CONTACT HIM BY E-MAIL. SO FAR NOBODY RETURNS CALLS OR ANSWER MY E-MAILS

Date This Problem Happened: April 17, 2012

State You Live in: Florida

Race/Ethnicity: White

Age Range: 66+

Total Amount of Fee Paid: $3,495

Company Name: Prudential Law Group

Company Address:

4500 CAMPUS DR.
# 525
NEWPORT BEACH, CALIFORNIA 92660

Company Telephone Number: 888-206-2075

Website of Company: prudentiallawgroup.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Is DebtConsolidation.com Smoking Dope?

Steve Rhode — Thu, 24 May 2012 16:49:30 +0000

From How to Get Out of Debt

A company called DebtConsolidation.com just put out a press release making some rather odd statements. They claim they are “a leading information and referral source for debt management and credit counseling” but seem to be instead providing misinformation instead.

The reader who sent this to me was most upset by the statement they make, “”There is no signup fee for the debt consolidation companies we recommend. You can avoid bankruptcy which can ruin your credit for up to 10 years. You can wipe out about 50% of your unsecured debt at one of the lowest costs possible,” Spears adds.” – Source. The reader seems to feel the statements made are untrue or not in compliance with FTC regulations.

But let’s look at the entire press release / marketing message and see what DebtConsolidation.com is saying.

Debtconsolidation.com, a leading information and referral source for debt management and credit counseling, recently urged consumers to choose debt settlement as their credit card debt management solution of choice and effectively wipe out 40% to 60% of their debt in as little as 24 months.

According to public domain records DebtConsolidation.com is owned by Platinum Worldwide, Inc. The records say the domain is for sale or lease.

You would imagine that a “leading” site would not be for lease but maybe that’s just me.

The press release title is “Credit Counseling Site Announces Its Debt Settlement Service As One of the Fastest and Most Effective Ways Out of Credit Card Debt.” It seems that even though they label themselves as a credit counseling site their primary focus is debt settlement.

The site starts the release making claims that seem to support that point of view.

In response to the increasing number of people finding themselves immersed in debts, Debtconsolidation.com recently offered its debt settlement service as the most effective solution for managing consumers’ finances.

But how is it the most effective and how can that statement be made with any support since both traditional debt settlement and credit counseling have such poor consumer performance numbers. The DebtConsolidation.com release doesn’t even mention the performance of the services they offer, but then again it seems the site is more of a referral service than a company that provides these services.

Credit card debt consolidation is one debt management solution that can help individuals keep their payment delinquencies in check—as clearly evidenced by over 100,000 consumers that have made their way out of debt thanks to Debtconsolidation.com’s financial advice and support.

I was with them on the first part of this section. It is one possible solution for some well qualified consumers. But how does it “keep their payment delinquencies in check” when the very premise of debt settlement is that creditors will most likely negotiate with consumers that are delinquent.

“Debt settlement, rather than credit counseling or bankruptcy or debt consolidation loans, can prove to be one of the best choices you make when you want to reduce your credit card, hospital, and medical debt. Debt settlement is a life-saving decision,” says Adriana Spears, a Debtconsolidation.com representative.

I beg to differ on this statement of theirs. I’ve researched and written about this extensively and there is a great difference in the effectiveness of the different debt relief solutions. See The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. The press release does not provide consumers with any evidence to support their claims of effectiveness.

Debtconsolidation.com provides all the relevant information and comprehensive assistance clients will need as they seek to restructure their financial foundation. Depending on a client’s ability to save funds for settlement arrangements with their corresponding creditors, a debt relief program can take anywhere from 24 to 48 hours to reach completion.

“There is no signup fee for the debt consolidation companies we recommend. You can avoid bankruptcy which can ruin your credit for up to 10 years. You can wipe out about 50% of your unsecured debt at one of the lowest costs possible,” Spears adds.

If the website claims to offer “all the relevant information” then why do they go on that state that bankruptcy is something to be avoided and can ruin your credit up to ten years when debt settlement will be on your credit for seven years, the same length of time as a chapter 13 bankruptcy. With settlement they claim you can wipe out “about 50%” of the unsecured debt but with a chapter 7 bankruptcy you can wipe out 100% of your unsecured debt in about three months. That all seems like relevant information that should be presented as well.

But is the 50% savings amount really a fair statement to make? It seems they say something very different on their website. “Clients who are able to stay with the program and get all their debt settled realize approximate savings of 50% before fees, or 30% including our fees, over 24 to 48 months.” – Source

So now we learn it’s not about 50% but really about 30% and that this only applies to people that complete the program and settle all of their debt but what percentage of people is that? They appear to be silent on that very important fact.

Debt Consolidation.com is a Mystery

A visit to the website for debtconsolidation.com seems to only further the mystery. There is no information about the physical location of the company or who is behind them. If we look at New York, the state where the domain is registered there is no company under the name DebtConsolidation.com that is authorized to do business.

Neither the contact us or about us pages provide any information why the company is or where they are located. – Source

The lack of transparency about who they really are makes me worried for consumers that provide information to them. Where does it go and who are they giving it to?

All of this seems like issues that you would not find a “leading” company engaged in.

A Look at the DebtConsolidation.com Website

They make some very bizarre statements on their website. Take this one for example.

In some instances a bankruptcy filing can help you with debt reduction. But what is more likely is that you will still have to pay back most of what you owe over a 4 to 5 year repayment plan. – Source

That’s a statement that is not supported by the facts, at all. About 70% of all bankruptcy cases filed are under a chapter 7 bankruptcy in which the entire unsecured debt is eliminated in about three months.

If you are tired of getting calls from credit and medical debt collection agencies, consolidating your debts may be your best answer.

Bankruptcy happens to be the only legal solution that can intervene with all of your creditors and make the calls stop.

The company claims to be an AFCC member, a trade association that is supposed to put consumers first. The AFCC site lists the member using this domain as:

Nationalrelief.com
11 Broadway
Suite 1300
New York, NY 10004
888-703-4948
www.nationalrelief.com
www.debtconsolidation.com – Source

As an AFCC member the company is supposed to be in compliance with the AFCC code of conduct which says, among other things:

Members shall comply with all federal and state laws regulating credit advocacy and debt relief services, including, but not limited to, the 2010 FTC Rules for debt relief providers. (Their performance claims do not seem to comply.)
Communications with clients and the public shall be honest and truthful. (Lacking a bit of truthfulness in my book.)
Representations regarding the services and potential outcomes of the service shall be fair and accurate. (Accurate?)
Estimates used in setting up a program for clients such as the total cost and program length shall be based on historical and substantiated data. (But where is the substantiated data?)
Members shall clearly and conspicuously disclose both the risks as well as the benefits of credit advocacy to individuals enrolling in programs. (Well balanced?)
Members shall clearly and conspicuously explain what fees are charged for services, how they are charged and when such fees are earned. (Where are they?)

The website seems to be silent on their actual fees as well. – Source. Even though their AFCC membership says they need to be open about fees, they appear to primarily say the fees are “The debt relief companies we recommend only get paid when they successfully settle your debts. Their fees are comparable to all the top performance based debt relief firms.”

The NationalRelief.com domain that is listen on the AFCC membership for DebtConsolidation.com is registered to National Debt Relief Group, 2502 86th St, 4th Floor, Brooklyn, New York and the contact is Tom Leydiker.

National Debt Relief Group, Inc is registered in New York but on September 22, 2009. That seems like less time that the amount the website claims to have experience for when they say in their press release, “For nearly a decade, the company has been providing valuable insight on debt management strategies that would prove to be the best course of action for a client’s specific financial situation.”

And just when you didn’t think it could get any stranger, there is a company called National Relief, LLC that is located at the same address listed for National Debt Relief Group, Inc. The company National Relief, LLC used to be called New Vision Debt Solutions and changed their name to National Relief, LLC on January 11, 2012. – Source

Other debt relief companies that have used the same address include Eagle One Debt Solutions, Law Offices of Robert S. Gitmeid, Maple Leaf Debt Helpers (a Canadian debt relief company) and Horizon Legal Group. – Source. There is no way to tell if these companies are related in some way or maybe they simply share the same office space.

But then there is this bit, Maple Leaf Debt Helpers, Inc uses a domain name associated with Canada, debtconsolidationcompanies.ca but the contact for the domain is Daniel Tilipman that has the email address of danny@nationalrelief.com. Maple Leaf Debt Helpers is not registered to do business in New York.

AFCC members should be able to do better than this.

@GetOutOfDebtGuy

Financial Management Partners – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 14:26:27 +0000

From How to Get Out of Debt

Consumer Statement:

I paid them $897.00 and they were to help me reduce the fees on my credit cards, so that I could pay them off quicker. I have asked them repeadely to refund my money and they said they would send it to me. I have never received it. I have tried to call them no answer. I have emailed a man by the name of Eric Pugh, he keeps assuring me that they are not a scam, but I see now that they are.

Consumer Action Taken:

I have emailed numerous times to these people. I don’t know what else to do.

Date This Problem Happened: January 26, 2012

State You Live in: Oregon

Race/Ethnicity: White

Age Range: 66+

Total Amount of Fee Paid: $897

Company Name: Financial Management Partners

Company Address:

1945 WEST CR 419
STE 1141-303
Oviedo, fl 32766

Company Telephone Number: 877-274-8238

Website of Company: financialmanagementpartners.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Universal Fidelity – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 14:22:46 +0000

From How to Get Out of Debt

Consumer Statement:

I just got off the phone with two different people at Universal Fidelity, LP. According to them, I owe Hollywood Video $34.41 for movies I rented 3 years ago. I explained to them that one day when I went to drop off movies, the store had completely shut down with a sign on the door saying they were permanently closed.-they had been open just two days prior. Not knowing what to do, I left them in the drop box. I have no idea how long they sat in that dropbox, given that the store was closed with. It was metal and locked, so I assume only an employee could get into it.

I also explained that some of these charges could not be accurate as they were on different dates, and a late fee wold’ve been paid the next time I rented.

Consumer Action Taken:

1. I asked when the store I rented from had closed, that would at least provide some clue about the dates on the letter; they could not tell me when it closed. The lady said that since I had returned movies that day, I should know–three years ago. Anyone keep that kind of think in their calendar?
2. They did tell me that the store had filed bankruptcy January ’09, a few months before any of my supposed late fees. However, a quick internet search shows two different bankruptcy filings-October 2007 and early 2010, o I don’t know what to believe.
3. I asked them to provide some documentation that I had in fact even rented the movies and when, which she said they were under no obligation to do and would not.
4. She said that the US Bankruptcy Court had determined that this money was owed, so I asked her to provide some documentation on that. She referred me to their website, which I will check.
5. I told her that I could not pay the fee until they had provided me some documentation, to which she said the bill was my documentation.

Note: I found information that the Iowa Attorney General’s office filed suit for similar complaints against another debt collection company (National Credit Solutions) working on behalf of Hollywood Video.

http://www.state.ia.us/government/ag/latest_news/releases/may_2011/Hollywood_video.html

Date This Problem Happened: May 23, 2012

State You Live in: New Jersey

Race/Ethnicity: White

Age Range: 36-50

Total Amount of Fee Paid:

Company Name: Universal Fidelity

Company Address:

PO Box 219785
Houston, TX 77218-9785

Company Telephone Number: 281-647-4156

Website of Company: uflp.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Greenleaf Finance Ltd UK – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 14:18:50 +0000

From How to Get Out of Debt

Consumer Statement:

Guys and Gals I was scammed £49.99 21/5/2012 my bank the halifax are going to refund, the banks are getting 100′s of complaints I have also reporoted to fraud police the web is still down I contacted one of the loan companies my details was not passed by them i never even took a loan , you have to close down your cards and bank account your card alone can not stop this in the future the website is down the registrant is not matthew wilson on companies house it is a marty green non uk resident google marty green scam it looks like this might be the same guy who scammed in the us, i have done what my bank said why they investigate if it is him he will continue to open new companies and access your bank in the future, THE BANKS ARE NOW AWARE SO GO BACK IF THEY REFUSED AT FIRST if you need my details on my searches I will be happy to assist

Consumer Action Taken:

You can not this is a scam

Date This Problem Happened: May 21, 2012

State You Live in: Warrington, UK

Race/Ethnicity: Other

Age Range: 36-50

Total Amount of Fee Paid: £49.99

Company Name: Greenleaf Finance

Company Address:

35 St Pauls Square
birmingahm
United Kingdom

Company Telephone Number:

Website of Company: greenleaffinance.co.uk

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Sallie Mae – Consumer Complaint – 5-24-2012

Consumer — Thu, 24 May 2012 14:11:29 +0000

From How to Get Out of Debt

Consumer Statement:

In 2004 fresh out of high-school I decided to go to Culinary school in Las Vegas, NV. I took $15,000.00 out in private loans from Sallie Mae. Now going through the years with less glamorous jobs then I’d though I’d have over this time and using all my forbearance and deferment time. Around this passing Thanksgiving time i made several higher payments that I really couldnt afford to become eligible for different payment programs after falling behind. So at the New Year 2012 I apply to be in the graduated payment program with 24 payments at $50.00- thinking hat I now have my foot in the door with a great company etc in two years time I’d be in a better position since I’m not so stupid anymore with some of the srltuff I’ve had to solve (umeployment, near homelessness, illnesses, etc) So, I’m making my payments feeling good about being able to do the best with what I have then in May 2012 a big snag comes up. I am notified that I am months behind and whatnot. I call Sallie Mae to see what is going on and they tell me that I was not in the Graduated payment program and I needed to pay over $600.00 (I make a little more then $1000.00 monthly but have rent, car payment etc) to get current then pay $150.00 appx mthly as my payment. I told them I have the letter hey sent me about being approved and the only answer I got from a payment specialist supervisor was it was an error. I asked how this was my problem and that I wanted to be in the graduated payment program since I was making those payments in good faith to the lettered agreement. He said hat couldn’t be allowed and so I asked about the income sensitive programs they had and what the payments wouldn’t be-—they all were $150.00 or more a month and I can’t really afford that since almost every cent counts. I said that and how it would literally not allow me to eat (ramen and peanut butter is what I mostly eat already) or wouldn’t let me have my car or gas for it (there isn’t a any public transportation by my house I rent a room in or where I work) his suggestion was to not pay rent or my car payment— it made me angry he’d say something like that! All I wanted to do was work something out so that loan would stay in good standing and let me eat.

So how can I get this worked out? Consolidation, Default, etc?

Friends and family that are in the legal field say to just keep paying the $50.00 a month and if goes to court just explim to the judge what happened, but I’ve read horror stories relating to that.

Consumer Action Taken:

I have called and emailed haven’t heard much beyond what I wrote above—I filed a complaint with the counsumer protection bureau but Sallie Mae has stalled them with “requesting more time to determine the situation”

Date This Problem Happened: May 14, 2012

State You Live in: California

Race/Ethnicity: White

Age Range: 21-35

Total Amount of Fee Paid:

Company Name: Sallie Mae

Company Address:

P.O Box 9500
Wilke-Barre, PA 18773-9500

Company Telephone Number: 888-272-5543

Website of Company: salliemae.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

10 Thousand People a Day are Retiring in America – Are You Ready?

Damon Day — Wed, 23 May 2012 22:46:11 +0000

From How to Get Out of Debt

As a college student studying finance, I would often hear of references to the baby boomer generation. It would typically be described as a very large mouse traveling through a skinny snake. Meaning there was this extremely large mass off people traveling through various stages of life. Now the tip of that metaphorical mouse has hit a major milestone and so begins the retirement of the biggest generation in American history. 10,000 people every day and this is one of their stories.

I’m a Struggling Musician That is Drowning in Medical Debt. – Danika

Jon Emge — Wed, 23 May 2012 13:06:33 +0000

From How to Get Out of Debt

“Dear Jon,

I am paying off my student loans, about 8,000.

BUT after that, I am considering to file BANKRUPTCY for my more than 20,000 (and growing of medical debt).

I do not have any other kind of debt. No outstanding credit cards, or the such. I have a good standing and three months of living in my local credit union account.

I am a gigging musician, who has a life long struggle with a severe back problem, and insurance is something I did not have in the past. My younger days were of saving enough to see specialists, and then ignoring the rest of the bill.

If I could start all over I would get involved with some kind of low-income insurance policy. As of now, I cannot afford to pay these growing medical debts off. I still need help with my health problem.

Is this wise or will I be hurting myself in the long run?

Danika”

The Answer:

Danika,

As a former struggling musician myself, I do understand a bit about your situation.

A few questions:

I am assuming you can afford to repay the student loans? But not the other 20K of medical debts? Is all the 20K medical debt?

Do you have any health insurance at the present time? Are you deemed uninsurable?

Are you working at all besides playing music gigs? Can you do other work?

Bankruptcy is always an option, and it may be the best one for you, but we need to look at making sure what has brought you to the point of bankruptcy does not occur again; and if it is an ongoing medical issue, that may be difficult to do.

If you were to get a job at a large company, one large enough that they do not require a medical for health insurance, this may be one way to alleviate any future medical bills.

Get back to me and let me know more about your situation, how you afford to live, etc, as well as my questions above, and we’ll look more into this and what is the best option for you.

Regards,

Jon Emge is an experienced UK debt advisor who has helped thousands and thousands of people in the UK to deal with problem debt. Jon specialises in finding good solutions for problem debt using a variety of UK specific techniques.

If you have a question you’d like to ask about how to get out of UK debt, just use the online form. I’m happy to help you for free.

Can I Include a Title Loan in Bankruptcy?

Steve Rhode — Tue, 22 May 2012 19:09:55 +0000

From How to Get Out of Debt

“Dear Steve,

I have some debt…. have not been employeed in nearly two years, but I am sure that I will be soon . In the meantime, I do have some debt and since Ive not been employeed & no one has hired me – I need to file a BK. I have a title loan can I include it in a BK.

I have a title loan can I include it in a BK.”

The Answer:

Interesting question. Ultimately the specifics of your situation would have to be reviewed by a local bankruptcy attorney. You can click here to find a local bankruptcy for a free consultation.

Generally speaking the title loan may be a lien against the collateral, in this case the car. So if you want to keep the car then you’d have to satisfy the lien. At least that’s what I always thought.

Recently I we published an article about a service that claims to be able to strip down the value of the lien in a bankruptcy and allow you to keep the car for less. Read File Bankruptcy — But Keep Your Car for Much Less Than You Owe.

I’d find that local bankruptcy attorney and tell them about this service to help you redeem the car for less than you owe on it.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I’m Distraught, Depressed, and Anxious About My Debt. – Janine

Steve Rhode — Tue, 22 May 2012 18:47:56 +0000

From How to Get Out of Debt

“Dear Steve,

I’m a 42 year old professional, recently divorced. I took all the debt, left him all the assets, i.e. collateral, for a 401k distribution as settlement, which I’ve basically been triple taxed on and came out still far down in the hole. Then I got laid off and have been in the process of starting my own company back up, but have been unable to secure any capital to properly fund the venture, nor to sustain myself through the transition of my new receivables, thanks to my bad credit still lingering and remaining behind on my obligations. I make a good income and have only needed the global fix, so to speak, to consolidate and settle out the remaining accounts and have something reasonable to contend with.

Given my situation, what would you recommend for me? I’ve quite honestly been so distraught and depressed and anxious, it’s severely affected my focus, my relationships and my health. I’ve looked everywhere and tried everything. I feel like I’m constantly backstroking and spinning my wheels, getting nowhere. I had a commitment for a loan that fell through and now I’m in serious dire straits, facing eviction, repossession, no funds to appropriately operate my business, pay expenses or take care of daily survival necessities at the moment. Any advice you would have to offer would be greatly appreciated, as I’m literally hanging by a thread. Thanks so much.

Janine”

The Answer:

Dear Janine,

First off, let me share this video with you I recently made. It describes the emotional path you are on. You can read more about this here.

What I need for you to do is to see if you can find a way to separate your emotional reaction from recent events from that part of your brain to processes issues in a reasonable and logical manner. It’s a tough request for me to make for sure.

I’ve got some initial ideas that will allow you to close the door on this situation and move forward with an opportunity to have a new financial life but I have some questions first.

Can you please describe for me the type and amount of debt you currently have and if you have any assets of any value still in your name.
What line of business are you in?

I’d suggest you read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Have to Start Paying on My Student Loans I Can’t Afford. – Jessica

Steve Rhode — Tue, 22 May 2012 18:37:25 +0000

From How to Get Out of Debt

“Dear Steve,

In 2010-2011 I attended a private graduate school in Chicago and racked up 70,000 in student loans (including current interest). After the first year I realized that the program was not as reputable as I previously thought and I removed myself from the program due to the fear of going into 250,000.00 in debt with no job opportunities. I originally took a 1 year leave of absence from the program before fully withdrawing so that my loan payments wouldnt start kicking in.

Now a year later I just received the letter that my loan payments will start at the end of this month. My monthly payment will be $1,098.00, and my loan is gaining over $400 in interest every month. I feel like I am suffocating under this debt and I dont know what to do or even what options I have.

For more information my loans are federal loans through Nelnet at interest rates of 6.8 and 7.9. I make $1400 a month.

PLEASE HELP STEVE!!

Jessica”

The Answer:

Dear Jessica,

Well let’s see what we can do here. What you might want to do is see if you can consolidate your loans under a Direct Loan and then put them on an IBR plan to create a payment you can afford based on your income. You can use the links below to find out more and if your specific loans are eligible. I just don’t know about the types of loans to make a more concrete statement.

Student Loan Resources

You can use the following student loan resources to help reorganize, discharge or forgive your student loan payments.

Student Loan Forgiveness and Discharge Information

Student Loan Consolidation Information

Student Loan Petition

Private Student Loan Help Needed. Pass the Fairness for Struggling Students Act. Sign the Petition Now.
Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Billion Dollar Foreclosure Settlement Money Goes Elsewhere

ProPublica — Tue, 22 May 2012 18:29:12 +0000

From How to Get Out of Debt

by Paul Kiel and Cora Currier
ProPublica

States have diverted $974 million from this year’s landmark mortgage settlement to pay down budget deficits or fund programs unrelated to the foreclosure crisis, according to a ProPublica analysis. That’s nearly forty percent of the $2.5 billion in penalties paid to the states under the agreement.

The settlement, between five of the country’s biggest banks and an alliance of almost all states and the federal government, resolved allegations that the banks deceived homeowners and broke laws when pursuing foreclosure. One part of the settlement is the cash coming to states; the deal urged states to use that money on programs related to the crisis, but it didn’t require them to.

ProPublica contacted every state that participated in the agreement (and the District of Columbia) to obtain the most comprehensive breakdown yet of how they’ll be spending the funds. You can see the detailed state-by-state results here, along with an interactive map. Many states told us they’ll be finalizing their plans in the coming weeks. We’ll be updating our breakdown as the results come in.

What stands out is that even states slammed by the foreclosure crisis are diverting much or all of their money to the general fund. In California, among the hardest hit states, the governor has proposed using all the money to plug his state’s huge budget gap. And Arizona, also among the worst hit, has diverted about half of its funds to general use. Four other states where a high rate of homeowners faced foreclosure during the crisis are spending little if any of their settlement funds on homeowner services: Georgia, South Carolina, Wisconsin, and Maine.

Overall, only about $527 million has been earmarked for new homeowner-focused programs, but that number will go up. A number of large states 2014 in particular New York, Nevada, Illinois, and Florida 2014 have indicated they’ll be dedicating substantial amounts of the funds to consumer programs, but haven’t yet produced a final breakdown.

Iowa Attorney General Tom Miller, who led the coalition of attorneys general who negotiated the deal, argued that only a very small portion of the settlement was being diverted and it will “overwhelmingly” benefit homeowners. The centerpiece of the settlement is a requirement that the banks earn $20 billion in “credits” by helping homeowners in various ways 2014 from reducing principal on underwater homes to bulldozing empty ones. Because the system awards only partial credit for certain actions, Miller said the settlement would bring more than $20 billion in benefits to consumers 2014 he estimated $35 billion. Critics contend those sorts of numbers far overstate the benefits to consumers, because the banks can claim credit for some activities that were already routine.

The banks will only pay $5 billion in actual cash penalties under the agreement. The largest chunk, $2.5 billion, goes to the states’ attorneys general, while about $1 billion goes to the federal government. $1.5 billion will be sent to borrowers who lost their homes to foreclosure during the crisis in the form of $2,000 payments.

Compared with the billions going to consumers, Miller contended, $1 billion going to states’ general funds was minimal. It was always expected that the states would divert some of the money to their general expenditures, he said.

But when announcing the deal, state and federal officials said the states’ $2.5 billion would mainly fund housing counselors and legal aid organizations. Studies have shown homeowners stand a better chance of avoiding foreclosure if they get the help of a counselor, and homeowners lack legal representation in the overwhelming majority of foreclosure cases. The money was divvied up among the states according to a formula that took into account how large the states were and how hard they were hit by the crisis.

As you can see from our breakdown, 15 states have so far allocated over half their amounts to consumer-focused efforts. But the uses range widely. In Ohio, $75 million has been set aside to destroy some 100,000 abandoned homes. In Minnesota, the state is setting up a fund to compensate victims of the banks’ foreclosure abuses.

In two of the states most affected by the foreclosure crisis, California and Arizona, the attorneys general had intended to use most of their funds on homeowner-related efforts before the governors intervened.

After California Attorney General Kamala Harris prepared a proposal to spend the money on counselors, lawyers, and other consumer-related efforts, Gov. Jerry Brown released a proposed revised budget last week that used the state’s $411 million for existing housing programs. In other words, the money would just be used to help fill the state’s $16 billion budget deficit. Harris opposes the move, which still must make its way through the state legislature for it to become law.

In Arizona, the attorney general had similar plans. Then state lawmakers and the governor took $50 million of the $98 million coming the state’s way. Although the budget legislation stated that the money should be used to fund departments related to housing and law enforcement, there will be no new spending. Housing advocates are readying a lawsuit to stop the transfer and expect to file in the coming month, said Valerie Iverson, Executive Director of Arizona Housing Alliance.

Several other large states have diverted most or all of the money:

2022 Georgia directed all of its $99 million to programs designed to attract new businesses. A spokesman for the governor said, “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”

2022 In Missouri, the state legislature used almost all of its $39 million to fund higher education, which had been slated for cuts. The attorney general’s office kept $1 million for hotlines and outreach related to the settlement.

2022 Virginia put the entirety of its $66.5 million into the state’s general fund without restrictions. In March, Democrats proposed a budget amendment that would funnel that money to foreclosure prevention and homeownership programs, but it was voted down.

2022 Wisconsin Governor Scott Walker announced soon after the settlement was finalized that the bulk of it2014roughly $26 million2014would go into the state general fund. Two million went to an economic development fund, including funds for demolition in blighted neighborhoods. Many state Democrats and housing advocates opposed the plan, but failed to block it.

2022 Texas directed its $135 million to the state’s general fund, of which $10 million has been allocated for basic services to low-income Texans. The legislature won’t formally decide what to do with the rest until next January because it meets only once every two years. John Henneberger, co-director of Texas Housers, an affordable housing group, said that in speaking to legislators, advocates had “received no assurances that this money will be used according to the purposes of the settlement.”

ProPublica will continue to track how the funds are being used in the coming months. Check out our breakdown and interactive map for updates.

Connecticut Fox TV Station is Looking for Persels & Associates Consumer to Interview

Research Department — Tue, 22 May 2012 18:09:05 +0000

From How to Get Out of Debt

My name is Beau Berman – I’m an investigative reporter at WTIC TV, the FOX affiliate in Hartford, Connecticut.

We are working on a story about Persels & Associates, which is trying to get the state to let them operate here without a debt negotiation license.

I’m trying to find someone in Connecticut who has used the debt settlement services of Persels & Associates who would be willing to talk about their experience with us on camera.

If there happens to be any way you could help, please let me know.

Thank you,
Beau
Beau Berman
bjberman@ctnow.com
FOX CT News
Reporter
www.ctnow.com
@beaubermanfoxct

If you might be interested in helping this reporter, please reach Ben using the contact information above.

AVOID – Proposed Litigation Notification – Investigation Advertisement Mailer

Steve Rhode — Tue, 22 May 2012 15:13:44 +0000

From How to Get Out of Debt

A hero reader has sent in a new mailer that is promoting legal action against New Century Mortgage. It appears to be a mailer that could be used generically against other lenders as well.

The reader said, “On Saturday I received via postal mail what appears to be (attached) the latest iteration of a mass joinder mailing. I believe that a recipient could be easily mislead about a “lawsuit” against New Century Mortgage – similar to other California Bar enforcement actions.”

What is interesting about this mailer is that while it is for a “Pending Law Suit” and “Proposed Litigation” there is no mention that it is end by a lawyer and it does not appear to conform to legal advertising requirements.

The mailer also does not identify who the company or person is behind the mailer. Real upstanding. (That’s sarcasm.)

On the front of the mailer we see a message about a “Pending Law Suit”, a notation that it is a “Secured Document” and that the postal permit is 55 from Santa Ana, California. Seriously, what does “Secured Document” even mean? Does it mean that it was sealed and you have to open it? From my point of view it is language intended to scare the consumer into opening the mailer.

The inside of the mailer is just as problematic. The mailer says it is a “Proposed Litigation Notification.” The only place it even mentions this is a sales piece is in the one line that it is an “Investigation Advertisement.”

The mailer says consumers should contact the “Litigation Department” at 877-454-7503 but there is nothing to indicate this mailer was even sent out by a lawyer or law firm. I have no idea what “Litigation Department” even means in this context but I suspect it will be a sales department manned by non-attorney staff.

The mailer says “our office is investigating…” but never mentions who they are. Who is the office?

It also says the recipient may have received a mortgage by New Century Mortgage that they are investigating but down in the fine print it says “information was obtained through public record sources.” Unless they are manually filtering through mortgage documents, which I deeply suspect they are not pulling each mortgage filed, they are only guessing. They even say as much in the fine print.

If the only information they obtained, as the mailer claims, for sending the mailer was “loan amount, loan to value percentages, date of loan, and residential jurisdiction” then how would they have any idea about their statement “Records indicate that you may have the type of home loan or mortgage our investigative auditors are investigating.”

Consumers are supposed to call 877-454-7503 to find out if they will receive benefits like:

Reduction in interest rate
Reduction in monthly payment
Reduction in principal balance
Monetary relief
Delay or stop foreclosure
Compensation for damages

The reader is right is recognizing these claimed benefits to be associated with the mass joinder marketing efforts by some lawyers that have now been disbarred in California. The mailer calls this approach “loss mitigation negotiations.”

The pitch for “affordable legal representation” is made which seems to clearly indicate a fee will be requested. Otherwise, why would they say it was “affordable.” Then they go on to say there are costs and fees involved.

The fine print at the bottom only tells us the company is located in New York. They disclaim the proposed outcomes as well. The mailer says “Lower monthly payments, compensation for damages and debt forgiveness are Potential Savings, but will vary case to case.”

My advice, if you get a mailer like this, is for you to consult with a local licensed real estate attorney before you take any action. You must speak with an attorney and not a non-attorney sales staff before taking any action.

Additionally, the Federal trade Commission has strict guidance on what, if any fees many be charged in advance for such services. See this post for more details.

In my opinion, the mailer is deceptive and not much different than the other mailers that have been discredited.

Who is 877-454-7503

This telephone number is associated with a company called Free Fresh Start CPN that advertises they are “Credit Repair Specialists.” – Source

What is interesting is that although the mailer says the company is located in New York, the website of Free Fresh Start says they are located at:

877-454-7503 Toll Free
888-907-1628 FAX

5482 Wilshire Blvd. Ste. 1573
Los Angeles, CA. 90036 – Source

This address appears to be the location of a UPS Store. – Source

Their website lists their name as Free Fresh Start CPN LLC but there is no such company in California or New York that is registered to do business. There is a Free Fresh Start LLC in California but that company lists a different business address and the records say that in California they will do business as Spiegel & Utrera, PC.

A search of companies registered in New York, as the mailer claims, shows no companies registered under the name Free Fresh Start CPN.

The domain records for freefreshstart.org are private and ownership can not be ascertained.

The company also claims to want people to “get a new credit privacy number now.” The use of credit privacy numbers, or CPNs is very problematic. You can read this post for details.

The company was issued a cease and desist order after not responding to requests from the State of Nevada for mortgage modification and foreclosure consultant services. – Source

@GetOutOfDebtGuy

Offer In Compromise Rules Relaxed by IRS. Big News!

Jim Buttonnow — Tue, 22 May 2012 14:04:51 +0000

From How to Get Out of Debt

I do not normally get motivated by IRS changes in collection rules, but yesterday’s change to the Offer in Compromise (OIC) program was fairly significant. As you know, this program allows taxpayers, who qualify, to settle their tax liability in full for an amount less the full liability owed.

There are many deceptive companies who publish that they can get a taxpayer into these by negotiating with the IRS. The rules for an OIC are computational in nature and rarely have any negotiation needs to qualify – i.e. you either qualify and can pay the offer amount or you don’t. Yesterday, the IRS changed some of its computational rules that may make the program more attractive to those who qualify.

Some background:

In the past three years, the IRS has been attempting to help financially distressed taxpayers. In 2008, it relaxed the lien filing rules for those who owed and could not pay. Last year, they streamlined the investigation process for the OIC. Earlier this year, the IRS relaxed the streamlined installment agreement rules to allow taxpayers who owe up to $50,000 to get into a 6-year payment plan. Yesterday, the IRS changed some of its computations related to the OIC.

The computation of an OIC is based on the reasonable collection potential of the taxpayer. If the tax can be paid before the collection statute of limitation expires, the taxpayer does not qualify for an offer in compromise. Reasonable collection potential is computed as:

the monthly disposable future income of the taxpayer (as computed according to IRS future income rules and allowable living expense limitations) times the number of months remaining on the collection statute of limitations, plus
the net equity in assets, including any assets that have been dissipated since the tax liability was incurred and not used to pay necessary living expenses of the taxpayer

The IRS changes announced yesterday changed the future income computation, allowed some expenses that were not previously allowed, and clarified the rules to provide some relief to business taxpayers.

The changes:

There are 4 significant changes to the OIC:

If a taxpayer qualifies, the computation of the offer amount can be significantly less – the monthly disposable income multiplier was reduced from 48 months to 12 months. This could lower an offer amount significantly. For example, a taxpayer who has $300 a month in monthly disposable income would have to pay $14,400 for the future income component in the old OIC rules (48 months @$300) plus their net equity in assets. Under the new rules, this amount would be $3,600 (12 months @$300).
Taxpayers are now allowed, in certain circumstances, expenses for payment of student loans in the computation of monthly disposable income. In the past, these expenses were not allowed.
Taxpayers are allowed payments for state liabilities owed in proportion to the amount they owe for federal taxes. In the past, these expenses were not allowed.
Business taxpayer rules have been clarified to not add equity in business assets to the asset component of the OIC calculation

What this means is that more will qualify AND have the ability to pay the offer amount- which is often the largest roadblock to obtaining an OIC.

As always, my consumer tip is to beware of anyone who says you qualify without looking at the computation in detail.

Jim Buttonnow, CPA, CITP

Citizens Financial Group – Consumer Complaint – 5-22-2012

Consumer — Tue, 22 May 2012 13:45:53 +0000

From How to Get Out of Debt

Consumer Statement:

Citizens Financial group sent us a letter promising after we were prequalified for a modification of our loan that if we paid them $2995.00 they would help us reduce our mortgage payment by at least 50% .There was also a 100% money back guarantee policy ,that they would refund 100% of money if not approved.Once we provided payment and all documents if was sent to a ” Document Specialist ” for them to forward to our current lender.I did everything step by step.They were always a phone call away if we had any questions. Once I was advised they sent packet to my lenderI was advised to call weekly to check status.I did this.Was then advised we were denied.I got denial letter and contacted Citizens Financial Group ,which was getting very hard to get a call back at this point.I faxed denial letter and was advised by ducumant specialist that my refund was submitted and I would receive it by the end of February.Nothin. Now all phone lines di sconnected and my letter returned, and email could not be delivered. I have all my ducuments and eamils from this company.It is 5/21/2012 and I have yet to receive any money back and this has further hurt my situation.

Consumer Action Taken:

I tried to call as was expected step by step and now the phone is disconnected, emails can not be delivered.Sent certified letter returned.Contacted owner of buliding in Arizona and Citizens financial group left no forwarding ADDRESS.I have tried everything.I have copy of canceled check, all emails, all paperwork, and names of people.

Date This Problem Happened: September 20, 2011

State You Live in: Florida

Race/Ethnicity: White

Age Range: 36-50

Total Amount of Fee Paid: $2,995

Company Name: Citizens Financial Group

Company Address:

40 North Central Ave
Suite 1400
Phoenix, Arizona 85004

Company Telephone Number: 866-573-2890

Website of Company: lgutierrez@citizensfg.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Priceline.com – Consumer Complaint – 5-22-2012

Consumer — Tue, 22 May 2012 13:42:24 +0000

From How to Get Out of Debt

Consumer Statement:

I purchased the insurance on an upcoming stay at a hotel from Priceline.com. I need to cancel the reservation but they said the insurance can only cancel the trip if I die or are hospitalized. I have an education conflict taking place the time of travel and that is why I wanted to cancel. They said there is nothing they can do and my insurance cannot be refunded even though it serves no purpose.

Consumer Action Taken:

I contacted priceline.com and they told me to call the hotel I am staying at. The hotel told me it can only be modified through the company it was purchased through. I called priceline again and they said there isn’t anyone higher up that I can speak to. They transfered me to the insurance company and the insurance company gave me inappropriate answers to my questions. I called priceline back and they straight up told me there is nothing we will do to help you.

Date This Problem Happened: May 21, 2012

State You Live in: Texas

Race/Ethnicity:

Age Range: 21-35

Total Amount of Fee Paid: $598

Company Name: Priceline.com

Company Address:

Company Telephone Number: 877-477-5807

Website of Company: priceline.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Universal Fidelity – Consumer Complaint – 5-22-2012

Consumer — Tue, 22 May 2012 13:39:05 +0000

From How to Get Out of Debt

Consumer Statement:

I received a letter from Universal Fidelity LP saying I owed them late fees from movies for Hollywood Video. The 3 films they list I have never rented. When Hollywood Video closed I did not owe them any money. I believe this to be a scam.

Consumer Action Taken:

I called the compant and they said someone used my card at the store. This is not possible. The films listed are really strange. There seems to be no title. I also e-mailed them at the dispute e-mail address.

Date This Problem Happened: May 21, 2012

State You Live in: New York

Race/Ethnicity: White

Age Range: 51-65

Total Amount of Fee Paid:

Company Name: Universal Fidelity

Company Address:

P.O box 219785
Houston, Texas 77218

Company Telephone Number: 281-647-9785

Website of Company: uflp.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Life After Bankruptcy – The Truth

Steve Rhode — Mon, 21 May 2012 21:48:47 +0000

From How to Get Out of Debt

Here is what you need to know right off the bat, there is absolutely life after bankruptcy. Ironically for many their financial lives turn out to be better and stronger than before. Almost all the negative preconceived notions you may have about bankruptcy are generally incorrect. That surprises most people.

Let’s look at some of the key areas of life after bankruptcy.

Your Credit – Life After Bankruptcy

Chances are most likely your credit was already taking a beating when you elected to file bankruptcy. Filing bankruptcy actually put a quick halt to much of that negative information. About 70 percent of people file a chapter 7 bankruptcy so only a few months exists between the time they file and the time their debt is discharged.

Immediately after their discharge they should be focused on rebuilding their credit. It can be rebuilt quickly using this guide of mine.

If you follow that free guide you can rebuild your credit very quickly without going into debt. It’s the best approach to be credit eligible again without the consequence of being in debt.

Buying a Car – Life After Bankruptcy

Until you get your credit rebuilt the interest rate you may be charged will be higher than normal but that won’t stop you from buying a car after bankruptcy. If you do rebuild your credit, within a year after bankruptcy you should be eligible to buy a new car again.

Your initial reaction may be to avoid a new car but you may just find the new car financing to be very competitive even for people that have filed bankruptcy. Car manufacturers want to sell cars so in my experience they are more willing to take a chance on someone.

Besides, after a chapter 7 bankruptcy you can’t file again for eight years. The lenders are less worried about you filing again and have the car as collateral anyway.

Buying a Home – Life After Bankruptcy

Again, you need to focus on rebuilding your credit right after your discharge but within two to three years after bankruptcy you will be mortgage ready. The irony is that without filing bankruptcy you probably would not have been able to save money and accumulate a downpayment for your new future house.

About a year or so after your bankruptcy, as you are continuing to build your downpayment fund, you will want to find a mortgage broker and be open with them about your bankruptcy. Let them know you want to get ready to buy a home and they will guide you through the process and get you qualified for a new mortgage.

Getting a Job – Life After Bankruptcy

Will you be able to get a job? Most people can without a problem. Of course there are some occupations, like financial or fiduciary, where bankruptcy might create a bit of an issue.

Renting a Home or Apartment – Life After Bankruptcy

You will be able to rent a place to live after bankruptcy. However, it may be initially more difficult from a major apartment complex. They tend to have stricter criteria and a lot of applicants to choose from. Instead, focus on smaller apartment complexes or private landlords. You can always offer to put up a larger security deposit to ease the mind of the landlord. I can’t think of a single person over all these years that followed my instructions and was not able to find a place to rent after bankruptcy.

Doubting Yourself – Life After Bankruptcy

This is one of the most interesting issues people deal with after bankruptcy. I know I did when I went bankrupt in 1990. Afterwards I felt terrible about it. It wasn’t until years later that I put it all into perspective and saw that for me it was the right thing to do at the time.

Don’t let artificial and internal judgments weigh you down. instead, learn more about the natural emotional stages that everyone deals with.

The Reality – Life After Bankruptcy

If you file bankruptcy with the knowledge that it is a reasonable and logical solution for you, you will find that life after bankruptcy is less traumatic than most fear. There are some adjustments to deal with. For example a chapter 7 bankruptcy will be on your consumer credit report for ten years and a chapter 13 bankruptcy for seven. But just because it is listed on your credit report is not a reason to fear it. Accounts that have gone into collection will be listed for seven years as well.

The more you can embrace bankruptcy as a necessary, reasonable, and logical path to follow to deal with your situation, then the more likely you will recover faster and stronger.

The only way you can understand what bankruptcy will mean for you would be for you to click here to find a local bankruptcy attorney.

@GetOutOfDebtGuy

Freedom Debt Relief Sues Century Negotiations, Inc. My How Times Change.

Steve Rhode — Mon, 21 May 2012 20:34:31 +0000

From How to Get Out of Debt

For those that have been involved in the debt world for a number of years the names Freedom Debt Relief (FDR) and Century Negotiations, Inc. (CNI) were linked together through thick and thin under the trade group TASC, (The Association of Settlement Companies). In fact the honcho over at CNI, Dave Leuthold, was even the Executive Director of TASC, under which FDR worked diligently for to help try to get favorable debt settlement legislation passed.

And as recently as April, 2012, both companies had leadership and/or speaking roles in AFCC, (American Fair Credit Council). – Source

That was then. Flash forward to May 16, 2012. That’s the day FDR sued CNI in the Northern District of California.

According to the complaint, Since November 2004, FDR and CNI had an agreement where FDR referred a number of potential clients to CNI.

“When a referral is made by FDR, it is up to CNI to determine whether or not to enroll the customer based upon CNI’s own proprietary underwriting procedures and specific enrollment criteria. A number of these referrals are rejected by CNI as a result of its own independent review. In those instances where CNI chooses to enroll a referred client, it will enter into a written contract with that client, in a form approved by CNI. The client does not enter into any agreement of any sort with FDR.”

Things look like they really began to sour in July of 2010. Around that time a CNI customer, Mr. Webster, filed suit against CNI, FDR and others. But this complaint filed by FDR against CNI alleges that “at no time did Mr. Webster ever enter into an agreement with FDR.”

Another CNI customer filed suit in August of 2010 against CNI and its chief executive officer, David Leuthold. FDR was later added to that suit.

To summarize the case, CNI feels FDR should indemnify CNI for the cases filed and FDR says bollocks. FDR claims they had nothing to do with these clients except pass the lead over to CNI.

You can read the complaint filed, here.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Greenleaf Finance Ltd – Consumer Complaint – 5-21-2012

Consumer — Mon, 21 May 2012 20:12:02 +0000

From How to Get Out of Debt

Consumer Statement:

Was looking for a loan – next thing I know today greenleaf finance have take a payment of £49.99 do not even know who they are website gone Checked who they are on the web director mathew wilson previous company name British Fish Ltd no idea how this guy got my details but need stopping after reading other experience I never even signed up for any loan

Consumer Action Taken:

I am going to contact my bank as i am worried my details have been passed on or sold to other scammers and write to this individual other than that I am not sure what to do

Date This Problem Happened: May 21, 2012

State You Live in: Cheshire, UK

Race/Ethnicity: Black or African American

Age Range: 36-50

Total Amount of Fee Paid: £49.99

Company Name: Greenleaf Finance

Company Address:

35 St Pauls Square
Birmingham
United Kingdom

Company Telephone Number:

Website of Company: greenleaffinance.co.uk

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

I Can’t Go Home Because of the Job Market? – Louise

Steve Rhode — Mon, 21 May 2012 17:06:54 +0000

From How to Get Out of Debt

“Hi Guy ,

you have no idea how lucky we are to have you help everyone in dire situations . I live in dubai I can not got back home at the moment beacuse of the job market back home . I had lost my job in Dunai in 2009 and suffered for one year with no income all my saving had gone I am a single parent I have credit card debt at the momenet from pendind debt . thankfully I have a job but i need to get rid of my debt is a 4 year loan the answer ? do not know what to do ?

Louise”

The Answer:

Dear Louise,

Did you mean to say you are in Dubai or in Dunai, Nepal?

What country are you living in now?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

How Can We Refinance Our Mortgage While I’m Unemployed? – Nicole

Steve Rhode — Mon, 21 May 2012 16:46:54 +0000

From How to Get Out of Debt

“Dear Steve,

Unfortunatly as I found out the HOPE program and all other programs will not modify your loan if you are currently on Unemployment benefits. What are options for people who are unemployed. I am working but my husband was laid off over 2 years ago. I have tried to modify my mortgage thru Citi Mortgage but they are just having me send in hardship packages. I have sent 6 so far and no one is ever assigned to my account the hardship “times out” for more information needed even thou no one has been assigned to account.

Is there anyone who will refinance someone who in on unemployment with an FHA loan? obviously my credit is shot now since we are behind in payments…… some time has passed since I posted they previous question on your site. I applied for the ELHP loan in August 2011 and did not get denied until January 2012 They denied because we owed to much money. well if they had reviewed my loan in august when I gave them all the pa perwork we would have not owed to much to be approved for the loan and now My husbands unemployment has now run out. We opended a small business in hopes to bring in enough money to be refinanced but that has not happend we are just making enough to survive. With my credit now ruined I don’t know what to do. I wont even be able to rent with bad credit.

I am consdering Filing Chapter 13 to try and save my home. I have applied for all the programs offered to me by citimortgage but have had no success. my mortgage is now higher than the value of the home I have received the letter stating that they are gong to foreclose. My income is not high enough to afford the mortgage so how can I negociate with them? Is a lawyer my best option at this point?

Nicole”

The Answer:

Dear Nicole,

First off, no lender is required to modify any mortgage. If you want to discuss your options you can always talk to a HUD Housing Counselor for free.

There is no doubt that the modification process is long and arduous. But from what you’ve shared there are a couple of really problematic issues.

The first is your new debt levels and your current income. Both factors certainly seem to make you a very high risk or simply excluded for a modification or a refinance. For a modification your debt to income ratio can not exceed a certain standard.

Let’s say you did file a chapter 13 bankruptcy to save the home. What then? In a chapter 13 bankruptcy you’d have to make at least your regular mortgage payment to stay in the home. The chapter 13 would address your other unsecured debt and potentially give you a repayment plan you can afford on top of the regular mortgage payment.

But at the end of that process you will still owe more on your home than it is worth. The chapter 13 bankruptcy will no alter that fact.

Your fears of being able to rent with bad credit are not exactly true. While you might not be able to rent from a major apartment complex, there are many private landlords that will rent to you.

This might just be the time for you to evaluate your entire situation and see if this isn’t the time to reorganize your entire financial life. You may not be able to afford the mortgage. But the underlying primary issue here is the income situation. Until you can resolve finding a job and bringing more income in, much of your recovery is going to be difficult.

One option may be to focus on finding a job, stop paying your debts, including potentially your mortgage. You need to be aware that this approach will land you in collections and may lead to the eventual foreclosure of your home.

However, once you find a job you could then consider handing the house back to the bank and a chapter 7 bankruptcy. This would give you a fresh start.

It’s an emotionally tough strategy and one you should discuss with a local bankruptcy attorney in detail before you embark on that path. You can click here to find a local bankruptcy attorney through the site.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I’m Being Sued for Private Student Loans After the Staute of Limitations

Steve Rhode — Mon, 21 May 2012 16:14:48 +0000

From How to Get Out of Debt

“Dear Steve,

I has several private student loans taken out in 2004-2005. I am being sued by collection agency representing the lender. The ny statute limitations is 6 years. They allege I admitted the debt on phone. I recently received a letter from collection agency to call them so we can work on a payment agreement and not have to go to court. I can’t afford a lawyer, I have no job or assets. I was already summons.

Should I settle or dispute the statue of limitations expired.”

The Answer:

It really depends if you want to hire a lawyer to fight this or you feel you actually did admit the debt on the phone and that would have extended the statute of limitations.

You could always let them sue you and try to defend yourself in court if you can’t afford a lawyer. This is probably the least attractive option.

If you think you can afford a payment plan, give them a call. But since you have no job or assets I’m not sure what kind of payment you can promise or afford. Can you afford any?

Do you have any other debt besides this one?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

American Web Loan – Consumer Complaint – 5-21-2012

Consumer — Mon, 21 May 2012 15:50:45 +0000

From How to Get Out of Debt

Consumer Statement:

A web site by American Web Loan, which is very misleading in not only how your payments are made but what they are actually applied too. This is the worse kind of scam and should never have been allowed! DO NOT APPLY!!!

I took a loan out from AmericanWebLoan, (I should also say, that I was continuosly offered loans from one company after the other when I appied), in truth, so many had popped up, I couldn’t make head or tails as to if any were ever processed. However, this one I had actually spent the most time with and after several web site lock up’s, setting up payments, a pop up screen show’s up, with the explaination that I needn’t do another thing, if I make all the payments it indicated 15 of them, that after that period, I’d be able to get a larger loan if I ever needed from them again as a way of saying thank you! So, I did nothing an allowed them to take those 15 payments bye-weekly. after such time, I contact them because they continued to take payments even after those 15. When I called customer service about it, they informed me that I hadn’t paid anything on the loan at all? $1800 was taken on a $1000 loan. I had the bank information to prove it, but they informed me that those payments where just thier fee’s and that I had to make above those payments to draw down on my loan? I informd them that nothing I filled or signed or clicked on indicated that at all, in fact, their we site leave everyone with the impression you need to nothing more when you set it up! The scam, is that is isn’t true at all, so, I called my bank and blocked any further payments being taken. To ensure they didn’t get around it, I also closed that particular bank account! Now they are sending me a law firm notice asking for an additional $1500 more. Indian or no, my answer to them and anyone else thinking of doing so, NO, “no more’ not now, not later, not ever!

Consumer Action Taken:

Tried showing the customer service rep my bank statements which indicated my payments, showed that the web site part that indicated I needn’t have done anything more, they gave me the impression, that they didn’t care, nor are bound by any laws or governess of these types of loans that OUR GOVERNMENT CAN’T prevent or stop! And then just laughed, well, the joke is on them, they will get nothing! DON’T FALL FOR THIS OR ANY WEB BASED LOANS

Date This Problem Happened: September 12, 2011

State You Live in: Florida

Race/Ethnicity:

Age Range: 51-65

Total Amount of Fee Paid:

Company Name: American Web Loan

Company Address:

Company Telephone Number:

Website of Company: americanwebloan.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

I Withdrew From College And Have No Intention of Paying The Old Bill But Want to Go Back

Consumer — Mon, 21 May 2012 15:47:56 +0000

From How to Get Out of Debt

Progressive Financial Service Invoice that was sent to my home to inquire about a repayment fee for my student loan.

I was not able to finish due to a lack of income and withdrew from college for a time. I was not able to go back immediately because of other obligations of a person matter, but now I feel as if I can be able to attend. But I cannot attend and have financial aid unless I find a way to repay a total amount of $9,201.17. I have no intention of paying this amount of money altogether. I spoke to a representative about my problem and agreed to put me on a payment plan of $100/month, but I support a family so that is hardly an option.

What would the best course of action be to repay this loan so I can get back in school?

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

The Seven Stages of Debt. Which Stage Are You In?

Steve Rhode — Mon, 21 May 2012 15:14:56 +0000

From How to Get Out of Debt

Many years ago I wrote my original Seven Stages of Debt, as modified from the Five Stages of Death and Dying by Dr. Elisabeth Kubler-Ross.

Both experiencing the emotional loss of a loved one and the emotional loss of your financial life are similar in some distinct ways. However, the emotional stages of debt also have two additional components that a mortal death does not. And these stages are almost magical as they can lead to a new and better life for you.

When I was going through my financial troubles I distinctly remember passing through all the stages below. And in helping thousands and thousands of people over the years to deal with their financial issues I’ve clearly witnessed them passing though these same stages as well.

But people don’t pass through these stages in necessarily an orderly fashion, they may jump back and forth but in the end the healthiest way to deal with any debt problem is to acknowledge each stage of debt and be aware of how you are emotionally feeling at the moment. It will help you to understand how your emotional state at the moment may be clouding your judgment about how to deal with your debt.

If you are living with financial problems right now I challenge you to identify what stage you are in right now.

The Seven Stages of Debt

Denial

Denial begins a long time before the financial problem rears its ugly head and gets in your face. Denial distorts reality like a street drug. It’s addictive. As an impartial observer, I’ve seen bad situations brewing time after time. But the person about to land in the sticky stuff often says the same thing, “It won’t happen to me.”

Whatever you are in denial about will wind up smacking you in the face like a cinder block on a rope. Even if you don’t know what that’s like from experience, I think you can imagine what kind of a mark it will leave.

Here are some things people have actually said to me while in the denial stage:

“I know I can’t pay my mortgage, but they won’t take my house.”
“I refuse to take my child out of private school just to pay my bills.”
“I didn’t know they’d sue me if I didn’t pay them back.”
“It’s not worth my time to get out of bed for a $12 an hour job.”
“How did I know a collector would call me? It’s not like anyone ever reads the fine print.”
“My creditors suck because they keep calling me for payments. I’ll pay them when I’m
good and ready.”

Yeah, I know they sound funny. But the people involved weren’t laughing, and I’m guessing you’re not laughing at your situation, either.

My role as the Get Out of Debt Guy is to get you through these initial stages as fast as possible and get you to where you want to be. Here’s all you need to know about denial.

If you think you’ve got money troubles, you do. Period.

Denial will just slow you up and, if you are having problems with money, time is your enemy. You have to take action as quickly as possible. The more time you spend in denial, the further you will circle down the bowl and, unless you can get past denial, you may actually go down the drain.

Anger

Anger is an emotional waste of time and energy in most situations, especially when it comes to money troubles. Remember what I said before? Your situation just is what it is. You can be angry all you want, but things will get better faster if you can turn that anger into a fire inside of you that creates intense motivation to properly deal with the underlying situation and take positive action to repair the situation.

Okay, so you want to get angry. Let’s get it out of the way.

Creditors — These are the folks you promised to repay when you took their money. You even signed terms and conditions that stated what would happen if you defaulted. You can be mad at your creditors all you want, but that’s not going to change the price of eggs in China, nor is it going to get you out of this mess.
Yourself — So you’re mad at yourself. At least that’s fair. After all, you’re the one that got you into this mess and probably through no fault of your own. So let’s have a quick pity party and then go for a walk and talk some sense into you. You think you’re a failure? So what? Everybody, I mean everybody, fails at some point in their lives at something. I certainly have. It’s part of life. Failures are great learning tools. They teach you what not to do. But unless you’ve developed a time machine, you aren’t going to be able to go back and change anything, so the best you can do is learn from the lesson and leave the anger in the past. If you screwed up, you screwed up. No need to beat yourself up over it. There’s no sense wasting a perfectly good mistake. Learn from it and let’s move forward.
Others — The “others” category is broad, vast and deep. “Others” falls into the same group as “Them” or “They.” There is no “They” and I still haven’t met “Them,” but they sure do get the blame for a lot of the world’s ills. If you are angry with others, stop it and forgive them. It’s not helping anything.
Yes, it’s possible that situations and experiences in your past led you to make some of the decisions that have gotten you where you are today. But no matter what those situations and experiences were, you always had a choice, every step of the way. Probably many choices. And for whatever reason you made the ones that got you here. Stop casting blame all around town. This is your life. At some point you’ve got to take responsibility and stop blaming others. Without personal responsibility, you’ve got no way to fix this so that you can get on with the life you always wanted.
External Events — There is no need to cast emotional blame on external events like a slow economy, accident, divorce, illness, relationship issues, etc. There is a never ending set of circumstances and events which can lead you to financial problems. Unless you can control them, sometimes you are just caught off guard. Life is just what it is.

Depression

There is no question that money troubles aren’t fun. They typically lead to some kind of loss and that makes us sad and/or depressed. The loss can be anything from cutting out the cleaning service to having to sell your home and moving to a cheaper area. There is no doubt that some of the things you might go through may be difficult, but rather than stew over them, let’s put them into perspective.

If you had your choice of either dealing with what you are going through right now or getting poked in the eye with a sharp stick, which would you do? It’s a no-brainer, right?

I remember one day, I was talking with a lady who was paralyzed with inaction, even though her mortgage company was about to foreclose on her home. She was so bitter about the situation, she was blaming a cast of characters and refused to see a way out. In fact, she had waited so long that it was pretty darn likely that her house was going to be sold at auction that week. She said that foreclosure was the worst thing to happen to her. I asked her, if she had a choice, would she rather lose her home to foreclosure or be set on fire? She laughed. That put it into perspective for her.

The lesson to be learned here is that no matter how bad the situation feels, it can always be worse. Even when it’s bad, there are still things to be thankful for. Try as hard as you can to look up and find the rainbow rather than stare down the well. That’s not just some “New Age” nonsense. Medical studies have shown that people who think positively live longer, have fewer health problems, experience less stress and, consequently, get the things done that they need to get done.

It may be hard to believe sometimes, but mood is a choice, just like most other things in life. Don’t believe me? Try this exercise. What kind of mood are you in right now? If you are feeling pretty good, think about the worst thing that ever happened to you. Close your eyes and put yourself back into that situation and live through it again in your mind. I bet that brought you down pretty quickly. Now try the reverse. If you are feeling down, angry or depressed, think about some of the good things in your life. Maybe you have a wonderful wife or husband. Perhaps you have great kids. Everyone has things to feel thankful for, even if it’s just the fact that you’re not on fire right now. Again, close your eyes and focus on those good things. If any bad thoughts creep in, push them out of your mind and go back to the good stuff. If necessary, pretend that you’re happy. Laugh out loud. Jump up and sing your favorite song at the top of your voice. Do whatever you would do if you were in a great mood. If you give this an honest try, you’ll find that pretty soon you start to feel better. Everyone feels down from time to time, but with practice, you can take control of your emotions and not let those down times run your life. Besides, as long as you think only sad thoughts, you’re going to be sad.

For some depression is rooted in an out of balance brain chemistry. No matter how hard you try to lift yourself up you may just need to talk to a psychiatrist or or doctor about medications to help you slip the cycle of depression. I’ve watch the miracle of recovery from depression in ones I love after they worked with a medical professional and were prescribed specific medications. It took a while to tune the dosage but the results were lifesaving for them.

Here is the easiest advice to give but the hardest advice to follow: Suck it up or take action and get medical help and let’s move on toward a solution. Bad things happen to good people. Life is unfair and sometimes cruel. It is what it is. Heard that before?

Bargaining

Typically, this is the stage when your higher power is brought into the mix.

“God, I promise I’ll make all the rest of the payments on time if you can help me get out of this jam.”
“God, if you can just bring my credit card payment current somehow, I promise I’ll go to church every Sunday/be nice to my kids/work really hard for the rest of my life/never buy a $500 pair of shoes again.”

I know all about this stage. In 1990, I filed bankruptcy. It was not the happiest time of my life, but out of that mess came my passion for helping other people find solutions to their financial problems.

When I was going through my troubles I searched all around and couldn’t find the kind of help I needed. Sure, there were a lot of companies out there who said they could help with debt, but all they do is collect your money and distribute it to your creditors. That might help a few people who just don’t have the discipline to make their payments on time, but if you’re in a real financial jam, like I was, you need a lot more advice and assistance. Unfortunately, it just wasn’t out there.

I now help many people through GetOutOfDebt.org to get their financial lives back on track by providing free help and advice. Strange how life works. My biggest failure turned into my greatest success. I would not be able to help as effectively unless I had lived through that situation.

You can bargain with your God (or the Devil) all you want, but you might as well go outside and look for a four-leaf clover or throw some coins in a fountain. Bargaining is nothing more than wishing and wishing is okay, so long as it’s not your only plan.

Bargaining also sets you up for trouble if you bargain the wrong way with debt collectors or creditors. Some people make bargains to resolve their debt by promising payments they can’t make. They feel if they tell them what they want to hear it will make everything better. It won’t. The first time miss a payment all bets and deals are off or you make a big payment thinking the balance of your debt will be eliminated. And speaking of deals, if you are bargaining with your creditors or debt collectors, get it in writing. If you don’t, any bargain they made with you is worthless and trust me, I’ve seen too many examples of creditors or collectors that later deny they made any such bargain.

Acceptance

You made it. Congratulations. I’ve been waiting for you. This is my favorite stage, even though the next two are where you start putting the pieces back together. I love the acceptance stage. It is so full of peace and leads people down the right path. Until now, you’ve been like a long-distance runner going round and round in circles, lost. Once you reach acceptance, you are turned in the right direction and now, instead of being tired and going nowhere, every step you take is in the right direction toward your new life, whatever that may be.

Once people reach acceptance, they know that what I said before is a fundamental law: Life just is what it is.

If you got your hours cut and you are not bringing home what you used to, it just is what it is.

If you bought a home that was too expensive and now you are struggling to afford the payment, it just is what it is.

If you’ve been unconsciously feasting at the all-you-can-eat buffet of debt for the past few years and now it’s caught up with you, guess what? It just is what it is.

Once you reach the acceptance stage, you are like a fertile field ready for me to sow the seeds of your brighter future. Up until this stage you are going to deal with some uncomfortable moments. Life just isn’t going to be much fun. It will be cloudy and uncertain. But when you reach acceptance, the clouds will part and a new day will dawn.

Acceptance does not mean that you aren’t going to suffer loss or pain. In fact, you probably will. But the good news is that if you can see your situation with clarity, you will understand that whatever loss you are going to experience will be temporary. Don’t let loss bury your hope for a better future.

Although I’ve talked a lot about what you may have to give up right now, it doesn’t mean that you’re going to have to live hard the rest of your life living off beans and water. It’s like being sent to your room. As much as I hated it as a kid, it passed, and I was soon outside place and each day is a step closer to a repaired and better life, if you let it happen.

The acceptance stage is the point where you can make the best decisions about how to deal with your debt. You can be clear of thought and inquisitive about what path may be best for you. It’s at this time that you may want to investigate credit counseling, debt settlement and even click here to talk to a local bankruptcy attorney to become better informed about solutions that may or may not be appropriate.

You should also read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Resurrection

Some time will pass after you take action and seek a way to intervene in your financial troubles, but slowly you will notice that you are starting to rebuild your financial life. You can even resurrect your good credit rating by following this guide.

If you are careful, you will be able to start saving money and buy a few luxuries again. It’s OK. If you lost your last home to foreclosure, you’ll be able to buy another. If your last car was repossessed, after you take care of that situation, you’ll be able to get another. (After my bankruptcy I drove a $500 used Postal jeep until I could save enough money to buy a better vehicle. That jeep was an accident waiting to happen. I held my breath every time I turned a sharp corner, praying the darn death trap wouldn’t overturn!)

Gradually, you will start to see that what I’m telling you is absolutely true. Now, you might not have as much stuff as you used to – you might not have the three-car garage and beautiful home on ten acres – but you’ll have what life wants you to have and you’ll find greater joy in it.

This stage is just like coming back from the dead. Your financial life was pronounced DOA, but now – “CLEAR!” – you’ve zapped it with a defibrillator and there’s a pulse again. Sure, it may be a faint pulse to begin with, but its regular and getting stronger every day. Let’s learn from whatever mistakes we made and move forward — smarter and sharper.

Rebirth

Your life will have changed noticeably once you reach this stage. The experience of surviving your financial problems will have made you a stronger person; a different person; a better person.

I firmly believe you can lead multiple lives within the one that exists between the time you were born and the time you die. We grow, evolve, learn and change. We grow apart, grow together and just plain grow old. Your life can be so much more than the struggles you are going through right now. You didn’t get into debt overnight and it’s probably going to take some time to be reborn, but trust me, you’ll be a better person for it, if you want to be.

The past does not have to predict the future. You don’t have to be saddled with your old mistakes. Others might not, but guess what? It’s as simple as being forgiven. I forgive you. Life just is what it is. If you need a hug, I’ll gladly give you one.

What others might not see, or reward you for, is that when you were faced with your money troubles, you did everything you could, gave it your best shot and survived. That’s pretty darn amazing. You will truly be a silent hero. But I’ve got a special place for you in my heart and, if you send me your picture and story of survival, I’ll frame it and hang it in my Debt Survivors Hall of Fame.

@GetOutOfDebtGuy

Universal Fidelity – Consumer Complaint – 5-21-2012

Consumer — Mon, 21 May 2012 15:10:14 +0000

From How to Get Out of Debt

Consumer Statement:

I received a letter from “Universal Fidelity LP” saying that I owe “Hollywood Video / Movie Gallery” $42.90 for late fees from back in 2009. This is not true.

Consumer Action Taken:

There was something about the letter that did not seem right, so I decided to check it out on the web. That was when I saw all the complaints about the company. I did not try to contact them, but I feel that they should be stopped.

Date This Problem Happened: May 16, 2012

State You Live in: Colorado

Race/Ethnicity: White

Age Range: 36-50

Total Amount of Fee Paid:

Company Name: Universal Fidelity

Company Address:

P.O. Box 941911
Houston, Texas 77094-8911

Company Telephone Number: 281-647-4156

Website of Company: payuflp.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

My Sallie Mae Loan Was Discharged in My Bankruptcy But They Still Are Trying to Collect

Steve Rhode — Mon, 21 May 2012 15:03:07 +0000

From How to Get Out of Debt

“Dear Steve,

I signed as co-signer for a Sallie Mae student loan for a friend back in about 2003 and in shortly after that about 2005 never had further contact with this person. Later found out that they defaulted in their loan, so Sallie Mae started sending me collection letters. In Nov. 2007 I filed for personal BK 13 in the state of Georgia Atlanta and included them in the BK. In Feb 2008 my BK 13 was discharged showing clearly that Sallie Mae loan was included on my discharge papers. I was told since I was a co-signer it was accepted in my BK.

Now May 2012 I get called from Sallie Mae that they are aware of BK and it will not hold up and that since they can not get paid by other person they where going to start garnishing my wages. My questions is are they able to do this even having discharge papers showing them clearly on it from the courts of Atlanta, Ga. I am self employed how would they be able to garnish my wages.”

The Answer:

It is unlikely that the Sallie Mae loan was discharged in bankruptcy even though it was included. Since it may not have been eligible at the time it was included in your chapter 13 bankruptcy the regular payment to Sallie Mae was probably made as part of the chapter 13 bankruptcy. At the end of your bankruptcy you would have resumed your liability for the Sallie Mae debt and that’s what they are coming after you for now. This previous court case seems to speak to some of the issues about including a Sallie Mae loan in a chapter 13 bankruptcy.

At least this is what I’m supposing from the information you gave.

If you have any specific questions about your previous chapter 13 bankruptcy and this Sallie Mae debt I urge you to call your previous bankruptcy attorney and discuss it with them. They will be able to talk in specifics, rather than guessing.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

American Web Loan – White Hills Cash – Vandelier Group – Consumer Complaint – 5-21-2012

Consumer — Mon, 21 May 2012 14:47:20 +0000

From How to Get Out of Debt

Consumer Statement:

i applied online to get a loan back in 2011 but never signed anything saying i agreed to accept the loan i actually told them i didnt want the loan after all and they told me its too late we already deposit the funds into your account. How can they just deposit it into my bank account without my consent. Since this has happened it really put me in a bigger debt and it is not right at all and its not right that they have the right fto sell my info to other loan companies and scammers trying to act like lawyers which they arent first of all. So after investigating these companies found out they they were scammers and not real loan companies. Well lets say a lesson learn and found out that these wanna be loan companies are scamming people and getting all their info and then having other peopl call to harrass and threaten people like me. i ask these wanna be loan companies to not call my work and they dont listen. I filed a complaint with the FTC and other legit companies about this scam. My account was closed by my bank cuz of all these loan companies putting me in a bigger debt when i only applied for 1 loan and not 3. I never signed anything they just got my bank info and they did the rest on their own without any of my consent. Ive never got anything from these wanna be loan compaines. They never emailed me or never sent me anything by mail only they called me by ph. They told me that if i dont pay them back that they will sell my info to others and we will make your life hell. Well guess what they have made my life a living hell and i told them well i never wanted these loans and that you cant do that. they laughed and said well we did…. i knew that something wasnt right and i knew by what they said was a lesson learn on my behalf and later they did sell my info to scammer calling me from 1-888-876-0901 and 1-888-826-0901 saying that they are going to come to my house and my work and arrest me saying i made fr audulent check charges when i never did that cause i dont have checks on a debit card. All these people that call and harrass me at work and on my cell is trying to rip me off even more. I wont give them any info of me that they call to request. Also 1-877-636-1353 has been calling me and threatening me and harrassing me at my work and on my cell after i told them to not call my work. they dont listen and they sit here and tell my work everything and make me be the bad person when im not. what can be done. because the loans that got me is American Web Loan and White Hills Cash And Vandelier Group LLc. They are all online loan scammers and they stoled my indentity and my ss# and my bank info and my job info. not cool at all…. something needs to be done….

Consumer Action Taken:

i called them and told them that they already took out more than what they were suppose to take out and what i was to pay back and they keep harrassing me and threatening me telling me that i still owe. oh okay thats why i am in a whole with my bank account cause of them taking and taking and taking money out of my account. They would take money from my account everyday and i got hit with alot of overdrafts fees due to these people taking money out of my account when they had no right in the first place. Since i found out bout the whole scamming thing i ignore them cause i found out that they are not real companies. and now they are charging me big time fees…. not right at all…. these people should be punished for harrassing and threatening and calling my work when asked not to…. Thank you!

Date This Problem Happened: May 11, 2012

State You Live in: California

Race/Ethnicity: White

Age Range: 21-35

Total Amount of Fee Paid: $1,500

Company Name: American Web Loan – White Hills Cash – Vandelier Group

Company Address:

Company Telephone Number: 877-636-1353

Website of Company: americanwebloan.com

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

I Have a Lien on My Property I Didn’t Know About From a Credit Card Company

Consumer — Mon, 21 May 2012 14:44:02 +0000

From How to Get Out of Debt

I was trying to do a refinance of my mortgage when i was told there was a lean on my proptery from Assest Mangement. After a bunch of different phone calles i was told that this was due to a credit card bill from 2003. I was never informed of a hearing, nor do i have any knowledge of the credit card or the bill and tried to explain that to the company. I have no idea what to do where to go or even where to start with this issue. Any suggestions?

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

I Have Fraudulent Charges on My GE Money Mervyns Card and Now I’m In Collections. – Diana

Consumer — Mon, 21 May 2012 14:41:57 +0000

From How to Get Out of Debt

I had a store credit card through GE Money for Mervyns. At the time, I lived in a apartment complex where the post man kept putting some of my bills in the wrong boxes, causing late bill payments.

Well, with this specific company, I had the card for close to two years and had paid it off when I got married.

Next thing I know, I call them up to close my account since I didn’t use the card for 6 months and got tired of not receiving statements. The rep said I would receive all the statements in the mail in 1-2 weeks. The statements came, and I owed about $500 on a card that I had paid off! Of course I called and disputed it with GE Money!

The charges were done not long after I had made my last payment on the card and for over $200 each! I rarely spent $50 when I went to the store so you can only imagine my suprise and frustration that not only was I not called about two, back to back charges in just two days, but that they didn’ t call when I didn’t pay my bill – FOR 6 MONTHS!!! When I called to dispute the charges, they send me their proof – a itemized list that showed ISBN numbers and a digital signature – saying that I paid for the items listed with my card and owed them money.

After repeated phone calls from me to them, trying to clear this up, I got sent to collections where now, my total charges to date to be paid off are $866. I am at a loss of how to handle this! Between late fees, the two fraudulent charges, and the collection agency’s fees, my account balance went from $0 to $866! How should I handle this? I am disabled and unable to work and I have two children now to think of!

How should I handle this? I am disabled and unable to work and I have two children now to think of!

Diana

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

We’ve Borrowed From Life Insurance and Profit Sharing and Still Underwater. – Julie

Consumer — Mon, 21 May 2012 14:36:26 +0000

From How to Get Out of Debt

Three years ago, my husband lost his job. He spent about 8 months on unemployment at which point a friend of his offered to train him in the field of Medical Recruiting. He was led to believe it would be easy money and one placement would equal 2 months salary or more in other fields. Catch was, it was 100% commission. He decided to go for it. He was in recruiting prior so how hard could it be? Well, then the Obama Care was passed and the medical field stopped hiring or using recruiters to help with hiring. Great, this happened just as my husband finished his training…he fought to try and get placements but no dice. So, back onto unemployment.

Back to looking for a job in a terrible recession. He was unemployed for 2 years. My salary and our savings barely got us through. We now have ZERO savings. Literally closed our account. We have had to use credit cards to start paying for things. The bills and debt are more than we can handle. We ha ve tried to refinance our mortgage time and time again with no luck. Because he has not been at his job a full 2 years, all the numbers are based on myself, alone, and our debt to income ratio is too high by about $20,000. Fast forward, he is now working but again 100% commission and he is just starting out so he does not have much business yet which means no income. Our mortgage is upside down. Credit is just about maxed out. We have already borrowed from our life insurance policies and my profit sharing. I am now just about to go down the drain. I am faced with the fact that I will not be able to pay our bills for the first time EVER. I don’t know what direction to go in. Where to go to get help. My mortgage broker has told me if I could find a way to get a personal loan of $20,000. that would not go on my credit report, put that towards the credit cards in my name, she could get us refinanced.

Please help or advise…we are feeling very alone and vulnerable and not sure what to do anymore. We have hit bottom.

Your Question(s)
1) What would you suggest?

2) Are there any investors that would possibly do a p2p loan for us to cover credit card debt so we can qualify to refinance our home?

3) Are there personal loans available that will not appear on my credit?

Please help…Thank you.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

Should I File for Bankruptcy?

Steve Rhode — Mon, 21 May 2012 03:17:35 +0000

From How to Get Out of Debt

Many people are all mixed up when it comes to figuring out the tough question, “Should I File for Bankruptcy?” Right off the bat I can give you a definitive answer, “Maybe.”

Bankruptcy is a legal process that is available to consumers that are suffering under the weight of problem debt. The law affords consumers a periodic right to establish an affordable repayment plan or completely discharge their debt. This isn’t some made up process that your creditors can laugh off. This is a process with the power of law behind it that your creditors can’t ignore.

This process gives people a legal fresh start and a financial second chance when there is no other reasonable expectation they can break out of the pit the are in.

Bankruptcy should be strongly considered if you don’t see any way out of your situation without an intervention to lower or eliminate your monthly payment. It should also be considered if you want to stop collection calls, stop debt collection lawsuits from advancing or you want to remove wage garnishments.

If you strip away the emotional baggage that comes with considering bankruptcy and look at it as the legal tool that it is, then there are many reasons to consider filing for bankruptcy.

Say for example you have fallen behind on your car payments or mortgage and you want to stop a repossession or foreclosure. In that case bankruptcy can stop those actions and it can help you to get back on track with your obligations if you can afford the regular monthly payment plus some to get caught up.

Let’s say that through no fault of your own you have fallen behind in debt and just can’t dig your way out and you have little equity in your home or car. In that case you may be able to file a chapter 7 bankruptcy, keep your home and car, and legally discharge your debt on your unsecured credit in just a few months.

Free Bankruptcy Resources

Click Here to Find a Caring, Compassionate and Kind Bankruptcy Attorney in Your Area

Easily Rebuild Your Credit After Bankruptcy
The Truth About Bankruptcy Success Rates
How to Get Out of Debt Calculator
How Long After Bankruptcy Can I Buy a House?
Is Bankruptcy Sinful and Bad or Right and Moral? An Examination
How to Get Out of Debt. The Honest and Unvarnished Truth
The Emotional Seven Stages of Debt
Getting a Job After Bankruptcy

Considering if You Should File for Bankruptcy

The reality is that only by speaking with a local bankruptcy attorney will you have an informed and educated review of what bankruptcy would mean for you. Without speaking to an attorney you are only guessing and listening to supposition and conjecture. Even I can’t tell you to absolutely file bankruptcy. Only a licensed bankruptcy attorney can help you get the facts.

Many other debt relief providers will scare you and tell you to avoid bankruptcy. Why? Because they want to frighten you away from bankruptcy so they can sell you their debt relief product instead. Sad, but true.

It is my experience, those consumers that embrace the bankruptcy process and review it in a logical and reasonable fashion, find that if they are good candidates for chapter 7 bankruptcy they can deal with their debt quickly, rebuild their credit quickly, and be recover faster than though other solutions.

Bankruptcy does have some consequences. It may initially lower your credit score. But then again it may raise your credit score as well. Every situation is different. Bankruptcy will appear on your credit report for seven to ten years, depending on what type of bankruptcy you file. But then again a debt settlement approach where you default on your debts will appear for seven years.

So you see there is no one hard and fast answer until you do some legwork and talk to a bankruptcy attorney. You can click here to talk to a licensed bankruptcy attorney in your area. They will give you a free consultation and there is no obligation.

@GetOutOfDebtGuy

Mortgage Modification Company Former Owner Facing 80 years in Jail

Steve Rhode — Fri, 18 May 2012 21:00:09 +0000

From How to Get Out of Debt

Isaak Khafizov, a former owner of American Home Recovery (AHR), a mortgage loan modification business, was found guilty yesterday in Manhattan federal court of conspiracy, mail fraud, and wire fraud in connection with a scheme to defraud distressed homeowners and lenders. Khafizov was convicted after a ten-day jury trial presided over by U.S. District Judge George B. Daniels. He was remanded into the custody of the U.S. Marshals following his conviction.

“At the height of our nation’s financial and housing crisis, Khafizov and his conspirators defrauded homeowners desperate to save their homes,” said Christy Romero, Special Inspector General at SIGTARP. “Khafizov exploited the government’s response to the financial crisis by touting his operation’s purported affiliation with federal programs. He and his conspirators used the false comfort in those reassurances to dupe hundreds of victims out of hundreds of thousands of dollars while some victims fell into foreclosure and personal bankruptcy. Those exploiting TARP and the federal government’s response to the financial crisis will be brought to justice by SIGTARP and our partners in law enforcement.”

Manhattan U.S. Attorney Preet Bharara said: “Isaak Khafizov dangled false promises of relief to distressed homeowners who were trying to keep their homes, but instead, he repeatedly victimized them by stealing their money and forcing many of them into foreclosure. He will now face justice for the fraud that he committed against vulnerable and needy homeowners all over the country.”

According to the Superseding Indictment filed in Manhattan federal court, other court documents, and statements made during court proceedings:

In or about the spring of 2008, Isaak Khafizov, Jaime Cassuto and David Cassuto, founded American Home Recovery (AHR), a mortgage modification business that operated in Manhattan. As shown at trial, from the spring of 2008 through the summer of 2009, Khafizov used AHR to commit a systematic fraud that preyed on distressed homeowners. Khafizov and AHR’s salespeople fraudulently induced distressed homeowners all over the United States to pay AHR thousands of dollars in up-front fees, by falsely promising the homeowners that: (1) AHR could get them better interest rates and lower monthly fees, all within a short timeframe; (2) AHR would return the up-front fees if it did not succeed in getting the homeowners the mortgage modifications they desired; (3) the homeowners had been “pre-approved” for mortgage modifications by their lenders; (4) AHR was affiliated with government agencies and programs established by the Economic Stimulus Act of 2008; (5) AHR possessed special expertise in mortgage modifications, and (6) AHR had special relationships with lenders. After receiving up-front fees from the distressed homeowners, Khafizov and AHR did little or no work to try to renegotiate the homeowners’ mortgages. And on those rare occasions when Khafizov succeeded in getting a homeowner a mortgage modification, he typically did so by coaching the homeowner to lie about his or her income and assets on forms submitted to the mortgage-lender.

Because Khafizov and AHR did not do the work they had promised and because Khafizov specifically directed the distressed homeowners to stop paying their mortgages and to pay AHR its fees instead, many of AHR’s clients wound up in foreclosure. All told, Khafizov and AHR defrauded hundreds of customers across the country out of hundreds of thousands of dollars in fees.

Khafizov, 25 of Queens, New York, was convicted of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud. He faces a total maximum sentence of 80 years in prison and is due to be sentenced by Judge Daniels on September 6, 2012. Jaime Cassuto and David Cassuto each pled guilty to multiple counts of fraud on April 2, 2012. – Source

Women and Financial Insecurity

Gary Foreman — Fri, 18 May 2012 20:52:57 +0000

From How to Get Out of Debt

A recent article in the online version of the Wall Street Journal caught my attention. It was called “Clients From Venus.” Source

It began by pointing out that women are becoming increasingly involved in personal finance. “Women control $8 trillion in assets in the U.S., and by 2020 are expected to control $22 trillion, according to TD Ameritrade Institutional, a division of TD Ameritrade Inc.”

Naturally the financial services industry is trying to figure out how to capture their share of this market. And as part of that attempt they’ll study women to try to find out what works for them.

The same WSJ article provides an interesting glimpse on how women relate to money and personal finance. “A 2010 Boston Consulting Group study found that women globally identified financial services as the industry they are most dissatisfied with on a service and product level. Those surveyed said the industry doesn’t understand that women view money and wealth differently from men. For example, women don’t seek to accumulate money, the study reported, but see it as a way to care for their families, improve their lives and find security.”

As someone who has worked in the area of personal finance for decades I can verify that women do look at money differently than men. And that there are some tools that can make it easier for women to manage their financial affairs. So let’s look at some of those tools.

Begin by selecting your goals. For most of us this is easy. Providing for our ongoing monthly needs. Saving for a vacation, car, house or baby. Saving for a college education. Saving for retirement. Some are short-term. Others may be decades away.

But, they all have something in common. You can estimate how much money you’ll need and when you’ll need it. So you have a goal and you know how much time you have to achieve it.

There are a wide variety of online calculators to help you figure out how much money you’ll need and how much you’ll have to save to get there. Some of my favorites come from Bankrate.com/dls. They’ve been an unbiased research source for decades.

Why is it important to start with goals? Let’s state up front that not all women are the same. But, for many the study is right. Finances are about security. That means that the recognition of goals is especially important for them. Picturing their baby getting a diploma is the kind of motivation that will cause them to take the necessary steps to make it happen.

Working as a financial planner back in the 1980s I noticed that on average women weren’t much interested in the beating the market or having water cooler bragging rights for their latest stock pick. What women wanted was evidence that they and their families were financially secure (or at least becoming financially secure).

That meant that their investment style was different from men. Guys were much more willing to be aggressive. More willing to take risks if the possible rewards were big enough.

Women were much more likely to choose a slow but steady path. They were happy playing tortoise to the men’s hare. In fact, more than once I heard a wife suggest her husband’s investment ideas were ‘hare brained’!

As a financial planner I was always more comfortable with the ladies’ approach. There are fewer surprises and disappointments on the slow but sure road. To that extent I often encouraged them to use a strategy that’s commonly known as ‘asset allocation management.’ When used with mutual funds it becomes a two layer diversification strategy.

The concept of diversification is important to successful wealth accumulation. Diversification is a way of saying that all your investments are not the same. They’re diverse or different. The fact that they’re different is the key. Because they’re different they won’t go up or down together.

If you were a stock investor you might own ten different stocks. If one stock ran into trouble, the other nine would cushion the loss. One way to easily achieve diversification among stocks is to invest in a mutual fund that holds many stocks. So-called index funds are an excellent example.

Now while a fund protects you from one stock performing badly, what heppens when the whole stock market collapses? Something that we’ve seen twice in the last 15 years. In that case a stock mutual fund would drop.

That’s where the second level of diversification comes in. The asset allocation model. Different types of investments respond differently to changes in the economy. For instance, inflation is bad for cash and bonds. But it’s good for hard assets like real estate and metals.

By diversifying your investments in surprises. An example was the stock financial planner. Asset allocation year. While one type of mutual fund loss.

We don’t have space here to get into how to allocate between different asset classes. The Securities and Exchange Commission (SEC) has a pretty good explanation here.

You’ll want to adjust your allocation as your age and goals change. Economic different types you protect yourself from market crash of 1987. At the time I was a protected clients throughout that turbulent went down, another went up to offset the situations can also be a reason to tweak the allocation.

The approach is cautious, but one that works well. Especially over a number of years and in uncertain economic times.

Bottom line? Part of sound personal finance is understanding how you relate to money. And then tailoring a plan that works with your personality and the uncertainties of the world we live in.

Gary Foreman is a former financial planner with over 30 years experience in getting value for a dollar. He currently writes on personal finance and edits The Dollar Stretcher website. You can follow Gary on Twitter.

Precision Law Center – Consumer Complaint – 5-18-2012

Consumer — Fri, 18 May 2012 20:42:55 +0000

From How to Get Out of Debt

Consumer Statement:

We sent Precsion Law $4500.00 in Aug. 2011. We were joining a mass gender suit. We haven’t heard from them and my many calls to them have failed. I’m a 100% disabled marine corps veteran and my home is set up for my wheelchair with ramps and etc..I don’t know what to do.

Consumer Action Taken:

I’ve called many times to no avail. Thanks so much for any help or suggestion.

Date This Problem Happened: August 15, 2011

State You Live in: Colorado

Race/Ethnicity: White

Age Range: 66+

Total Amount of Fee Paid: $4,500

Company Name: Precision Law Center

Company Address:

6 Hutton Center Dr.
Suite 600
South Coast Metro, California 92707

Company Telephone Number: 800-813-5958

Website of Company: precisionlawcenter.com

Notice From precision Law Center Court Receiver

After a hearing on March 21, 2012, the Court entered a Preliminary Injunction as to Precision Law Center, LLC and Precision Law Center, Inc. Click here to read a copy of the Preliminary Injunction. Defendants Sameer Lakhany, The Credit Shop, LLC, Fidelity Legal Services, LLC, and Titanium Realty, Inc. had previously stipulated to a Preliminary Injunction on March 19, 2012. These Preliminary Injunctions continue the asset freeze and make the appointment of a Receiver permanent.

Operations at Precision Law Center and MyHomeSupport.org are still suspended after the Receiver’s conclusion, set forth in the Preliminary Report filed March 19, 2012, that these businesses could not be operated lawfully and profitably going forward.

Notice to Clients of Precision Law Center. All “mass joinder” lawsuits filed by Precision Law Center had been dismissed prior to the appointment of the Receiver. There are no pending cases. If you need immediate mortgage relief, we suggest that you contact your lender directly, contact a government-sponsored loan modification provider such as www.HopeNow.com, or contact a competent attorney with expertise in mortgage relief. If you have specific questions, please send them to info@precisionlawreceiver.com.

Notice to Clients of MyHomeSupport.org. MyHomeSupport.org cannot assist you in your loan modification efforts. You should contact your lender directly, contact a government-sponsored loan modification provider such as www.HopeNow.com, or contact a competent attorney with expertise in mortgage relief. If you have specific questions, please send them to info@precisionlawreceiver.com. – Source

If you feel you’ve been financially hurt by a debt relief company and deserve a refund, read these step-by-step instructions on how to proceed to attempt to get your money back.

If you do get your money back, come back and leave a comment about it. I’d love to praise companies that step-up and do the right thing for people.

Scam reports are submitted by consumers like you. If you would like to file a scam report, please click here.

If you are the company named in this report and you want to respond, please read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose

Getting a Job or Finding a Job After Bankruptcy

Steve Rhode — Fri, 18 May 2012 20:33:50 +0000

From How to Get Out of Debt

A common conern I hear from time-to-time is if someone goes bankrupt will they be able to find a job or get a job. The answer will surprise you.

According to Christine Saah Nazer, of the U.S. Equal Employment Opportunity Commission, “The use of credit histories in employment can have a disparate impact on a range of people, including people of color, women and people with disabilities. Many experts say that credit history is a poor predictor of job performance, and that credit reports are often filled with errors, and thus aren’t reliable sources of information about an employee’s financial history.”

And she’s right, there is no correlation between credit reports and job performance. In fact if we look at how employers report they use credit reports the results are not as daunting as people fear.

But Let’s Look at the Facts About Finding a Job After Bankruptcy

A survey of employers found that 85% of the time they looked to make sure the candidate was a good fit and that was the most important employment factor. And 82% of the time they wanted to make sure the person had previous work experience that related to the open job.

Only 9% of the time did employers look to make sure the applicant had good credit or used theta as the sole hiring decision.

When something did appear on a credit report, like bankruptcy, 87% of employers said it was not a factor or they would ask about the circumstances that led up to the bankruptcy so they could understand what happened.

If you’re contemplating filing bankruptcy and want to know more about how it might impact your ability to get a job, just click here and talk to a local bankruptcy attorney and get the facts. The consultation with the bankruptcy attorney is free.

As you can see, the common misconception is that bankruptcy will prevent you from getting a job all together, and that’s just not true. Your credit is a lesser factor than you might think and you are better off getting comfortable explaining what happened and let any future employer know why you found yourself in that situation. They will most likely understand.

@GetOutOfDebtGuy

IRS Yanks Nonprofit Status of Credit Counseling Agencies

Steve Rhode — Fri, 18 May 2012 18:59:40 +0000

From How to Get Out of Debt

The IRS has just posted a public update on the nonprofit credit counseling agencies that have recently lost their 501(c)3 tax status from the IRS.

The companies named lost their nonprofit status in April and early May, 2012. They include:

Budget Right Debt Management, Inc. Lake Mary, FL 4/9/12
Budget Right Debt Management, Inc. Maitland, FL 4/9/12
Consumer Advocacy Group, Inc. Beverly Hills, CA 4/16/12
CreditGuard of America, Inc. Boca Raton, FL 4/16/12
A Family Budget Counseling, Inc. Huntington City, NY 4/30/12
Freedom Debt Management, Inc. Boca Raton, FL 5/7/12

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Credit Reports, Credit History, and Credit Scores in Hiring and Job Performance. Is It Even Fair?

Steve Rhode — Fri, 18 May 2012 13:55:35 +0000

From How to Get Out of Debt

You hear all the time how credit history can impact your ability to get a job. In the debt relief world debt settlement and credit counseling companies claim bankruptcy prevents people from getting jobs and that’s why people need to use their services instead. But what is reality and what is the negative impact of alternative interventions like debt settlement in hiring decisions as well?

First we must look at the use of credit reports in hiring. Let’s start with the elephant in the room — There is no proof or evidence that there is any relationship or correlation between job performance and past credit history.

In 2010 the credit reporting bureau TransUnion allegedly made just such an admission at a hearing in Oregon, “… we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.” – Source

At a trade show once I asked a credit bureau executive why they pushed credit reports to employers as part of the job application process, his response was that it helped them to sell more credit reports. If that’s the only reason, that’s unfortunate for job seekers.

The use of credit history is receiving some attention and should get a lot more. The State of Illinois has even passed a law that makes job discrimination based on credit history, illegal.

According to a 2010 poll by the Society for Human Resource Management, 60 percent of surveyed employers conducted credit checks for some or all candidates as part of the hiring process but as you’ll learn the credit history is only a small part of the decision process to employ someone.

But do credit scores even make sense as a tool for exclusion for a job? Not so says a Louisiana State University research study.

Jeremy Bernerth, assistant professor in LSU’s E. J. Ourso College of Business Rucks Department of Management said their study of credit scores found that, “easy-going individuals actually have worse credit scores than disagreeable and rude individuals.”

However, contrary to what many employers consider common knowledge and practice, the researchers found no correlation between poor credit scores and bad behavior on the job.

“It was telling that poor credit scores were not correlated to theft and other deviant types of work behaviors,” said Bernerth. “Most companies attempt to justify the use of credit scores because they think such employees will end up stealing, but our research suggests that might not be the case.”

It appears this widespread practice of employers pulling credit histories can lead to discriminatory practices against otherwise qualified and preferred candidates for jobs.

One such case was brought by the Equal Employment Opportunity Commission (EEOC) against Kaplan Higher Education, Inc. In that ongoing 2010 complaint the EEOC alleged: “Since at least January, 2008 , Defendant has subjected a class of aggrieved Black job applicants and incumbents throughout the United States to an ongoing pattern or practice of discriminatory failure to hire such persons because of their race, Black, in violation of Title VII. In this regard, Defendant has used, and continues to use, a selection criterion for hiring and discharge, namely, credit history information, that has had, and continues to have, a significant disparate impact on Black job applicants and incumbents, is not job-related and consistent with business necessity, and for which there are appropriate, less-discriminatory alternative selection procedures.” – Source

It is logical that some groups of employees may be more susceptible to credit report problems and that could create a pattern of racial or gender discrimination.

In a unique irony, Kaplan discovered that the EEOC, through the Office of Personnel Management, uses background or credit checks in its own hiring of employees. – Source

According to the testimony of an EEOC employee, the credit reports that are utilized by them list “bankruptcy records, court records, consumer credit counseling, child/spousal support records, individual credit account records,” among other things. So apparently credit counseling can make an appearance as well and may have an impact.

And for people that run into money troubles during their course of employment the EEOC has a policy of no action as long as the employee has been honest about their bad debt problem.

From documentation issued by the government Office of Personnel Management it appears that which credit may be a factor, so are relationships with foreign family members, living arrangements, and sexual behavior.

The OPM guidebook however makes it clear that it is not the presence of credit problems that makes it an issue but the absence of proactive action to resolve the issues.

The guide says the following are examples of disqualifying issues surrounding credit history:

Unwillingness to satisfy debts
Indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of willingness or intent to pay the debt or establish a realistic plan to pay the debt
A history of not meeting financial obligations
Consistent spending beyond one’s means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ration and/or other financial analysis – Source

What is interesting to note however is that the issues that raise concern above are also addressed and handled with debt relief tools like credit counseling, some debt settlement approaches, and certainly chapter 7 bankruptcy and chapter 13 bankruptcy.

Other Positions on the Use of Credit in Hiring

In 2010 the EEOC held hearings on the employer use of credit history as a screening tool. A number of experts submitted testimony as part of those hearings.

“High unemployment has forced an increasing number of people to enter or re-enter the job market,” said EEOC Chair Jacqueline A. Berrien. “As a result, an ever increasing number of job applicants and workers are being exposed to employment screening tools, such as credit checks, that could unfairly exclude them from job opportunities.”

The Commission heard from a diverse set of experts. Chi Chi Wu of the National Consumer Law Center (NCLC) expressed grave concerns that the use of credit histories is mushrooming at the time of economic instability for many Americans, noting that the use of credit histories “create[s] a fundamental ‘Catch-22’ for job applicants,” especially during this period of high unemployment and high foreclosures, both of which have a negative impact on credit.” She observed, “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.” This view was echoed by several of the witnesses.

Sarah Crawford of the Lawyers’ Committee for Civil Rights Under Law and Dr. Avis Jones-DeWeever from the National Council of Negro Women, explained that the use of credit histories in the employment context can have a disparate impact on a range of protected groups, including people of color, women, and people with disabilities. While the use of credit checks as employment screens increases, Crawford cited studies that show credit history is a poor predictor of job performance. Additionally, she pointed out that many credit reports are riddled with errors or incomplete information, a view that was echoed by Wu of the NCLC, making whatever predictive value they might have even less reliable.

Representatives from the business community—Michael Eastman of the U.S. Chamber of Commerce, Christine V. Walters of the Society of Human Resources Management (SHRM) and Pamela Quigley Devata of the law firm Seyfarth Shaw, LLP—told the Commission that the use of credit histories is permissible by law, limited in scope, and predictive in certain situations of reliability.

Walters of Society for Human Resource Management said that “13 percent of organizations conduct credit checks on all job candidates … [and] another 47 percent … consider credit history … for select jobs,” but for those employers, “credit histories are but one piece of the puzzle.” It is the experience of SHRM member companies that very few utilize credit histories for every single job opening. Devata asserted that the use of credit histories is driven, in part, by the need for background information on potential employees in a current environment when it is difficult to obtain any but the most basic information in job references.

The Evidence Is That Credit Reports Are Worthless for Hiring

There seems to be more evidence that credit reports and credit histories are not a good guide for determining employment that there are to support it.

In 2003 the American Psychological Association found there is no correlation between credit history and job performance. When we include the statements made by the recent LSU study and even the words of TransUnion’s own representative it seems very compelling that credit reports do unfairly discriminate without any foundation of reality.

Additionally, there is a vast rate of credit report errors that could impact an employment decision regardless of the actual financial performance of a potential employee. Or even that financial issues might be easily created beyond the control of the individual, such as by unexpected medical bills or other event beyond the control of the person.

But not all companies, nor all positions result in a credit check being performed. According to the Society for Human Resource Management the overwhelming use of credit checks involved positions of fiduciary or financial responsibility.

The same study concluded that most organizations:

Do not conduct credit background checks on all job candidates
Employers place lower relative importance on credit background checks than other job-related factors in making hiring decisions.
Credit background check results are seldom used as a definitive hiring criterion. – SHRM Research Spotlight Credit Background Checks

Even after pulling a credit report and spotting something that drew attention, the study found that only 13% of the time was that an exclusion to employment without allowing the job candidate to have an opportunity to explain the circumstances.

In general the employment history is not the determining factor for employment. Many other factors are more important.

So Where Does This Leave Us?

Well if you have been one of the people that has potentially lost a job specifically due to your credit report, you are in a tiny minority. Even the military allows does not exclude people from high government security clearances for bankruptcy. – Source

It seems that rather than have a credit report that leaves a trail of debt without resolution, the more prudent course if to take some action to address your debt in a positive fashion that shows you did something to address the issue.

If that action results in comments or entires on your credit report you should be open and honest about the situation and explain the circumstances to make your past credit, little to no factor in deciding to employ you.

Of the three major debt relief tools it would appear that the credit report impact is varied:

Credit Counseling – May be reported on an employment credit report and serves as evidence that some financial concerns existed for the consumer to seek credit counseling assistance. Also impacts credit when included accounts are closed by creditors.
Bankruptcy – Bankruptcy remains to only legal tool that allows consumers to address and discharge their debt. It will be reported on the consumer credit report for seven years if a chapter 13 bankruptcy is filed or ten years of a chapter 7 bankruptcy is filed.
Debt Settlement – Depending on the approach taken for settling the debt the credit report impact can be significant. Accounts that are allowed to go delinquent or result in legal action against the consumer by the creditor may create a more damaging pattern of poor credit performance than an approach where the debt is settled quickly. Allowing outstanding debts to sit and fester while they are hopefully settled over a long period of time extends the credit impact and leave the issue unresolved. in that case what prospective employers may see is, well, just a mess.

From my personal experience and experience in working with many people over the years the most important thing you can do is take some action to address a current financial situation and explain that to future employers when asked. Your explanation is that you took some action to resolve the issue and that might even involve bankruptcy, which is a legal tool to get a fresh start.

Rather than fearing that your past credit problems may hold you back, just make sure the credit issues are in the past, your addressed them, and you’ve begun the process to rebuilding your credit. I even show you how to do that for free.

@GetOutOfDebtGuy

How Does Bankruptcy Work?

Steve Rhode — Thu, 17 May 2012 21:25:13 +0000

From How to Get Out of Debt

Bankruptcy is one of those things people are afraid of, but they really don’t know why. Once you learn the facts about bankruptcy and how it works, you’ll want to know more.

Bankruptcy is a legal process that is administered through the court. While people can technically file bankruptcy themselves, it’s not a smart idea. Mistakes happen and a mistake in bankruptcy can be costly.

Instead, people generally seek the advice and assistance of a local bankruptcy attorney to file bankruptcy. The bankruptcy attorney will be familiar with bankruptcy and the local variations in your area. If you follow this link I can help you to find a local bankruptcy attorney who can give you a free consultation.

So How Does Bankruptcy Work?

Once you meet with the bankruptcy lawyer you’ll have a much better idea if bankruptcy is right for you. You and your attorney will evaluate if you will file a chapter 7 bankruptcy or a chapter 13 bankruptcy.

In either case you will need to complete a pre-bankruptcy credit counseling session, otherwise known as a total waste of time. It’s mandatory however. You will also gather up information about your income and debts and give it to your bankruptcy attorney. They will probably ask for copies of your tax returns as well.

The bankruptcy attorney will complete the paperwork, called the petition, and that will be filed with the court. Once the paperwork is filed it will stop any lawsuits and wage garnishments. Once your creditors and debt collectors are notified it will stop all of that activity as well.

In the case of a chapter 7 bankruptcy you will have to meet with the bankruptcy trustee once and shortly thereafter you will receive a notice that your bankruptcy debt has been eliminated.

If you file a chapter 13 bankruptcy to protect your house or some other asset, the trustee meeting will be a confirmation of the monthly payment plan your attorney drew up. You will then make those monthly payment to the bankruptcy trustee each month.

If you want to learn more about bankruptcy in the context of getting out of debt I’d suggest you read How to Get Out of Debt.

And you may be surprised to learn that in a nutshell, that’s the entire bankruptcy process and how bankruptcy works.

Following the discharge of your debt you can then focus on quickly rebuilding your credit. Use my free guide to show you how.

Bankruptcy gives you a legal fresh start and a second chance to get out from under overwhelming debt so you can move forward with your life.

@GetOutOfDebtGuy

My Student Loan is Almost 30 Years Old and I’m In Collections. – Dawn

Steve Rhode — Thu, 17 May 2012 21:09:32 +0000

From How to Get Out of Debt

“Dear Steve,

I currently have a student loan that is 27 years old. I was 17 years old when I was offerred this loan, and really unaware of the rate of interest, penalties, etc. I divorced from my husband at the age of 19 (due to the fact that he was physically abusive), and in the divorce decree, it was ordered that he pay child support for my two children, and he pay half of my student loan.

The initial loan was for $5,000, and I just received a bill from Coastal Collections, requesting immediate payment in the amount of $22,000.!!!!!!!!! I actually offerred them the full principal amount of $5,000 and they counter-offerred @ $17,000. I am unemployed, have guardianship of my three grandchildren, and am starting an Ebay business. (struggling to keep our heads above water).

Long story short, they refused my payment, and have been harrassing myself and everyone in my family. Can this debt be forgiven after 27 years, if not, is there any way that I can pay just my half of the original loan, or even make an offer and comprimise? I realize that this is my debt, and it has been given to so many collection agencies over the years, that every time I make contact with the new agency, I get a different story, and more grief. Thank you for any advice you can give me.

Sincerely, Dawn”

The Answer:

Dear Dawn,

The most important issue is if this was a government backed student loan, which I believe it may be since the statute of limitations would most likely have expired on a private student loan long ago.

I would suggest you look into the Income Based Repayment Program to get your student loan payment down to as low as $0. The monthly payment will be based on your income and circumstances and it sounds as if you qualify. If you pursue this option and it is granted it will go a long way towards making this a less stressful situation for you since you’ll be out of collections.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

How to Get Out of Debt With the Get Out of Debt Guy

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