How to Get Out of Debt With the Get Out of Debt Guy » chase bank

How Do We Get Chase to Remove Illegal Mark They Made On Our Credit Report? – Leslie

Consumer — Tue, 10 Apr 2012 21:15:03 +0000

We foreclosed on a home in CA in 2008. We paid taxes and mortgage payments while offering deed in lieu and a short sale offer (moving due to job needs). After the bank refused all, we stopped paying for three months and mailed the key and left the house in good repair, with taxes current until auctioning. We are in a non recourse state, there was no refi on the home. The house was successfully auctioned off and we thought that other than our steep financial loss and angst over the first time of not paying a bill in our lives – we were done. We understood at the time that the first and second deal with each other and once the home is auctioned both have no recourse.

Somewhere in that time (after we defaulted and the house was auctioned) EMC was bought by J.P. Morgan Chase. We now see on our credit report that Chase has us with an open debt for a mortgage of $158,000 and shows us as $65,000 past due. Our credit is otherwise good in that we have always paid all our bills on time, we have only one credit card, no car payments and pay rent on time every month now for five years.

How do we get Chase to remove the illegal mark on our credit report without putting ourselves in the path of their random, terrifying choices to do whatever they want to a consumer?

Leslie

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.

Chase Bank – Scam, Complaint, Review, or Praise?

Research Department — Mon, 20 Feb 2012 07:21:18 +0000

From How to Get Out of Debt

Please share your experience with this bank and provide your review and feedback, in the comments section below.

The goal of this page is to allow people to share information that may be important to help others to make a more informed decision regarding their experience with this bank. Here are some potential questions you might be able to provide feedback about.

How did you feel about the customer service experience you received?
Was the bank easy to communicate with before or after you became a customer?
Did the bank respond to your communications promptly?
What were the fees charged for the services you received?
Did the bank give you the terms and conditions for the products you were interested in before you gave them any personal information?
Was the bank helpful in assisting you with your financial needs?
Did you have a really good experience you can share?
Did you have a bad experience you want to share?
Is there any other information you’d like people to know that might be considering the services of this bank?

It is important to understand when reading comments below that they are the opinions of the individual posters and may not be representative of the overall impression of all consumers that may have or have not used the debt relief services of this company. But everyone does deserve to have an opportunity to express their opinion, even the debt relief company itself, be it good, bad, or indifferent.

Chase Stops Suing Consumers Over Debt

Steve Rhode — Wed, 11 Jan 2012 20:21:16 +0000

From How to Get Out of Debt

In a move that will most certainly not be permanent, JPMorgan Chase is reported to have stopped suing consumers over debts.

The American Banker is reporting that almost overnight, suits to collect debts by Chase have nearly stopped.

A rumor exists that the Office of the Comptroller of the Currency is looking into issues surrounding Chase consumer debts. Those actions, if true, may result in actions like we’ve seen over other robo-signing issues.

The American banker article states:

In a sign that Chase acted with urgency, numerous regional collections teams were fired in mid-2011 at the order of the New York bank’s headquarters, according to people familiar with the events.

“Nobody told anybody anything. It was very traumatic,” says a former Chase attorney who asked to remain anonymous because of a nondisclosure agreement. “I think there were investigations by the [Office of the Comptroller of the Currency] and other government entities. If we’re not there, we can’t be interviewed.” – Source

What is not known is if Chase has been or will be selling off these debts to debt buyer for collections and passing the buck on to someone else to deal with.

An interesting turn of events for sure.

@GetOutOfDebtGuy

Freedom Debt Relief, Chase Bank, & Nonprofit Credit Counseling

Steve Rhode — Fri, 02 Dec 2011 13:42:47 +0000

From How to Get Out of Debt

In a recent story that a reader brought to my attention, Freedom Debt Relief did a good thing and fully refunded a disgruntled California couple the $3,290 fee they paid Freedom Debt Relief for advanced fee debt settlement services after they got sued and Chase Bank said they would not work with Freedom.

A double pat on the back to Freedom for giving the refund. That was the smart and right things to do.

That’s not the part of the original story, here, that caught my eye.

It was the bit about Chase Bank said they would not work with a for-profit debt settlement company but would work with non-profit credit counselors.

But a year into the agreement with Freedom Debt Relief, the Theriaults got a call from Chase, one of their two creditors.

“They contacted us and said ‘we will not deal with Freedom Debt,’” Sherry Theriault recounted.

Chase sent ConsumerWatch a statement confirming it “does not work with debt-settlement companies.”

The company said it will work with non-profit credit counseling agencies.

Frankly, the position of Chase Bank stinks and not one I find to be consumer friendly. One could argue that since Chase Bank exercises more control over credit counseling groups by controlling their funding that they would rather steer the consumer that way rather than let the consumer find independent help.

@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.

NCO Agrees to Settle Chase Bank Account. Chase Backs Out of Deal.

Steve Rhode — Thu, 27 Oct 2011 13:37:34 +0000

From How to Get Out of Debt

Angelo Anzalone, president of Active Debt Solutions, has asked me to bring to your attention an issue with Chase Bank and NCO that concerns him regarding the backing out of a settlement agreement with Chase Bank USA.

Anzalone states, “We reached a settlement agreement with NCO on a Chase account.

The terms were as followed:
$1,300 on June 30th
$25 July 30
$25 on Aug 30th.

NCO took the first payment of $1,300 but didn’t take the 2nd or 3rd. When we called NCO to find out why they never took the 2nd payment and we were told that Chase pulled the account back and they would not honor the settlement even though we have a settlement letter and they took the first (majority of the settlement) payment.

Chase is now saying that they will not honor the settlement letter and that the payment of $1,300 was applied to the balance.

Next time someone complains about consumers suing collection agencies remind them of tactics like this one. This is not the first time that NCO has done this either. ”

Here is the backup supplied on this event.

Is This Something You’ve Seen Happen as Well?

Please post your comments below to help Active Debt and this consumer if you have any feedback on this or other similar situations.

@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.

I Have a Chase Bank and IndyMac Mortgage and Need Banking Help on My Modification. – Carlotta

Andy Faria — Tue, 19 Jul 2011 21:12:03 +0000

From How to Get Out of Debt

“Dear Andy,

1st mortgage with chase 3. something interest, adjustable, 2nd mortgage Indymac 12. something interest, fixed. No late mortgage payments, very low credit score and no equity in my home.

I need wise advice on how to resolve this situation—high interest and two mortgage payments. Please give all information you have on this situation

Carlotta”

The Answer:

Dear Carlotta,

Refinancing both loans into one lower fixed interest rate would be the obvious solution. However, with very low credit scores and no equity in your home, refinance probably won’t be an option. If you have the ability to hold on for a couple years and build your credit scores back up, this could be an option.

You could look into loan modification if you haven’t already. Modifying your 1st mortgage may possibly get you out of the adjustable rate, but with a 3% interest rate already, you won’t see much relief (if any) for the monthly payment amount. I’m not sure if all the work that would be involved in modifying this loan is going to be worth it, just to get the rate fixed.

Trying to modify your 2nd loan may be a better use of your time. With a 12% interest rate, there is definitely room for improvement. If you’re able to get that interest rate down through modification, you could save money on your monthly payments. How much you save will all depend on the balance of the loan though. The higher the balance, the more opportunity for savings. And on the other hand, if the balance is really low (under 20k), you won’t actually save much, even if they drop that rate to 4%, it could only end up saving you small potatoes in the end. Modifying a 2nd mortgage is the same process as modifying a 1st mtg, so you want to consider whether or not it will be worth your time.

Depending on how far underwater your home is, and any other debts you have, you may want to speak with a bankruptcy attorney. If you qualify, bankruptcy could potentially strip the 2nd mtg and leave you with only the 1st mortgage to pay. From what I understand the 2nd mtg would need to be completely underwater in order to strip it, but a local bankruptcy attorney would be your best source for this information. Click here to find a local bankruptcy attorney.

If you find that none of these options are workable, then you may want to strongly consider letting the home go. Even if your home is underwater, you can still sell it. This is called a short sale and it allows you to sell the home, release both loans, and move on with your life without the lasting damage of a foreclosure. A short sale won’t cost you anything in real estate commissions and there are many real estate brokers that have a lot of knowledge in this field. To learn more about short sale you should find a local broker, call them up, and schedule an appointment to meet with you at your home. They can give you a realistic market value for your home and lay out your options.

Good luck and please keep us posted on your progress in the comment section below.

Best Regards,

Andy is a licensed real estate broker in Massachusetts and is the founder of Northeast Properties in Norton, Massachusetts. His brokerage is designed to help homeowners in today’s difficult real estate market, specializing in short sales. Andy speaks with Massachusetts homeowners every day, helping them to address their questions or issues with short sale or loan modification. He enjoys helping consumers arrive at the correct solution to their problem, and believes that the only way to correctly do that is by presenting them with all of their options in an un-biased manner.

If you have a mortgage, short sale, real estate, or loan modification question you’d like to ask just use the online form. I’m happy to help you totally for free.

Chase Bank Dropping Debt Collection Lawsuits

Steve Rhode — Fri, 24 Jun 2011 16:40:12 +0000

From How to Get Out of Debt

in a yet unexplained move, JP Morgan Chase has been dropping lawsuits against consumers for past debts. The Wall Street Journal is reporting Chase “wouldn’t disclose the number of cases dismissed or the reasons for the move. State judges said the bank has dropped lawsuits targeting borrowers in California, Florida, Illinois, New Jersey and New York since April.” – Source

Mitch Granat, a lawyer who handles debt-collection cases for J.P. Morgan in Palm Beach County, Fla., on a contract basis, said he was told by other lawyers for the bank that the suits in Florida were dropped because of “irregularities” in paperwork used to verify the validity of the credit-card debt being pursued.

Lawyers who represent credit-card borrowers sued by J.P. Morgan said they have never seen the bank throw out so many debt-collection lawsuits at once. The cases were dropped starting in April and as recently as this week, according to lawyers and judges in the five states where J.P. Morgan has dismissed credit-card lawsuits.

Something is going on. The best bet is Chase has found a big problem with the chain of title on a number of debts they are attempting to collect on. Only time will tell if they will sell these debts on the secondary market, try to correct any defects in the accounts or refile again.

These cases may be withdrawn for now but they are not gone forever.

@GetOutOfDebtGuy

My Mother is Being Sued by Chase. All She Gets is Social Security Income. – Helen

Michael Bovee — Mon, 06 Jun 2011 16:02:37 +0000

From How to Get Out of Debt

“Dear Michael,

My Mother was served a summons today by 2 Sheriff’s Deputies. I haven’t seen the document yet, but it sounds like she is being sued by Chase. She has 30 days to respond to Magistrate Court. The debt is for $10,000 she owes on a credit card. She had a serious health scare, a ruptured aortic aneurysm in 2006 and her life has spiraled since. She sold her condo at a loss and basically lived off of her credit card. She is now living on $795 per month Social Security and her rent is $440 per month. Once she pays her rent and utilities, she has very little left over.

My Mother is being sued by Chase for $10,000. Her only income is Social Security. She rents her apartment and doesn’t own any other assets. What is the best course of action? She has 30 days to respond. Can they garnish her Social Security wages? Thank you so much for your help. I really don’t know where to start. She can’t afford to get advice from a lawyer.”

The Answer:

Hi Helen,

Generally speaking, the detail you provided suggests your mother is “judgment proof”. Her social security cannot be garnished, but her bank account can be levied as part of collection efforts after a judgment is entered. If any of the funds in her bank account are not sourced to exempt monies, it becomes complicated. In fact, if her account is levied and all funds are exempt it is still a hassle to undo.

At this stage in her life and the limited income situation, filing bankruptcy may be the best way to put all of the debts behind her. I realize she may not be able to come up with enough money to cover the costs of bankruptcy. Are there any family members that can help chip in to cover the costs? I would also encourage you to look for a low income legal aid office in her area. If you can locate one, your mother may be able to get legal assistance at a reduce or even no cost given her limited income.

Please let me know what you find in the comment section below.

Michael Bovee has worked with financially challenged consumers for the past 17 years and is a recognized expert in his field. Michael founded Consumer Recovery Network (CRN) in 2006. CRN offers debt settlement services and educational resources nationwide. He has served as its president since 2006.

If you have a debt related question you’d like to ask, just use the online form.

I’m 70 Retired, With Some Health Issues and Trying to Get Chase Bank to Modify My Mortgage. – Lyn

Andy Faria — Fri, 03 Jun 2011 18:43:54 +0000

From How to Get Out of Debt

“Dear Andy,

I’m 70, retired with some health issues. Have quite a lot of debt besides my condo on which I owe $29900, and its only worth about $49000 at the moment. When I purchased it in 2000 it was $118000. In 2003 I refinanced to bring the interest rate down to 5.75 and switched to a 15 yr. fixed mortgage. Have considerable other debt, $9350 vehicle ($67 monthly interest), and $18500 credit cd.debt ($102.78 monthly interest), also monthly condo dues $206 and utilities. Have only my social security and a small pension to rely on so I’m hoping to find a way to make my finances a little more stable. So far, I am not behind on anything, but its becoming more and more difficult since I am not working. When I asked about loan modification at my bank (Chase) I was told that all they could do was maybe give me 1% lower interest, but it would extend my mortgage for another 10 years and only lower my payment be about $57 a month. Oh, and also it would cos t me at least another $1500 to refinance.

Is there any kind of loan modification program that might help in my situation and if so what would it cost?

Lyn”

The Answer:

Dear Lyn,

To start off by answering your question… speaking to Chase directly is your best approach for getting your loan modified and it shouldn’t cost you anything, if you qualify Chase doesn’t have any fees for this. There are never any guarantees that you will qualify for a modification though, and even if you do, that it will have a drastic impact on your monthly payment. Refinance would have more of a guaranteed outcome, but like you said, it also comes with a price tag. With some equity in the condo you could also consider selling it, and using the cash to secure more affordable housing someplace else.

You could also leave the mortgage alone and look to free up some cash on the unsecured debts (cc’s). I calculate with $18,500 in debt you’re paying about $500-$600 in minimum payments alone. If you could find a way to reduce or eliminate that altogether, that would go a long way in helping to make the mortgage payment more affordable for you. With your only sources of income being SSI and a pension, there won’t be very much the unsecured creditors could do to you if you went into default. I would suggest you speak with a local bankruptcy attorney to see what can be done.

Please keep us posted or feel free to ask further questions in the comment section below. I am subscribed to this post and will do my best to respond promptly. Good Luck!

Best Regards,

Andy is a licensed real estate broker in Massachusetts and is the founder of Northeast Properties in Norton, Massachusetts. His brokerage is designed to help homeowners in today’s difficult real estate market, specializing in short sales. Andy speaks with Massachusetts homeowners every day, helping them to address their questions or issues with short sale or loan modification. He enjoys helping consumers arrive at the correct solution to their problem, and believes that the only way to correctly do that is by presenting them with all of their options in an un-biased manner.

If you have a mortgage, short sale, real estate, or loan modification question you’d like to ask just use the online form. I’m happy to help you totally for free.

Use a Debit Card from Chase Bank? Prepare to Have it Declined.

Steve Rhode — Thu, 10 Mar 2011 23:14:00 +0000

From How to Get Out of Debt

Chase Bank is talking about significantly reining in debt card transaction limits to $50 or $100. The reason, so the can make more money.

Recent legislation capped the amount the bank can charge retailers per transaction for using a debit card. Currently it is 44 cents per debit card transaction but soon it will be limited to 12 cents.

I can only imagine that the per transaction limit of $50 is to force consumers to have to swipe their card four times for a $200 transaction and generate more fees for the bank.

@GetOutOfDebtGuy

Chase Bank – DIY Credit Counseling Repayment Plan Terms

Steve Rhode — Sun, 13 Feb 2011 03:18:42 +0000

From How to Get Out of Debt

The following information is designed to assist you to put together a self-directed debt repayment plan with the creditor listed.

This information has been obtained from a number of sources and while believed accurate at the time it was posted, it may have changed.

However, it is good information to use to get an understanding of the types of things the creditor may do to assist you when working directly with them to create a repayment plan you can afford.

If you would like some personal advice and assistance from a credit counselor to put together your own repayment plan, visit the DIY credit counseling section of the forum and a counselor will help you there for free.

If you would like some free guidance on how to put together a self-directed debt repayment plan then download my free ebook, Eliminate Your Debt Like a Pro.

Below you will find terms that are specific to this creditor.

@GetOutOfDebtGuy

Chase Bank
DIY Credit Counseling Terms

Payment % of Balance:		2%
Minimum Payment Required:		$15
Interest Rate Reductions Available:		10%
May Bring Account Current After Some Payments:		Yes
May Stop Late and Overlimit Fees:		Yes
Requires a Full Budget to Grant Terms:		No

Terms subject to change without notice.

Definitions:

Payment % of Balance: – The minimum payment the creditor is looking for. For example, if the formula is 3% of the balance then multiply your balance by the percentage. Let’s say your balance is $1,000. To calculate your minimum payment you would multiply 1000 x .03. The minimum payment would be $30.
Minimum Payment Required: – This is the minimum payment the creditor is looking for. If your calculated minimum payment is less than this amount you will need to increase it to at least this amount.
Interest Rate Reductions Available: – The creditor has been know or currently does reduce interest rates when consumers are on special repayment programs.
May Bring Account Current After Some Payments: – If you are delinquent on your account the creditor does or has been known to bring accounts current when making special payments.
May Stop Late and Overlimit Fees: – Some creditors may stop late and overlimit fees when special payment plans are agreed to.
Requires a Full Budget to Grant Terms: – Creditor may require a complete budget before agreeing to special terms. A budget guide may be found my free ebook you can download, Eliminate Your Debt Like a Pro.
Secret Phone Number to Reach Representative: This is the telephone number to reach a special payment representative.

More DIY Help is Available

There is so much free help and advice available on GetOutOfDebt.org that it can be overwhelming. But let me steer you to some important sections.

DIY Main Page – You can find the top of the DIY part of the site, here.
DIY Credit Counseling and Creditor Index – Want to find a specific creditor and their DIY credit counseling terms, click here.
DIY Debt Settlement – Want to see if settling your debt might make more sense for you in your situation. Visit the DIY debt settlement section of the forum and speak with an expert for free.
Ask Steve Your Question – Do you have a debt related question you’d like to ask me directly? You can do it right here.

Have New Information?

The terms and information listed above may change without notice. You can help to keep this information accurate by updating me when you learn about changes.

Consumers

If you are an individual and have tried to work with this creditor, please share your advice and terms you were given in the comments section below.

Creditors

If you are a representative of this creditor and you would like to update any of the terms listed below. Please complete the following form.

Chase Bank Alleged to Not Be Able to Confirm Real Balances Owed While Shredding Documents

Steve Rhode — Mon, 20 Dec 2010 21:15:46 +0000

From How to Get Out of Debt

Chase Bank has recently become the subject of a whistleblower complaint to the SEC by Linda Altamonte, a described mid-level employee of the Chase Bank Credit Card Litigation Department.

Documentation on this case states:

Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts that were marked by Chase Bank as Judgment Accounts when in fact Chase Bank executives knew that many of the accounts had incorrect and overstated balances.
As part of the sale of Judgment Accounts, Chase Bank executives knowingly mischaracterized delinquent accounts as already reduced to judgment, when in fact proof existed that no judgment existed or at the very least insufficient documentation existed to reach that conclusion.
Chase bank executives routinely destroyed information and communications from consumers rather than incorporate that information into the consumers credit card file, including bankruptcy notices, powers of attorney, notice of cancellation of auto-pay, proof of payments and letters from debt settlement companies.
Chase Bank executives mass-executed thousands of affidavits in support of Chase Banks collection efforts and those Chase Bank executives did not have personal knowledge of the facts set forth in the affidavits.
When senior Chase bank executives were made aware of these systemic problems, senior Chase Bank executives — rather than remedy the problems — immediately fired the whistleblower and attempted to cover up these problems.

The documentation goes on to say that the Chase Bank computer system that employees rely upon is know as the System of Record. Apparently once an account goes into litigation with the Credit Card Litigation Department at Chase Bank the records of that action are kept in a separate database, the Litigation Database, with limited or different capabilities for being able to maintain cardholder data.

Altamonte says in her review of 11,472 Judgment Accounts of Chase Bank customers living in California, 44% of the accounts did not have the judgment on file or if the file did have a copy of the judgment it was not properly signed or date-stamped by the court. In some cases even though the consumer had won a judgment against Chase Bank the judgment was recorded incorrectly in the Chase Bank records and reflected Chase had actually won a judgment against the consumer.

Multiple accounts were found that Chase claimed were still owed but it is said the internal survey found it had in fact already been paid in full.

Linda Altamonte in her claims made the following assertions to the SEC regarding Chase Bank.

The Pre-Litigation Group in the Credit Card Litigation Department routinely destroyed material, inbound communications from borrowers including bankruptcy notices, settlement communications, and debt settlement company communications. To the extent the Pre-Litigation Group did not destroy these inbound communications, the group failed to timely incorporate the information contained in these communications into the Litigation Database. In one instance, Ms. Altamonte witnessed the head of the Pre-Litigation Group shred such documents before incorporation into the Litigation Database. Failing to properly record the information and data contained in these inbound communications to the Litigation Database rendered the information therein inaccurate.
Senior Chase Bank executives instructed Chase Bank employees remove important information and data from Litigation Accounts, as the retention of the information would have resulted in increased computer hardware costs. Removing important consumer information rendered the information in the Litigation inaccurate and unreliable.
The information and facts set forth in a Judgment Affidavit required a meaningful reconciliation among the System of Record (including at times multiple legacy databases that compromise the System of Record), the Litigation Database and at times third party law firms’ own databases. At no time did the Affidavit Signers perform this reconciliation, relying on hourly workers to perform this process. Hence the Affidavit Signers did not have personal knowledge of the facts set forth in the Judgment Affidavits.
The Affidavit Signers in a cavalier fashion almost flaunted their lack of personal knowledge of the facts contained in the Judgment Affidavits. On numerous occasions, Ms. Altamonte witnessed these Affidavit Signers work through at time 3 feet tall stacks of Judgment Affidavits at once during weekly multi-hour long, non-related company meetings. The notaries were not present at these meetings. The Affidavit Signers simply relied on hourly workers to reconcile amounts owed and then treated the actual execution of the affidavit as busy work to be performed while the Affidavit Signers could focus on other matters.
The reconciliation process itself was manual in nature, cumbersome at best and prone to significant errors. Chase Bank failed to properly integrate its computer systems and databases so the underlying facts of these affidavits required the reconciliation of information from multiple databases. The diligence performed by Ms. Altamonte in late 2009 uncovered errors in the actual amount owed by a borrower and the amount Chase Bank claimed to be owed in the Judgment Affidavit. Indeed, Ms. Altamonte determined as many as 20% of the Judgment Accounts to be sold failed and internal test to check for accuracy. Such errors could be the result of systemic errors in the reconciliation process, which Chase Bank could have resolved if it unified its databases onto one platform.
Chase Bank failed to properly maintain records and documents that supported the status of a Judgment Account. For example, a Chase Bank required practice was to maintain a copy of a judgment secured in Chases Bank’s favor in the account file. In late 2009, Ms. Altamonte audit work found that in a large percentage of the files, Chase Bank did not have record of obtaining such a judgment and in fact in some files the records indicated that the borrower had the judgment against Chase Bank.
Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts that were marked as Judgment Accounts when in fact Chase bank knew many of those accounts had material defects, were not in fact Judgment Accounts and had incorrect and overstated balances.
As part of the sale of Judgment Accounts, Chase Bank executives knowingly mischaracterized delinquent accounts as already reduced to judgment, when in fact proof existed that no judgment existed.
As part of the sale of Judgment Accounts, Chase Bank executives knowingly mischaracterized delinquent accounts as Judgment Accounts when insufficient documentation existed to reach that conclusion.

Almonte JPM SEC Letter

@GetOutOfDebtGuy

Chase Freedom Card – Debt Relief Television Commercial

Steve Rhode — Tue, 09 Nov 2010 16:44:49 +0000

From How to Get Out of Debt

Commercial Name: Chase Freedom Card
Record Date: 11-08-2010
Network/Channel: Mad Money, CNBC
Description: ChaseFreedomCashBack.com, 877-454-5403. Helps you maximize cash back on popular categories that change. 1% cash back on all other purchases. Get $200 if you spend $800 in the first three months.

[quicktime]http://getoutofdebt.org/member/video/ChaseFreedomCard-20101108.mov[/quicktime]

The debt relief commercial above is presented only as an example and archive of debt relief marketing and NOT AS AN ENDORSEMENT by this site. The commercial is archived for research purposes only.

Card Terms and Conditions

See online terms at the time of the commercial, here.

$200 Cash Back
You will receive 20,000 bonus points with this bonus offer, which can be redeemed for a $200 check. To qualify and receive your bonus, you must make qualifying transactions totaling $800 or more during the first 3 months from account opening. Qualifying transactions include purchases, balance transfers, and any checks that are used to access your account, and exclude cash advances. After qualifying, please allow 6 to 8 weeks for bonus points to post to your account. To be eligible for this bonus offer, account must be open and not in default at the time of fulfillment. This one-time bonus offer is valid only for first-time cardmembers with new accounts. Previous and existing cardmembers/accounts are not eligible for this bonus offer.

You are earning your rewards as points. If you choose to redeem for cash back, 1 point equals 1% or $0.01 cash back. For example, 2,000 points can be redeemed for a $20 check.

5% Cash Back
You earn 1% on all purchases and 4% more in bonus categories for a total of 5%. 4% bonus earn is subject to a quarterly maximum. You will be eligible for quarterly bonuses as long as (i) your account is not in default under, and/or you have not violated, the terms of your Cardmember Agreement and Rewards Program Rules and Regulations at the time accounts are selected for the promotional offers, and (ii) your statements are sent to a US address. Quarterly enrollment required.

1% Cash Back
You will earn 1 point for each $1 of net purchases. You will earn an additional 1 point for each $1 of eligible airfare net purchases made online through the program booking tool. You do not earn points on balance transfers, cash advances, cash-like charges such as travelers checks, foreign currency, and money orders, any checks that are used to access your account, overdraft advances, interest, unauthorized or fraudulent charges, or fees of any kind, including fees for products that protect or insure the balances of your account. There is no maximum number of points that you can accumulate in the program. Bonus/Promotional offers may have a maximum accumulation. A service fee of up to $20 per ticket may be charged for the use of our toll-free number to book or change airline itineraries. Redemptions made online do not have a service fee. See Rewards Program Rules and Regulations which will be mailed after your account is established. – Source

Chase Bank Will Not Honor Our Settlement Arrangement, What Do We Do Now? – Bryce

Steve Rhode — Tue, 09 Nov 2010 02:10:49 +0000

From How to Get Out of Debt

My wife and I entered into a debt settlement with Chase for 4 payments. On the 4th payment of each account we were notified that we are no longer in this settlement program because they had not credited to our account the payment until it was 2 days late on one account and 3 days late on the other. All the other payments were credited fine and sent in with the same time frame. They have now told me that my account will show paid–waiting for letter in 15 days but not my wife’s account.

It appears to me that this was a pre-planned event on their side. What do you recommend she should do about her account? We entered into this with good faith and made the said payments to uphold our end of the deal, now we are back to square one on hers

Bryce

Click here to help people to get out of debt.

This reader question was submitted for site members to answer.

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

If you have a credit or debt question you’d like to ask just use the online form.

@GetOutOfDebtGuy

The Chase Legal Department Says They WIll Sue Me. – Jacqueline

Steve Rhode — Mon, 25 Oct 2010 00:05:33 +0000

From How to Get Out of Debt

“Dear Steve,

I am in financial hardship and have always had perfect credit but had to stop the bleeding. Chase now threatning to take me to court.

Due to financial hardship I stopped paying my Chase credit card and Us bank card, I attempted a settlement at 10% they said 85% then late 65% (Chase) they talked me into a payment plan but I couldn’t afford it so just stopped paying again. I received a letter from their law department stating they were taking me to cout, they could garnish my wages, put a lien against my property etc and I still had time to work out a payment plan. I owe them $18.000

My question is will Chase typically do this? shold I communicate I cannot pay and have no equity in the property and am not working (had to close down my company this year) so they will know its a waste of their time? What do you advise and what is the worst i can expect?

Jacqueline”

The Answer:

Dear Jacqueline,

Chase has every right to sue you, and they almost be sure to win. Chase has an agreement between you and Chase where you agree to repay the debt according to a formula in the agreement. For whatever reason you have been unable to make those payments. The Chase position to the judge will be you broke the agreement, which it seems you did. I’m not trying to be harsh, just shedding a little reality on the situation.

The worst you can expect is you will be sued, lose, they will get a judgment and wait for you to get employed and then garnish your wages. The judgment will build interest and will include an additional amount for costs and attorney fees.

At this point your options are to enter into a mutually agreeable repayment plan with Chase and hope US Bank doesn’t sue you or go talk to a bankruptcy attorney and put an end to the debt.

You can click here to find a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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.

Chase Bank Wants Their Balance in Full. How Can I Get Them Down? – Glenn

Steve Rhode — Mon, 11 Oct 2010 17:12:58 +0000

From How to Get Out of Debt

“Dear Steve,

I owe Chase Bank USA on two credit cards: one for $20000 and the other for $15000. I am delinquent on both. I get repeated calls from them on my home and cell phones. I have not spoken to anyone there since June.

I have just received a letter demanding the unpaid $20000 balance in full and that they will sue me if I don’t call them within 20 days to schedule an acceptable repayment arrangement. My question is: how much negotiation can be expected? Can I get them down to 50% or less with payments with 0% interest? And finally, will they actually sue me to garnish wages, attach my bank account, etc.?

Thank you

Glenn”

The Answer:

Dear Glenn,

Each creditor has their own way of playing with settlements. Chase may be willing to take a reduced settlement but what they may not be willing to do is accept little payments from you over the long run. It really all depends on what their policy is at the time you call.

You are currently in the sweet spot for settling, seeing how you are already four months behind. The best approach at this point would be for you to call Chase and talk to them about settling the debt and under what terms they will accept payments on the debt.

Doing that isn’t going to hurt. Chase already knows you are behind, they already have the legal right to sue you, and they will do that probably if you can’t work out some mutually acceptable arrangement.

If they do sue you they can avail themselves of all their options under the law for collecting and depending on where you live that can include wage garnishment. Once they sue and win they can go after you hard or just let the judgment earn more interest while they have a legal right to do so. The judgment won’t be removed till it’s satisfied.

One other option if you don’t want to deal with the settlement route is to consider bankruptcy. Bankruptcy will stop the suit cold, discharge the debt and allow you to get a quick fresh start.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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.

Money Management International Settles Case for $6.5 Million to Avoid Allegations of Improper Credit Repair Services

Steve Rhode — Tue, 05 Oct 2010 18:23:38 +0000

From How to Get Out of Debt

I just had a long conversation with an inside party that told me about a massive settlement by the credit counseling company Money Management International to avoid further involvement in a suit that alleged they engaged in improper credit repair services through their debt management plans.

This case seems to clearly go hand-in-hand with a recent ruling that could expose credit counseling providers to similar suits alleging that a debt management plan could be seen as a form of credit repair and as such the credit counseling group would not be able to earn fees prior to the full delivery of those services.

The lawsuit: Janice Abat, Ildiko Nyleen, Jeanne Rossean, Shannon Carreiro, Nancy Wilksen, Erica Hal vs. Chase Bank, Money Management International, and Money Management International Financial Education Foundation (8:07-CV-01476), made the following allegation:

The plaintiffs allege: MMI DMPs included improper credit repair services prohibited by the federal Credit Repair Organizations Act; MMI did not operate like a tax-exempt, not-for-profit; MMI statements that it is a not-for-profit were false; and MMI’s activities improperly benefited Chase Bank. MMI denied all of plaintiffs allegations and asserted defenses including the results of a comprehensive, multi-year audit where the Internal Revenue Service determined MMI has operated as a tax exempt organization. MMI further asserts that by its terms the Credit Repair Organizations Act did not apply to MMI. The case only seeks reimbursement or restitution of fees and contributions. It does not affect payments to creditors. Chase denies all of these claims and other claims made by Plaintiffs. – Source

On October 1, 2010 a filing was made indicating MMI had just entered into a $6.5 Million settlement to extract itself from this case in full settlement of the claims alleged against them. – Source, Source

What makes this case so interesting and why all credit counseling agencies, regardless of 501(c)3 status and NFCC affiliation should take notice is that Money Management International is as mainstream as it gets. You would think that by all appearances Money Management International would be recognized as a fully approved credit counseling organization but here is where the Achilles heel is in my opinion.

Around 2005 the IRS conducted audits of large credit counseling groups in an effort to clean up the credit counseling industry. Those agencies that were audited and continue to operate are said to have entered into agreements with the IRS to change ways they operated to bring them into compliance. The letters are not public information but it appears that by entering into that agreement with the IRS that the agencies who did make changes, at the urging of the IRS, were effectively not operating as true 501(c)3 groups prior to that settlement with the IRS. That creates a huge exposure for any agency, no matter how mainstream they are, if they either entered into such an agreement or have not yet ended the audit process, as many have not yet.

@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.

Biggest Banks Nailed by Foreclosure Paperwork Problems

ProPublica — Tue, 05 Oct 2010 16:22:42 +0000

From How to Get Out of Debt

by Marian Wang, ProPublica

Three of the nation’s largest mortgage servicers have halted foreclosures as scrutiny increases over whether they verify the required paperwork. Several other servicers have also been faulted for foreclosure affidavits that were signed without much authentication, but they have not yet halted foreclosures.

Last week, we noted that the discovery of “robo-signers” — employees who signed off on thousands of foreclosure documents without much, if any, knowledge of their accuracy — had caused Ally Financial’s GMAC mortgage unit to freeze foreclosures in 23 states where foreclosures require a court order.

Since then, Bank of America and JPMorgan Chase have joined GMAC in halting foreclosures in those states. Together with Wells Fargo and Citigroup, these make up the nation’s top five mortgage servicers, with a 71 percent market share, as Bloomberg has noted. (Wells Fargo and Citi both have faced questions about their foreclosure affidavits.)

The Associated Press reported late Sunday that a Wells Fargo executive acknowledged in a May deposition that he had signed hundreds of foreclosure documents each week without verifying any information aside from the date. The company, nonetheless, told AP it had no plans to halt foreclosures and was confident of the documents’ accuracy. (As we’ve noted, other banks — including those that have chosen to halt foreclosures — have also expressed confidence in the accuracy of their documents and played down the likelihood of mistaken foreclosures, despite the flawed paperwork.)

The Wall Street Journal reported today on a homeowner who was engaged in a foreclosure proceeding with IndyMac, which is now called OneWest Bank. A judge threw out the case after ruling that the servicer’s use of a robo-signer meant the affidavit — which establishes basic facts such as the bank’s ownership of a mortgage — had not been properly reviewed. The judge also concluded that the affidavit was incorrect; IndyMac didn’t own the mortgage and therefore did not have standing to foreclose.

The broadening scope of these problems shouldn’t be surprising. Officials at Fitch, a credit rating agency, recently noted that the processing “defects” are industrywide.

The breadth of these problems could initiate a Justice Department investigation or, for public companies like JPMorgan and Bank of America, a civil investigation by the Securities and Exchange Commission over the servicers’ disclosures to investors, according to Peter Henning, a securities law expert and blogger for The New York Times’ White Collar Watch.

More homeowners will likely challenge servicers’ foreclosure cases in court, which may ultimately prolong the housing slump, as Bloomberg pointed out.

We’ve noted that the paperwork flaws are only one of the many types of problems experienced by homeowners fighting foreclosure. For example, our reporting on the mortgage modification process has also uncovered instances in which banks failed to follow the rules and were sloppy with the handling of paperwork. In some cases, homeowners being helped by one part of a bank have been foreclosed on by another part of the bank.

We Handed Our House Back in Bankruptcy But The Chase Bank Refused to Accept It. – Ron

Steve Rhode — Mon, 20 Sep 2010 22:31:32 +0000

From How to Get Out of Debt

“Dear Steve,

Wife lost her job 2 years ago – since then we liquidated savings, sold a cabin, got rid of both vehicles, searched high and low for a job for my wife. 18 months ago we applied for a loan modification as our monthly loan amount increased due to escrow increases.

Then 6 months after trying to get the modification, My employment closed the local office and told me I can stay, but need to relocate 4 states away.

Notified Chase (mortgage holder), who still was dragging their heals on the loan modification. They said we had to do a short sale – we spent about $3000 (credit cards) fixing the house up – driveway, new paint inside & out, fixing everything, and had the Realtor push it hard knowing our situation – 2 months went by, nothing, meanwhile my company was putting me up in a hotel to work out of the new location but giving me pressure to relocate.

I notified the bank, and they said they understood, I told them it would be impossible to make payments on the house and an apartment as well, they understood and said since we have the house up for a short sale, not to worry.

Well – they hit our credit report up for ‘seriously delinquent’ payments, when we finally got a buyer – Chase refused them, increasing the amount the buyer would have to pay, the buyer countered – increasing his offer by $20K. From what I understand, the negotiator told the Realtor they were going to foreclose instead.

By this time (April of 2010) we were so deep in financial trouble – because of the credit report – our credit cards were dropping us or reducing the credit limit and increasing the monthly amount owed, …. We were boxed into a corner and sought help – every lawyer we turned to said you need to file for Chapter 7 – you have no alternative.

We did – and surrendered the house, Chase filed for a release from Stay, the bankruptcy was discharged in August (1st week). Now we are getting escrow bills, tax bills, sewage bills, water bills, and we have not even seen the property or have keys to it since January of this year – the keys were turned over to the Realtor and Chase ‘fired’ our Realtor, so we don’t even know who has the keys – we are literally 12 hours away and cannot get up there, neighbors complain about the grass and condition, insurance company would only insure it for 90 days while vacant, so it now has no insurance.

Now as of July, Chase has sold our bankruptcy discharged loan to a debt collector that is telling us they understand it is discharged, but we have to maintain insurance and pay these escrowed amounts, taxes, and keep utilities on. One month prior to selling our loan, Chase changed from foreclosing and was working with us on a DIL (we had asked for that back in November of last yearwhen we knew we had to relocate). The new company says they are willing to entertain a DIL but we need to fill out reams of paperwork, give a hardship letter, etc.

Our budget is very tight and my time very limited, it will take me weeks to fill everything out.

Is there anyway to speed up a foreclosure or DIL, so we can get on with our life? Why, when the house was surrendered in bankruptcy are we responsible for all the supporting financial issues (which we could not afford prior to bankruptcy, let alone now)? What should we do now?

Ron”

The Answer:

Dear Ron,

Did Chase get the stay lifted after they applied for it?

You really should discuss this matter with the bankruptcy attorney that handled your situation. They will have more information about your specific situation and can advise you better. After you find out more from them, come back and post an update in the comments.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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.

Mortgage Loan Modification Problems. Delayed then Denied, Often Mistakenly

ProPublica — Wed, 18 Aug 2010 20:29:53 +0000

From How to Get Out of Debt

Loan Mod Profiles: Delayed then Denied, Often Mistakenly

by Karen Weise ProPublica, Today, 10:09 a.m.

Download the audio.

Listen to David Moe talk about trying to get a loan mod.

Retired pastor David Moe describes the process of trying to get a loan modification — only to be denied after more than a year — as nothing short of “The Twilight Zone.”

“I keep waiting for Rod Serling to walk out and sit down in my living room,” he says.

Have you worked for a servicer in a loan modification call center? We want to hear from you.

Are you a homeowner who’s struggling to pay your mortgage? Are you seeking a loan modification through the government program?

Moe is one of more than 520,000 homeowners who have had trial modifications through the government’s foreclosure relief program but have eventually been denied permanent modifications, according to Treasury Department data [PDF]. The program puts eligible homeowners in three-month trials, at which point their mortgage servicer determines if they qualify for a permanent modification.

An additional 538,000 homeowners have been rejected for even trial modifications by the eight largest mortgage companies participating in the program. (The Treasury Department has not released program-wide data.)

Program guidelines say homeowners can be denied for a number of reasons, including further reductions in income, missing trial payments or not being able to document their income. However, it appears that in many cases, servicer errors, such as losing paperwork and improperly calculating income, have caused denials.

Moe says he first contacted Chase, his mortgage servicer, in February 2009 when he and his wife had a large drop in income but still wanted to keep their home in upstate Michigan. After months of back-and-forth with Chase, Moe started a trial plan in October. More than six months later, Chase sent him a letter denying a permanent modification, saying he did not have enough income. Chase would not count the self-employment income that Moe earns from contract work with a local newspaper. Servicers are supposed to count self-employment income, according to program guidelines.

Chase spokeswoman Christine Holevas says, “We worked with the borrower, but we were unable to approve a modification.”

Many homeowners believe their denials were the result of servicer mistakes. Belinda Stanley of Kentucky says her mortgage servicer gave her four different reasons for being denied, including that her husband made too much money. “What husband?” she says. “I’ve never been married.”

The Government Accountability Office recently found that 15 of the largest 20 servicers made mistakes using [PDF] the computer model that determines if a homeowner qualifies for the program; they miscalculated income and did not properly determine if investors would make more money from a foreclosure or modification.

The sheer volume of documents involved in modifications also appears to cause mistaken denials. Banks report to the Treasury Department that “missing documentation” has been a major cause of denials, but homeowners say it’s the servicers that regularly lose documents.

Since homeowners make reduced payments during the trial, if they are denied a permanent modification, servicers regularly ask for immediate payment to cover the difference between the reduced and full payments. They also often ask for accrued interest and late fees.

For homeowners like Sylvia Kambouris who were current before entering the trial period, they could end up worse off because of the trial. Kambouris, who lives in Massachusetts, says she was shocked to learn that because of her three-month trial, she had accrued $11,000 in back payments, fees and interest. She is now working to pay off that money, but on top of her full monthly payments, she says it’s a challenge.

Stanley, the homeowner from Kentucky, just recently was contacted by her mortgage servicer about getting an alternative modification that does not fit the government guidelines. Among the outcomes reported by the Treasury Department, about a third of the homeowners denied government modifications end up in these in-house modifications from the mortgage servicers, but the quality of those modifications is not known. Historically, these proprietary modifications have not reduced monthly payments as much as those in the government program, and sometimes have even increased monthly bills.

When homeowners disagree with a denial, they have little recourse. They can voice concerns through housing counselors and the government-sponsored HOPE Hotline, which in turn can bring problems to an “escalation team” at Fannie Mae. Many homeowner advocates, however, criticize the process. Moe’s housing counselor, Kitt Latsch from the Center for Nonprofit Housing in Fremont, Mich., says the escalation process is “about worthless” and just parrots back the servicer’s response.

The Government Accountability Office recently said [PDF] that the escalation team is limited because it does not have access to a homeowner’s loan files and does not conduct independent investigations.

ProPublica’s Paul Kiel and Olga Pierce contributed to this story.

Have you been denied a modification? Please use the comments section below to discuss with other homeowners. And if you haven’t already filled out our questionnaire, please tell us your story.

Even Though Cosigner Wants to Payoff Mortgage, Chase Bank Still Foreclosing

Steve Rhode — Tue, 17 Aug 2010 18:21:11 +0000

From How to Get Out of Debt

In an odd twist, a Stratford, Connecticut man’s mother is being foreclosed on by Chase Bank even though he is wiling to pay the mortgage off.

@GetOutOfDebtGuy

Chase Bank Kicking the Shit Out of Attorney Run Debt Settlement. Not the Safe Harbor Some Think.

Steve Rhode — Tue, 20 Jul 2010 17:50:49 +0000

From How to Get Out of Debt

In June, 2010 Chase bank filed an adversarial proceeding against now disbarred attorney Keith “Andy” Nelms in his bankruptcy filing that he filed when his debt settlement law firm, Allegro Law, went bust.

The complaint filed by Chase seems to make it pretty clear they are not fans of debt settlement.

Chase makes an interesting argument when it says the attorney, debt settlement company, and other parties involved conspired to collect money from consumers due to creditors and to take money from those funds for their own personal gain. “The Debtor, who took “millions” from “unsuspecting consumers” “for payment of credit card debt,” “illicitly divert[ed]” some of that money to himself, his family and other businesses.”

This position is not just that of Chase Bank, it was also the position of the Judge in the bankruptcy case of Allegro Law. You can read that memorandum here.

From the complaint. All the attachments are in the source link at the end of this complaint.

INTRODUCTION

As described by one State Attorney General, debt settlement is, at best, an “aggressive” and “risky” form of debt management in which consumers stop paying all of their unsecured debts in an attempt to have their creditors agree to a reduced settlement. See Plaintiff’s Complaint, State of Texas v. CSA-Credit Solutions Services of America, Inc., No. 09- 00417, at p. 2 (Dist. Ct. Travis County, Tex. Mar. 26, 2009) attached hereto as Exhibit A. The myriad risks inherent in a debt settlement program “can have catastrophic effects on the consumer,” including the following: (a) an increase in the amount owed by the consumer due to the addition of interest, late fees and penalties on any accounts that are not being paid, (b) a creditor’s decision not to accept, let alone entertain, any settlement offers, (c) an increase in collection calls, (d) a drop in the consumer’s credit score, and (e) an increase in tax liability because any debt forgiveness that may occur as part of the settlement is taxable as income. Id. at 3. As discussed below, when these inherent risks are coupled with promoters who are operating with fraudulent intent and spurious “legal” theories, it is a recipe for disaster.
The Debtor began operating a debt settlement scheme under the name Allegro Law, LLC (“Allegro”) in April 2008. In an order permanently shutting down Allegro’s operations at the behest of the Alabama Attorney General and the Alabama Securities Commission, the Circuit Court of Autauga County, Alabama found, inter alia, that the Debtor and Allegro had “promoted a particularly risky form of debt-settlement service where consumers were counseled to stop paying monthly minimum amounts to their creditors with the chance that those creditors would either write off the debt in full or at least agree to a substantial reduction in the amount” due. See State of Alabama, et al. v. Allegro Law, LLC, et al., No. CV-09-125-F, at pp. 19-20 (Cir. Ct. Autauga County, Ala. Feb. 11, 2010) (order granting permanent injunction and appointing receiver), attached hereto as Exhibit B. As a result, consumers faced “increased interest rates, late fees, further damage to their credit ratings, and additional and increased collection activities by their creditors.” Id. at 20. The Court further found that although “unsuspecting consumers” had “paid millions to Defendants for payment of credit card debt,” the Debtor and Allegro “are illicitly diverting some of this money to themselves and their families and other businesses. Continued irreparable harm will result to consumers without the requested relief because Defendants have already transferred funds to individuals who are not creditors of consumers.” Id. at 14. As a further result of his operation of Allegro, the Alabama State Bar brought an action against the Debtor which resulted in his suspension from the practice of law effective July 9, 2009. See In the Matter of Keith Anderson Nelms, ASB Nos. 08-247 and 09- 4981, and CSP 09-1684 (Ala. Jul. 9, 2009) (order suspending Keith A. Nelms from the practice of law), attached hereto as Exhibit C.
The Debtor’s scheme is simply the latest manifestation of a fraudulent debt elimination scheme created by Hess Kennedy Chartered, LLC, and its principals and affiliates (collectively, “Hess-Kennedy”). It was only after the Florida Attorney General and others filed suits against Hess-Kennedy that suddenly Allegro and its debt settlement scheme sprang to life while Hess-Kennedy’s efforts tailed off dramatically. The Allegro program — right down to the form letters used — varied imperceptibly, if at all, from what had preceded it.
On April 10, 2009, Chase brought suit against the Debtor, Allegro and AmeriCorp, Inc. (“AmeriCorp”) [The back office processor.], Allegro’s and Hess-Kennedy’s back office processor, in the United States District Court for the Eastern District of New York, Chase Bank USA, N.A. v. Allegro Law, LLC, et al., Case No. 08-CIV-4039 (DRH)(WDW). Chase initiated suit to stop the Debtor, Allegro and AmeriCorp from perpetuating the unlawful debt settlement and related schemes first devised and operated by Hess-Kennedy, its affiliates, principals and others acting in concert with them, including AmeriCorp. As a result of Hess-Kennedy’s schemes, Chase cardmembers responsible for more than 12,000 credit card accounts had refused to make any further payments on account balances in excess of $75 million dollars of legitimate debt owed to Chase. Although the Debtor’s continuation of Hess-Kennedy’s schemes only began in 2008, as a result of the Debtor’s fraudulent debt settlement scheme, Chase cardmembers responsible for more than 5000 accounts have ceased making payments on at least $39 million in credit card account balances owed to Chase. Those cardmembers, and Chase itself, have been severely injured by the actions of the Debtor, Allegro and AmeriCorp, and specifically the Debtor’s perpetuation of Hess-Kennedy’s pernicious schemes.
The Debtor’s perpetuation of Hess-Kennedy’s unlawful schemes is particularly reprehensible in light of the fact that the Attorneys General for Florida, North Carolina and West Virginia each successfully brought actions against Hess-Kennedy. In an eerie foretelling of the fates of Allegro and the Debtor, the lawsuit filed by the Florida Attorney General under Florida’s Deceptive and Unfair Trade Practices Act resulted in the appointment of a receiver (the “Florida Receiver”) who took over Hess-Kennedy’s operations on July 18, 2008. See Office of the Attorney General v. Laura L. Hess, Esq., et al., No. 08-007686-08 (Cir. Ct. Broward County, Fla. July 18, 2008) (order appointing receiver), attached hereto as Exhibit D. In addition, due to their role in the fraudulent debt settlement scheme, two of the attorneys involved with Hess-Kennedy were suspended from the practice of law.
The Debtor has replicated the unlawful tactics utilized by Hess-Kennedy and AmeriCorp, in effect taking over Hess-Kennedy’s general processes following the adverse legal actions taken against Hess-Kennedy. Mimicking Hess-Kennedy’s prior conduct, the Debtor induced Chase cardmembers to “retain” Allegro as part of a so-called “bankruptcy prevention program” and, just as occurred in the Hess-Kennedy scheme, caused those cardmembers to instruct Chase to cease all direct contact with them and to deal only with Allegro in connection with their “alleged debt[s]” to Chase. The Debtor also sent Chase virtually identical form letters stating that Allegro’s “counselors” will be reviewing the cardmember’s account as part of a “financial evaluation” and warning Chase not to have any direct contact with the cardmember. The form letters sent by the cardmembers and/or Allegro contain thinly veiled threats of unspecified Fair Credit Billing Act and/or other statutory violations. See Allegro form of demand attached hereto as Exhibit E. Between April 2008, when Allegro’s involvement began, and the end of March 2009, Chase received more than 6,000 such form letters from Allegro on behalf of cardmembers in all fifty states, plus residents of the District of Columbia and Puerto Rico. At the same time, correspondence from entities which were unquestionably part of the Hess-Kennedy debt elimination scam slowed to a trickle of their former volume. Chase has determined that, as was the case with Hess-Kennedy, cardmembers stopped paying Chase amounts owed on their credit card bills after retaining the Debtor and Allegro. – 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.

Other Related Articles to Read
Read the full article at GetOutOfDebt.org, click here: Chase Bank Kicking the Shit Out of Attorney Run Debt Settlement. Not the Safe Harbor Some Think.

Supreme Court to Hear Case About Chase Bank Raising Interest Rates on Cardholders

Steve Rhode — Mon, 21 Jun 2010 18:42:31 +0000

From How to Get Out of Debt

In October, 2010 the Supreme Court of the United States will hear the case of Chase Bank, NA v. James McCoy which was originally filed in 2006 and has been working its way through the court system having been appealed by Chase Bank, now JPMorgan Chase.

This case presents the question of whether the notice requirements of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601-1615 and Regulation Z, 12 C.F.R. § 226, as interpreted by the Federal Reserve Board’s Official Staff Commentary, apply to discretionary interest rate increases that occur because of consumer default. We hold that Regulation Z requires a creditor to provide contemporaneous notice of such rate increases.

FACTUAL AND PROCEDURAL BACKGROUND

James A. McCoy (“McCoy”) brought this action on behalf of himself and others similarly situated against Chase Manhattan Bank, USA, N.A. (“Chase”), a national bank located in Delaware. McCoy alleges that Chase increased his interest rates retroactively to the beginning of his payment cycle after his account was closed to new transactions as a result of a late payment to Chase or another creditor. McCoy claims that the rate increase violated TILA and Delaware law because Chase gave no notice of the increase until the following periodic statement, after it had already taken effect. The district court dismissed McCoy’s complaint with prejudice, holding that because Chase discloses the highest rate that could apply due to McCoy’s default in its cardmember agreement with McCoy (“Cardmember Agreement”), no notice was required. – Source

You can listen to the appeal and arguments by Chase and the attorney of Mr. McCoy. It’s actually pretty interesting. The attorney for Chase seems to get rattled.

06-56278

@GetOutOfDebtGuy

I Used My Cash and Savings to Stay Current on My Debt. – Loui

Steve Rhode — Fri, 21 May 2010 17:01:17 +0000

From How to Get Out of Debt

“Dear Steve,

I Was laid-off Jan of 09, used my savings and cash available to stay current on all debt. I’m recently found employment but Chase has already file a lawsuite against me. I call Chase and worked out a payment plan but they plan on submitting this as a judgement. I was told by a bankrupcy attorney that chase could chose not to sign and honor the payment agreement after I sign it and get a judgement to take 25% of funds in my banking account. I do have other debt and I’m pre-qualified for a loan mod. I not sure if bankruptcy is the way to go or not. what is your advice. I tried to put this on Forum but the window never came up. I have days to figuere out what to do. what do you suggest?

Loui”

The Answer:

Dear Loui,

It’s not clear if Chase is moving ahead with the lawsuit or has in fact already sued you and won and is not going for the judgment. If that is the case then bankruptcy is certainly a serious consideration to block the judgment and help you to address your debt. Bankruptcy would give you a fresh start while you try to recover from your economic tragedy.

My suggestion would be for you to go back and talk to your bankruptcy attorney.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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.

Chase Bank Lowers My Credit Limit As I Make Payments Each Month. – Josh

Steve Rhode — Wed, 21 Apr 2010 19:44:09 +0000

From How to Get Out of Debt

Josh

“Dear Steve,

Chase Credit Cards are cutting my limits as I pay off the card saying the same thing each time.

So, Chase has been cutting my limits despite me having a solid 720+ credit rating. Seems like every time I send in $500 they cut my limit proportionately. They claim my balance has grown too much in each letter, always saying the same thing. However, I’ve done nothing but pay down my debts. Is using the same excuse to cut my limits legal?

Josh”

The Answer:

Dear Josh,

They could cut your credit limit because they say you have toe cheese. The reason why is not important. They cut it becuase they can.

I think that since you get the same letter each month your balance is just above an amount they want to see it at and the reduction and letter happens automatically.

It’s not personal, it’s not you, it’s just Chase saying they don’t value your business or you anymore.

Big Hug!

@GetOutOfDebtGuy

Have a Chase Bank Card. You Might Be Getting Fired.

Steve Rhode — Fri, 16 Apr 2010 20:20:50 +0000

From How to Get Out of Debt

Chase Bank has announced to shareholders that they will be chopping off 15% of card members. CEO Jamie Dimon announced.

“In the future, we no longer will be offering credit cards to approximately 15% of the customers to whom we currently offer them. this is mostly because we deem them too risky in light of new regulations restricting our ability to make adjustments over time as the client’s risk profile changes. – Source”

I know these are painful decisions but in reality what Chase is doing is dropping the customers they never should have taken on in the first place who were basically risk managed by the other card holders that were making Chase more profit at less risk.

We’ll just have to wait to see who the folks are that get the “don’t let the door hit you on the ass on the way out” letters.

@GetOutOfDebtGuy

My Hydroponic Farm Burned Down. – Jay

Steve Rhode — Fri, 02 Apr 2010 22:34:10 +0000

From How to Get Out of Debt

“Dear Steve,

I had a hydroponic farm business that burned down four years ago.

I rebuilt it using credit cards and then I could not make everything cash flow and I have since sold the buildings and equipment piece by piece.

Two years I had 40 creditiors.
Total credit cards 200K
school loans for 3 people 200K
morgages and notes on farm property along with lines of credit attached to them another 200K
600 K total debt.
Income is just under 100K.

My wife lost her income last Christmas and there is not much farm income anymnore.

I have worked and worked with many creditors doing settlements from 100% over 60 months with no interest and fees to 15% on the dollar over 3 -6 months.

I am down to 3 creditors.

One had not contacted me in over 2 years.

One just filed suit for 9K and the law firm will not return my calls ( this was for a Target credit card).

The last is a huge Chase card balance of 38K and I am close to settleing with them. Actually 10 days ago I had a deal from there law firm ” agent ” to pay 500 dollars a month for 12 months and I ask for them to email the contract and when they did not I called and they said Chase took the debt back and I have to start over. I am close and have talked to them a couple of times but, the price went from 500 a month to 1119 a month, a great deal but I countered with 800 because that will be very hard for me to make.

I have sold 401K , ( I know not the best idea).

I have borrowed the max against the balance of what was left.

Sold all my stock and my savings as well as taking things to auctions and craiglist.

I just am at my end and want to finish this without a judgement that makes me sell property at the worse time in the history of real estate sales.

Very worried about the law suit which is against my wife but, we file a joint return and the farm income was always just a schedule F and not incorporated in any way.

FYI, the insurance company only paid 15% on the dollar for the 77K loss.

I am employed and my wife just started a new job but, I do not have lump sums anymore. Already maxed out parents and siblings and even my church.

I know this is a broad and tough thing but, I just do not want to overlook something I should be doing. I have talked to a Bankrupcy atty and they said it usally runs 15% to file. Well if I am settling for 15 to 25% then I do not want to file until I am forced to.

Any answers to my prayers?

Jay”

The Answer:

Dear Jay,

It sounds like you’d do a consumer bankruptcy and those are not by percentage. Maybe the lawyer was quoting you a business bankruptcy price. If not, see another lawyer.

It’s a good thing you walked away from the Chase settlement. Unless you could get something in writing from the creditor a reduced payment offer can still be collected on latter. See Debt Settlements May Be Voided And the Money Due Anyway.

If you feel you’ve done all you and the last few creditors are being unreasonable then bankruptcy is a legal and logical approach.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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 in Debt and Talked to CCCS and They Said They Could Not Help Me. – Ray

Steve Rhode — Mon, 08 Mar 2010 21:01:38 +0000

From How to Get Out of Debt

Ray

“Dear Steve,

I have about $75,000 in credit card debt on 3 cards. I know I have been spending beyond my means and I have already changed my ways. I didn’t have any trouble paying my bills until a few months ago, when several things that needed cash added up.

I have never been late on payment of any kind, and I have continued paying my mortgage and other bills. I have recovered and want to begin repaying my creditors (all three are Chase cards), but they have continued to rack up late fees, increased interest, and now “over the limit” fees, since the interest is so high, it put me above the limits.

The repayment plan they’ve offered is 6% apr and if I start repaying, I will have $27 to live on each month, not counting money to savings and incidentals, like car repairs, periodic child care, etc. CCCS was not able to help me. I make a very good income and I am able to pay my bills, now; I just need a bit of a break on the interest or payment terms, so I can save a bit and get rid of credit cards for good (I stopped using all of them when I no longer could pay the bills).

I’ve talked to two debt settlement companies and I don’t want to go that way. Their BBB ratings are all “F’s” and I know I spent the money I’m fine paying it back under livable terms.

Is there help for someone in my situation out there, or is this the best I am going to be able to get?

Ray”

The Answer:

Dear Ray,

A monthly credit counseling or debt management plan is not going to help you here. You absolutely can’t live on $27 or even with a necessary budget that leaves you with $27. That margin is not safe. Just one unexpected expense will sink the repayment plan.

I’m glad to read that you recognized how you got in this situation and that you are now reformed. There is nothing so educational as clarity. And now it is time for the last step in your education, you need to go bankrupt. Here’s why.

Bankruptcy is the only solution in America that will allow an independent entity, the court, to put together a binding repayment plan that will be based on what you can afford at 0% interest. That part of your debt that the court feels you can’t repay, will be discharged. But even if it is discharged, you can still repay your creditors if you feel you have a duty to do so. Highly moral people can go bankrupt and repay their full debt. It is just that bankruptcy gives you protections as a consumer and a debtor that you otherwise don’t have.

Find a local bankruptcy attorney, call to schedule a free bankruptcy consultation, and go learn what bankruptcy will mean for you. It might be painful, but in your situation it is necessary.

Big Hug!

@GetOutOfDebtGuy

Holy Crap. Chase Minimum Credit Card Payment Goes to 5% of Balance for Mary.

Steve Rhode — Thu, 25 Feb 2010 14:55:50 +0000

From How to Get Out of Debt

“Dear Steve,

My husband and I have credit card debt of $ 87,000 and medical bills of about $ 2,000. The credit card int. rates vary from 2.99 to 9.99%. We have 2 teenage children. We own a mobile home and a couple acres but don’t have much equity in it.

We both have fairly good jobs and have paid our bills on time up to this point. For years I did some part time work in addition to my regular job but 6 months ago I lost that income of about $400 month. Since then we have used the credit cards on quite a few occasions to pay utility bills, phones, dr bills, medicine or whatever on months that we couldn’t pay everything.

We just developed a budget and have cut about $150 month in expenses for things we really didnt need and are working on trying to cut more. We are also trying to sell some small personal belongings but that will only bring in about $2,000 at the most, assuming we can even sell them.

We wanted to put this money in savings. I am looking for addl work to replace the $400 mo I lost. Right now we are just able to pay our regular bills (house, cars, utilities, ins, groceries, gas, etc) and the minimum payment (or a little more) on credit cards. We are not able to put any money away for savings for things that come up so I dont know how we will pay those things other than using a credit card.

Two days ago I received a letter from Chase on one credit card saying the min pymt is going to 5% in August – this will make the pymt on that card go from $250 mo to $625 mo. We are considering selling my husbands truck to save us $300 month to pay this difference. However, we have 3 different cards with Chase so if they all go up we will be looking at owing an additional $850 month. If all our credit cards go to 5% minimums we will owe $2,500 mo in additional pymts on credit cards.

There is no possible way we could ever come up with a way to pay that. My husband is able to retire at end of this year and was planning on retiring then (assuming he is able to get another full time job). We were planning on using his lump sum distribution (about $40,000 after taxes) and the monthly checks (about $800 after tax) to pay off our cars and our mortgage to get to a point where we could breathe.

At this point however we really dont know what to do. If our card min payments all go to 5% I guess we will have no choice other than to file bankruptcy because there is no way we can make those payments. This is causing extreme stress on our lives. I dont even sleep anymore unless a take sleeping pills. I am constantly worried sick about what we are going to do.

I have a medical condition, Multiple Sclerosis (a big part of the credit card debt) and all this stress just aggravates that. We have got to come to some resolution and proceed with whatever we are going to do. We just dont know what the best solution for us is. We really dont want to file bankruptcy but if that is what we end up having to do I guess that is just the way it is and we will have to live with it. I would appreciate your opinion on where we go from here.

Should we just file bankruptcy or will anything else work for us?

Mary”

The Answer:

Dear Mary,

Selling things to fund yet another month without it resolving the situation is not a solution. It helps you to avoid making the hard choices but it does not resolve the underlying problem.

With Chase Bank raising your monthly minimum payments to 5% of the outstanding balance it leaves you in a position where you can’t recover. You’ve been using credit to make ends meet and that strategy will fail.

Sadly, I think the best course of action is for you to immediately find a local bankruptcy attorney and go in and talk to them about bankruptcy for you in your situation.

If you go bankrupt now you can protect the retirement funds, can discharge the debt, can eliminate the underlying stress and that should begin to slowly improve your medical state.

Based on the likely prognosis for your situation, after meeting with the bankruptcy attorney you should probably stop making any additional payments on the credit cards and save that money to go bankrupt.

Unless you take the action of intervening in your situation with bankruptcy it won’t be long when you will be without anything to sell, not in good physical shape to work, won’t be able to afford to make ends meet, and in need of your full retirement funds to take care of yourselves.

While it might not feel like it at the moment, in the face of an almost certain disastrous outcome, bankruptcy is the logical and responsible action to take.

Big Hug!

@GetOutOfDebtGuy

Chase is Making Me an Offer. Either Pay More Each Month or Pay More. – Sheri

Steve Rhode — Sat, 20 Feb 2010 15:08:06 +0000

From How to Get Out of Debt

Sheri

“Dear Steve,

My Chase credit card balance is approx $3,500. Most of the balance is 4.99% for life of loan. I haev automatic deduction for minimum payment (2%). They are increasing my minimum payment to 5% which I cannot budget for. Can they do this legally? They offered to keep the payment near $70 but increase my interest rate.

Can they increase my minimum premium? The only reason they are doing it is because of the low interest rate.

Sheri”

The Answer:

Dear Sheri,

I am afraid that under current law, as long as they give you at least 15 days notice, they can change the terms.

One option would be to say that you refuse the new terms and would like your account closed under the old terms and pay it off that way. The bad thing about that approach is that it will end the benefit the Chase card provides to your credit score and may lower your credit score.

Obviously Chase would either like to have more of your money faster, or less of your money each month for a longer period of time and at a higher rate of interest. Of course if you elect for the higher minimum payment and another creditor does the same thing you could find yourself in a situation where you might default on your debts and then have the rates raised to the maximum penalty interest rate.

This is a classic example of the Golden Rule – He who has the gold, rules.

Under new credit card rules yet to go into effect the limits would be:

Existing balances: Issuers cannot retroactively change the rate on an existing balance unless the account is 60 days delinquent.

Payments: A consumer payment above the minimum applies first to the balance with the highest rate.

Teaser rates: Issuers cannot raise rates for the first year after an account opened. Promotional rates must last at least six months.

Bills: Issuers must send a bill 21 days before the due date.

Over limit: Issuers cannot charge over-limit fees on credit cards unless the consumer has signed up to allow such transactions.

Minors: For consumers under 21 years old, a company must get the signature of a parent or another to take responsibility for the debt, or it must obtain proof that the under-21 consumer can repay credit.

Disclosure: Cardholders must get 45 days notice of change in terms.

Fees: Issuers cannot charge fees to pay by mail, phone, and electronic transfer or online, except for expedited service.

Gift cards: All gift cards must have at least a five-year life.

Big Hug!

@GetOutOfDebtGuy

Should We Make a Deal With Chase Bank on Repaying Our Debt?

Steve Rhode — Mon, 15 Feb 2010 20:36:38 +0000

From How to Get Out of Debt

“Dear Steve,

My husband has a credit card with a $10,000 balance and interest at 23%. needless to say it is impossilbe to get the balance down. he was also laid off last year which doesnt help. i am interested in making a “deal” with Chase if its an option. we have been late on a couple payments over the past year but are currently not behind. we of course have all the other bills and two other cards with low balances and rates.

How do you make a deal and does this sound like the thing to do?”

The Answer:

Well the first step you can make is to call Chase and see what they have to offer you in the way of an internal debt repayment plan. Or you could click here for credit counseling information and talk this a credit counseling group for information about how the interest rate can be reduced in a debt management plan.

My concern is that a repayment plan might not be sustainable for him without a new job. Unemployment benefits do expire and if he was counting on the unemployment benefits in order to make his credit counseling payment I’d have an issue with that.

A credit counseling program is effective when all the payments in the program can be made. If they can’t then he has not been able to achieve his goal of getting out of debt.

So, do you think he could afford to make payments of say $250 a month for the next five years if he was unable to find a new job?

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.

My Parents are in Their Late 80s and Can’t Make Ends Meet With Chase Card Increase. – Brenda

Steve Rhode — Fri, 29 Jan 2010 20:28:41 +0000

From How to Get Out of Debt

Brenda

“Dear Steve,

I helped my parents in their late 80′s transfer balances to a low 3.99% till pay down, because they had been solicited by a number of credit card companies to go ahead and use the convenience checks for a low promotional which grew to over 36% interest. They used it to pay their property taxes, insurance, heating fuel and Christmas over the years for over 35 grandkids and great grandkids, in addition to groceries.

They are now receiving letters from Chase and various other credit card companies, that their minimum due is going up from 2% of entire balance to 5% of total balance due. On the Chase alone that makes the payment go from $200. per month to $500. per month, which they cannot pay. They are on a fixed income of $1500. per month and that is just the increase for 1 card. I asked Chase if there was an opt out and could they keep the affordable terms and cancel the card. They said no….there is no such option. What can I do to help my parents now? I would appreciate some safe advice.

Thank you and God bless.

Brenda”

The Answer:

Dear Brenda,

I think the situation is fairly clear. Your parents are not in a position or time in their life where they can earn additional income. With a finite amount of income their lives either have to fit within that income, supplemental income must be given to them to help make ends meet, or the debts will have to be reduced.

I don’t know if they have any assets for creditors to go after and I’m not a big fan of ignoring the creditors and disregard collection attempts because some may say your parents are judgment proof. I think the cleaner solution here is for you to go meet with a local bankruptcy attorney and discuss bankruptcy for your parents as a way to eliminate debt they can no longer afford to pay.

Bankruptcy in their situation is not a judgment about what kind of people they are. It is a reality based on their age, situation, income production and likelihood that this situation would ever reach a definitive conclusion with any other course of action.

My primary concern is now that those credit lines will be closed, I need for you to focus on a way to help your parents make ends meet without borrowed money.

Big Hug!

@GetOutOfDebtGuy

I’m in Debt Due to My Own Foolishness and Stupidity. – Mari

Steve Rhode — Thu, 28 Jan 2010 13:35:19 +0000

From How to Get Out of Debt

“Hi Steve,

I am $18k in credit card debt due to my own foolishness and stupidity. My intentions were good, and I was good at paying my debt, but since I accumulated so much, I eventually wasn’t able to pay them all on time.

There are a couple unsecured credit card debts ($4k from Chase and $6k from WaMu) that I am having a difficult time paying. They both went into collections just a month ago. I was paying on the $4k for what little I could afford to the original creditor (which was $100 a month), but it wasn’t enough and it was sent to collections.

I even paid what little I could to these companies, but they still sent me to collections.

Since Chase owns WaMu now, I now owe Chase the entire amount.

I have other debts, but I have been paying them.

As for these two debts, I am so worried about being sued and going to Court. There is no way that I can pay a lump sum. My phone is ringing all hours of the day and I suspect it is not from the original creditor, but from collection agents. The agent calls and leaves messages indicating that I should call them back about a business matter, but not saying what it is about.

I can pay the debt, if I am able to pay in small monthly amounts, but I know that at this point, it won’t be accepted.

Can you please advise me on what I should do? Your response would be truly appreciated.

Sincerely,

Mari”

The Answer:

Dear Mari,

If you can only afford $100 a month that’s not going to be enough to enter a credit counseling program to get a payment plan going. The debt management program would require about $350 a month.

Outside of a debt management plan your only other choice to totally eliminate these debts is going to be with bankruptcy. Otherwise, unless you take some action there is nothing to prevent you from being sued for these debts.

You should click here to find a local bankruptcy attorney and make an appointment to go in and talk to them about what bankruptcy would mean for you. It’s the only way to close the door on this for good and stop all collection activity.

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 Got Caught in the Chase Credit Card Term Changes That Raise My Interest Rate. – Dave

Steve Rhode — Fri, 22 Jan 2010 17:39:08 +0000

From How to Get Out of Debt

“Dear Steve,

Caught in the Chase scam. Accepted offer of “low interest for the life of the loan” to consolidate debt with a Chase card. I have always paid on time and more than the minimum, and have not used the card for shopping or other purposes. They now advise that my minimum payment will go up to 5% (from 2%) and I cannot possibly meet their demand. I had already (too late) changed my standard of living. I don’t have cable tv, no cell phone, don’t smoke, drink, play the lottery, or have any hobbies that take my money.

Chase says there is no ‘opt out’ for this issue, other than to accept the 2% minimum with a much higher interest rate. Is there any recourse?

Dave”

The Answer:

Dear Dave,

To sum up the situation succinctly, “you’re screwed.”

If the offer made to you was to either keep the 2% payment but have your interest raised or keep your current rate but pay 5% of the balance as a monthly minimum payment, you fell in the same trap as many others.

You might want to try and contact the Proactive Solution Team at Chase and tell them the new terms create a financial hardship for you. They may elect to close your card and keep your rate low. Call Chase customer service using the telephone number on the back of your card and ask for the Proactive Solution Team.

This trap is designed to trip people up and lead them into default which in turn increases income for Chase Bank. It is a brilliant but simple plan for Chase to achieve that goal.

Best little part of the plan is the fact that Chase is apparently not offering an opt out path for current card holders. And the unfortunate part is they don’t have to offer one. In 2010 new credit card laws will go into effect that will prevent such action but as of today, that behavior is perfectly legal.

Credit Card Accountability Responsibility and Disclosure Act of 2009
(Provisions will be effective on February 22, 2010, unless otherwise noted.)

Provides Enhanced Disclosure of Card Terms and Conditions

Requires issuers to provide cardholders with 45 days notice of annual percentage rate, and other significant changes (Effective August 20, 2009);
Requires issuers to disclose changes in card terms that take effect upon renewal;
Requires issuers to disclose the period of time and total interest that will be paid if a consumer repays a card balance by making only the minimum monthly payment;
Requires full disclosure in billing statements of payment due dates and late payment penalties; and
Prohibits the use of the term “fixed rate” unless the APR or interest rate will not vary for any reason over the period specified.

Requires Fairness in the Timing and Application of Card Payments

Requires credit card statements to be mailed 21 days before the bill is due rather than the current 14 days to treat a payment as late or deny a grace period otherwise offered (Effective August 20, 2009);
Prohibits issuers from setting early morning deadlines for credit card payments;
Requires that credit card payment due dates be the same day each month;
Requires that payment at local branches be credited on the same-day; and
Except for deferred interest balances, requires payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest.

Fosters Responsible Lending

Requires issuers to consider a consumer’s ability to pay when issuing credit cards or increasing credit limits.

Restricts Certain Fees and Interest Charges

Prohibits issuers from charging a fee to pay a credit card debt by mail, telephone, or electronic transfer, except for live services to make expedited payments;
Prohibits issuers from charging over-limit fees unless cardholder has agreed to allow the issuer to complete over-limit transactions and restricts the manner in which over-limit fees may be assessed;
Requires penalty fees to be reasonable and proportional to the omission or violation
(Effective August 22, 2010);
Prohibits applying excessive fees to the credit available on low-credit, high-fee credit cards; and
Prohibits interest charges on debt paid on time (prohibits “double-cycle billing” and requires that when grace periods are offered, they must extend to partial payments ).

Prevents Unfair Increases in Interest Rates and Changes in Terms

Prohibits APR, fee, or finance charge increases during the first year an account is opened and subsequently on outstanding balances subject to limited exceptions that do not permit “universal default” or “any time/any reason” repricing;
Requires a credit card issuer who increases a cardholder’s interest rate to periodically review and decrease the rate if indicated by the review (Effective August 22, 2010); and
Requires promotional rates to generally last at least 6 months.

Strengthens Oversight of Credit Card Industry Practices

Requires Federal Trade Commission to issue rules that prevent deceptive marketing of free credit reports; and
Requires credit card issuers to post credit card agreements on the Internet and provide those agreements to the Federal Reserve Board to post on its website.

Enacts Safeguards for Young People Who Obtain Credit Cards

Requires issuers extending credit to consumers under the age of 21 to obtain the signature of an individual 21 years or older who will take responsibility for the debt or proof that the applicant has an independent means of repaying any credit extended;
Limits prescreened offers of credit to young consumers;
Prohibits increasing a credit limit unless both the cardholder and other jointly liable individual agrees to the increase; and
Increases protections for students against inducements to obtain a credit card, and increases transparency of affinity arrangements between credit card companies and universities.
Enhanced Penalties
Increases existing penalties for companies that violate the Truth in Lending Act for credit card customers.

Gift Card Protections (Effective August 22, 2010)

Requires certain gift cards to have at least a five-year life span; and
Eliminates the practice of declining values and hidden fees for gift cards not used within a reasonable period of time.

If you’ve already trimmed your life to the bone and cut out everything that might be discretionary in your life, I think you might have reached the end of your financial rope.

Could you please tell me more about your situation and how much you owe to other creditors? Just give me an update in the comments section of this question.

Big Hug!

@GetOutOfDebtGuy

What Can We Do to Force Chase Bank to Give Us Realistic Repayment Terms? – David

Steve Rhode — Thu, 31 Dec 2009 20:42:31 +0000

From How to Get Out of Debt

“Dear Steve,

My wife Shantell has two unsecured credit cards from Chase Bank. Her debt on the cards totals about $23,000.00. They are threatening to sue her on January 14 if she does not pay almost $2400 on the largest debt upfront to have the debt removed from the hands of the attorneys so she can deal directly with Chase.

We are willing to repay the debt, but they want more than we have upfront and are driving us nuts with constant phone calls.

What can we do to get Chase to give us more realistic terms for repayment? We want to avoid bankruptcy if we possibly can.

David”

The Answer:

Dear David,

The only tool you have to legally make them either accept a repayment plan you can afford or eliminate the debt is bankruptcy.

You have unfortunately now discovered why the leading cause of bankruptcy is collection pressure by creditors or collectors. It is obvious you want to pay what you can afford but you can’t afford their demands.

I’m afraid I am not convinced Chase will actually recall the debt. I would not be surprised if that isn’t a hollow promise to get you to pay something.

If you don’t feel you can come to some mutual agreement with the law firm that you can afford then I would take the money you would have paid them and give that to a bankruptcy attorney. Click here to find a local bankruptcy attorney you like. Make an appointment and you and Shantell should go see the bankruptcy lawyer together. Don’t go with the intention of filing bankruptcy. Go to learn what bankruptcy would mean to you in your situation.

Rather than getting intimidated by the collector, get informed and find out what legal tools you have to stop the suit, prevent a garnishment and get this matter resolved. It has obviously been going on for quite some time.

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.

John McCain Has Bad Credit Card Rates

Steve Rhode — Tue, 29 Dec 2009 23:11:50 +0000

From How to Get Out of Debt

So there I was on opensecrets.org and looking at the financial disclosure form for presidential candidate Senator John S. McCain, III, and right there on page 27, there it was.

John and Cindy McCain have a joint credit card with Chase bank with a balance of between $10,000 to $15,000 and they are paying 25.99% on it. That hit me like a ton of bricks, why would the McCain’s be paying a penalty rate of 25.99% unless they had missed payments, had some recent credit problems or had a bad credit score?

According to the low rate credit card section of this site, Chase is currently offering a credit card at 10.49%.

On the same page of their financial disclosure form you can see that Cindy McCain has two American Express cards, each with balances between $100,000 to $250,000. Now that is a lot of unsecured credit card debt.

The financial disclosure form for presidential candidate Senator Barack H. Obama showed that he had no liabilities over $10,000 to report. And yet Senator Obama is the one pushing for a Credit Card Bill of Rights and more disclosures and protections for American consumers from unfair and unreasonable credit card company practices. If he is elected and has an opportunity to enact those protections it would help to protect John McCain from the penalty rate he is paying on his credit card.

It appears that Barack Obama has a very good grasp on the problems faced by people in America today that are carrying credit card debt. An article in the Chicago Sun-Times reveled a number of comments that Senator Obama made regarding credit card debt.

“For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford,” Obama said. I agree.

Obama said he knew only too well how easy it was to get caught by deceptive credit card deals: “In the interest of full disclosure, I’ve gone through this. I’ve had credit cards.” Wouldn’t it be nice to have a President that actually lived through credit card debt and cares about all the consumers in financial pain?

Source: John McCain Has Bed Credit Card Rates

Chase Put a Hold on My Bank Accounts and I Can’t File for Bankruptcy. – Gina

Steve Rhode — Tue, 23 Jun 2009 20:13:56 +0000

From How to Get Out of Debt

Gina

“Dear Steve,

Chase places a judgement against me for $3,700 for a credit card. I was going to include this in my bk. They got to me before I could file and put a legal hold against 3 bank accounts (joint checking, joint savings, personal checking). The hold was for $7,500 per account for a total of negative $22,500.

I had about $1,400 between the three accounts (this was from a hardship withdrawl I took from my 401k to pay my mortgage). I also had a pay check direct deposited 2 days later — which I can not access.

I live in IL. How are they allowed to hold all of my 401k withdrawal and my entire paycheck? Is there any way to get this money back?

I’ve changed my mind quickly and will be filing a 13. However, I don’t even have the $450 the lawyer needs for fees b/c they are holding all of my money.

Gina”

The Answer:

Dear Gina,

I think you need to discuss the situation with the bankruptcy attorney you have selected. They may be able to help.

I’ll ask a bankruptcy attorney friend to comment to give us some insight. I don’t know if the stay from bankruptcy will release the money held.

Big Hug!

@GetOutOfDebtGuy

I’m Doing Debt Settlement and Getting Sued by Chase Bank. – Darlene

Steve Rhode — Tue, 05 May 2009 14:40:58 +0000

From How to Get Out of Debt

Darlene

“Dear Steve,

My husband and I have a judgement against us from Chase for $5200. Our debt settlement company said they would answer the summons for us. The lawyer from Chase said they don’t work with debt settlement. We told them we didn’t have the money to pay (may be losing our home). The next thing we know we received some documents from the local justice court saying “Judgement by Default Without Hearing.” We can’t afford a lawyer and dont know what this means.

The documents we received read “Motion and Affidavit For Entry Of Judgement By Default Without Hearing” Does this mean we just have to find a means to pay it without Chase taking us to court?

Darlene”

The Answer:

Dear Darlene,

There is no rule or law in the United States that any creditor must work with your appointed third-party. In this case, your debt settlement company.

Working with a debt settlement company does not prevent you from being sued, even if the debt settlement company responds to any document or summons on your behalf.

The law allows the creditor to pursue their contractual rights through your agreement with the creditor, and under the law, in the courts.

If you are not paying Chase and have broken your agreement with them, they can sue you and you seem to have no defense to that claim.

I’m not going to address the specific issue about the document they asked you to sign except to tell you to immediately contact an attorney licensed in your state for specific legal advice or contact a local bankruptcy attorney, to go bankrupt and end this issue.

If I was a betting man, which I am not, at least with real money, the safe bet would be that you will lose this fight with Chase, be successfully sued, and that will lead to a judgment against you and a lien against property, wage garnishment, or bank account garnishment.

Somehow I need to convey to you in a loving and caring way that you need to pull your head out of the sand on this issue and go get legal help. Once you do that, this situation with Chase bank will be resolved, probably through bankruptcy. Let me know what you decide to do.

Big Hug!

@GetOutOfDebtGuy

Circuit City May Be Dead, But Not The Circuit City Credit Card. It’s Alive.

Steve Rhode — Fri, 03 Apr 2009 18:28:07 +0000

From How to Get Out of Debt

This news about Best Buy and Circuit City was recently reported.

Best Buy Co. Inc. is making a move to woo people who had credit cards through its now-defunct competitor — Circuit City, according to media reports.

Best Buy spokeswoman Sue Busch told Bloomberg News that Chase Bank USA will automatically issue Best Buy cards to existing Circuit City credit-card holders.

A notification to Circuit City cardholders was sent March 26.

Chase handled credit-card transactions for both retailers. I’m sure Chase doesn’t want to lose those customers, just find a place to put them and Best Buy seems like a no-brainer.

Credit Card Companies Are Coming For You. Protect the Wife and Children.

Steve Rhode — Thu, 20 Nov 2008 14:50:35 +0000

From How to Get Out of Debt

I see a new advertising campaign in our future.

When Banks Panic
You Lose

Even though the Federal Reserve has lowered its rate to 1%, banks are raising your interest rates in hopes of making a bigger profit. Oh yes, they are raising your fees or charging news ones as well.

At a time when the government is pleading for consumers to return to consuming, the banks are instead dissuading people from doing this by punishing consumers with higher fees and charges. And at the same time the banks are getting billions of dollars in bailout money to help get this economy moving again. It almost sounds damn near unpatriotic.

And let’s be clear about why the banks and credit card companies are scrambling to make these new revenue streams and profits. It is because the brightest and most financial savvy banking minds of our time swindled themselves by buying and insuring crap loans that inflated housing values and now result in record numbers of foreclosures. That’s some damn smart banking.

So the banks losses are the direct result of their own ineptitude and you are going to pay for it with higher credit card fees and charges.

What Credit Card Companies Are Doing

American Express

Raising standard purchase interest rates and boosting APRs for cash advances, late payments and defaults.

Boosting the foreign exchange transaction rate for consumers and small business by 35% from 2% to 2.7%.

Bank of America

Is offering lower initial credit lines and closing some accounts with zero balances that have been inactive.

Reviewing all accounts and will adjust interest rates, fees and terms as they see fit based on risk.

Removed the balance transfer fee cap.

Look at the details of a recent BofA credit card offer here.

CrunchBase Information

Bank of America

Information provided by CrunchBase

Capital One

Changing its minimum payment formula which may increase monthly payments for some customers.

Raising interest rates.

Chase

Raising overlimit, cash-advance and default interest rates.

Will charge some customers a $10 monthly service charges and raise monthly minimum payments way up to 5% of the outstanding balance, from 2% where they are now.

Citibank

Raising interest rates on some customers.

Discover

Removed the balance transfer fee cap.

I would not be surprised at all to see monthly payments for cardholders to increase significantly as more creditors take the Chase lead to increase monthly minimum payments from where they are now. It is a quick win to increase their cash flow and will likely result in higher losses, but more cash now, when they need it.

Here is an example of what it can mean to you:

$10,000 Card Balance
Old Minimum Payment: $200/mo
New Minimum Payment: $500/mo

Imagine if all your cards did that to you, which they legally can. Many monthly budgets would be torpedoed leading to missed or late payments, but wait, that generates more fees to the credit card companies. Me sees a plan.

The banks will claim that by raising the monthly minimum payments that it is in the interest of the debtor since it will help the consumer to pay their bills off faster and get out of debt sooner. Truly this is nothing more than raising the hurdles higher and then saying it is better for runners who now have to jump higher.

Credit Cards Still Available

You should not get the impression that credit card accounts are not still plentiful and available. Just look here to see what is being offered.

While credit card companies are going to punish and raise revenue on its current crop of hostages, ah, customers, they are not going to stop extending credit. It’s what they do.

That is a good news, bad news situation. If you are stuck with a bad card with horrible rates and terms, it is still possible to switch. Granted, with credit standards toughening it is harder to switch of you have bad credit.

CrunchBase Information

Bank of America

Information provided by CrunchBase

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