Family Debt Problems

15 Sep Debt collectors using auto-dialers face BIG fines

The average consumer debt collector employee places 200 collection calls per day or 50,000 calls per year! How do they make so many calls? Most use a technology known as autodialing, even though the use of an autodialer by a collector often violates the Telephone Consumer Protection Act (TCPA).
The penalty for violating the TCPA is HUGE – Every illegal phone call carries with it a $500 penalty, and if the collector knows he is violating the Act, the penalty is tripled! As the name implies, an auto-dialer is a sophisticated computer system that constantly and continuously dials numbers on collection accounts. When someone answers the phone, the computer immediately delivers the call to a collector, and the account pops up on the collector’s monitor. So, if you are behind in your bills, you (and your family and your employer) are getting calls from your debt collectors – a lot of calls! Not every call using an autodialer is illegal. Most notably, a consumer debt collector can call a debtor at home using an autodialer. However, the following two acts violate the TCPA if an autodialer is used:
  • Making a collection call to a cell phone belonging to the debtor or any third party
  • Making a collection call to any telephone number not belonging to the debtor
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19 Jun Debt Settlement Companies Come Under Increasing Scrutiny from Regulators

The lead article in the Economy section of the June 18, 2010 New York Times offers revealing insight into the practices of "debt settlement" companies. Debt settlement companies position themselves as alternatives to bankruptcy, suggesting that they have insight into "secrets that the credit card companies don't want you to know." In fact, the business models used by debt settlement vendors is fairly simple. As the Times article explains:
In the typical arrangement, the companies direct consumers to set up special accounts and stock them with monthly deposits while skipping their credit card payments. Once balances reach sufficient size, negotiators strike lump-sum settlements with credit card companies that can cut debts in half. The programs generally last two to three years.
The problem, however is this:
What they don’t tell their customers is when you stop sending the money, creditors get angry,” said Andrew G. Pizor, a staff lawyer at the National Consumer Law Center. “Collection agents call. Sometimes they sue. People think they’re settling their problems and getting some relief, and lo and behold they get slammed with a lawsuit.
Further, "the industry’s own figures show that clients typically fail to secure relief. In a survey of its members, the Association of Settlement Companies found that three years after enrolling, only 34 percent of customers had either completed programs or were still saving for settlements. According to one debt settlement executive quoted by the Times, the entire industry is like a "Ponzi scheme."
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13 Mar Co-Signors Beware – Don’t Sign If You Can’t Afford It

As a Consumer Bankruptcy Attorney, I get to see the amazing financial deals that my clients get themselves into. Some of my bankruptcy clients must have been amazing salesmen to get family members and others to co-sign their debts. I don't know what a person would have to say to get me to put my signature on a piece of paper for them. Unless, it's a scene from The Godfather. " My father put a gun to his head and said either his signatureor his brains were going on that contract." (Michael) Then I would have to consider the idea. But, in the back of my mind I would be thinking about whether or not I could pay for this if the other party defaults. Usually I am always upbeat and positive, and I like to make my clients feel like there is hope and a light at the end of the tunnel. Sometimes the tunnel is long and dark in the beginning, but, the light eventually comes.
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28 Feb Getting A Tax Refund? Just Say No To The Refund Being Loaded On A Credit Card!!

Recently, I discussed why consumers needed to rethink getting their tax refund quickly with a refund anticipation loan. The same tax prep companies that push the refund anticipation loan have a relatively new tool to help them make even more money (like the high interest is not enough?) from taxpayers. The loading of the refund anticipation loan (or the regular refund) on a prepaid credit card, issued through, of course, the tax preparation company. Today's warning involves the Emerald Card from H & R Block.
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