If your debt and net worth are both declining, you are not alone. Americans are facing debt collection and even collection abuse because of ongoing unpaid bills. As a result, more people are spending less and the national economy continues to decline.

CNN Money reported on the recent flow of funds report compiled by the Federal Reserve. Household debt fell $30 billion. At the same time, Americans’ net worth plummeted by the largest amount in the past 50 years.

One of the reasons debt fell is over a million Americans surrendered their homes to foreclosure since August, 2007. Credit is more difficult to obtain when people are already facing debt collection on other bills. With all the defaults, it is also more expensive to get credit.

Because so many Americans are already dealing with unpaid bills and debt collection, they can’t afford to finance major purchases such as cars and homes. Jobs are lost, corporations are seeking the shelter of bankruptcy and the overall economy continues to suffer.

Former Federal Governor Lyle Gramley commented, “Consumers are going through a major change in their spending and savings habits. Throughout the housing bubble, consumers had a savings rate of zero, relying on the rising price of their homes. Now they’re saving money for the future instead of spending it.”

If you are facing debt collection, it’s time to make a change. Don’t wait until your telephone is ringing all day and your mailbox is stuffed with collection letters. Deal with debt collectors head-on. Talk frankly about your financial circumstances rather than ignoring the problem.

Debt collectors cannot threaten you, coerce you, charge unauthorized fees or call at odd hours. Owing money does not mean you don’t have rights. Feel confident to approach debt collectors without dealing with collection abuse.

Take control of your finances and start pulling back with the rest of America. Review your current outstanding debts and earnings. Discuss your options with a professional attorney to get a clear picture of your financial future.

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The current financial state of the nation has brought many big businesses to their knees. Companies have gone from prosperity to bailouts, profits to bankruptcy. On Monday the Chicago Tribune reported the world famous Tribune company filed for Chapter 11 bankruptcy.

By filing for bankruptcy, the Tribune was looking for essential protection from debt collection. Chairman of the Tribune Sam Zell referred to the forces against the media industry and economy as a “perfect storm”. With diminished advertising revenue, the Tribune sought the shelter of bankruptcy.

Zell states, “This filing is all about relieving the pressure on the company from too much debt. This is a great challenge. It’s a great opportunity. The chief operating officer in charge of debt will be yours truly.” He hopes the company will come out of the Chapter 11 process stronger.

When the company realized their dangerous level of debt in a falling economy, they started to cut costs. The company is still earning revenue to payoff their debts. The Tribune has 180 to develop a plan the bankruptcy court will deem acceptable.

Much like the Tribune, each individual has their moment of reckoning during a difficult economy. Their first step was to find ways to increase revenues and cut expenses. This useful advice is beneficial to people, too.

If you are facing debt collection and your telephone is ringing constantly, it’s time to review your expenses and income. Start by tallying your monthly bills versus your monthly income. Finish by totaling your outstanding bills versus your annual income last year.

Make payment arrangements with your creditors and stick to them. Creditors who threaten you or demand something you cannot deliver might be committing collection abuse. Collection agents are not allowed to curse, threaten or call constantly to demand payment and you have legal rights.

When you finances start to spiral out of control, call an experienced consumer protection lawyer to discuss your options. Don’t let debt collection and collection abuse take over your life. Get the help you need to get back your personal and financial freedom sooner than you think.

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All debt collection efforts are not legal. If you are facing collection abuse, you are not alone. On Monday, the Federal appeals court ruled against a Afni, a major debt collection agency, for imposing improper fees.

The 7,000 Cingular Wireless customers who were part of the class action will be paid damages.  Last year, the plaintiffs in the class action against collection agency Afni were awarded over $200,000 in damages.

Afni was also allowed to appeal, which they did. On Monday, the original ruling was upheld. The Court found Afni’s collection charges were 15 percent of the total amount due.

The charges were not allowed in accordance with the cell phone contracts with customers. The fees were also a violation of the Fair Debt Collection Practices Act (FDCPA) and Wisconsin law. The class can also petition the Court to attempt to get additional damages to pay for the cost of the appeal.

If you are facing collection abuse, you don’t have to take it. Owing money does not mean you should be harassed. Debt collectors cannot impose additional fees, call in the middle of the night, threaten you or use inappropriate language.

Further, third party debt collectors often attempt to collect old debts referred to as “zombie” debts. Never admit to a debt unless you are certain it belongs to you. By law, the debt collector must provide valid evidence of the debt when you request it.

As outstanding debts increase across the nation, debt collectors are getting more aggressive. They often feel justified in their actions. Consider the statements made by Debra Ciskey, the director of compliance at Afni:

“We do strive for excellent customer service for our clients. In this particular case, it was a technical issue that was being litigated. We interpreted the contract to allow us to add collection fees. The court looked at the specific language of the contract and interpreted it differently.”

Don’t be intimidated by abusive debt collectors. If you are dealing with debt collection abuse, talk to a lawyer to find out your options. Collection abuse is against the law and you should know all your rights.

Source:  Chicago Tribune

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If you are staring debt collection in the face, there are numerous predators looking to “help” you out. From phony debt collection agents to predatory mortgage brokers, if the help sounds too good to be true – it’s likely it is.

Recently a New York Times editorial discussed the latest predators. An increasing number of people are unable to payoff credit card balances and other unsecured debts. To get out of debt collection, people may consider re-mortgaging to save money.

The advertisements are purposefully alluring to grab your attention. Consider the lofty promises made by a mortgage loan modification company on Long Island.

“Reduce your mortgage rate to as low as 4%. No refinancing, no closing costs. Reduce your monthly payment. Foreclosures, late pays/bad credit okay.”

As I stated earlier, inflated statements may sound tempting but they often omit the most important facts. In this instance, the cost for loan modification is 1 percent of the outstanding loan with half the amount paid upfront.

Often these businesses are unregulated. Some are scammers who take the money or even commit identity theft. Of course you never see them again. If you attend housing workshops to get help, often scammers pose as troubled borrowers. They wind up using their sales pitch on everyone attending.

Many of these loan modification companies boast a 100 percent success rate in lowering mortgage loans. Simply put, that’s impossible. You can’t fix every loan so claims of a “100 percent success rate” are clearly untrue.

Unfortunately, often the banks and nonprofit organizations designated to help borrowers are less assertive than predatory lenders. After all, predators want your money and will stop at nothing to get it. They know you are dealing with debt collection from public records and bank on your fears.

Don’t fall prey to predatory lenders. Rather than looking for help in all the wrong places, talk to a professional attorney to explore real solutions to your financial dilemnas. If you have already fallen prey to a predator, contact an attorney to find out your options.

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Harassing collection calls and letters often leads people directly to the bankruptcy lawyer’s door. And as a New York bankruptcy lawyer, I see a fair number of people who come to me for exactly that reason.

But for some consumers, the answer is not filing for bankruptcy. People who have simply gone through a rough patch and are back on their feet need nothing more than a little breathing room. They need some time to get their debts paid off, or just have one or two overdue bills to tackle.

Maybe they have assets that wouldn’t be protected in a Chapter 7 bankruptcy. Maybe their situation makes a Chapter 13 bankruptcy problematic. For those people, all they need is a way to stop the collection calls.

The Fair Debt Collection Collection Practices Act gives you that way to stop phone calls for the price of postage. All you need to do is write a letter to the debt collector telling them to stop calling you.

That’s it.

No magic there, folks.

One letter, sent to the debt collector, stops the phone calls.

When sending this “cease contact” letter it’s best to make sure it goes by certified mail or some other way that ensures delivery. Nothing worse than sending a letter and having no way to prove it got there. For my clients, I recommend that they send the letter by fax as well as by certified mail because with a fax, it gets there fast and you get a confirmation sheet proving that it got there.

What happens if the phone calls keep coming? It’s time to consult with an experienced debt collection abuse lawyer, someone who will sue the abusive debt collectors on your behalf and protect your rights.

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