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Recognize and Review a Debt Collector

Complaints about debt collectors number in the ginormous every year. The volume is somewhat understandable. I mean… how many other professions do you spend nearly all of your time trying to get someone to do something they cannot or will not do? Let’s face it, getting people to pay bills they likely can no longer afford is not all smiles and niceties.

I started out my debt and credit career because I got angry after a friend shared with me what a debt collector said on the phone. This led to me researching debt collection consumer protections, that then led to my helping my friend settle that bill with a debt collector, and for much less than what was owed. That was more than 20 years ago.

I have helped people settle many thousands of debts since then. In that time I have seen debt collection complaints increase dramatically. There is little that a person can share with me about what a legitimate debt collector may have said or done (in an effort to get paid) that would shock me. Some of the full on scam debt collectors can still surprise me a little with how brazen they can be.

How many people complain about pleasant debt collectors?

You do not often hear anyone talk about a pleasant experience with debt collectors. It is just not news worthy. How many people are going to read an article titled “Woman resolved an old bill by calling a debt collector with excellent communication skills”? How many people writing about personal finance topics would bother to write the article?

I am in somewhat of a unique position to write about other peoples experiences with debt collectors. The vast majority of my work with consumers has been teaching people to deal with debt collectors on their own. That means picking up collection calls and calling to speak with debt collectors themselves.

People often share a bit of nervous reluctance about talking with debt collectors, especially if they had a negative experience in the past, or read about collection drama online. But after sucking it up and calling, the overwhelming feedback from the people I work with tends to be how surprisingly easy it was to speak with debt collectors.

Admittedly, there are some things that set people up for success when speaking to a debt collector. I am usually working with people who are trying to resolve old unpaid bills. And most people I help have a realistic expectation about the potential outcome when resolving their accounts in collection. Talking to debt collectors when seeking a realistic solution is going to be different than when trying to avoid the debt all together.

Debt collector recognition and review.

There is no doubt that debt collectors behave badly. And they get all the press. When you do see something positive in the media about a debt collector, it is often a public relations puff piece (usually around the holidays). But the purpose of this post is to point out the fact that there are nice debt collectors too. By nice I mean they are easy to communicate with, and do not come across as if they are in a confrontation with you about your debt. A pleasant debt collector is still all about the business of collecting, so do not misunderstand their cordial tone. They still have a job to do, and that job is not to look after your best interests. That is still your job. But helping you understand how you can reach common ground (within your ability) to resolve unpaid bills, while maintaining professionalism and a pleasant tone, is what I view as an established metric worthy of recognizing.

I invite all readers to post in the comments below about any positives you experienced when dealing with a debt collector. You are invited to share the name of the debt collector, the collection agency they work for, and even their direct phone number and extension.

I will start this list off with a debt collector recognition and review of my own. I should set the situation up a little first.

Friends and family are well aware of the work I do. I get referrals from them for consults all the time. Even though I currently focus most of my time on publishing, I still actively work some files and accounts where I know the outcome is better reached by me communicating with the debt collector. That is what happened with a referral from a few weeks ago.

An elderly woman with a fixed income and no assets owed over $10,000.00 to one of the larger credit card banks. She had no ability to pay with additional medical expenses. Her account had been placed with an outside third party collection agency. Here is how that went.

Global Credit and Collection Corp.

The agency that was collecting the unpaid credit card was Global Credit and Collection Corp. The name of the debt collector that assisted me was Rohina Pasani.

When I negotiate bills for another person I need written or verbal authorization. I have forms for that with CRN letterhead that I have used for many years. This file was a personal referral, so I sent forms in to Global Credit and Collection that just contained my personal information and no company identifiers. And initially I did not mention I worked in the debt and credit industry to Ms. Pasani, just that I was helping someone I know. I am pointing this out so that readers know I was not given any different treatment than you might receive.

Rohina Pasani is a consummate debt collection professional. She recognized the account holders commitment to having maintained her account for so long, and immediately understood the financial situation required some concessions if the debt were to be resolved. I generally have a target amount of money to pay in order to resolve a debt before I call a debt collector. That target was reached, and there was no trouble getting the settlement agreement documented and sent to me. There was no trouble with getting the time needed (a couple of weeks) for the money to be available to pay the amount agreed to.

Once the agreement with Global Credit and Collection was reached and everything put in motion with the payment, I did mention I had experience in the debt and credit space, but only in passing when thanking Ms. Pasani for helping resolve the account.

I have only truly had one debt collector conversation that I hung up from thinking “I could have gone my whole life without having made that call”. On the flip side, the majority of people I have communicated with to resolve debts have not left an indelible impression. Rohina Pasani is an exception.

I wanted to write this post to recognize Ms. Pasani, and also to have an article up that I can send people to in order to share their own story. If you have a positive debt collection experience to share, and would like to recognize a debt collector, you are welcome to share in the comments below.

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Debt Help and Advice Costs in Ways You May Not Think About.

If you need help dealing with problem credit card, and other types of debt, there is a seemingly endless amount of tips, advice, and opinions about what amounts to only a half dozen options. One of those options only requires spending less, or earning more. Another hopes that you would systematically pay more than your minimum towards your highest interest credit card until you have a zero balance, and then take all that money and pay down the next debt, followed by the next… until your debts are manageable or paid off. These are the conventionally wise forms of debt help that the majority of folks can speak to with confidence. That is because the solution to the debt problem is just simple math and good old self discipline.

But most people leave out a great deal of math, and also how many people fail with conventional wisdom. And the vast majority of tipsters, advisers, and well wishers do not tell you how you can fail even when you do pay off all your debt. But I am getting ahead of myself.

There are no clear and reliable resources for how many people fail at spending less, or using debt roll up strategies to pay off problem debts. But there are resources that speak to how other debt help options measure up. I am not out on a limb when I say half of all debt help programs fail to achieve the result advertised – debts paid down to zero – and am, in fact, optimistically rounding up when it comes to credit counseling, debt settlement programs, and chapter 13 bankruptcy. But what if I told you the majority of people that do succeed with paying down debt using debt settlement or credit counseling can be seen as having failed?

You see… problem debt is not always just a temporary setback that finds you stopping in the pit for a new set of rubber and some fuel, and then back out you go to zip around the track of life. In many situations, debt help is a long pit stop that involves a complete engine swap. Depending on the circumstances, you could be swapping for a four banger… for life.

The cost of consolidating credit cards into one payment.

Assume you are 30 years old and have $22,000.00 of unsecured debts (mostly credit card bills) that you can no longer afford due to job loss, or unforeseen expenses. You consolidate your credit cards into one payment working with a nonprofit counseling agency. Your new lower payment is more affordable, at say $418.00 a month. And you are set to pay that same monthly amount over 60 months, for a total repayment of roughly $25,000.00. You complete the plan and feel like the biggest weight of your life has been lifted, and you do not look back.

If you do not look back, you will not see that the real cost of your consolidated repayment was not 25 thousand dollars. It was as much as $590,000.00 if you were to have instead contributed that same $418.00 into a retirement fund for that 5 years; for a total of roughly 32k; with an average return of 9.74%; until you reach a retirement age of 65.

Let’s take the same scenario and apply it to settling debt for less.

Assume the $22,000.00 total debt can be settled for less than the balances owed over a period of 24 months by saving up $418.00 every month and not paying your credit cards. You end up paying about $10,000.00 to settle and will be out of debt. That time and lost opportunity could result in long term losses of roughly $270,000.00 were that money placed into a similar retirement fund using the example above.

I invite you to take your own financial and age example and use the debt repayment impacts my retirement calculator that I used for the above examples. The calculator is half way down that page.

Consolidating your monthly credit cards for a single lower payment appears like the longer pit stop where you might as well be swapping out your balanced and weighted high performance engine for a four cylinder. But settling debt for less still looks like your trading down your future financial power, just not as much as bill consolidation. But make no mistake; you are giving up major performance.

Comparing the cost and time frames for debt help with chapter 7 bankruptcy is both simple and complicated.

Simply put, chapter 7 on average could cost between $1,500.00 and $1,800.00 from start to finish, and take as little as 90 days. For many people that would be the equivalent of three months worth of minimum payments on 22k of credit card debt. What are the longer term implications of this on your future financial potential? As a friend of mine, Steve Rhode, put it in a recent email exchange on the topic:

“People are emotionally subject to valuing immediate items more importantly than future items…. Ultimately the question seems to be if someone is willing to throw away what may amount to a million dollars or more in retirement for the emotional satisfaction of repaying their debt in a long term plan when the debt could be eliminated quickly and for not much money.”

The complications with deciding to make a quick vs long financial pit stop over problem debts do not originate with the math. The math clearly favors chapter 7 bankruptcy. The complications are introduced by our individual emotions, and the perceptions of the conventionally wise.

How wise is it to call losers winners anyway (those that applaud your having avoided bankruptcy)? And how much do people driving around in 4 bangers lead to congestion for everyone else driving our nation’s economic highways?

It is not just about how debt help right now leads to less of an ability to pay for tomorrow. Let’s assume someone is never going to take that $418.00 a month after filing chapter 7 and focus on funding their retirement account. People trading down their personal financial performance to fix a debt problem from yesterday, or today, are not contributing to their local and regional economies while they are off the track, or running at lower speeds. This means fewer jobs nationally and globally. Fewer jobs mean less demand for goods and services. This in turn means fewer jobs, even less demand, and a feedback loop.

Think the problem is small? I am only talking about revolving consumer debts. Being strung out on student loans is an even bigger concern. Add student loans to the mix and the economic issues surrounding debt help are compounded.

But this is only the part of the problem that is immediately visible. The bigger story is hidden and not being talked about, and has much bigger implications for every one of us on the track.

When we swap out our future financial performance and ability to fend for ourselves, those costs are going to be passed on… to everyone. Unless you see a future where it is a societal norm to regularly overhear people discussing which cat food they prefer to eat, there will be a safety net for those without one. The cost of that safety will be borne by society. That cost will be borne by all of us.

I understand there are strong opinions about how individuals should go about resolving problem debts. I have long advocated consumers speak with a credit counselor, a debt settlement professional, and a bankruptcy attorney. And only after they feel they have all the information to compare, then choose the best way out of debt.

After more than 20 years of working with people to resolve debt problems, I am of the opinion that debt help and conventional wisdom should not be “you can look at filing bankruptcy as a last resort if you have to”, but rather “too bad you could not get back on the track with chapter 7”.

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How will contacting a collection agency restart credit reporting or time limits to sue?

Dear Michael: “My daughter has medical bills from 2008 when an emergency situation arose and she was not covered under insurance. She recently checked her credit report and contacted the collection sites to see if they were really hers. If you contact the collection agency does this restart the ‘7.5’ years on your credit report? Would it make any difference to see when the last contact or mail was sent to her? What if she didn’t live there anymore and the mail was returned to sender?”

That 7 and one half year credit reporting time frame is never really restarted unless an account is brought completely current. When a debt stops being paid, or perhaps in the case of a medical bill that never saw a payment, that then appears as a derogatory on your credit reports, is when the credit reporting clock starts ticking. Calling debt collection agencies and lenders about a debt does not change anything about credit reporting.

I do see people confuse restarting credit reporting limits with how calling or sending letters to debt collectors might restart the time limit to be legitimately sued for collection. I am going to post more than you were potentially asking about, because I do not think I have a dedicated post about how verbal or written acknowledgment of a debt can reset the time collectors must follow in order to file legitimate lawsuits.

Acknowledging or reconfirming a debt passed your state time limits to sue.

There are state specific laws that govern when your debt can be “reset” for the purposes of suing you in court in order to get a judgment and expand their options to force payment. This is commonly referred to as acknowledging your debt, or reconfirming it. More often than not this happens with a debt collection agency or debt buyer.

Most state laws speak only to reconfirming your debts and resetting the SOL to sue when you submit a written acknowledgment of the debt, or remit a partial payment (no matter how small). When in doubt about this issue, you will want to speak to someone with experience in consumer law and how your state courts have ruled on this issue in the past.

There are places online you can read about only negotiating with debt collectors in writing. And I think, over time, people have blurred the line of what debt collectors can legitimately do to sue, with credit reporting limitations.

Sending debt collectors only written offers to pay a reduced lump sum to settle debts has long been bad advice, as those written offers to pay can mistakenly reset the SOL to be sued. Negotiating on the phone is preferred, followed by any written agreement being sent by the debt collector, and not you. Are there exceptions to this? Absolutely there are, but this is enough of a concern to suggest phone calls over written communication with collection agencies.

Now… your daughter was only calling to verify the debt on her credit report was hers. That’s great because:

1. She did this over the phone.

2. She was trying to validate the debt as hers, not admit to the debt.

There are stark differences, and consumer rights you avail yourself, when disputing or requesting validation of a debt from a collection agency compared to what can be considered a creditors rights when you reconfirm or re-acknowledge a debt. You also have the right to dispute off of your credit reports any incorrect and out of date information .

Should you be concerned about restarting your debts?

There are different camps people fall into when it comes to communicating with debt collectors. Some folks preach how you should never communicate with debt collectors; others say only communicate in writing; and never admit the debt. Because most of my debt and credit career has consisted of helping people understand their options for resolving debt, and often with a collection agency, I have a different take.

I believe people should communicate with debt collectors when there is a goal to achieve. Here are some different goals I know people want to achieve when it comes to collection agencies.

  • You want to stay under the radar until the debt passes the SOL to be sued in your state.
  • You want to communicate, or not, if it serves the purpose of limiting your risks of being sued.
  • You want to resolve a collection agency debt so that your credit reports can be updated to show a paid collection.
  • You want phone calls and letter form collectors to stop.
  • You want to make sure a debt is yours, or that the amount owed is correct.
  • You want to be certain you would be dealing with the right debt collector.

If you do not have a purpose to communicate with a debt collector, you are often better off just biding your time until you can either no longer be sued, or the derogatory item is removed from your credit reports.

It is helpful that some states have passed laws that require debt collectors to clearly disclose that your states limitation on whether they can sue you has passed. And some larger debt collection agencies have settled with regulators to disclose expired lawsuit limits to all consumers they try to collect from, regardless of state of residence. I do hope that national law changes currently being contemplated include, at the least, the disclosure about your debt being time barred from being sued.

Lastly, I should point out that while derogatory credit reporting from unpaid credit cards and medical bills may not be reset from phone calls or letters you send, if you can still be sued for a debt, a judgment will create a new negative entry about the same debt, and that will cause fresh damage, and generally for a whole new 7 year period.

Based on the 2008 dates for when the medical debts were created, they should be deleted off of her credit reports soon. Post the dates you see the collection agencies are reporting for these accounts in the comments below. I may have more feedback based on what you share.

Anyone with questions or concerns about what collection agencies can do to mess with your credit reports, or how collectors view you as a potential lawsuit target, is welcome to post in the comments below for feedback.

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Women are not talking about money – here is why

A recent study by Fidelity Investments has uncovered some intriguing paradoxes about women’s relationship with money.

Despite the fact that 92 percent of the women involved in the study want to learn more about financial planning, and 83 percent want to get more involved in their finances in the next year, a whopping 80 percent admitted that they have refrained from discussing money with family and friends.

In addition, only 47 percent feel confident when talking about finances with a financial professional—compared to 77 percent who would be comfortable discussing medical issues with their doctor.

Where does this disconnect come from? Why are women eager to learn more about money, and yet reluctant to discuss it?

Fidelity’s study found that there are some common factors that make women closemouthed about financial topics: privacy worries and lack of confidence.

Privacy Worries

56 percent of respondents who have refrained from discussing finances with friends or family kept mum because money was “too personal,” while 35 percent didn’t want to share financial information with those they were close to, and 27 percent were raised not to discuss finances.

In addition, 32 percent of women feel uncomfortable discussing money, and 16 percent feel that the issue is taboo. 26 percent claim that the topic never comes up in conversation.

In short, it’s really tough to talk about money when we are socialized to keep this kind of information private.

Of all the reasons why we do not discuss finances, this is one of the most difficult to overcome. We worry that talking about money will make us vulnerable, make someone feel bad, or simply cross a tacit societal boundary—and those worries are not without merit.

So how do women overcome their financial reticence? Fidelity makes a couple of excellent suggestions for introducing financial conversations into your life without feeling overexposed:

  1. Find a Financial “Buddy”:By making time on a regular basis to discuss financial matters with a trust-worthy friend, family member, mentor or financial expert, tackling financial goals can become less overwhelming and more attainable. In the same way that “gym buddies” keep each other motivated, financial confidantes can help both parties make progress and stay accountable.
  1. Join an Online Conversation:Take advantage of online conversations with other women looking to get more involved in their finances, as well as experts providing insights and guidance.

Both of these options allow those who are interested in becoming more financially proficient to start and join conversations without feeling exposed.

Lack of Confidence

In addition to privacy concerns, women often have difficulty talking about money because they assume they do not know enough about the subject. 14 percent of respondents worry that talking about money would be a waste of time and 10 percent feel as though they do not understand finances well enough to talk intelligently about it.

According to Kathy Murphy, president of Fidelity’s Personal Investing:

“Beneath women’s reticence to talk about money lies a lack of confidence in their knowledge of financial planning and investing. This lack of confidence is really self-imposed. Our analysis of more than 12 million investors shows that women actually demonstrated stronger saving rates than their male counterparts and enjoyed better long-term investment performance when they did engage. Unfortunately, too many women still hesitate to take control of their finances.”

That confidence gap can feel like a Catch-22: you feel foolish for not knowing things, but asking questions feels too intimidating. So you continue worrying in silence and assuming you don’t know enough to talk intelligently.

But women have mastered many important money skills that they often tend to discount. According to Fidelity’s study, 82 percent of women are confident in managing their day-to-day budgets, and 74 percent are proactive about saving for the future. Women who are hesitant about making investment decisions simply need to build on the financial skill set they already have. Fidelity suggests several ways to do so:

  1. Kick-Start Your Financial Education at Your Own Pace:There are numerous tools, tips and reference materials online which can help women boost their financial knowledge to the next level.
  1. Take Advantage of Workplace Retirement Guidance:Many employers offer on-site financial workshops and guidance, yet the study shows that sixty-five percent of women are not taking advantage of retirement guidance made available to them through their workplace plan provider. Check if your employer offers onsite financial workshops or 1:1 guidance, sign up if available, or contact a financial services provider directly.
  1. Work with an Expert:A financial professional can be a valuable resource to turn to with questions and to help build a roadmap for the future. When choosing an adviser, look for a good listener who communicates clearly about fees, professional designations, and investment advice. Interview the adviser before you make a commitment, to make sure you are comfortable and can build strong working relationship.

Take Action

The good news is that women are poised to take charge of their financial lives. Fidelity has shown that the majority of women already have great self-discipline when it comes to saving for the future—and they can apply that discipline to investing. According to Murphy, “The key is to take action now to ensure that your money is working just as hard as you do, so you can achieve the goals and live the life you deserve.”

This article by Emily Guy Birken first appeared on PT Money and was distributed by the Personal Finance Syndication Network.


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Fixing the student loan debt problem – 5 things.

The U.S. Department of Education recently unveiled a new and improved methodology for calculating student-loan payment delinquencies. Where it once figured the late-payment rate of student loans as a whole to be 17%, the department has now determined that when the same data is expressed in terms of individual borrowers, it’s as high as 38%.

However, the new calculations don’t even take into account the borrowers who are currently in default or have had their payment plans modified by loan servicers so that their accounts no longer appear to be past due – even though many technically are. Taking all that into consideration, the number of distressed borrowers approaches 50%.

There are two problems with the ED’s latest effort to convince a skeptical world that it really does know how to manage the more than $1 trillion of directly-originated and government-guaranteed student loans that are on its books.

The first problem is, frighteningly, the ED has demonstrated that it really doesn’t know what it is doing — not with all its restated metrics and loan-administration mishaps. The second is that even this latest parsing of payment-performance data has yet to inspire anything more than a frustratingly incremental approach to solving what is clearly a rapidly deteriorating situation.

Starting with the manner in which performance is evaluated, there are three categories of loans: those that are not in default, those that are and those that are someplace in between because the contracts have been temporarily restructured (granted forbearance) or permanently modified (via the government’s Income-Based Repayment and Pay As You Earn plans).

True, the above three categories combine to make up the aggregate value of student loans currently in repayment, but each of these types must be separately tracked and analyzed, for two reasons: first, so that migrations between delinquency statuses (30-, 60-, 90-days past due, for example) can be monitored and corrective actions (with regard to servicing) taken; second, so that the activities of the loan servicers can be more closely scrutinized than they currently are.

These private-sector companies are compensated for managing payment performances to within predetermined standards. So it’s reasonable to be concerned about the temptation to improve upon the results, such as by temporarily accommodating delinquent borrowers so their loans no longer appear as past due.

These dreadful metrics should inspire lenders and servicers to find a comprehensive solution, but don’t. The plain truth is that the plans to help student loan borrowers — those currently in place (income-based repayment programs) and proposed (such as Sen. Elizabeth Warren’s reintroduction of the Bank on Students Emergency Loan Refinancing Act) — don’t do enough.

Here’s why: PAYE and IBR are helpful but cumbersome. Not only must borrowers re-qualify for the relief they need every year, but as their incomes grow, so will the value of their monthly payments. That makes it harder for households already under pressure to set budgets, let alone plan for the future.

What Can Be Done?

A loan portfolio in which roughly half the borrowers are either in trouble or treading water is one that is in obvious need of restructuring. So let’s stop wasting time pointing fingers about how these loans were first approved or structured, or why borrowers are still struggling as the economy improves, and solve the problem. Here’s how.

  1. Restructure every loan—without regard for origination channel and payment status—for terms of up to 20 years. Longer repayment durations will do more for affordability than monkeying around with interest rates, although these, too, should be reconfigured because the consumer-unfriendly rate-setting mechanism that Congress put into place in 2013 has more to do with politics than it does finance.
  2. Permit partial and full prepayments—without penalty. Just because a loan has a lengthy duration shouldn’t mean that it can’t be settled ahead of time. Penalty-free prepayments—where the additionally remitted amounts are appropriately applied against the principal—will help borrowers to limit the amount of interest they pay overall.
  3. Expunge previous credit histories for loans that are subsequently refinanced. The standard 10-year repayment plan that was originally put into place is to a large extent responsible for the problems many borrowers have had. Creditors should therefore be more concerned about repayment performance after the contracts have been restructured.
  4. Offer student-loan borrowers the same tax relief that has benefited homeowners. Waive taxation on the value of the debt forgiveness that may be granted on an exception basis, just as it has been for distressed home mortgages that were permanently modified after the crash.
  5. Permit student loan debts to be discharged in bankruptcy. This will motivate recalcitrant owners and servicers of government-guaranteed loans to come to the bargaining table with tangible, sustainable solutions.

The money exists to pay for all this.

It’s no secret that the ED rakes in enormous profits from its student loan programs. Much of that is a result of the risky manner in which the government has chosen to finance this activity (low-rate, short-term borrowing is used to support its high-rate, long-term lending at a time when the Federal Reserve is contemplating raising rates). But even if the ED were to “match fund” its portfolio as lenders often do, it would still earn substantial profits from the combination of fees and interest that are charged.

What’s not so well-known is how these profits end up appropriated by Congress to offset the national debt. Said differently, lawmakers are, in effect, taxing the very same constituents it should be helping.

This story is an Op/Ed contribution to and does not necessarily represent the views of the company or its partners.

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This article originally appeared on

This article by Mitchell D. Weiss was distributed by the Personal Finance Syndication Network.

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9 Plead Guilty to $20M Scheme to Defraud Soldiers.

Eight Alabama residents and one Georgia resident pleaded guilty to participating in a scheme in which they stole thousands of identities to file more than 7,000 false tax returns, according to the U.S. Attorney’s Office of the Middle District of Alabama. Over the course of nearly three years, the group defrauded the government of approximately $20 million. A 10th accused conspirator is scheduled to appear in court April 6.

The group collected identifying information from a variety of sources, including a military hospital. Defendant Tracy Mitchell of Phenix City, Ala., worked at a military hospital in Fort Benning, Ga., where she had access to service members’ identifying data, including information about soldiers deployed to Afghanistan, according to a news release about the case. Court documents cited in the release say Mitchell used the information she accessed at the hospital to file fraudulent tax returns.

Other defendants took data from the Alabama Department of Corrections, a call center in Georgia where two of the defendants worked and two unnamed Alabama state agencies. This went on between January 2011 and December 2013.

Identity thieves favor the tax-return tactic as a way to cash in on sensitive data, which they can get by breaking into databases containing the information (aka a data breach) or following people’s paper or electronic footprints.

The success of a tax-related identity theft scheme depends upon thieves filing fake tax returns early in the season before victims do. This leads to a delay in refunds for those who are entitled to them, not to mention the hassle of straightening out identity theft and dealing with the consequences of someone using your personal information. Losing control of your Social Security number may mean years of identity theft problems, which can take time to fix.

Additionally, identity theft can lead to damaging information on your credit report, potentially hurting your credit standing and everything it’s used for, like getting loans or applying for an apartment. To look for potential signs of fraud, you can get your free annual credit reports from, and you can get a free credit report summary, updated monthly, on

Related Articles:

This article originally appeared on

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


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Should you get help negotiating settlements?

Most of the debt negotiation help requests and questions I deal with come straight to me from the person who needs assistance and answers. But occasionally I receive phone calls from friends and relatives about a situation with someone they know. Here is a recent exchange about stalled out debt negotiations, why that can occur, and when it may be a good idea to seek out help from a debt negotiator.

Ron writes: I have 6 credit card debts I can not pay due to lack of work. I sold some stuff around the house and managed to settle 3 cards. Two of my cards have now charged off and went to law firms for collection. I tried to settle one of those and they will not budge on the amount. Any help or any chance you think they will budge later before I get sued.

Can I get help settling my remaining debts, or should I wait and see if I can get them to budge?

It is important to know when you hit a wall negotiating and settling your own debt, and whether you can clear the hurdle, or should get help.

6 reasons your debt negotiations may stall out, and when to seek help.

1. Your creditor is not known for offering reduce lump sum payoffs.

There are some smaller local banks that will just not negotiate a bill or settle for less. Some types of creditors, like a furniture store, or a medical service provider, are just not going to discount the balance owed. It can help a great deal to know in advance who will settle, and what the typical amounts may be.

2. Your creditor has a policy of not reducing the balance you owe if your account fits certain criteria.

Your balance could be too low, the account you opened too new, or the amount owed today was mainly from purchases you made just before you stopped paying your bill. Some banks refuse to settle when the bulk of the balance you owe is from balance transfers or cash advances. There are some helpful work around strategies in these situations that I cover elsewhere on the site, and can cover in more detail if you post what your concerns are in the comment section below.

3. Your prior success settling your other accounts is catching up to you.

Debt collectors are paying attention to your recent credit history. Some will use programs that are designed to show the collector how good a target you are for payment. The higher the score, the more likely they can collect. Some interpret what they see about your having settled other debts recently as a sign that they should hold out for full payment. You can avoid this by negotiating as many of your debts as you can in a short window of time, say 30, 60, or 90 days.

Navigating this reality as it may apply to you is often better handled by a professional.

4. You look like someone who can pay the full balance.

Similar to number 3 above, but not because you settled other accounts recently, you look highly collectable. If you have a mortgage, car loan, or other secured loan payments being kept current when your other bills are not getting paid, it can impact how you are viewed by a debt collector. It is not at all helpful if you have other credit cards you kept current with, while selectively choosing not to pay a larger balance, or higher interest credit card bill, you look even more like someone who will pay in full (also can be a good profile for a debt collector to sue in court).

5. You said something in your initial negotiation efforts that triggered the hard line stance.

Debt negotiation in general does not require a recipe or formula to follow. Think of it like making an omelet, or a soup. Just about anything can go in those and have it turn out right. But there are times where negotiating your bills for less will be more like baking. Unlike a casserole where anything goes, baking often means the end product is highly dependent on how you follow a recipe.

I have picked up many a file and found that my customer told the debt collector something that would prevent me from giving the a discount too. Here are some examples of things you could say that are not productive to negotiating a good pay off deal with collectors:

  • I fell behind because I lost my job, but have a better paying job now.
  • I chose not to pay this bill because they would not work with me to lower my payments.
  • I have enough money to settle my remaining debts.
  • I am trying to qualify for a home loan (or refinance), but cannot because of this collection account.

You get the gist. You want to stick to discussing only elements of your situation and finances that support the collector accepting the limited money you have, or can pull from other resources, like a family member. Avoid discussing anything with a debt collector that would help them view you as someone who can pay more than what you are offering.

6. Time.

Ron is right to think about how it just may not be the right time to get a deal negotiated. If your negotiating with a debt collector right when they get your account, they are more likely to start with a “we do not settle and will only accept the full balance” position. But a month or two later, they may have a softer stance.

Waiting out a debt collector is best when you know it is less likely you will be sued. Now that Ron’s account is with a collection law firm, the reality of being sued is likely much higher. The strategy from here may be to make certain you are not sued, or be okay with it if you are. Much of what you do from here can depend on the balances on the accounts you have left to negotiate, who you owe, who the collectors are, and some other factors. Talking over strategies for dealing with collections at the stage Ron is at with his last 3 accounts would be extremely helpful.

I support people everyday with their DIY debt negotiations. But I also know there are people and situations that could benefit from hiring someone to do part, or all of the debt negotiating. Ron may be in a situation that could benefit from getting help from a debt negotiator to help resolve the debts he has left. You may be reading this while looking for help and answers too.

You can call the debt help hotline you see on the screen, and choose the option for a debt negotiator, and receive a no cost consult to see what getting some help will look like for you.

Anyone with questions or concerns about dealing with a collector who will not budge on settling for less is welcome to post in the comments below for feedback.


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How to find and interview the bankruptcy attorney you will hire.

Not all bankruptcy attorneys are created equal. That is not shocking. The same could be said about finding help in any profession or job that requires expertise and training. That said, finding the right bankruptcy attorney for you is not something that should prove difficult for most of us. But there are some things I would encourage you to both look, and look out for, when you go about consulting with attorneys and their staff.

Having worked with people to resolve problem debt by choosing bankruptcy alternatives for more than 20 years, I have referred more people to attorneys than to my main debt relief niche of debt settlement. That is not just because you should look at the pros and cons of bankruptcy as part of any due diligence into how to solve your debt problem, but because debt settlement cannot compete with chapter 7 bankruptcy for speed and overall cost when resolving problem debts for most people.

My focus in this post will be tips for how to interview your bankruptcy attorney with a chapter 7 focus, though chapter 13 bankruptcy filers can apply all of this too.

Chapter 7 attorney fees are not all that important.

Depending on the reason you need to hire an attorney, your fees can be all over the place. That is not the case with the amount of fees chapter 7 attorneys will charge. Their fees tend to be within a few hundred dollars of each other, and are often more related to where you live (coastal cities tend to have higher chapter 7 attorney fees than what those of us living inland often see).

Two reasons why attorney fees when filing chapter 7 bankruptcy stay fairly consistent: 

  1. If your chapter 7 filing does not involve many assets your case is going to be pretty straight forward. There will not be any notable amount of “lawyering” that will be necessary.
  2. Bankruptcy judges and trustees would be alerted to uncommon, or inflated chapter 7 fees. And because court fees and costs are going to be uniform, there is not much  to elevate your average chapter 7 filing to total costs from A to Z anywhere over two thousand dollars. In other words, the court system keeps bankruptcy lawyers from fee gauging people filing no asset and uncomplicated chapter 7’s.

There are some exceptions that could require an attorney to incur more than the average amount of hours, such as attempting to discharge student loans, someone having multiple asset interests, and other things that can put a kink in a straight chapter 7 bankruptcy, but those are not the norm. And if you have special considerations in your bankruptcy, it would generally cause me to stress the importance of key attorney attributes and experiences that I cover below even more.

For these reasons, fees are not generally a part of what I suggest you use as a comparison for the bankruptcy attorney you ultimately hire. If you think that fees could be a concern, post more about your situation in the comments below. With that out of the way….

The good things to find in a bankruptcy attorney.

I have spent a good amount of years working with people to help them resolve their debt. My approach has nearly exclusively been to help people find the quickest path to not just debt relief, but to accomplishing the goals they have for when the “debt dust” settles (usually with a 2 to 3 year view). And sometimes the quickest path to relief from debt can work against reaching your goals. When that happens, you want to know about it.

I can candidly tell you that not everyone in the debt relief industry works with those two things prioritized, let alone telling you to spend your money and time on another option that is a better fit for reaching your goals, even if that means losing you as a customer or client. And just because an attorney has a dedicated practice in the area of consumer law (that is the category that chapter 7 and chapter 13 bankruptcy fall under), does not mean they are good at it, or that they are going to help you understand how to make the most of what is already a bad situation.

Here are some things you can immediately look for when consulting with bankruptcy attorneys, paralegals, and paraprofessionals offering debt relief assistance through bankruptcy.

  • Are all of the questions you are being asked (yes, there will be many questions) dedicated to numbers and figures?

Details about your income and expenses are necessary, no doubt, you cannot start your bankruptcy without knowing what you can qualify to do, and with which accounts. But I find bankruptcy professionals are overly focused on this aspect of the process. I encourage people to listen for leading questions the attorney or other debt relief professionals should be asking. These questions can include:

  • Do you or any of your children plan on applying for student loans in the next 3 years?

Bankruptcy can impact individual and parent plus or direct loans.

  • Do you plan on staying in the home you barely have any equity in, or may be upside down on, and if so for how long?

If the home is more cost than you can keep up with anymore, and you are not in a great equity position, it can make sense to plan that out with your eventual bankruptcy filing in mind so that you can seek relief from real estate related debts through the bankruptcy process.

  • Are you experiencing and immediate medical issues, or do you have any immediate medical needs?

If your health is not stable at the time of filing bankruptcy, it can often be better to delay your filing until you are more stable. But there are times where financial stress can cause, or aggravate existing health concerns.

  • Is chapter 7 going to cause you to liquidate non exempt items that could be sold and the cash used to settle debts for less than what you owe?

It is entirely possible to avoid bankruptcy by negotiating lower payoffs with unsecured creditors. It is also silly for many people to use debt settlement as a way to avoid chapter 7 bankruptcy, both from a cost and lost time basis, and even from a psychological one. But it troubles me how many reports I get from consumers about how the bankruptcy attorney they consulted with never touched on the possibility of settling bills to avoid filing chapter 7, and especially as a way to keep out of chapter 13 repayment plans that are often inflexible and hard to complete.

Unless your pulling into bankruptcy court with a financial tank full of fumes (your out of money each month before your out of bills to pay), all of the above leading questions should be assessed by bankruptcy professionals. Your answers to those questions, and several others, may still have you filing chapter 7 bankruptcy, but perhaps on a 6 or 12 month delay, maybe even longer.

You may need legal relief from a wage garnishment, lien, levy, or to prevent a loss of property.  Bankruptcy can provide immediate relief from creditors right away. But unless you are in some type of financial emergency, you likely have time to consider why and when it is best for you to hire the attorney and proceed with bankruptcy.

For many people, finally reaching the decision to simply talk with a bankruptcy attorney was exhausting. As you go about gathering up information about the process, do not rush head long into filing if you do not need to right away. Slow down enough to not only make sure you are making the right choice, but that you are also maximizing the benefits that chapter 7 bankruptcy brings to what I know has already been a very difficult journey. And along that same line of thought, do not allow yourself to be rushed into filing bankruptcy by a bankruptcy professional.

Calling an attorney for bankruptcy help and information.

There is so much more to learn about bankruptcy beyond taking the first step to call or walk into an attorneys office. I will be covering much more about bankruptcy in coming posts.  I will wrap this one up by pointing out some obvious stuff.

  • Do not take for granted that what you read about filing bankruptcy on line (including on my site) is accurate or the complete information you need. There are state specific concerns for bankruptcy, and a host of individualized things about your situation, that need to be discussed with bankruptcy professionals. That means consulting with someone about bankruptcy is important.
  • Calling to consult with an attorney or their staff does not mean you are filing bankruptcy. It means you are gathering information you need. Those consults are going to be confidential, and many are offered at no cost. You can call the hotline I set up for a no cost consultation at 800-939-8357 and choose option 3.
  • You can and should shop around for the attorney you want to hire. Just because you talked to one a month ago and got some helpful information, you are not obligated to hire that attorney. If something rubbed you wrong, they were not personable, or left off many of the types of things I talk about above that are very real concerns for you, I would suggest calling someone else.
  • No cost bankruptcy consultations are common, but can also be relatively brief. Be sure to call back with additional questions that are sure to come up.
  • Some attorneys will accept monthly payment plans when you are filing chapter 7 bankruptcy. They may not file your bankruptcy petition until you have paid their fee and covered courts costs and filing fees, but you can often get relief from debt collector calls and the like once you retain your attorney.
  • There are some low income legal aid offices that provide discounted bankruptcy services to those who qualify.
  • Just because you can squeak through with making payments on your debts each month does not mean you are not a perfect candidate for bankruptcy and a fresh start with your finances. I find people in this category to be some of the best candidates for chapter 7.
  • If you are not being asked personal life and financial outlook types of questions by bankruptcy professionals you speak with (like those I covered above), I would question whether or not they are going to be looking out for your best interests.
  • Don’t let debt relief professionals of any type skew your perception of how to resolve problem debts with talking points about how your credit scores can be hurt, and the damage to your credit reports that can occur. There is a ton of misinformation out there about how chapter 7 bankruptcy kills your credit, or cuts off access to financing. It doesn’t, at least not to the level you may be concerned about.

Anyone with questions or concerns about finding the right bankruptcy attorney, or whether bankruptcy is right for you given your finances, types of debt, and goals, is welcome to post in the comments below for feedback.

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Debt Help Hotline

Having worked in the debt and credit relief industry for as long as I have has helped me to form relationships with other like minded professionals. It is because of those relationships, that after shutting down CRN’s debt relief coaching and professional debt negotiation services, I get to continue working with cool people, while continuing to help folks with debt and credit struggles get informed, and not just here on the CRN site.

There are some truly awesome people out there making the world a better place for consumers. Few are dedicated to publishing educational tools and helpful debt guides like Steve Rhode on his site

I have been an active contributor at the Get Out Of Debt site since I met Steve through a mutual industry friend. And starting November 2014, I will begin actively managing the debt relief hotline published there.

Like minded debt and credit professionals can contact me.

If you are involved in the debt relief services industry, and have an interest in the debt relief hotline published here, or on the GOOD site (get it… the initials for GetOutOfDebt…), fill out the contact box you see below. Be sure to include any pertinent details about your interest in the hotline.

Couple of things before you contact me:

  • I am critical of most things debt relief services.
  • I am beyond committed to, and probably commit-table, regarding my passion for providing detailed education and information to people with debt and credit problems.
  • I realized after some time, and even frustration, that most people want to hire someone, or buy a product, to resolve their problems. Not everyone’s a DIY debt relief-er.
  • People generally need, and benefit from,  getting individually informed and educated about how to solve debt and credit issues.

All of the companies involved in the debt relief hotlines, where I play a part, are involved in helping people through debt and credit triage situations. Legitimate companies and professionals helping the debt trodden will generally be credit counseling agencies, bankruptcy attorneys, and debt negotiation experts. Why?

Callers are looking for help to manage bills they can no longer continue to pay, or have stopped paying, according to the original terms.

I have long preferred people use a process of elimination for what type of help they need, and the path they will choose, to deal with overwhelming debt. While over simplified that process looks like….

Understand your monthly income and expenses to determine the debt help you need.

  • Can you afford your bills with some not so overly painful adjustments?
  • Can you afford a credit counselors debt management plan to get out of unsecured debts, and is your income stable enough to support that approach?
  • Can you file chapter 7 bankruptcy in your state, and without that decision leading to the sale of nonexempt items that could be sold without bankruptcy, and using those resources to resolve debts?
  • Can you negotiate and settle your debts inside a shorter window of time than a chapter 13 bankruptcy repayment plan?

That process of elimination is why many callers to the debt relief hotline will start at the top of this decision tree.

Get Involved.

The backbone technology and connectivity platform for the hotlines are provided through Peregrin. Costs to participants are affordable, and implementation simple.

If you are interested in participating in any of the projects I work on to help consumers, be sure what you do fits within the basic framework outlined above.

I am committed to helping build a better financial future for consumers, and the companies who work with them. And I look forward to connecting with more like minded debt and credit professionals.

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CRN ceased offering our paid membership program in June of 2013. We wanted to keep our focus on the educational mission we started CRN with back in 2004, and chose to continue those efforts through publishing. We considered charging nominal fees through a pay wall for access to all of our self help guides, and ongoing specialized feedback, but ultimately opted not to charge any fees for access. But we still needed a viable way to fund our educational efforts.  We chose to seek out sponsors.

Why sponsors work with CRN?

CRN has a unique history in the debt relief markets. We never fit in with the majority of our peers in the debt settlement side of the industry. And our efforts, that begin and end with consumer education and awareness, have been more akin to that of a nonprofit counseling agency, but we have never been structured as a nonprofit.

Regardless of our unique perspective on the debt relief markets, and how we have, or have not fit in the last 10 years, this site is recognized for its helpful and informative content. There are companies and individuals who recognize the efforts and commitment CRN has brought to the table to assist consumers searching for debt help.

Sponsors of this site care about what we care about: Helping to educate and inform people struggling with debt and credit issues.

Who sponsors our education guides?

Anyone interested in sponsoring the site can contact me (Michael Bovee) at [email protected]

Current debt relief services sponsors are:

Since 1958, Money Management International (MMI) has helped millions of people take the steps necessary to repay their debts, reestablish their credit, and manage their finances wisely. Through community education programs, counseling services, and online resources, MMI is dedicated to providing consumers and clients with valuable information on money management and how to use credit wisely. They are the largest nonprofit, full-service credit counseling organization in the nation with branch offices throughout the country.

Readers of this site are encouraged to reach out and speak with a credit counseling agency like MMI when they need help with establishing a budget, negotiating with creditors, avoiding home foreclosure, or repaying student loans.

You can talk with an MMI certified counselor at: 877-721-9723




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