Debt Bytes Blog

Solve Loan Builder and Swift Financial Payments Affordably

March 25, 2021 by Michael Bovee Leave a Comment

Loan Builder is a business lender offering loans through PayPal that are serviced by Swift Financial. They offer competitive loans and rates like brick-and-mortar banks do. They are a good option to consider while you are implementing your business plan.

I regularly see Loan Builder offers and would put them in the mix of lenders I would look at if I needed cash to pursue my business goals. LoanBuilder provides fixed payments with no origination fee, and no prepayment penalty.

WebBank is the funding source behind Loan Builder loans.

Okay… so that is stuff you think about in good times, when we want to grow our business. What about in bad times?

What if I run into trouble keeping up my Swift Financial payments?

If you are unable to keep your payments with Swift Financial current, you have options. You can even negotiate a lower pay off, or some payment relief, but first, let us look at the totality of your situation.

How I approach helping people struggling with consumer debt is the same way I approach helping with business debts, by focusing on math.

If your business debt is unmanageable, are there moves you can make to bring your costs and expenses in line with your forward-looking cash flow? Will making those moves allow you to stay current with all or your business debts, including payments to Swift Financial?

Is your financial pinch temporary?

If you cannot stay current on all debts, can you restructure some of your loans and obligations? Would doing so buy you the time you need to deal with a temporary shortfall?

If the business cycle you are in is such that not everyone will get paid, or the reality is that you have, or are looking at winding down your business, what about the personal guarantee you gave to Loan Builder, and other lenders?

Negotiating a settlement for less with Loan Builder

Your business debt can be settled for less than the balance owed, but it is often a different animal than dealing with your personal unsecured credit card. Much of the difference comes in the form of any collateral we may have pledged when obtaining credit from Loan Builder, and other business lines of credit.

We have negotiators in our network with great experiences settling Loan Builder accounts for less. The experience you may have on the path to reducing your debt with Loan Builder will often be dictated by the type of account and collateral crossover you have in your business.

Being late on your Loan Builder account, depending on the situation, can potentially impact your inventory and vendor relationships, or your Amazon and PayPal merchant services accounts. These impacts are not a small matter for some, and are of little concern to others.

If you have the ability to keep your business open, but need to find weekly cash flow relief, it is ideal if you can talk to someone knowledgeable about your options before falling behind. You can schedule a time to speak with one of us, at no cost, below.

If you are already behind with Loan Builder, or other business loans, and need to assess your viability going forward, and how to address these loans to ensure that, or how to deal with the personal guarantee you gave that puts you at further risk, even after the business is gone, you can connect with someone below in order to help you outline a workable strategy.

Who is Swift Financial?

Swift Financial is a business lending company now owned by PayPal. It is common to see Swift Financial mentioned in loan and collection letters and documentation related to your LoanBuilder account.

Swift Financial is who services LoanBuilder loans.

As mentioned above, you may see WebBank and PayPal referenced as well.

If your loan is more than a few payments late you may already be hearing from outside third-party collection companies. That is normal, and a sign that you may need to start thinking about your strategy to deal with this before collection efforts get further escalated.

Portfolio Recovery Associates and Solving Your Debt

February 17, 2021 by Michael Bovee Leave a Comment

Portfolio Recovery Associates is one of the largest debt buyers in the country, and one of few publicly traded in the United States. Like many of the largest debt buyers in the US, PRA buys up unpaid collection accounts, mostly tied to credit cards, from Citibank, Synchrony, Comenity, US Bank, and more.

Portfolio Recovery Associates purchases unpaid debt by the bundle. They pay less than the face value of the debts, and then use their own internal debt collectors to try to get you to pay.

Upon purchase of your account, PRA will typically make phone calls, and send you collection notices in the mail.

Starting in 2021 PRA will be able to start texting you, and even post to social media, trying to collect from you. You will have the ability to opt out of text and other forms of communications. More on that below.

Payment plans and settlements with Portfolio Recovery Associates

For many years I have helped people determine the priority of the collection accounts they are dealing with by risk, potential settlement savings, as well as payment flexibility. If you want to resolve a debt with Portfolio Recovery Associates you have some options to think through.

If you can afford to settle with PRA for a lump sum you can generally negotiate a better savings outcome. Settlements are often around half the balance owed.

If you do not have a lump sum of cash to settle your debt with PRA, they are one of the more flexible debt buyers offering to spread your payments out over many months, even a few years depending on the situation. Payment plans when settling debt is a fantastic tool that can help you prevent being sued by PRA (more on that below).

Here are a few reasons why you should consider resolving a debt you have with Portfolio Recovery Associates:

You have the resources to resolve the debt.
You do not want to be sued in court for collection.
You have credit and finance goals you want to accomplish in the future and want this removed from your credit reports.

If you want help settling your debt with Portfolio Recovery Associates you can request a free estimate or schedule a call with a debt expert below.

Should you pay PRA?

You may be hearing from Portfolio Recovery about an unpaid debt, or see them on your credit reports, and wonder if you should even pay the collection account. Here are some reasons to consider whether you can, or should pay:

You do not recognize the debt as yours.
Your debt is passed your states SOL to sue you, and you have no credit or finance goals you are trying to reach until after the negative ages off your credit reports.
You have limited financial resources to work with, or to protect, were PRA to sue you (fixed income scenarios mostly).

I have talked with many people over the years who would prefer not to deal with a collection agency, or debt buyer, when paying or negotiating a debt. But once your account is sold to a debt buyer, it would be exceedingly rare to get it recalled by your creditor, so you may have to consider working with PRA if your goal is to solve the debt, even when you prefer not to.

If you are too stretched financially to commit to a half off settlement stretched out over a few years, it may be best to let things lay, even if you want to resolve your debt with PRA. If you have no assets, like real estate, and if your current and future income is limited to an exempt source, such as disability or social security, you could be protected from collections even were PRA to sue.

Request debt validation from PRA

You have a right to request debt validation from collection agencies and debt buyers like PRA. This right is outlined in the federal Fair Debt Collection Practices Act. Many of us have additional protections under a state law equivalent.

Debt validation is an important right to exercise anytime you are confused about the legitimacy, nature, and balance of a debt. You can learn more about debt validation from the CFPB, a federal agency with regulatory authority over PRA.

You may be reading this article wondering who PRA even is, and why you are hearing from them. It can be a bit confusing when you were hearing from your bank, say Synchrony or Citi, with collection calls and letters, and then suddenly you start getting calls, texts, and letters from PRA.

If you are concerned about whether PRA is the legitimate owner of your debt, a simple phone call to your original creditor to verify they sold your account to Portfolio Recovery can help you move forward with any debt resolution goal you have with confidence.

Also, if PRA has sent you a collection letter, they will typically identify the creditor they bought your account from, and often part of your credit card number, so you can identify whether you had the account at issue.

Banks have, in recent years, started to notify you of accounts they are selling to debt buyers like Portfolio Recovery Associates. Be sure to open all collection mail you get and keep track of accounts in a journal or file. It is helpful even when you cannot financially tackle an account just yet, to have access to the chain of communications that may have been mailed to you.

If my goal is to settle with Portfolio Recovery Associates, I would not request debt validation before negotiating, as it can complicate that effort.

Portfolio Recovery Associates files lawsuits to collect

It is common to see unpaid debts lead to a civil lawsuit being filed in your local court to try to get you to pay. Your risks of being sued increase based on the banks you owe, and the debt buyers they sell to. Portfolio Recovery Associates is one of the largest, and most active debt buyers suing in courts across the United States.

There is a large network of debt collection law firms across the country that banks and debt buyers tap in to. Once you have an account being handled by one of these outside law firms, your options to resolve or dispute the debt can change, as does the urgency for action.

There is more to think about when you are being sued, but I will focus this feedback on resolving the debt or defending the collection lawsuit.

If your goal is to resolve a debt with Portfolio Recovery Associates, the ideal time is before collection law firms get involved. Once the firm is involved, and even if they have not filed the lawsuit paperwork yet, settlements tend to be more costly, and often do not allow for as much time to make monthly payments.

Like most negotiations, I suggest calling to initiate the discussion, and once you reach a verbal agreement, get the deal in writing before you pay.

If you have been sued already and cannot settle with the PRA attorney for a lump sum, be prepared to sign a stipulation (formal court document) when you need to make monthly payments.

If you are settling an existing Portfolio Recovery Associates judgment, I would typically want to have a lump sum to work with before initiating negotiations.

If you dispute the validity, nature, or amount of the debt PRA sent to a collection law firm, you have options for defending the lawsuit, and using the court discovery process to address your concerns. Using the formality of the court process you have an increased ability to get all supporting documentation of their claim than you typically have with a basic debt validation request mentioned above.

Most of us do not deal with court issues enough to be familiar with the court process, and how to use it to our advantage. It may be best to run your situation by an experienced debt collection consumer law attorney in your state.

The smaller the account balance PRA is collecting on, the more it can become uneconomical to retain an attorney to fight a lawsuit.

Getting Portfolio Recovery Associates off your credit reports

If you see Portfolio Recovery Associates on your credit reports, you will want to check to see that the original creditor that sold your account is showing as a zero-balance owed. If, for example, Synchrony sold your two-thousand-dollar credit card to PRA, they would typically show a charged off account on your credit with no balance owed, and now PRA would show the balance owed to them.

Negative items on your credit reports have a seven-year shelf life. This means that Portfolio Recovery should be deleted from your credit reports at the same time the charge off Synchrony is reporting falls off. PRA does not get extra time to report.

You can also resolve the debt with PRA and take advantage of their published policy to delete the item from your credit. Whether you pay the amount in full, or settle with PRA for less, they ask the credit bureaus to delete the item.

If you do not recognize the debt PRA is reporting, you can dispute it with the credit bureaus. But if you know the debt is yours, and there is still time left in your state to legitimately sue you in court for collection, I would not try to dispute a legitimate debt on my credit reports with a known aggressive debt collector. It shows I am trying to improve my overall credit and may have bounced back financially and am perhaps a better collection target.

Appearing as a better collection target when there is still time to sue me for collection can be a form of an invitation.

Sending a cease communication letter to debt collectors

You have a right to request a debt collector like PRA cease communication with you. I would send that to them in writing if it were me. But I would also think twice about doing this, as PRA will then only be able to continue any collection efforts by suing you if there is still time to do so based on the statute of limitations (SOL) in your state.

If your state SOL is passed, sending a cease communication letter to PRA, or any debt collector at that point, is something I would do if simply ignoring their efforts was overly burdensome.

New rules that will begin in 2021 give companies like Portfolio Recovery Associates the ability to communicate with you in an attempt to collect a debt through text, email, and social media. You will be able to opt out of these methods without sending a cease communication notice, but if you use this letter, it will stop these types of efforts too.

PRA and your bankruptcy

You may find Portfolio Recovery Group has purchased your debts after you entered a chapter 13 bankruptcy repayment plan. Debt buyers are already purchasing distressed debt, but buying debts that are part of a chapter 13 repayment plan is uber distressed, so why do it?

If the price is right, it is profitable.

Roughly seventy percent of the people that have filed chapter 13 bankruptcy do not complete it. Some will convert their chapter 13 to chapter 7, where PRA would likely get paid nothing more in that event. But many people drop their chapter 13, and have to look to resolve the debts in the plan on their own. Settling debt for less than what you owe is a good alternative to chapter 13. Ideally you do this before you file bankruptcy, but it is the option of choice if you have to cancel the 13, and still cannot qualify for chapter 7 bankruptcy.

If PRA is trying to collect from you, and you are not sure what to do, we can help. If you want to talk through your options, schedule a call with me using the tab below. We can help you negotiate the debt for less, and often get you great monthly payment terms on the agreed settlement. We can connect you with experienced attorney resources that can help you too.

If you are hearing from a debt buyer like PRA, you may also be hearing from some others. You can get more information about resolving debt with LVNV Funding and Resurgent, as well as Midland Credit Management.

Settling debt with Radius Global Solutions

June 13, 2020 by Michael Bovee 8 Comments

A site reader recently wrote in to ask about dealing with a large debt collection agency by the name of Radius Global Solutions, who they are, and whether to settle a debt with them. The submitted questions are great, and as is the case with much of the site, I publish the exchange so others can learn from it.

I would like to ask you about settling a debt with Radius Global Solutions, LLC. Are they legitimate?

Radius Global collects on accounts from many different banks. I run in to them all the time. If you are curious about whether they are legitimately collecting on your account you can call your original lender and ask who they have your account out with for collection at this time. Your creditor is nearly always happy to provide the details.

What leverage do I have to get the agreement in writing or is the letter sent by the collector sufficient for an agreement and payment terms?

Your leverage to get your settlement agreements in writing is the money you are offering to pay off the account. Nearly all collection agencies have a policy for sending you the settlement in writing once you have negotiated a deal.

If Radius has already sent you a settlement offer in the mail that you like, and can afford to pay, just be sure you are acting on the letter by the expiration or due date. If you need a new date you can call Radius Global and negotiate a new date, and get a new letter.

In general, what cases does the “settled” portion of a debt greater than $600 get taxed and in what cases does it not? In the cases it is not taxed, what specific terminology is used in the agreement between the collector and the payee to ensure that it is not taxed?

Generally speaking, all settlements where you save in excess of $600, should result in a 1099c the following January. Having been at this for a while, I recall a time when no one got them. Nowadays few do not.

There is no effective language or negotiation tactic I can provide that results in a creditor or debt owner agreeing to ignore a known tax reporting obligation. There are some instances I have seen though, such as when there was active litigation, the settlement has resulted in an agreement not to report. Not sure the IRS would be cool with it.

Radius Global, as a contingency collection agency, collects on the debts of others. I highly doubt they are in a position to ever negotiate anything about tax reporting.

You do have the ability to submit IRS form 982 to show you were technically insolvent at the time of settling, and should not owe a tax.

Radius Global Not Known To Sue

The reader submission went on to ask more generalized questions. Some of my answers tie in to all debts, and some are specific to Radius Global, such as the fact that, as a contingency collection agency, they do not file collection lawsuits.

Finally, in general, is my following assessment of debt collection accurate?

It is best to settle with the credit card company. They will likely close the account for this.

Your accounts are typically closed after a few months of missed payments. By the time you are settling for the best savings you should already be dealing with a closed account. If you are not, yes, settling for less would close the account.

It is not necessarily always true to say that it is best to settle with the original creditor. There are some creditors that use Radius Global for collections where I would get a better settlement savings outcome from Radius than I would the creditor.

Getting more than 3 months to pay on a settlement is much more likely after an account gets charged off and placed with a collection agency like Radius.

If the account goes to collections, is it best to settle with the collector instead of being sued?

Nearly every time this would be true, but there are some limited exceptions to this. One would be when you do not have enough to settle an AMEX account that Radius may be collecting on, and you can use the formal collection process in the court to your advantage.

A charge off occurs from the credit card company when the debt is not paid for a period of time. This event damages the credit score.

Yes. Most of the damage is done leading up to the charge off, but that is the pinnacle of negative impact from an unpaid credit card.

Another hit to the credit score occurs when the debt is paid to a collector.

Not true. Many of us will only see a benefit immediately, and there after, from settling and paying a collection account.

There are many instances though, when settling an old and stale unpaid collection account, that paying can bring a certain level of freshness to the negative. I do see temporary dips to credit scores in some of these cases. And there are scenarios where peoples expectations are to see their credit scores jump after settling 1 out of 5 collections, which is not always going to be the case. Several other things could be holding back improvements.

Another hit occurs to the credit score if a lawsuit is settled regarding the debt.

This has not been true since July 2017 when most of us saw the removal of judgments showing on the major three credit bureaus.

It is best to pay a non profit debt management firm instead of a debt collector as the event will remain on the credit report for less time, like 3 years instead of 6. However, to do this, involves a total survey of your debts and ability to pay a monthly amount to resolve the debt through the third party. In some ways, it is similar to filing bankruptcy but it is not as extensive and involved.

This is not accurate. Debt management plans with credit counseling agencies last up to 5 years. If you enroll a collection account with Radius Global into a plan like this, none of those monthly payments are getting reported. If the plan goes the distance, your credit is going be much worse than if you settled with Radius for less and paid it off much quicker.

The similarities between a DMP and a chapter 13 bankruptcy start and end at:

Creditors are getting paid (though in chapter 13 not necessarily in full).
The plans tend to go 5 years.

Thank you and keep safe and healthy!

You too! I invite you, and all readers dealing with Radius Global to post in the comments below with experiences and for feedback.

Resolving Debt with Velocity Investment LLC

May 5, 2020 by Michael Bovee 10 Comments

If you are hearing from Velocity Investment LLC it is likely because they have purchased an unpaid account from one of your creditors.

Like with many debt buyers, Velocity bids on accounts that have gone unpaid more than 4 months in the case of fixed loans, and more than 6 months late in the case of credit cards (though I do not see Velocity buying unpaid credit card debts at the time this is being published).

What debt buyers pay for the legal rights to collect debt gone bad can vary based on the creditor selling, the economic climate, how long ago payments ceased, whether the accounts have been sold in the past, and other details.

What a debt buyer pays for the legal rights to collect from you really does not come in to play when you want to resolve a debt with a company like Velocity Investment.

What types of debt does Velocity Investment buy?

As of right now, if you had a loan with Prosper, Lending Club, Upstart, and a few other market place lenders, you could be hearing from Velocity.

I have seen them buy up the accounts from Lending Club and Prosper right after your accounts charges off, so around 5 or 6 months after you stopped paying on your loan. I also see Lending Club send accounts out to an external debt collection agency for a round of phone calls and letters before they sell to Velocity (or other debt buyers too).

Upstart and a couple of other online lenders are pretty much the same timeline for when they sell unpaid accounts to Velocity and others.

You may get a letter from your lender where they clearly tell you they have now sold your account to Velocity Investment.

Using external collections and law firms to sue.

Like most debt buyers these days, there is an element of risk to not proactively trying to work things out with Velocity Investment LLC once you hear from them. They use a handful of collection agencies to write to you and call you in order to collect.

CKS Financial is one of a few collection agencies they use. CKS also bids on, and buys debt from, some of the same lenders that Velocity does.

It is not overly problematic to hear from collection agencies who do not sue, as they will have the account for a few months before Velocity pulls it back if the agency cannot get you to pay.

It can become a problem when you are hearing from collection law firms debt buyers like Velocity Investment sends your account to.

There is a massive network of collection law firms around the country that banks, lenders, and debt buyers can tap in to. When you hear from one, and they are licensed in your state, it typically means they are authorized to sue you in order to collect.

Settling and paying your debt

Any debt Velocity Investment has purchased is already going to be charged off. That means your credit already took a hit. You are not going to get anything extra out of the situation by paying them in full compared to settling for less. That being the case, settling proactively will save you money and prevent being sued.

If you have the resources and the inclination to negotiate and settle debts with Velocity, they are pretty easy to deal with. You can call them and negotiate using many of the tips I highlight through out this site, and in videos about how to talk to debt collectors.

If your Velocity account is with a collection agency, negotiating is much the same as dealing with any collector, but if the account is with a collection law firm, I typically suggest getting help.

Generally I have found the best results on settlements with Velocity Investment, no matter if negotiating directly with them, a collection agency, and certainly a collection attorney, to come from working with a professional negotiator. Not just from an amount saved on the settlement perspective, but with getting as much as a few years to pay the agreed upon amount, getting everything documented up front, and set up correctly.

Velocity Investment on your credit reports

It is common to find debt buyers on your credit reports. Velocity is no different. Some debt buyers have developed policies for removing their credit reporting when you resolve a debt with them (whether you pay in full or not). At the time I am writing this Velocity is not one of them, but more debt buyers are starting to do this, so stay tuned.

If Velocity is credit reporting, when you settle with them, like any other company furnishing information to the credit bureaus, they will need to update Equifax, Experian and TransUnion that you no longer owe the debt, and that it is a zero balance, paid collection.

Do not get hung up on whether they show on your credit as settled for less, or anything else like that, as the words on the credit report are not important, but the zero balance, debt no longer owed is.

If you would like help settling your account with Velocity Investment LLC, we do that! You can schedule a call to talk with me about it here:

https://calendly.com/debtbytes/15min

If you have questions or concerns about dealing with Velocity Investment you are welcome to post in the comments below.

Credit One Bank Debt Settlement and Payment Plans

August 29, 2017 by Michael Bovee 4 Comments

If you find yourself unable to keep up with bills, and you get to the point where your payments with Credit One Bank are going to be late, it may be time to look into your options.

Credit One is closer to the sub prime credit card category. They are a great option for rebuilding or starting to build your credit. The credit limits they offer are generally on the low side, and the interest rates on the cards not as competitive. And for that reason, lets start with some conventional wisdom.

Can you afford to pay all of your monthly bills and still have enough left to apply $50 (or so) to your highest interest credit card? If so, look into using a debt snowball strategy to paying off debt quickly.

Getting Credit One to lower your interest rate.

If you cannot apply the debt snowball method, what if you were to get Credit One to reduce your interest rate? In fact, you may want to look at your options for lowering your interest rates on all of your credit cards.

First off, you can call Credit one and talk to them about things getting tight and see if you qualify for a temporary or long term hardship repayment plan. Most banks will listen to your financial hardship and see if they can get you qualified for lower monthly payments for a few months, and all the way through paying the balance off over a 5 year period.

If Credit One cannot qualify you for any internal hardship plan while you are current with payments, they may offer one to you after you have missed a payment or two.

You can also get monthly payment reductions from Credit One by working with a nonprofit credit counseling agency.

Settling with Credit One Bank.

If you have passed the point of no return with Credit One it may be time to look at your options to settle for less than what you owe. You can target your settlements with Credit One for less than 50% of the balance once you are more than 5 months late.

Credit One tends to offer lower credit limits. This can make it an easier path to raising the money you need to settle with them. If you are thinking of negotiating with Credit One on your own, be sure to check out my 10 part series about how to negotiate with your banks. If you would like to have a professional negotiate for you, I can help you learn more about that when you submit for debt help.

You may end up dealing with an outside debt collection agency that purchased the legal rights to your debt from Credit One. Currently, Midland Funding is purchasing unpaid credit cards from Credit One. Check out that page for options when dealing with Midland. They are one of the easier debt buyers to deal with, and they have a credit reporting policy like no other collection agency at this time (in a beneficial to you way).

If you have more than just Credit One to contend with, it may be better to submit for help and see how we prioritize your creditors. It is free to get a debt settlement summary, and it can be important to prioritize the money you have in order to settle for the best savings, or to eliminate collection risks. And that can mean Credit One, while being a smaller balance, and a quicker win, should be 3rd, or even later down the line for money.

Reduce Credit Card Interest Rates.

August 8, 2017 by Michael Bovee Leave a Comment

Readers regularly write to me asking what options they have for lowering credit card interest rates. Many people inquiring about consolidation are making monthly payments on time, but are only barely getting by, and some months end up taking money from one credit card to pay another, and are running out of balance transfer options.

If you are stuck in a similar situation, here are three common ways you can reduce your interest rates on unsecured loans and credit cards.

Consolidation loans

You take out a consolidation loan and use all of that money to pay off the credit cards and higher interest personal loans.

Your current debt to income ratio may prevent you from qualifying for a debt consolidation loan in the size that you would need to fully pay off all of your credit card bills.

In fact, I do not see unsecured consolidation loans as high as many of us would need these days.

If you are only able to secure half of what you would need to consolidate, it still could make sense to use a consolidation loan to lower monthly debt servicing costs, just less so.

Debt Consolidation Company

You can use a debt consolidation company for their established relationships with your banks in order to combine all of your balances into one smaller monthly payment, and pay that same fixed monthly amount of money until all of your credit card balances are eliminated.

I cover the benefits and drawbacks in this article series about debt consolidation counselors

You can call my hotline 800-939-8357 and choose option one to speak with a counselor and get an accurate quote for what your lower interest rates would be, and how much your monthly payments will be reduced.

Credit Card Hardship Plans

I cover how to get your credit card interest rates reduced by yourself. Much of that article series relates to recession era bank policies. But I am now seeing several credit card banks return to that era’s hardship plans due to COVID 19.

If you are unable to get your banks to work with you on long term hardship repayment plans (at seriously reduced interest rates) they may still give the debt consolidation companies the lower interest rates for the life of your balances.

The more credit cards you have to attempt to get lower interest rates from, the more of a juggling act it can be doing self administered hardship plans. Because calling a credit counselor is a fairly quick and free way to get a baseline monthly payment quote, I typically suggest starting with that call. You take the quote and sleep on it for a few days, or weeks, and compare that to the debt consolidation loan interest rates and amounts you qualified for.

If for any reason you determine your situation is now beyond debt consolidation being helpful, and you want to compare consolidating with settling debts for less, you are welcome to schedule a call with me, or requesting a debt settlement quote below.

Resolving Debt with Synchrony Bank

April 20, 2017 by Michael Bovee 79 Comments

Many branded store, and specialty credit cards, are serviced by Synchrony Bank. If you are wondering whether you card is serviced by Synchrony, I provide a list of known businesses that use them below.

As you can see, Synchrony is not just about its flagship relationships like Amazon, and Care Credit. They do a ton of financing with fuel stations, and other auto related purchases we all need, as well as major clothing stores like Old Navy, American Eagle, and many others.

There are other credit card servicing platforms for large and small retailers, like Comenity Bank, but Synchrony is the largest. They have millions of customers.

Can’t Make Payments on a Synchrony Credit Card?

If you miss a payment to Synchrony, they are likely going to charge a late fee. If your situation is such that you can get the payment and fee to them prior to your next billing cycle, you can avoid being reported as 30 days late on your credit reports.

If you are dealing with something more than a one month financial hiccup, you may want to call Synchrony, after already being late, and ask about any hardship repayment program they may offer to you. But be sure you are confident you can follow through with any reduced payment Synchrony offers on a continuing basis.

If your situation is one that causes you to miss more than one payment, or you have too many accounts that you are juggling, it may be time to seek out a more permanent solution.

Getting Help with Synchrony Debt

You may have passed the point where temporary relief, or Synchrony waiving a late fee, is going to be helpful. This is often the case when you do not have enough income to meet all your bills each month. When this happens, you are typically looking at the following 3 mainstream methods for getting debt relief.

Enroll in a consumer credit counseling program and get all of your credit card debts under control. Review that link for a complete understanding of how credit counseling can help you. The gist is that your interest rates are reduced through agreements the counseling agency has with Synchrony and your other lenders.
Be late enough with payments to Synchrony in order for them to settle with you for less than what you owe. I often target Synchrony settlements at 40% of the balance owed (there are reasons to aim lower, or accept higher). You can sometimes split that up into 3 months if your account has not been charged off. And you will often find you are dealing with debt collection agencies and debt buyers the longer your account has gone unpaid.
You could file chapter 7 bankruptcy and wipe out all unsecured debts. Be sure to review your situation with an experienced bankruptcy attorney. There are income and asset considerations for each state that can vary, and prevent you from filing.

Anything but paying Synchrony on time, all the time, is going to have an impact to your credit score, or your ability to access new credit products and loans. Be sure to review this article about how debt relief hurts your credit before you make any assumptions. The truth may surprise you.

Things may not be simple

There is usually more to think about when your settling debts with Synchrony. Most of us have more than one debt we are struggling to keep current, and Synchrony balances may be the lowest on our list. In fact, the smaller the balance (less than $1500), I will often discourage falling behind if it can be avoided.

It is also important to point out that Synchrony is one of the few lenders that will refuse to send you a written agreement, or settlement letter, outlining what you negotiated with them over the phone, until your payments are set up in the system. I typically encourage you to record the phone call where you are covering all that you are agreeing to with them. Use an old-school tape recorder on speaker phone, or download one of the free apps. Be sure to tell them you are recording that portion of the call and why (they will not release a letter). Hold that recording until your letter arrives (they do send them).

Check out this video where I cover negotiating with Synchrony in more detail:

Be sure to reach out via the get help button if you want to talk through your options with someone. I can often answer basic questions via email, and you have the option of scheduling a 15-minute free call.

Here are the more common retailers and services that provide credit cards through Synchrony. Not all of these accounts will settle the same way, or for the same amount, but most do.

76 Gas
AAMCO
ABC Warehouse
Abt Electronics
Amazon
America’s Tire Store
American Eagle Outfitters
American Signature Furniture
Ariens and Gravely Get the Gear
Art Van
Ashley Furniture HomeStore
Athleta
Banana Republic
Bargain Outlet
Belk
Bernina
Big Sandy Superstore
Bjorn’s
Bomgaars
Boris Home Furnishings
BP Visa
Briggs & Stratton
Brooks Brothers MC
Car Care One
Care Credit
Carpet One
CheapOair / One Travel
Chevron / Texaco Visa
CITGO
City Furniture
Conoco
Dick’s Sporting Goods MC
Dillard’s Amex
Discount Tire
Dream Bed
Drexel Heritage
DX Engineering
Ebates Visa
Ebay MC / Paypal MC
Electronics Express
Ethan Allen
eXmark
Field & Stream
Flooring America
Freedom to Ride
GAP
Goldsmith Store
Golf Galaxy
Google Store
Guitar Center
Haverty’s
HH Gregg
Hudson’s Furniture
Husqvarna
Hyde Park Jewelers
JCPenney
Jewelry Exchange
Kauffman Tire
Kraft Music
La-Z-Boy
Lee Michaels
LensCrafters
Levin Furniture
Living Spaces
Loves
Lowe’s
Lumber Liquidators
Maaco
Marvel
Massey Ferguson
Mattress Firm
McCoy’s Building Supply
Meineke
Men’s Warehouse
Metro Mattress
Midas
Mills Fleet Farm
Mohawk Flooring
Musician’s Friend
Napa EasyPay
Nautilus
Newell
Old Navy
Olejo
C. Richard & Son
Pearle Vision
Pep Boys
Phillips 66
QVC
Raheem
Reeds Jewelers
Regency Furniture
Rooms To Go
Sam Ash
Sam’s Club MC
Sewing and More
Shaw Floors
Shaw Floors
Shelly’s Furniture
Sleep Experts
Sleep Number
Sleep Train
Sleepy’s
Sony Store
Specialized
Star Lumber
Stash Hotel Rewards
Stein Mart MC
Summit Racing Equipment
Sunglass Hut
Sutherlands
Sweet water
System Pavers
Thomasville
Tire Pros
TJ Maxx
TJX Rewards MC
Toro
Toys R Us MC
US Appliance
Value City Furniture
Value City Furniture
Vine Live / Shop HQ
Walmart MC
Westrich Furniture & Appliances

Remember, Synchrony is one of the largest sellers of unpaid debt to companies like Portfolio Recovery Associates, Midland Funding, and Cavalry Portfolio. It is often more ideal to get affordable help to settle when you are dealing with debt buyers. The help can end up paying for itself.

Pros and Cons of Chapter 13 Bankruptcy

March 1, 2017 by Lucy Lazarony 1 Comment

If you make more than your state’s median income and are looking to clear away high, unsustainable debts through bankruptcy, and you have too much disposable income to qualify for a Chapter 7 bankruptcy, a Chapter 13 bankruptcy may be a good option for you.

With a Chapter 13 bankruptcy, your debts are reorganized and you often pay just portions of your outstanding debts to your creditors and you’re also able to keep your assets. It’s called Chapter 13 because it is contained within Chapter 13 of the U.S. Bankruptcy code.

Here’s a closer look at the pros and cons of Chapter 13 bankruptcy.

Also known as a wage earner’s plan and re-organization bankruptcy, a Chapter 13 bankruptcy allows consumers to repay some of the debts they owe through a repayment plan lasting either 3 or 5 years. Once a repayment plan is complete, all other debts that are eligible for discharge during bankruptcy will be cleared away. A key advantage of filing for Chapter 13 is that you get to hold on to your assets, so if you’re worried about your nonexempt assets and property being at risk, then it may be an option to consider.

A Chapter 13 bankruptcy is noted on your credit record for up to seven years, three years less than with a Chapter 7 bankruptcy filing. In both instances, a public notice item of the bankruptcy is listed on your credit report. Individual accounts listed in your bankruptcy proceeding will be removed from your credit report within 7 years as well.

From a credit perspective, a Chapter 13 bankruptcy is more favorable than a Chapter 7 bankruptcy. It makes sense because with a Chapter 13 bankruptcy you are agreeing to re-organize and pay back a portion of the debts that you owe, whereas with a Chapter 7 bankruptcy, in many instances, debts may be cancelled without payment to creditors.

From a dollar and cents point of view, one disadvantage of a Chapter 13 bankruptcy is you’ll likely pay back more of the debts that you owe than you would in a Chapter 7 bankruptcy, but you also make good in even a small way on all the debts that you owe. All your creditors are likely to receive at least some payment from you when you file a Chapter 13 bankruptcy.

How Chapter 13 Repayment Plans Work

With a Chapter 13 bankruptcy repayment plan, you do agree to pay some debts in their entirety. These debts include child support, alimony, wages owed to employees and some taxes. Your repayment plan also includes your current secured debts such as auto and home loans and any overdue amounts owed on these loans.

After making these payments, any income that you have left gets applied to your unsecured debts such as credit cards, medical bills, and personal loans. With a Chapter 13, you won’t need to pay your unsecured debts in full, but you will need to show you are applying your remaining disposable income to this debt.

This type of bankruptcy is designed for consumers to re-organize their debts and pay back a portion of what they owe with future income, while maintaining their assets.

If you’re unable to complete your repayment plan in a Chapter 13 bankruptcy due to financial hardship such as being laid off from a job or a medical emergency, your bankruptcy trustee may modify your repayment plan or the court may allow you to discharge your debts due to hardship. Another option if you are unable to complete a repayment plan through a Chapter 13 bankruptcy is to convert to a Chapter 7 bankruptcy.

Lowering Your Repayment Plan

Claiming exemptions on assets and property will help to lower the amount that you’ll pay your creditors through a Chapter 13 bankruptcy proceeding. These exemptions vary from state to state, so it’s important to research the property exemptions you may claim in your state when filing. It will lessen the amount you ultimately owe your creditors and make your repayment plan more manageable.

There are federal exemptions for property and assets to consider, as well. You may wish to consult a local bankruptcy attorney to discuss the best exemption strategies for you as you contemplate bankruptcy.

Exceptions to the Chapter 7 Means Test

The U.S. Congress was concerned that too many higher income consumers were wiping away debts through Chapter 7 bankruptcy instead of paying back parts of their debts through a Chapter 13 bankruptcy proceeding, so in 2005, a law was passed establishing a means test for qualifying for Chapter 7.

Those who make less than the median income in their state may file a Chapter 7 bankruptcy without taking a means test, and those who make more than the median income must pass a means test first, but there are exceptions to this rule.

If 50 percent of your debts are non-consumer debts such as business debts, you won’t need to take a means test to qualify for Chapter 7 bankruptcy even if your income is above the state median. Disabled veterans, members of the National Guard and military reserve also may qualify for exceptions to the means test.

Everyone else earning more than the median income in the states where they live must take a means test to qualify for Chapter 7 bankruptcy. If it’s determined that you have too much disposable income, you won’t qualify, but Chapter 13 may still be a viable option for you.

Before qualifying for a Chapter 13 bankruptcy, you must complete credit counseling with an approved credit counseling agency. To find one near you, visit www.usdoj.gov/ust and scroll down to “Credit Counseling and Debtor Education”, or ask your bankruptcy attorney who they recommend to their clients.

Chapter 13 isn’t for Businesses

Businesses are unable to file a Chapter 13 bankruptcy in order to re-organize debt and should look to a Chapter 11 bankruptcy for that purpose instead. If you happen to own a business, you can still file a Chapter 13 bankruptcy as an individual and you can include business-related debts for which you are personally liable.

There are two exceptions. Stockbrokers and commodity brokers are not allowed to file a Chapter 13 bankruptcy for their personal debts.

Budget your way out of debt

March 1, 2017 by Lucy Lazarony Leave a Comment

If you’re in debt, you may be able to break free just by making some smart moves with your budget. Slashing expenses that you don’t need, finding ways to lower fixed expenses such as auto insurance and utilities bills will free up more room in your budget.

And so will the plain, old task of taking a close look at your monthly income and expenses. It will take a little bit of time to get organized, but it will be well worth the effort. It’s hard to see where the money you make is going when you don’t have a clear budget. Not having a clear and airtight budget makes it even tougher to rein in and pay down the debt you’ve acquired.

How much are you spending on food each month? How often do you fill up the gas tank? How much are your utility and cable bills? Just tracking your expenses for a month will help you to slow down spending and free up more money for debt payments.

Revamping Your Budget

Start with your fixed expenses. Tally up your fixed expenses such as rent or mortgage payments, utility bills, cable bills and cell phone bills. Add in any other monthly bills as well. Are you paying a little extra for auto insurance coverage each month rather than each quarter? Include this in your fixed expenses for now but know you can save money if pay this bill every six months or even yearly.

Short of moving or getting a roommate, there is little you can do to lower your monthly mortgage or rent payment, but those utility bills and cable bills and phone bills should be scrutinized. Keeping the temperature in a home just a few degrees cooler in the winter and warmer in the summer can help with utility costs. So can turning off lights whenever you leave, and doing without air conditioning on low-humidity summer days. Letting the fresh air into your home or apartment can do wonders for your budget.

Cable bills can be expensive. Weigh the pros and cons of keeping your current cable package. Can you get by with a less expensive option? Could you get by without this option altogether for a few months to free up more money to pay for your debts?

Cell phone bills are another big monthly expense. Do you have the best plan for your calling, texting and data needs? If you talk on the phone infrequently, opting for a less expensive voice plan than unlimited may make sense. Take a look at your text and data usage too. Could you get by without unlimited data? Ask your mobile phone provider just how much data you used last month. If you are nowhere near the lower data limits on cheaper plans, why not switch?

Making changes to your fixed expenses, the bills you pay each month, is a fast way to have a little more green in your pocket for that debt you are keen on paying off.

Reining in Variable Expenses

Variable expenses may change from month to month, or they may be a big expense such as homeowner’s insurance that you pay once or twice year. Making sure you get all the deductions you qualify for with your homeowner’s insurance is one way to lower what can be a very expensive bill. A quick call to your insurer may save you money, so don’t hesitate to reach out. Be honest with your agent. There may be ways to lower your bill that you didn’t realize.

This strategy works with car insurance too. Your insurance company wants to keep you as a customer so they may help to lower your costs with just a quick phone call. Shopping around for a better deal from another insurance company may save you money too. Loyalty and having a good relationship is certainly nice if an accident should happen and you need to file a claim, but when the priority is paying down debt, you may want to double-check that you’re getting the absolute best deal.

Food and gas are common variable expenses that may shift from month to month. A few dinners out can make food costs soar, while a few more nights in can have the opposite effect on your wallet, so take a close look at your food spending and make adjustments accordingly. If your food costs are burdened by meals eating out with friends, plan lunch or happy hour dates instead. Even better, invite friends over to your home instead, and savor a night in for a change.

Gas is another variable expense. If you travel the same route to and from work and do little additional driving, your variable gas expenses may not be all that different month to month. If you look back at a couple of months worth of spending and see big swings in what you’re paying to fill up your gas tank and it’s just more than you want to be paying, it may be time to re-assess your driving habits. Running errands all in one day can save on gas, as can carpooling with friends. Walking more and leaving your car behind to stroll a couple blocks works well too.

Apply the Cash You Save to Debt

Once you recognize and act on the spots in your budget that are costing you more than you’d like, you can apply the savings to your debt. Continue this habit and you have a strategy and the cash for paying down your debt.

But there is a big caveat; all that fun and impulsiveness is curbed back for awhile until your debt is paid in full, and you can build up some savings too. It’s more fun to spend money on an impulse when you have plenty of green in your account to handle it.

Plus, no regrets.

Pros and cons of Chapter 7 Bankruptcy

February 22, 2017 by Lucy Lazarony 2 Comments

If your debts are unsustainable, and you have few assets, you may wish to clean the slate by filing for a Chapter 7 bankruptcy. Even those of us with assets we want to keep, such as your home or car, may find that it’s more suitable for their situation as well. As consumers, we will typically find we have two types of bankruptcy options. A Chapter 13 bankruptcy re-organizes a consumer’s debts and establishes a repayment plan rather than wiping the debts away like Chapter 7 bankruptcy.

I am going to focus on chapter 7.

The process takes three to six months and a Chapter 7 trustee oversees the process, selling a debtor’s non-exempt assets and then distributing the proceeds to creditors, according to the priorities established in the U.S. Bankruptcy Code.

Referred to as Chapter 7 because it is contained within Chapter 7 of the U.S. Bankruptcy code, this type of bankruptcy also is called a “liquidation” bankruptcy or a “straight” bankruptcy. This type of bankruptcy is the most popular form of bankruptcy in the United States.

No Asset Bankruptcy Cases

Most Chapter 7 bankruptcy cases that are filed in the United States are no-asset cases, meaning the debtor does not own any non-exempt assets, which could be sold to pay for debts owed to creditors. In a no-asset Chapter 7 bankruptcy case, a trustee will file a no asset report for your case and your creditors will not receive any payments from you through the bankruptcy proceedings.

Each state has its own set of exemptions that allow consumers to protect certain types of property and assets when filing for Chapter 7 bankruptcy. And there are federal exemptions as well. The reason behind the exemptions is the belief that you need a certain amount of assets and property to make a new start and sustain yourself and your family after filing bankruptcy.

For example, when you file bankruptcy a motor vehicle exemption may protect your family’s car. If all or most of your car’s equity is covered by a motor vehicle exemption, the trustee in a Chapter 7 bankruptcy filing will not be able to include your car when selling off assets to pay debts.

Making the Most of Property Exemptions

In Maine, the motor vehicle exemption is $5,000 so if you live in that state and your car is worth say, $4,500, the bankruptcy trustee will not be able to touch your car. In Florida, the motor vehicle exemption is just $1,000. In Kansas, this exemption is $20,000 when that vehicle is “regularly used for the transportation to and from a person’s regular place of work.”

In some states, these motor vehicle exemptions are higher for married couples and if the vehicle in question is equipped for people with disabilities.

Because of the range of exemptions, it is important to research the motor vehicle exemption in your state when contemplating bankruptcy. (Also be aware if you are delinquent on car payments, a lender may still be able to repossess your car before or after bankruptcy.)

Homes are another big consideration and exemption allowed in bankruptcy proceedings. Some or all of the equity that you’ve established in your home may be exempted in a Chapter 7 bankruptcy proceeding because of your state’s homestead exemption. As with motor vehicle exemptions, homestead exemptions vary greatly between states, so it’s important to research the laws where you live.

To learn more about the bankruptcy property exemptions in your state, reach out to a local bankruptcy attorney.

Pros and Cons of Chapter 7 Bankruptcy

As mentioned, Chapter 7 bankruptcy has a number of advantages for consumers. Filing this type of bankruptcy may allow you keep all or most of their assets thanks to exemptions. The whole process typically takes three to six months, which is shorter than other types of bankruptcy.

In contrast, a Chapter 13 bankruptcy requires a three- or five-year repayment plan.

Upon completion of the bankruptcy, the consumer walks away essentially debt-free, other than loan payments for assets they were able to keep, their home and their car, plus any non-dischargeable debts, such as student loans, recent taxes and unpaid child support.

A Chater 7 bankruptcy will remain on your credit report for up to 10 years, whereas a completed Chapter 13 bankruptcy will remain for up to seven years. In both instances, a public record item associated with the filing of the bankruptcy is listed on your credit report. And impacted individual accounts will fall away from your credit report within seven years. So, a Chapter 7 bankruptcy does have a longer lasting negative impact on your credit by three years than a Chapter 13 bankruptcy would. But do not let these credit reporting facts fool you. People who file chapter 7 are in better shape to get new credit and meet life goals, like buying a home or car, long before someone who files chapter 13, and often before the many people who choose a bankruptcy alternative like debt settlement or credit counseling.

The Income Means Test

Because of income, not all consumers qualify for Chapter 7 bankruptcy.

A 2005 law added a means test, which was meant to prevent higher income debtors from cancelling their debts through Chapter 7 bankruptcy rather than repaying a portion of their debts through a Chapter 13 bankruptcy.

If your income is lower than the median income in your state then you will qualify for a Chapter 7 bankruptcy. But, if your income is higher than the median income in your state, you’ll have to pass a means test. This test compares your income and some expenses to see if you would be able to repay a portion of your unsecured debt.

But there are exceptions to taking this test if you do have higher income than your state’s median income. If 50 percent of your debts are non-consumer debts such as business debts, you may not need to take a means test to qualify for Chapter 7 bankruptcy.

Disabled veterans, members of the National Guard and military reserve also may qualify for exceptions to the means test.

Regardless of income, you must complete credit counseling with an approved credit counseling agency to qualify for a Chapter 7 bankruptcy. For a list of approved agencies in each state, visit www.usdoj.gov/ust and look for “Credit Counseling and Debtor Education.”

For a Chapter 7 bankruptcy, you will need to provide information on your current income and current living expenses, your property and assets, including property that you will be claiming that your state allows you to exempt from the proceedings.

If you have questions about how your state sees your assets as exempt, or whether you make too much money to file chapter 7, post in the comments below and include the state you live in.