With the U.S. economy showing only slow signs of growth, consumer debt continues to be a significant issue for many people.
The U.S. Federal Trade Commission (FTC) in Washington has provided some tips and insights to help consumers manage their debt. It also provides suggested strategies that can help prevent and/or solve financial problems.
Among the options are: realistic budgeting, credit counseling from a reputable organization, debt management, debt consolidation, debt settlement or bankruptcy. Pro-active communications (on your part) with your creditors is also important: it shows you’re trying to be part of the solution, not extending the problem.
Suggestion: Keep very detailed records of each bill, collection letter and phone call regarding your efforts to meet your obligations: be sure, for example, to write down the date and time of each phone call (by you or to you), with the name and contact information (phone, e-mail) of the person you talked with. You’ll also want, of course, to include an outline of the things you discuss for each call. Any payments you make should be by means of either check or money order so that there’s a record of the transaction.
While these strategies can be successful, many individuals and families are overwhelmed by the number of options and their complexities. A knowledgeable bankruptcy attorney can assist in sorting out the available options and help you make the correct choice(s) for your situation. In many cases, creditors will take it as a signal of “good faith” on the part of a borrower if they get an attorney or a legitimate credit counseling service involved.
The FTC’s Web site suggests:
Be wary of any debt relief organization that:
• Charges any fees before it settles your debts
• Pressures you to make “voluntary contributions,” another name for fees
• Touts a “new government program” to bail out personal credit card debt
• Guarantees it can make your unsecured debt go away
• Tells you to stop communicating with your creditors
• Tells you it can stop all debt collection calls and lawsuits
• Guarantees that your unsecured debts can be paid off for just pennies on the dollar
• Won’t send you free information about the services it provides without requiring you to provide personal financial information, such as credit card account numbers, and balances
• Tries to enroll you in a debt relief program without spending time reviewing your financial situation.
• Offers to enroll you in a DMP without teaching you budgeting and money management skills.
• Demands that you make payments into a DMP before your creditors have accepted you into the program.
Legal Issue Insights:
Legally, debt collectors cannot call you before 8 AM or after 9 PM. They also are forbidden from calling you at work. They also are not allowed to call you multiple times in a short time period (harassment.)
Check out any unknown debt consolidation services (that you have to pay for) with the Florida Attorney General’s Office Website, your county consumer affairs office or your local Better Business Bureau.
Remember, when you need help with a difficult financial situations, call DeLoach & Hofstra to get an experienced bankruptcy attorney who will fight for you.