Your credit is jacked, collection agencies are blowing up your phone and the mailbox is stuffed with letters demanding payment.
There isn’t enough money to pay the debts and your stress level is maxed out. What can you do?
If you read our last blog, you know that debt settlement or negotiation may not be the best answer. So what are some options? Are there workable solutions?
Some might consider bankruptcy. Filling for bankruptcy will put an end to a lot of debt and is often used as a strategy in business as well. But if there isn’t a significant amount of debt, usually $100,000 or more, filling for bankruptcy may not be the best choice.
Debt settlement or negotiation was discussed in our last blog. This option is not for the faint of heart. Prepare for law suits, wage garnishments, bank and property liens and a destroyed credit profile.
Credit counseling has worked for some. With this option you will pay back all the debt based on a budget that is mandated. Your credit will be compromised. Additionally most people can budget; they simply do not have enough disposable income, so for them, counseling is not the answer.
Another possible option enjoying success and popularity is using the law to fight back against credit bureaus, creditors and collection agencies. This option is only possible because these entities routinely violate state and federal laws in their collection process. The trick is to know when there has been a violation.
Since it is almost impossible to know when and if your rights have been violated unless you are a consumer-rights attorney, this option mandates that you receive help with the process. Attorneys that specialize in consumer rights can help but you have to bring the case to them.
There are companies that can review your credit report, collection letters and phone calls to determine likely violations. These, in turn, would initiate a correspondence with the potential perpetrator, and then put your case into the hands of a competent attorney who can correct the issue. If illegal conduct persists, or if the situation is not corrected, the attorney will take legal action.
If all of this is done correctly, there is usually no reason for a court hearing. Typically it is just a phone conversation between the consumer’s attorney and the collection agency attorney. The consumer attorney will outline the violation and the collection attorney will ask what it will take for the problem to go away.
- A good attorney will first ask that the debt is forgiven; the consumer will no longer ever have to worry about this debt again. It won’t be sold to another collection agency or ever brought up again.
- The removal of the debt from the consumer’s credit profile. The derogatory entry is expunged, never to come up again and the consumer’s credit score goes up.
- Cash award. State and Federal law exacts fees to be paid whenever violations occur. These fees can range from $1,000 or more.
Since the likelihood of collection violations are extremely high, using a company that can identify and catch violators and then direct the consumer to the correct legal team is by far the best approach to debt and collections for many people.
This approach does away with bankruptcy, debt settlement, consumer counseling, proactive and the least expensive. It also has the added benefit of actually putting money into your pocket via cash awards instead of costing you money as is the case with the other three options.
For more on this, please see https://heritagecreditgroup.com/credit-counseling-debt-counseling/