The 640 MEG Shareware Studio 2

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Text File | 1992-12-25 | 28KB | 548 lines

WHAT HAPPENS WHEN YOU CAN'T PAY Today, many credit card holders may find themselves in a situation where they simply cannot make their minimum monthly payment. Whatever the reason, loss of employment, overextension of credit, serious illness or unexpected expenses, don't expect your credit card issuer to be too understanding. If you get into the predicament where you can't pay your credit card bill, you'll be introduced to your credit card issuer's "dark side." First, it's important to know that a credit card is almost always an unsecured creditor, except, if the credit card is used to access a home equity line of credit. As an unsecured creditor, the credit card issuer has no secured interest (real estate, bank accounts, etc.) to guarantee the debt is repaid. While credit card issuers may seek a judgment against a debtor for nonpayment, they have few other avenues of recourse. Credit card collection activities are done by either a "Primary Bill Collector" or a "Third-Party Bill Collector." A primary bill collector is an in-house (accounts receivable department, staff collection specialists, etc.) attempt to collect money. This method is commonly, though not necessarily used in the first 90 to 180 days of collection efforts. When these in-house collection efforts fail, debts or "accounts" are usually handed over to what is called a Third- Party Bill Collector. It is important to know that these in-house bill collectors ARE NOT governed by the federal Fair Debt Collection Practices Act (FDCPA). Yet, although they are not legally required to do so, most in-house collection practices conform to the FDCPA. However, if an in-house collection department represents itself as an agent or uses a name other than the name of the credit card issuer, then, federal law treats them as a third party bill collector. The larger credit card issuers will first attempt to collect a credit card debt by using in-house resources. When these attempts are unsuccessful, the account is referred to a third-party bill collector, which is a professional collection agency or a law firm acting as a collection agency. A Third Party bill Collector may be located in your home town, on the other side of the United States, or somewhere in between. Third party bill collectors ARE regulated by the federal Fair Debt Collection Practices Act. Credit card issuers have rooms full of in-house people whose sole purpose in life is to convince you that you should send them money instead of eating. They have banks of computers that generate letters that will make your daily trip to the mailbox a "gut wrenching" experience. When you fall from grace by not paying your bill, credit card issuers will punish you. First, we'll explain what happens when you can't make your minimum payment. During the first 30 days of the billing cycle in which you missed you first payment you will receive a letter pointing out that your account is overdue. Such letters will tell you to "disregard this notice if payment has been made" while at the same time threatening to suspend your account "privileges" if it has not. You may also receive telephone calls placed by people from the dark side. If, after 30 days, your credit card issuer doesn't receive a payment, they'll really turn up the heat. Once you've been passed to the credit card issuer's collection department, there are several things you can count on. First, plan to receive regular telephone calls at irregular times, usually between 8 am until 9 pm, Monday through Saturday; bill collectors, as a rule, will not call on Sunday. Expect to be put through the same routine; every call will consist of someone telling you why they are calling (as if you didn't already know), followed by the question "When can we expect payment?". You also can expect the credit card issuer to use a rigorous letter writing campaign. At first, this could be a couple letters a month. But, if they don't see payment, you could receive as many as five letters a week. The subject matter of these letters will range from a request to set up a workable payment arrangement to threats of a lawsuit, up to and including attachment of your wages and assets. In most cases, this entire process will last about six months. If you simply can't or won't pay, they will ■charge off■ your account, which means they will write it off as a loss and then, either sell or broker it to a third party bill collector or they will sue you. If the amount in question meets the dollar requirements of the law (usually about $500 to $5,000), you can expect a small claims suit. In the case of larger amounts, you can expect that a full court action will be filed against you. If the loan is sold or brokered to a third party bill collector, you can expect the entire collection process to start over again. In many cases an in-house collection department will attempt to make "partial payment arrangements;" you should heed a word of caution about these "arrangements." These arrangements are tailored to benefit the credit card company -- NOT YOU. Such arrangements, consist of minimum payments, which cover interest and late charges, but, only a small portion of the principal (the amount of money you owe, not including interest and fees). In short, you'll end up paying forever. And that's exactly what credit card companies want. Strive to recognize when it's time to "stop fishing and cut bait." Try to realize when a principal debt cannot be conquered given your current resources. Know when to say "I'm sorry, I can't make my payment this month." Look out for your own needs, because credit card companies will sure look out for their's. You've made the decision to stop paying your bill, or, the decision has been made for you by your situation. As we've already explained, the credit card issuer will try to collect from you by bothering you with telephone calls and letters, they will restrict and then eventually close your account. Then, they will charge off your debt, file a law suit and try to attach wages and property, or, the loan will be sold or brokered to a third party bill collector and the entire collection process will start over again. And either the in-house or third party collector will ruin your credit rating by reporting your delinquency to major credit reporting bureaus, such as TRW, TransUnion or Equifax. What you need to know is how to fight back. Where in-house collection departments are concerned, a debtor is given very little protection. In-house collection departments use two methods to harass debtors; the mail and the telephone. Now, we'll focus on how a debtor can turn the tables on an in-house collection department. First, unknown to many, bill collectors by the very nature of their business are guilty of violating the U.S. Postal Laws. If you are not faint of heart or simply want to stick it to a particular bill collector, consider the following tactic. United States Code (U.S.C.) 18 876, "Mailing threatening communication," prohibits the sending of mail whose ". . . intent is to extort from any person any money or other thing of value . . . [by threatening] to injure the property or reputation of the addressee . . . [such an offense is punishable by a fine of] not more than $1000 or [five years in jail], or both." Black's Law Dictionary defines "extortion" as "The obtaining of property from another induced by wrongful use of actual or threatened force, violence, or fear, [while acting under the implied official right to do so.]" Black's Dictionary further defines "injure" as "To violate the legal right of another or inflict an actionable wrong. To do harm, damage, or impair . . ." If a collector's actions pose a clear threat to your person, mental well-being, or property, document their actions and turn them over to the Postal Inspectors for prosecution. If you simply want them to go away, consider using the following sample letter: * * * * * * * * * * * * * * * * * * * * * * * * S A M P L E L E T T E R * * * * * * * * * * * * * * * * * * * * * * * * Credit Services, Inc. P.O. Box 123 Somewhere, USA Mr. John Smith 123 Main Street Somewhere, U.S.A. 01000 RE: Account # 00000001 Dear Sirs: I am writing in response to your collection letter dated January 2, 1993 regarding my account with Give-U Credit Card Services. Gentlemen, I find the language of your letter extremely strong and subtly threatening. Your promise to report my refusal to pay this debt to a credit reporting agency should immediate payment not be received places undue mental hardship on me. Your implied future actions also threaten harm to my personal reputation. If you do not cease and desist your actions immediately, I will be forced to report the facts of your actions to my lawyer and the U.S. Postal Inspector for investigation under U.S.C. 18 876, "Mailing threatening communication." Sincerely, John Smith Another tactic a debtor can use against an in-house collection department is to report them to the telephone company or police department for making harassing or threatening telephone calls, which is against federal and most state laws. You may insist that the calls either be stopped or request that their telephone lines be disconnected as they are being used to harass or threaten the consumer, which is illegal. Debtors who are being subjected to in-house collection efforts should rent a mail or post office box, as well as a voice mail box. Debtors should also have their home telephone number changed to an unlisted number. Do not accept registered mail that can be identified as coming from a particular bill collector. Remember, you are not legally obligated to accept a letter just because it comes registered. Debtors also should rent a voice mail box to accept creditor's telephone calls. In short, the best a debtor can hope to do is ■wear down■ the credit card collections department. If they go to court and obtain a judgment against the debtor, it is their responsibility to find out where the debtor works or banks in order to enforce their judgment (garnish wages or attach bank accounts). Now we will explain the steps a consumer can take to protect their rights and turn the tables on the other people from the dark side -- the third party bill collectors. Properly applied, these steps can stop those annoying telephone calls and letters, and, eventually, make your debt go away without legal action being taken against you. Timing and strict record keeping is crucial to this plan's success. Debtors will find themselves dealing with a third party bill collector 90 to 180 days after they have defaulted on their payments. At this point, the debt may have been "charged off" to profit and loss and sold or brokered to the third party bill collector. Sometimes, such "bad debts" may be sold off to collection agencies for pennies on the dollar. In essence, the credit card issuer has already given up on collecting this debt. Remember, third party collectors ARE regulated by the federal Fair Debt Collection Practices Act, which means YOU the debtor are protected by federal laws against certain abuses. Your goal when dealing with third party bill collectors will be to frustrate them and make them believe they have no hope of collecting the debt. This is accomplished in several, carefully planned steps. First, when you receive your first third party collection notice, immediately send the following letter; be sure to enclose a photocopy of the collection notice. It does not matter if the debt is correct, send this letter anyway. Federal law requires the collection agency to certify the debt and send you a letter of verification. Until the account is verified, they must cease and desist all collection efforts. This tactic will buy you about one month of breathing time. As always, be sure and send this letter registered mail and request a return receipt. * * * * * * * * * * * * * * * * * * * * * * * * S A M P L E L E T T E R * * * * * * * * * * * * * * * * * * * * * * * * Wee Collect 'EM Services P.O. Box 000 Somewhere, USA 00000 RE: Account #1234567 Dear Sirs: I am writing in reference to your letter dated January 1, 1993 regarding Give-U Credit Card Services; I dispute the validity of this debt. In accordance with USC 1692g(b), I request that your firm verifies the name and address of the creditor, as well as the amount due, if any. Do not contact me further on this matter until you have fulfilled my request. THANK YOU Very truly yours, MR. JOHN SMITH If, at any time, after the letter is sent, the collection agency contacts you, make a note of the date and time, as well as the name of the person who contacted you. If you are contacted by mail, save the letter and envelope in which it was mailed. When you receive the debt verification letter, send the following letter to your credit card issuer: * * * * * * * * * * * * * * * * * * * * * * * * S A M P L E L E T T E R * * * * * * * * * * * * * * * * * * * * * * * * Give-U Credit Card Services, Inc. P.O. Box 123 Somewhere, USA Mr. John Smith 123 Main Street Somewhere, U.S.A. 01000 RE: Account # 00000001 Dear Sirs: I am writing about my credit card account, which was placed with your company for collection. Pursuant to USC 15-1692(c), I do not want to be contacted further by your office. I understand that federal law allows you to contact me one more time to tell me what further action you plan to take; please do so in writing. Sincerely, John Jones You must send this letter via certified mail and request a return receipt; send it to the address printed on your monthly statement. Your request not to be contacted is considered valid when the letter is mailed. So, the letters and telephone calls should stop at once. The only exception would be the final notice stating all the awful things the credit card company is going to do to you. But guess what? Almost never will the telephone calls and letters stop. Nor will the collection agency write and tell you what they are going to do. More than likely, they are just ignoring you. "They wouldn't do that, it's illegal" you say. Yes, it is illegal, and yes they will do it anyway. They have a way of just saying ". . . we never received the letter." Here's where record keeping is crucial. You must log every telephone call that you receive from the collection agency. Be sure and make a note of the date, time and person who called you. Don't complain saying that you've sent a letter requesting not to be called. Just get their name and hang up! Why? Because you are building a case against them, that's why. Every call they place is a violation of federal law. Keep a copy of every collection letter or statement that is postmarked after the mailing date of your first letter (the verification letter). Again, every letter they send is a violation of federal law; never part with the original letter. Finally, if and when the calls and letters stop, write the following letter to the State Attorney General's office in the bill collector's home state. * * * * * * * * * * * * * * * * * * * * * * * * S A M P L E L E T T E R * * * * * * * * * * * * * * * * * * * * * * * * State Attorney General's Office Main Street Somewhere, USA Dear Sirs: I am writing to file a formal complaint against Give-U Credit Card Services. On May 14, 1992, I asserted my rights under USC 15-1692c(c). Still, as the enclosed letters show, they continued to ignore my rights as guaranteed by federal law. Please note the date history of the attached letters: August 3, 6, 10, 11, 12, 18, 19, 25 (monthly statement) and 26. These letters were accompanied by telephone calls on the following dates: August 17, 18, 20 and 24. This is not a company's honest effort to collect a debt. Yet, it is an attempt to overwhelm, belittle and harass me into submitting to making promises and commitments that I cannot keep. It's clear that Give-U Credit Card Services has ignored my rights under federal law, and, they have used tactics, the intent of which were to intimidate and harass me. I request that you investigate this complaint on my behalf. Sincerely, John Jones The last thing collection agencies want is the government agencies breathing down their necks. What this tactic may do is make the third party bill collector leave you alone. Or, it may force them to give the debt back to the credit card issuer, who has already been unsuccessful in dealing with you. In the end, if you are taken to court, you'll have a good counterclaim if you can prove that either an in-house or third party bill collector has violated your rights. Chances are, if a debtor can prove, or make it appear that a bill collector has violated their rights, they will not want to tangle with them. All bill collectors prey on a debtor's fear and lack of knowledge about their rights, so, they hate educated debtors. A debtor should strive to be as knowledgeable as possible about their rights; it is the best weapon against the unconscionable practices of bill collectors. The other possibility is that nothing at all may happen. After both parties realize that they are not going to get paid, they may charge off or give up on collecting the debt and move on. In some cases it's not cost effective for them to try and recover a debt beyond a certain point. If this happens, there are ways to get the "derogatory" information removed from your credit report. That, however, is outside the scope of this book. In closing, dealing with credit card collection departments, or any collection department for that matter, can be an intimidating and tiring experience. The best course of action is to seek professional help. There are many affordable debt counseling services that are readily available. The most common is "Consumer Credit Counseling Services" (CCCS), which is a national non-profit organization sponsored by local companies and businesses. CCCS provides its services on a "sliding scale" basis (usually $20 - $40). CCCS helps debtors work with their creditors to structure payment plans and a budget that will hopefully solve their financial problems. The local CCCS office can be found in the yellow pages under "Credit & Debt Counseling Services." For troubled debtors who want to take a self help approach, a helpful and well-written publication is available: THE FINANCIAL PROBLEM SOLVER By Dean W. Charron Available from the author -- $14.95. Box 241, Granville, Massachusetts 01034 The following are some helpful tips for dealing with telephone calls from collection personnel: DON'T TELL THEM YOU'VE DECLARED BANKRUPTCY UNLESS YOU HAVE. If you tell them that you've declared bankruptcy they will ask you for a docket number, the date of your bankruptcy filing, your attorney's name and telephone number. If you can't give this information, not only will they keep calling, but, they will become very aggressive because you've lied to them. DON'T TELL THEM TO CALL YOUR ATTORNEY UNLESS YOU REALLY HAVE ONE. Federal law allows bill collectors ready access to your attorney, or, they can continue to communicate with you. Like saying you're bankrupt when you're not, this one can backfire. DON'T THREATEN THEM WITH VIOLENCE. They may have you arrested for threatening assault. DON'T SWEAR AT THEM. They will merely hang up on you and call back later starting the conversation from scratch. DON'T BEAR YOUR SOUL TO THEM. When you talk to them, you give them information that they can use against you later. DON'T MAKE PROMISES YOU CANNOT KEEP. Broken promises will only compound and worsen matters later. DON'T GIVE THEM ANY OF YOUR EMPLOYMENT INFORMATION. Federal law grants bill collectors the right, under certain conditions, to call you at work. Also, this information may be used later to garnish your wages. If a creditor is granted a judgment against you, it is up to them to find out where you work to garnish your wages. DON'T BE INTIMIDATED. Bill collectors rely on your intimidation for their tactics to work. In reality, bill collectors are basically powerless unless you let them be otherwise. DO TAKE NOTES. Always record times, dates, names, conversations. They will help you later. DO BE BRIEF AND TO THE POINT. Avoid explaining yourself. When you do, you get into trouble. DO BE POLITE. There is nothing to be gained by being rude or abusive to bill collectors. * * * End of WHEN YOU CAN'T PAY * * *