Comments on: Proposed Limits on Debt Settlement Companies Too Lenient http://blog.stopccdebt.com/?p=175 Vision Credit Education, Inc.: Your Nonprofit Credit Counseling Organization Thu, 09 Sep 2010 17:32:45 -0700 hourly 1 http://wordpress.org/?v=3.0 By: Kenneth Long http://blog.stopccdebt.com/?p=175&cpage=1#comment-13971 Kenneth Long Thu, 02 Sep 2010 15:31:21 +0000 http://blog.stopccdebt.com/?p=175#comment-13971 The FTC has finally acted to prevent advance fees charged by debt settlement companies who sell services by phone: <a href="http://www.debtorsunite.com/Blog/Debt-Management/July-2010/FTC-Puts-Freeze-on-Debt-Relief-Robocalls.aspx" rel="nofollow">FTC Rules Against Debt Settlement Companies</a> The FTC has finally acted to prevent advance fees charged by debt settlement companies who sell services by phone:
FTC Rules Against Debt Settlement Companies

]]> By: dombAmerm http://blog.stopccdebt.com/?p=175&cpage=1#comment-8285 dombAmerm Sun, 03 Jan 2010 04:07:46 +0000 http://blog.stopccdebt.com/?p=175#comment-8285 Help!!!! Anybody know of a respectable lender that YOU alone possess tempered to in the past? Essential recommendations fast. Help!!!! Anybody know of a respectable lender that YOU alone possess tempered to in the past? Essential recommendations fast.

]]> By: Colorado Study Looks at Debt Consolidation Services http://blog.stopccdebt.com/?p=175&cpage=1#comment-7584 Colorado Study Looks at Debt Consolidation Services Fri, 06 Nov 2009 00:34:01 +0000 http://blog.stopccdebt.com/?p=175#comment-7584 [...] debt woes is trying to be altruistic. If you need to file a complaint about a debt consolidation or debt settlement service you used, contact your state attorney general’s [...] [...] debt woes is trying to be altruistic. If you need to file a complaint about a debt consolidation or debt settlement service you used, contact your state attorney general’s [...]

]]> By: Sarah Gross http://blog.stopccdebt.com/?p=175&cpage=1#comment-4429 Sarah Gross Tue, 02 Jun 2009 23:23:24 +0000 http://blog.stopccdebt.com/?p=175#comment-4429 Student loan problem and rip-off by a collection agency. I complied with a request by a student loan lender by requesting a payment plan - monthly deductions from my bank. I sent a form with my bank account, but did not realize that my routing number was not the number listed on my deposit slip. The lender supposedly tried to reach me by phone -- but did not send notice to my email which I provided -- that the bank routing number was incorrect. They did not try to contact the bank to request my response as well. They simply turned my account over to a collection agency. The collection agency demanded a $500 set up fee to collect my payments and then stated that they will charge $2500 as a collection fee in addition to the $500 set up fee, and a monthly payment...with interest and collection fees that "may change" over the period of the loan. I tried to resolve the collection problem with the lender -- that I didn't realize the difference between the router number on my check was different from what was on my preprinted deposit slips....but they were very "nasty" and refused to discuss the issue with me. The collection agency they turned me over to is asking too much money for a "set-up" fee -- when I made the call to them, and stated that fees in addition to the $2500 collection fee stated in their correspondence may escalate even if my payments are made on a timely basis. Is this extortion, fraudulent, or what? I am already in debt, tried to resolve it with the lender, but now will have to pay $6000 plus over what the original debt is. This is a student loan -- that the lender started to collect while I was in my 2 year of college and which forced me out of school to pay. I haven't been able to complete my education to find a job that would pay me enough to afford the repayment since I don't have a college degree -- the very purpose of my parents indebting me to seek an education of "higher learning." I think the "business" of education and the collection agencies are creating a serious debt burden upon the young people of this country so that your credit is over run long before you even can get a degree or a job that will afford the repayment of this debt. Student loan problem and rip-off by a collection agency. I complied with a request by a student loan lender by requesting a payment plan – monthly deductions from my bank. I sent a form with my bank account, but did not realize that my routing number was not the number listed on my deposit slip. The lender supposedly tried to reach me by phone — but did not send notice to my email which I provided — that the bank routing number was incorrect. They did not try to contact the bank to request my response as well. They simply turned my account over to a collection agency. The collection agency demanded a $500 set up fee to collect my payments and then stated that they will charge $2500 as a collection fee in addition to the $500 set up fee, and a monthly payment…with interest and collection fees that “may change” over the period of the loan. I tried to resolve the collection problem with the lender — that I didn’t realize the difference between the router number on my check was different from what was on my preprinted deposit slips….but they were very “nasty” and refused to discuss the issue with me. The collection agency they turned me over to is asking too much money for a “set-up” fee — when I made the call to them, and stated that fees in addition to the $2500 collection fee stated in their correspondence may escalate even if my payments are made on a timely basis.
Is this extortion, fraudulent, or what? I am already in debt, tried to resolve it with the lender, but now will have to pay $6000 plus over what the original debt is. This is a student loan — that the lender started to collect while I was in my 2 year of college and which forced me out of school to pay. I haven’t been able to complete my education to find a job that would pay me enough to afford the repayment since I don’t have a college degree — the very purpose of my parents indebting me to seek an education of “higher learning.” I think the “business” of education and the collection agencies are creating a serious debt burden upon the young people of this country so that your credit is over run long before you even can get a degree or a job that will afford the repayment of this debt.

]]> By: Kenneth Long http://blog.stopccdebt.com/?p=175&cpage=1#comment-3924 Kenneth Long Tue, 19 May 2009 19:41:13 +0000 http://blog.stopccdebt.com/?p=175#comment-3924 Dear Parvenu: Thank you for your comment. While it is true that many debtors may procrastinate or fail to stick to a repayment plan, it is also true that the debt settlement industry has fundamental flaws that have caused substantial economic hardship for most clients. New York Attorney General Andrew Cuomo has labeled the debt settlement industry as a "<a href="http://blog.stopccdebt.com/?p=182" rel="nofollow">rogue industry</a>." When signing up with a debt settlement company, a consumer creates an additional creditor that they will owe thousands of dollars to. Clients are routinely mislead by debt settlement companies about the "savings" they will benefit from. Creditors are not granting the "pennies on the dollar" settlements that many are claiming. In addition, no debt settlement company to my knowledge informs clients that they will also receive Form 1099-C for a settled account. This serves as notice to the IRS that a portion of their debt has been forgiven. This forgiven debt is taxable as income, which can reduce the "savings" by up to 40%. These companies sell a single service to any client with debt, even though a huge percentage of those potential customers would be better served going through credit counseling or even bankruptcy. I appreciate your perspective and want to remind our readers that debt settlement companies cannot do anything that you cannot do on your own. They are for-profit companies that use high pressure sales representatives rather than counselors for enrollment. Dear Parvenu:

Thank you for your comment. While it is true that many debtors may procrastinate or fail to stick to a repayment plan, it is also true that the debt settlement industry has fundamental flaws that have caused substantial economic hardship for most clients. New York Attorney General Andrew Cuomo has labeled the debt settlement industry as a “rogue industry.” When signing up with a debt settlement company, a consumer creates an additional creditor that they will owe thousands of dollars to.

Clients are routinely mislead by debt settlement companies about the “savings” they will benefit from. Creditors are not granting the “pennies on the dollar” settlements that many are claiming. In addition, no debt settlement company to my knowledge informs clients that they will also receive Form 1099-C for a settled account. This serves as notice to the IRS that a portion of their debt has been forgiven. This forgiven debt is taxable as income, which can reduce the “savings” by up to 40%.

These companies sell a single service to any client with debt, even though a huge percentage of those potential customers would be better served going through credit counseling or even bankruptcy.

I appreciate your perspective and want to remind our readers that debt settlement companies cannot do anything that you cannot do on your own. They are for-profit companies that use high pressure sales representatives rather than counselors for enrollment.

]]> By: Parvenu http://blog.stopccdebt.com/?p=175&cpage=1#comment-3923 Parvenu Tue, 19 May 2009 19:13:01 +0000 http://blog.stopccdebt.com/?p=175#comment-3923 Nice article; however, you are missing the key points. I am in the settlement industry and most people who complain about it simply do not have the ability to set a goal and see it through until the end. Or, in many more cases, these people who have the "me, me, me" or "I want it now" mentality will never take the time to understand what they are getting into nor have the patience to see it through til the end. When we set up a program, a client fully understands the parameters of the program, the fees being charged, the potential for lawsuits, etc. When one account gets turned over to collections through an attorneys' office, these clients prematurely panic thinking that will get sued and they drop out of the program without even discussing the collection activity. This is the clients' fault, not the settlement companies fault. When they drop out, we give them a partial refund, but not the whole amount. We charge them only for the work performed. I find it fascinating that the lower the debts that a person has, the more likely it is that they will never finish a settlement program . On the reverse end, people with $100k or more in debt not only complete the program, they will actually do whatever is necessary to finish the program early by doubling up on payments and, these larger accounts never complain. If you have a debt of $50k and you know a program will cost you around $27k including fees, how is this a bad thing? Nice article; however, you are missing the key points. I am in the settlement industry and most people who complain about it simply do not have the ability to set a goal and see it through until the end. Or, in many more cases, these people who have the “me, me, me” or “I want it now” mentality will never take the time to understand what they are getting into nor have the patience to see it through til the end. When we set up a program, a client fully understands the parameters of the program, the fees being charged, the potential for lawsuits, etc. When one account gets turned over to collections through an attorneys’ office, these clients prematurely panic thinking that will get sued and they drop out of the program without even discussing the collection activity. This is the clients’ fault, not the settlement companies fault. When they drop out, we give them a partial refund, but not the whole amount. We charge them only for the work performed. I find it fascinating that the lower the debts that a person has, the more likely it is that they will never finish a settlement program . On the reverse end, people with $100k or more in debt not only complete the program, they will actually do whatever is necessary to finish the program early by doubling up on payments and, these larger accounts never complain. If you have a debt of $50k and you know a program will cost you around $27k including fees, how is this a bad thing?

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