Have You Successfully Gotten Out of Debt?

Have you successfully gotten out of debt...paid off student loans? Refinanced out of a high rate mortgage? Dug your way out of credit card debt?

I'd like to talk with you -- soon! A reporter for a national magazine wants to interview those who have successfully dug out from under for a story she's writing. And I am working on a new book and would like to hear your story as well.

For the magazine story, you must be willing to provide your name and perhaps be photographed (don't worry, it'll be a great experience). I can keep you anonymous in the book. (Of course you'll get an autographed copy when it is published!)

Feel free to contact me by email or by phone at 941- 227- 4496. The sooner the better.

Why I Believe the Critics Are Wrong About Debt Settlement

Two weeks ago, I met with three of the most experienced folks in the debt settlement industry (in order of appearance in the photo): Charles Phelan, Dan Smith and Alex Viecco. Between the three of them, they have seen the debt settlement industry, and the credit card industry, change and grow. Their knowledge about creditor policies, consumer problems with debt and the industry is amazing.

I know that debt settlement is highly criticized by some consumer advocates, but I don't think it's appropriate to paint all firms with the same brush. It's true there are many, many more debt settlement firms than there used to be and many are not doing a good job for the consumer. But a few are. And Alex, Charles and Dan represent a small but important part of the industry that is trying to help consumers who are deeply in debt.

Most of the consumers who contact me with deep debt problems do not want to file bankruptcy. I always encourage them to first see if credit counseling is an option, then to talk with a bankruptcy attorney so they know their rights and options.

But if the can't or won't file for bankruptcy, then debt settlement is the only option in between. And while some advocates say consumers shouldn't hire someone to help them settle debts, I feel the opposite: try to go it alone and you'll likely be pressured into making bad decisions or settling the wrong debts at the wrong time, and end up unsuccessful at best or sued at worse. Debt collectors often really put the pressure on, and it's the rare consumer who isn't emotionally drained by dealing with this process.

I toured the DTS office and came away highly impressed with the professionalism and caring attitude of the staff. The "other Gerri" who works at DTS shared touching stories of clients they have helped (anonymously of course) and their attorney Howard was clearly very well educated on the laws that are impacting that industry.

Again, dinner was a treat as we all shared our stories about the credit industry, views on how things are changing, and I basked in the cool California air -- a great change from the Florida heat and humidity.

I wish every consumer advocate and author who dismissed debt settlement outright would experience what I did. It reinforced to me that we need to focus on the positive options available to consumers, and make sure we don't lose this important service for those who need it.

How Long Can A Collection Account Be Reported?

Question from a reader:

I have credit card debt, am unemployed for the last 1 1/2 yrs.. Have a recent credit report. Two of my accounts (I'm told) sold my account to a new business and the seven year term is renewed. Now showing 2013 and 2014 to expire off report is this legal? Do I need to request info removed say 30 days before expiration date?

Answer:

No, it is not legal to report collection accounts for more than seven and a half years from the date you first fell behind with the original creditor. It doesn't matter that the debt was sold to a new business. If the original date of delinquency is correctly reported, it will be removed at the appropriate time. With the wrong dates, however, you are going to be haunted by these debts on your report longer than allowed.

Now the question is, how do you resolve it?

First, you can try disputing the dates with the credit reporting agencies. Their "investigations," however, will likely just involve checking with the collection agencies. So you will probably find they confirm the information as correct and you next have to dispute the dates with the collection agencies -- that will likely be your second step.

Keep copies of your correspondence because your third step may either be a complaint to the Federal Trade Commission, your state attorney general and perhaps a call to a consumer law attorney. Good luck and please tell us here how this turns out!

Will You Be A Certegy Identity Theft Victim?

Like me, did you receive a letter from Certegy explaining how one of their employees stole and sold personal information about checking account customers? I don't think they are doing enough to help us protect ourselves from the identity theft that may result. Read my post about it at Creditbloggers. com.

Finding a Financial Advisor After Debt Is Retired

Question: We have our own business and we've got approximately $17,000 in credit cards and other debt but we also have a good income that is $120,000 or more depending on the year. As a result, we expect that we'll be able to pay the debt off by the end of this year. Between now and then, we're very interested in finding a financial advisor who can serve as more of an educator than anything else, helping us to understand the various investment opportunities that are out there so that when we begin to save we can have a strategy in place and understand everything about it.

As I've gone about searching for someone to help, I've found that the vast majority of people tend to want to find clients with portfolios that they can manage. Unfortunately, we don't have a portfolio of investments and we really don't want a broker. We want an advisor, someone who will talk with us, evaluate our financial situation, and work with us to build a plan for the future on a flat fee basis. I'm not sure that we'll ever want the advisor to invest for us.

Is there anyplace that we can go to find this sort of consultant that I might have missed? I'd sure appreciate any help that you can offer!

Gerri's Answer: Congratulations on getting close to paying off that debt! Once it is, you'll have a lot more money to save and invest. It's great to have that goal in mind and to be working toward the day when the balances are zero.

I recommend two resources for you:

1. NAPFA...the National Association of Personal Financial Advisors. Their membership is comprised of fee-only financial planners. Visit www.napfa.org for a referral.

2. The Garrett Planning Network...This Sheryl Garrett's network of fee-only advisors. She is a highly respected financial planner and author of numerous books. You'll find her website at www.garrettplanningnetwork.com.

Please let me know how things turn out for you!

Do You Have to Pay an 11- Year Old Debt?

Here is a question I just received:

Q; When I was in the Army stationed in Germany (1995) I signed an agreement for some encyclopedia set ( that did not come in it's entirety). It wasn't until 2006 (11 years later) that I received a call about owing them money for it. Recently a collector said that she would close the account if I paid $2500 (the original amount in 1995 was $1800 for the set and now she says it's in the $7000 range due to interest rates).

I have made some payments in the meantime ($75 here and there) because I have mixed feelings about this issue:
1) The account is 12 years old.
2) I never received all of the encyclopedia's
3) It does not show up on my credit report. (which has me wondering if this is a legitimate transaction that they are trying to pursue)
4) It was originally solicited on a military base (soliciting on a military base is illegal) so, does the Statute of Limitations take effect in the debtors state of residence or the companies state of residence?

I don't mind paying the $2500 if they will close the account and it never gets submitted on my credit report and I never hear from them again.

My question to you is: Since I live in Washington state and the written contract statute of limitations in Washington State is 6 years ( which should have been in 2001), does a payment make "time" stop on the statute or does it reset the clock? I can not seem to find any information about this.

A: You bring up several important issues here.

First of all, if the facts you are telling me are correct, this debt cannot be reported on your credit report. It is too old. Under the federal Fair Credit Reporting Act, collection accounts can only be reported for seven and a half years from the date you first fell behind on the debt. If the debt collector tells you otherwise, make a note of it. Making false statements can be a violation of the Fair Debt Collection Practices Act.

Secondly, paying $2500 on an $1800 debt that is twelve years old (especially since you never received all of the items paid for) sounds far too high for me. The collector very likely bought that old debt for mere pennies on the dollar in a bundle with other debts, and any money they collect from you will be like a windfall.

But finally, you raise the statute of limitations issue. Every state has a statute of limitations that can be raised as a defense if the collection agency or creditor takes you to court. You are right that making payments on a debt can extend the statute of limitations. There is also an issue of which state statute of limitations applies here...typically it is based on the state in which you reside, but since you were stationed overseas it becomes more complicated.

I am not an attorney, so I can't give you legal advice. But if this were my debt, I would write a letter to the collector and send it certified mail. I'd explain that I believe the debt is too old to be pursued, that I never received all of the items ordered, and I do not want to be contacted further about the debt. If they took me to court (which I think would be unlikely in the circumstances) then I would contact a consumer law attorney for help.

But I doubt I would hear from the collection agency again. I think they'd most likely move on to the next customer.

Good luck!

What Are Your Rights When It Comes to Debt Collectors?

Do you have to pay that ten your old collection account?

Can the collector send you to jail if you don't pay up right away?

What's the first thing you must do when a debt collector calls?

How do collection accounts affect your credit?

You'll learn about these topics and many more by listening to an interview I did recently with loan officer Scott Swinford. As a loan officer, Scott frequently encounters collection issues that affect his client's ability to get a home loan. In fact, he talks in the interview about one case where an $8 library fine prevented a client from buying a home!

Listen online to the interview and let me know what you think!

The Shocking Truth About Student Loans

Some of the most heartbreaking calls I receive from consumers involve overwhelming student loan debt. I remember one call from a man and his wife who were teachers in a remote area in Alaska. They had over $125,000 in student loan debt and were simply unable to pay it. They had long since paid back the principal amount they borrowed but the interest continued to accumulate and they saw no hope for ever writing a check for the balance. They were going to have to give up their careers -- in an area where they were needed -- because of the loans.

MSN's Liz Pulliam Weston has written an excellent article on the student loan mess. Titled "How did student loans get so sleazy?" she explains how lenders are profiting at the expense of students who are often just trying to get the educations they need.

If you plan to pursue a higher education, have a child who will attend college, if you have student loan debt, read Liz's article, then head over to Student Loan Justice to take action. It's time for those of us who are saddled with this debt, or will be in the future, to speak up!