I started this Blog to educate consumers about bankruptcy in general. My intention is to have people share their experiences with bankruptcy so we can find the best way to approach bankruptcy. This blog comprises four informative sections; click on their LINKS below to find out more about bankruptcy.
Introduction: 7 Things to Consider When Filing Bankruptcy
Related Bankruptcy Articles
Bankruptcy Law - Links, Difference b/w Chapter 7 and 13, etc.
Bankruptcy Discussion! *New Find Answers to Your Questions/Contribute
Conclusion for Bankruptcy
Tuesday, November 11, 2008
Monday, November 10, 2008
Introduction: 7 Things to Consider When Filing Bankruptcy
Below is a list of items that you must think about when you are deciding to file for bankruptcy.
1. Cost. Most attorneys will try to get as much as they can out of you. Know that a typical Chapter 7 costs roughly $700 to $800, this figure really depends on the situation; however, if you have no unusual assets (such as a large boat or another house in Aspen) then look for the magic $700 to $800 number. Chapter 13s are closer to $1200 to $1300.
2. Most firms will allow you to set up a payment plan. Normally, they will ask you for $100 a month and some will even offer $50 a month. Please be aware that if they do not offer a payment plan, you probably want to go with a different attorney.
3. Although the costs quoted above are a lot of money, the attorneys you hire should get on the phone to your debt collectors soon after you hire them. Within the week of you signing with an attorney, you sould stop getting those nasty creditor calls!
4. Moreover, as soon as you hire a lawyer, you can stop worrying about your debt. You can immediately cease payment on most of the credit card or medical bills that you are struggling with.
5. Be careful of hiring any law firm that advertises on TV on a regular basis. These firms usually are "bankruptcy mills," processing thousands of bankruptcies per month. The downside to this type of firm is that you may end up with someone that will not give you the care and attention you deserve. Much better to go with a smaller, less money-hungry firm. This concept became clear to me when I was researching firms for my own bankruptcy, which I did when I lived near the Milwaukee area a few years ago. After several meetings, I found a good but fair-priced firm called Debt Advisors (their link is on the right) -- try to find something like them in your area.
6. Once you hire an attorney, your bankruptcy should begin immediately, and the entire procress (from the time you fill out your paperwork to the moment of meeting with a judge and your debt is wiped clean) should last 90 days, roughly -- again, this time frame depends on how usual or unusual your case is. Also note that 7 years after you file, the slate is wiped clean, and you can file for bankruptcy again if you need to.
7. Finally, the most important thing to know is that when you meet with a lawyer, you should get the feeling that you trust them; after all, they are handling one of the most important decisions you will ever make.
1. Cost. Most attorneys will try to get as much as they can out of you. Know that a typical Chapter 7 costs roughly $700 to $800, this figure really depends on the situation; however, if you have no unusual assets (such as a large boat or another house in Aspen) then look for the magic $700 to $800 number. Chapter 13s are closer to $1200 to $1300.
2. Most firms will allow you to set up a payment plan. Normally, they will ask you for $100 a month and some will even offer $50 a month. Please be aware that if they do not offer a payment plan, you probably want to go with a different attorney.
3. Although the costs quoted above are a lot of money, the attorneys you hire should get on the phone to your debt collectors soon after you hire them. Within the week of you signing with an attorney, you sould stop getting those nasty creditor calls!
4. Moreover, as soon as you hire a lawyer, you can stop worrying about your debt. You can immediately cease payment on most of the credit card or medical bills that you are struggling with.
5. Be careful of hiring any law firm that advertises on TV on a regular basis. These firms usually are "bankruptcy mills," processing thousands of bankruptcies per month. The downside to this type of firm is that you may end up with someone that will not give you the care and attention you deserve. Much better to go with a smaller, less money-hungry firm. This concept became clear to me when I was researching firms for my own bankruptcy, which I did when I lived near the Milwaukee area a few years ago. After several meetings, I found a good but fair-priced firm called Debt Advisors (their link is on the right) -- try to find something like them in your area.
6. Once you hire an attorney, your bankruptcy should begin immediately, and the entire procress (from the time you fill out your paperwork to the moment of meeting with a judge and your debt is wiped clean) should last 90 days, roughly -- again, this time frame depends on how usual or unusual your case is. Also note that 7 years after you file, the slate is wiped clean, and you can file for bankruptcy again if you need to.
7. Finally, the most important thing to know is that when you meet with a lawyer, you should get the feeling that you trust them; after all, they are handling one of the most important decisions you will ever make.
Stigma behind Bankruptcy
Unjustified Stigma
Amy O'Hare
"Bankruptcy has always had a stigma and it always will,” says Vito E. Lella, president of Accord Associates Denver Ltd. But should it? Today, stigma aligned with bankruptcy, resonates in words like,“deadbeat," or, according to Debtor Mike E.'s neighbors,“credit criminals.” But when actually filing for bankruptcy comes under examination, it seems the stigma surrounding it is just another set of false fears void of any merit.
In society, stigma crops up when a group of people consider themselves dominate over
another group due to perceived subtle yet unfavorable differences occurring in the second group. Social labeling then transpires, resulting in a definitive separation of those who are labeled from those who are the labelers. In this case, the dominate group happens to be anyone in society who believes bankruptcy is strictly negative and suitable for those who are careless with their money. But that is simply not true because, “today the average two income family that makes house, car, insurance and child care payments has less disposable income then a one income household making those same payments.” (Warren & Tyagi, 52). Also, little does the dominate group know that the majority of the middle class lives paycheck to paycheck to achieve a middle class standing where their kids can get a good education, somewhere safe. Nor, do they know that, “medical bills, mortgage payments and job losses are the main reasons for over eighty five percent of filings,”(Warren & Tyagi, 81). What deserves the criticism is that phenomenon which causes bankruptcy, not the debtors.
Yet debtors are still blamed. Why is this? In an attempt to answer that question we must first look into the past, to centuries ago, when gold was passed in coin currency and banks were born. Then, like to today, banks offered to be are our friend in need, willing to give out loans at the toughest of times. However, when the borrower or debtor was unable to pay the loan back, the banks took it upon themselves to recapture their money. And, of course, this is their right although one of their most successful techniques in doing this is to cause fear in the debtor’s mind. Similar to a mafia’s strategy, save the violence, the banks like to condemn to debtor who has trouble paying back there loans by scaring the debtor’s credit history, hiring collection agencies to harass the individual and notifying the debtors employer of the situation. While at the same time, they’ve also perfected another technique: indoctrination of the public. In other words, they us the dominate group to spread the idea of the “credit criminal,” until it becomes a malignant discrimination and the debtor feels stuck between not being able to pay his bills yet unable to do anything about it because the “credit criminal” is afraid of being a criminal, afraid of being discriminated against.
And ultimately, that’s how credit card companies make their money today. The longer the principal debt is unpaid the more interest on the debt grows and the more payments the stuck debtor will have to make. In fact, most debtors, 93% or more, believe in the stigma attached to bankruptcy as much as the dominate parties do. They spend (on average) more than a year trying to avoid bankruptcy. They are responsible and attempt repayment of a crushing debt but: at most, only 3.6% of Chapter 7 debtors could repay only 20% of their unsecured debts over 5 years. So a year drifts by. They have been paying interest payment after interest payment, not even coming close to their principal debt and, according to Attorney Raymond Ferrario, it’s, “the interest from the credit card debt that ultimately pushes people over the edge.” They reach a break down, either financial or emotional and then end up walking into an attorney’s office to file for bankruptcy, ashamed to be there.
Yet they should not be ashamed. They should be educated as to why bankruptcy occurs and what they can do to prevent it in the future. So why not create programs that teach both young and older adults how to budget their money, or restrict credit card usage in the beginning of someone’s credit history instead at it demise? A good idea yet when dominate members are in power and are the ones responsible for making such a decision, it becomes difficult because on one side there are people like Senator Orrin Hatch of Utah claiming, “These people abuse the system in order to get around their debts which they are very capable of paying,” (Warren & Tyagi, 71). While on the other side you have no one dissenting. Why? It’s possible that politicians don’t take a stand against credit card companies and institutional banks is because of the benefits they receive by not doing so. For example, the credit card industry gave 61.6 million dollars (an average amount of $100,000 to each member of the senate since 1987).
So as a slim fraction of the dominate party benefits (the politicians and the bank managers) the rest are left ridiculing the debtors, blaming them for eating up tax dollars or living “off the system.” Which is unfortunate because according to Attorney Mike George, “Bankruptcy isn’t a bad thing. It actually helps the economy by injecting all of the debtor’s disposable income back into society.” That’s the sobering aspect of it. All of the discrediting talk, which reduces the debtor from a whole and ordinary person to a tainted, discounted one, not only hurts him but also those who perpetuate the stigma and the general public. Ironic that most who deem bankruptcy so horrible actually benefit from its existence. Only if the public knew this, but they don’t because: the public is generally not aware about the specific concepts, the technical aspects of the legal system of bankruptcy.
In essence, this stigma is simply unwarranted. America must evolve and realize that the external circumstances are the real culprits behind bankruptcy. Then again, if the masses are educated, credit card companies and others like them wouldn't be able to profit as much. Wouldn't that be a shame?
Works Cited
1. Link, Bruce G., PhD, “The Stigma Process: Reconceiving the definition of Stigma” 5062.0 Abstract #8926, 15 Nov. 2000. 7 May 04
2. Marinna B. Culhane & Michella M. White. “Taking the New consumer Bankruptcy Model for a Test Drive: Means Testing Real Chapter 7 Debtors 7.” American. Banker. Institute. L. Rev. 27, 31 (1999).
3. Schlesinger, D. Going For Broke: Consumer Credit Industry Bankrolls Candidates and Parties With $61.1 Million Since 1987; Senate Poised to Act on Bankruptcy Legislation. supra note 5, at A1 Common Cause, Feb. 13, 1999. 6 May 2004
4. See 1.
5. Brussels. Belgium. Corporate Finance Committee. Stigma: Bankruptcy and a fresh start: stigma on failure and legal consequences of bankruptcy by Philippe & Partners and Deloitte & Touche. 9, Feb 2002. 05 May 2004
Bibliography
Warren, Elizabeth & Ameha Warren Tyagi. Two Income Trap. New York: Basic Books, 2003.
Amy O'Hare
"Bankruptcy has always had a stigma and it always will,” says Vito E. Lella, president of Accord Associates Denver Ltd. But should it? Today, stigma aligned with bankruptcy, resonates in words like,“deadbeat," or, according to Debtor Mike E.'s neighbors,“credit criminals.” But when actually filing for bankruptcy comes under examination, it seems the stigma surrounding it is just another set of false fears void of any merit.
In society, stigma crops up when a group of people consider themselves dominate over
another group due to perceived subtle yet unfavorable differences occurring in the second group. Social labeling then transpires, resulting in a definitive separation of those who are labeled from those who are the labelers. In this case, the dominate group happens to be anyone in society who believes bankruptcy is strictly negative and suitable for those who are careless with their money. But that is simply not true because, “today the average two income family that makes house, car, insurance and child care payments has less disposable income then a one income household making those same payments.” (Warren & Tyagi, 52). Also, little does the dominate group know that the majority of the middle class lives paycheck to paycheck to achieve a middle class standing where their kids can get a good education, somewhere safe. Nor, do they know that, “medical bills, mortgage payments and job losses are the main reasons for over eighty five percent of filings,”(Warren & Tyagi, 81). What deserves the criticism is that phenomenon which causes bankruptcy, not the debtors.
Yet debtors are still blamed. Why is this? In an attempt to answer that question we must first look into the past, to centuries ago, when gold was passed in coin currency and banks were born. Then, like to today, banks offered to be are our friend in need, willing to give out loans at the toughest of times. However, when the borrower or debtor was unable to pay the loan back, the banks took it upon themselves to recapture their money. And, of course, this is their right although one of their most successful techniques in doing this is to cause fear in the debtor’s mind. Similar to a mafia’s strategy, save the violence, the banks like to condemn to debtor who has trouble paying back there loans by scaring the debtor’s credit history, hiring collection agencies to harass the individual and notifying the debtors employer of the situation. While at the same time, they’ve also perfected another technique: indoctrination of the public. In other words, they us the dominate group to spread the idea of the “credit criminal,” until it becomes a malignant discrimination and the debtor feels stuck between not being able to pay his bills yet unable to do anything about it because the “credit criminal” is afraid of being a criminal, afraid of being discriminated against.
And ultimately, that’s how credit card companies make their money today. The longer the principal debt is unpaid the more interest on the debt grows and the more payments the stuck debtor will have to make. In fact, most debtors, 93% or more, believe in the stigma attached to bankruptcy as much as the dominate parties do. They spend (on average) more than a year trying to avoid bankruptcy. They are responsible and attempt repayment of a crushing debt but: at most, only 3.6% of Chapter 7 debtors could repay only 20% of their unsecured debts over 5 years. So a year drifts by. They have been paying interest payment after interest payment, not even coming close to their principal debt and, according to Attorney Raymond Ferrario, it’s, “the interest from the credit card debt that ultimately pushes people over the edge.” They reach a break down, either financial or emotional and then end up walking into an attorney’s office to file for bankruptcy, ashamed to be there.
Yet they should not be ashamed. They should be educated as to why bankruptcy occurs and what they can do to prevent it in the future. So why not create programs that teach both young and older adults how to budget their money, or restrict credit card usage in the beginning of someone’s credit history instead at it demise? A good idea yet when dominate members are in power and are the ones responsible for making such a decision, it becomes difficult because on one side there are people like Senator Orrin Hatch of Utah claiming, “These people abuse the system in order to get around their debts which they are very capable of paying,” (Warren & Tyagi, 71). While on the other side you have no one dissenting. Why? It’s possible that politicians don’t take a stand against credit card companies and institutional banks is because of the benefits they receive by not doing so. For example, the credit card industry gave 61.6 million dollars (an average amount of $100,000 to each member of the senate since 1987).
So as a slim fraction of the dominate party benefits (the politicians and the bank managers) the rest are left ridiculing the debtors, blaming them for eating up tax dollars or living “off the system.” Which is unfortunate because according to Attorney Mike George, “Bankruptcy isn’t a bad thing. It actually helps the economy by injecting all of the debtor’s disposable income back into society.” That’s the sobering aspect of it. All of the discrediting talk, which reduces the debtor from a whole and ordinary person to a tainted, discounted one, not only hurts him but also those who perpetuate the stigma and the general public. Ironic that most who deem bankruptcy so horrible actually benefit from its existence. Only if the public knew this, but they don’t because: the public is generally not aware about the specific concepts, the technical aspects of the legal system of bankruptcy.
In essence, this stigma is simply unwarranted. America must evolve and realize that the external circumstances are the real culprits behind bankruptcy. Then again, if the masses are educated, credit card companies and others like them wouldn't be able to profit as much. Wouldn't that be a shame?
Works Cited
1. Link, Bruce G., PhD, “The Stigma Process: Reconceiving the definition of Stigma” 5062.0 Abstract #8926, 15 Nov. 2000. 7 May 04
2. Marinna B. Culhane & Michella M. White. “Taking the New consumer Bankruptcy Model for a Test Drive: Means Testing Real Chapter 7 Debtors 7.” American. Banker. Institute. L. Rev. 27, 31 (1999).
3. Schlesinger, D. Going For Broke: Consumer Credit Industry Bankrolls Candidates and Parties With $61.1 Million Since 1987; Senate Poised to Act on Bankruptcy Legislation. supra note 5, at A1 Common Cause, Feb. 13, 1999. 6 May 2004
4. See 1.
5. Brussels. Belgium. Corporate Finance Committee. Stigma: Bankruptcy and a fresh start: stigma on failure and legal consequences of bankruptcy by Philippe & Partners and Deloitte & Touche. 9, Feb 2002. 05 May 2004
Bibliography
Warren, Elizabeth & Ameha Warren Tyagi. Two Income Trap. New York: Basic Books, 2003.
Bankruptcy Law - Links, Difference b/w 7 and 13, etc.
Links
The best description of bankruptcy law I have ever seen can be found at the University of Cornell's Web site -- click the LINK below. In a few paragraphs they clarify the meaning and purpose of bankruptcy.
Cornell University Bankruptcy Law Review
The Difference between filing a chapter 7 and 13:
Many people struggle with the decision to file bankruptcy. Usually this is because they have misconceptions about bankruptcy in general. Basically, bankruptcy is a legal way to level the playing field between an individual debtor and creditors. It is a legal proceeding that provides the debtor with a fresh start.
The two types of bankruptcy that are most commonly available for an individual are: Chapter 7 and Chapter 13.
Chapter 7, or straight bankruptcy, is what most people typically think of as bankruptcy. In Chapter 7 bankruptcy, a debtor's non-exempt assets are liquidated or sold and the proceeds are used to pay toward unsecured debts (credit cards, loans, medical bills, etc.). In the overwhelming majority of cases, however, people do not lose any property which means unsecured creditors get nothing. At the end of the bankruptcy, roughly 3-4 months after filing, the debts are discharged and the creditor can never collect on the debt.
Chapter 13 is a debt reorganization or consolidation bankruptcy. If a person has a regular monthly income, their debts (mortgage arrears, car payments, credit cards, medical bills, loans, student loans, etc.) are rolled into one low monthly payment. Because the debtor is paying back his creditors through this repayment plan, the debtor does not risk losing any assets as he might under Chapter 7 bankruptcy. Furthermore, while in the repayment plan, typically 3-5 years, creditors are stopped from contacting the debtor without first going through the debtor's attorney and the court.
Millions of people declared bankruptcy last year alone to get the fresh start they needed. Contrary to what many believe, bankruptcy does not permanently damage your credit, and you will still be able to have credit. The new bankruptcy laws that went into effect in 2005 changed bankruptcy very little.
Source: http://www.ArticlePros.com/author.php?Michele Wallace
The best description of bankruptcy law I have ever seen can be found at the University of Cornell's Web site -- click the LINK below. In a few paragraphs they clarify the meaning and purpose of bankruptcy.
Cornell University Bankruptcy Law Review
The Difference between filing a chapter 7 and 13:
Many people struggle with the decision to file bankruptcy. Usually this is because they have misconceptions about bankruptcy in general. Basically, bankruptcy is a legal way to level the playing field between an individual debtor and creditors. It is a legal proceeding that provides the debtor with a fresh start.
The two types of bankruptcy that are most commonly available for an individual are: Chapter 7 and Chapter 13.
Chapter 7, or straight bankruptcy, is what most people typically think of as bankruptcy. In Chapter 7 bankruptcy, a debtor's non-exempt assets are liquidated or sold and the proceeds are used to pay toward unsecured debts (credit cards, loans, medical bills, etc.). In the overwhelming majority of cases, however, people do not lose any property which means unsecured creditors get nothing. At the end of the bankruptcy, roughly 3-4 months after filing, the debts are discharged and the creditor can never collect on the debt.
Chapter 13 is a debt reorganization or consolidation bankruptcy. If a person has a regular monthly income, their debts (mortgage arrears, car payments, credit cards, medical bills, loans, student loans, etc.) are rolled into one low monthly payment. Because the debtor is paying back his creditors through this repayment plan, the debtor does not risk losing any assets as he might under Chapter 7 bankruptcy. Furthermore, while in the repayment plan, typically 3-5 years, creditors are stopped from contacting the debtor without first going through the debtor's attorney and the court.
Millions of people declared bankruptcy last year alone to get the fresh start they needed. Contrary to what many believe, bankruptcy does not permanently damage your credit, and you will still be able to have credit. The new bankruptcy laws that went into effect in 2005 changed bankruptcy very little.
Source: http://www.ArticlePros.com/author.php?Michele Wallace
Conclusion for Bankruptcy
For now, I hope that the sections of this Blog helped you in making an informed decision. Remember, go with an attorney that you trust and no matter what, do not ever feel ashamed of filing for bankrutcy. More than likely, someone you know already has.
Monday, June 2, 2008
The Truth About "Free" Credit Reports
The Truth About "Free" Credit Reports
By: Pat Hicks
Too many people are being confused, mislead and taken advantage of by tem, "Free Credit Report". We set the record straight so that won't happen. Text How many of us have looked at anything offered to us for "free"? Not me? Of course I have. In this day in age when gas prices are listed as "Arm" and "Leg", providing health insurance for your family costs more than some mortgage payments and the cost of raising kids looks like a hockey stick pasted onto a graph, you bet I look at offers to save money.
Therein lie's the problem. It seems like the vast majority of American consumers are desperate to cut costs, any costs, and will jump too soon at offers promising to do just that. Sometimes when you combine a cost cutting mentality with the importance of credit, not only to purchase the big ticket items important to us, but more and more to simply survive in this economy, desperation happens. Unfortunately, the marketers know this too. So, without a little education anyone can get confused and the likelihood of being taken advantage of increases significantly. The good news is that just a little education will save you plenty.
Take for example, the term "Free Credit Report". It now ranks right up there with the ubiquitous, "new" and "improved". "Free Credit Report" has become part of that lexicon of advertising buzz words that are absolutely meaningless to me. But for many, there is much confusion over this term. Why? I think mainly because it has been announced that federal law dictates we are all entitled to a free credit report on the front page of all the newspapers.
We know everyone wants a free credit report, which is why we started our site. People naturally want something that is mandated by law to be at no cost, is front page news and is so incredibly important to each of us if we want to purchase just about anything. We know people want their free credit report and because most all of us work so hard for our money, we think people deserve hearing the truth about the subject. That is why we even put a section on our page entitled, "The Truth About Free Credit Reports".
So, is it not true? Yes, it is true, it's just that the devil is in the details and the resulting confusion has been a bonanza for those seeking to cash in on the confusion. In fact, each of us in the good ole U. S. of A. is entitled to a free credit report. But, how do you get it? Where do you get it? Who is giving it to you? Why is it being offered for free? And most importantly, who cannot offer you one for free?
Who cannot offer a free credit report? Let's start with the last one first because it shines a lot of light on the rest of the questions. Any company, web site or service that is in business for a profit and is not named Experian, Trans Union or Equifax is not able to provide anyone at any time with anything remotely resembling a credit report free of cost. Period. End of story. Got that? Further, there is one place set up on the web to get free copies of credit reports at no cost and it is: www.annualcreditreport.com . We'll talk more about this site a little later but, other wise, caveat emptor, let the buyer beware.
How then are these offers being made? Look closely, the "Free" report is usually offered initially upon signing up for a service that charges your credit card each month for monitoring your credit. If you cancel the service just in the nick of time, before the charge is made to your card, you will get it at no cost. What a hassle! And the bet is you will wake up at least one, if not a couple or more months later with several charges to your card. You think these guys make foolish bets?!
Then what caused a free credit report to be offered on the front page of newspapers, who is providing them and how and where do I get one? Due to the importance of consumer credit history, identity theft and complaints from consumer rights groups about having to purchase a credit report in order to gain knowledge about the contents shown on individual consumer reports, even if it was reported inaccurately, a change was mandated.
The Fair and Accurate Consumer Trade Act (FACTA), a revision of the Fair Credit Reporting Act, provided for one credit report free of charge from the reporting agencies (Experian, Trans Union and Equifax) every twelve months, if and only if, you haven't received a credit report in the previous twelve months. The consumer, by either mailing a written request to the three major credit reporting agencies or going to www.annualcreditreport.com one can obtain the free report if they meet the criteria. This program was and is being phased in to sections of the U.S. by the credit reporting agencies starting in the western states, with the northeastern states at the time of this writing still to come.
However, Pamela Yip of The Dallas Morning News writes that even this has not been without its problems.
"The Federal Trade Commission said Experian Information Solutions Inc., one of the three major credit bureaus, settled complaints that it "deceptively marketed 'free credit reports' by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn't cancel within 30 days... . With the help of the Federal Trade Commission, the bureaus established www.annualcreditreport.com as the only authorized online source for consumers to get a free report under federal law.
While many consumers haven't had any problem getting their reports, others say they've been hit with sales pitches for products and services from the credit bureaus or were diverted to imposter sites. The FTC said the company led consumers to its www.freecredit report.com and www.consumer info.com Web sites. Radio, TV, e-mail and Web ads promised free reports and "a bonus - free trials of a credit-monitoring service."
The FTC said consumers "were assured that: 'Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account.' "
What the Web sites didn't adequately disclose is that consumers would be charged the $79.95 annual fee if they didn't cancel within 30 days, the FTC said.
"ConsumerInfo billed the credit cards that it had told consumers were 'required only to establish your account,' and, in some cases, automatically renewed memberships by rebilling consumers without notice," the agency said.
As part of the settlement, the FTC required ConsumerInfo.com, an Experian company, to "give up $950,000 in ill-gotten gains."
Experian also has agreed to provide refunds to consumers who purchased credit-monitoring products and ordered a free credit report between Nov. 1, 2000, and Sept. 15, 2003.
"It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection.
"It wasn't an attempt to mislead at all," said Peg Smith, an Experian executive vice president. "We absolutely deny any wrongdoing." She does acknowledge that consumers may have been confused.
"To the effect that our product offering has caused that confusion, we certainly regret that," Ms. Smith said. "We encourage consumers to read the language in any disclosure on any Web site, including our own."
The FTC also requires ConsumerInfo.com to state clearly that its free credit report offer isn't related to the federal program." http://nl.newsbank.com/nl-search/we/Archives?p_action=list&p_topdoc=21
The reality is that no one credit report or combination of three credit reports by and of themselves is sufficient to educate oneself about where you stand as a consumer in the eyes of a lender. Imagine a high speed race boat zooming across a lake at top speed without a steering wheel. Where it is going is a complete mystery but one thing is for sure, it will crash and crash quickly unless you get control. That's right, you. Because without your credit scores and the knowledge about what they mean, how they were calculated or how a lender views them, you are headed for a crash.
No bank, credit card issuer, mortgage company, retail store or any other credit provider will grant you any item, service or product without looking almost exclusively at your credit scores and the average person has no idea what their scores are and even if they did, many if not most, wouldn't know what they mean.
For example, most people don't even know that repeated "pulling" of your credit reports by potential credit grantors lowers your scores by as much as four points per "pull". You start "shopping" around for the best rate on a credit card by allowing each credit issuer to run a credit report on you and your score will take a dive. The difference between a 699 score and a 700 represents thousands and thousands of dollars in interest.
Often, credit issuers don't make it perfectly clear that your credit history is being accessed when you respond to their offer for a new card over the phone. The call center sales representative also doesn't explain and state clearly to you, that your credit history will show an "official inquiry" which counts against your scores whether you are accepted or rejected.
Most people don't know that a maxed out credit card lowers their scores even if they pay on time every month. Many don't know until it is too late that one late payment on one credit card will cause the interest rate charged to skyrocket not only on that card but any other cards that have a balance! Most also don't know that a credit card balance showing less than thirty per cent of the available balance improves the score. Most don't know that in calculating credit scores, your payment history counts as 35% of the score, amounts owed count 30% of the score, length of your credit history counts 15% of the score, new credit is 10% of the score and types of credit in use is 10%.
What is the truth about free credit reports? The truth, is that consumers need to read the fine print very, very carefully and get educated. The truth about credit reports in general is that only part of the story is being told by one. The truth, is that knowledge is power and without it your money is being taken from you, your buying power and therefore your future is being dictated to you rather than by you and that the cost of everything including insurance is based on your scores.
If asked for my advice to the average consumer? Worry less about getting a "free" report and more about the real cost of being ignorant regarding credit. Worry more about the immediate and long term costs of not taking control of what is reported on your credit report both the correct and incorrect. Gain some credit knowledge. It is easy to do and will literally save you a fortune. One thing is absolutely for sure, your money and future and your children's future will be severely impacted by your credit. How, is up to you.
Author Bio
Pat Hicks is the Managing Partner for www.Iwantafreecreditreport.com, a web site providing online shopping, reviews of and links to some of the top web based credit reporting sites. A statement regarding the truth about free credit reports is found there as well as the link to www.annualcreditreport.com.
Article Source: http://www.ArticleGeek.com
By: Pat Hicks
Too many people are being confused, mislead and taken advantage of by tem, "Free Credit Report". We set the record straight so that won't happen. Text How many of us have looked at anything offered to us for "free"? Not me? Of course I have. In this day in age when gas prices are listed as "Arm" and "Leg", providing health insurance for your family costs more than some mortgage payments and the cost of raising kids looks like a hockey stick pasted onto a graph, you bet I look at offers to save money.
Therein lie's the problem. It seems like the vast majority of American consumers are desperate to cut costs, any costs, and will jump too soon at offers promising to do just that. Sometimes when you combine a cost cutting mentality with the importance of credit, not only to purchase the big ticket items important to us, but more and more to simply survive in this economy, desperation happens. Unfortunately, the marketers know this too. So, without a little education anyone can get confused and the likelihood of being taken advantage of increases significantly. The good news is that just a little education will save you plenty.
Take for example, the term "Free Credit Report". It now ranks right up there with the ubiquitous, "new" and "improved". "Free Credit Report" has become part of that lexicon of advertising buzz words that are absolutely meaningless to me. But for many, there is much confusion over this term. Why? I think mainly because it has been announced that federal law dictates we are all entitled to a free credit report on the front page of all the newspapers.
We know everyone wants a free credit report, which is why we started our site. People naturally want something that is mandated by law to be at no cost, is front page news and is so incredibly important to each of us if we want to purchase just about anything. We know people want their free credit report and because most all of us work so hard for our money, we think people deserve hearing the truth about the subject. That is why we even put a section on our page entitled, "The Truth About Free Credit Reports".
So, is it not true? Yes, it is true, it's just that the devil is in the details and the resulting confusion has been a bonanza for those seeking to cash in on the confusion. In fact, each of us in the good ole U. S. of A. is entitled to a free credit report. But, how do you get it? Where do you get it? Who is giving it to you? Why is it being offered for free? And most importantly, who cannot offer you one for free?
Who cannot offer a free credit report? Let's start with the last one first because it shines a lot of light on the rest of the questions. Any company, web site or service that is in business for a profit and is not named Experian, Trans Union or Equifax is not able to provide anyone at any time with anything remotely resembling a credit report free of cost. Period. End of story. Got that? Further, there is one place set up on the web to get free copies of credit reports at no cost and it is: www.annualcreditreport.com . We'll talk more about this site a little later but, other wise, caveat emptor, let the buyer beware.
How then are these offers being made? Look closely, the "Free" report is usually offered initially upon signing up for a service that charges your credit card each month for monitoring your credit. If you cancel the service just in the nick of time, before the charge is made to your card, you will get it at no cost. What a hassle! And the bet is you will wake up at least one, if not a couple or more months later with several charges to your card. You think these guys make foolish bets?!
Then what caused a free credit report to be offered on the front page of newspapers, who is providing them and how and where do I get one? Due to the importance of consumer credit history, identity theft and complaints from consumer rights groups about having to purchase a credit report in order to gain knowledge about the contents shown on individual consumer reports, even if it was reported inaccurately, a change was mandated.
The Fair and Accurate Consumer Trade Act (FACTA), a revision of the Fair Credit Reporting Act, provided for one credit report free of charge from the reporting agencies (Experian, Trans Union and Equifax) every twelve months, if and only if, you haven't received a credit report in the previous twelve months. The consumer, by either mailing a written request to the three major credit reporting agencies or going to www.annualcreditreport.com one can obtain the free report if they meet the criteria. This program was and is being phased in to sections of the U.S. by the credit reporting agencies starting in the western states, with the northeastern states at the time of this writing still to come.
However, Pamela Yip of The Dallas Morning News writes that even this has not been without its problems.
"The Federal Trade Commission said Experian Information Solutions Inc., one of the three major credit bureaus, settled complaints that it "deceptively marketed 'free credit reports' by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn't cancel within 30 days... . With the help of the Federal Trade Commission, the bureaus established www.annualcreditreport.com as the only authorized online source for consumers to get a free report under federal law.
While many consumers haven't had any problem getting their reports, others say they've been hit with sales pitches for products and services from the credit bureaus or were diverted to imposter sites. The FTC said the company led consumers to its www.freecredit report.com and www.consumer info.com Web sites. Radio, TV, e-mail and Web ads promised free reports and "a bonus - free trials of a credit-monitoring service."
The FTC said consumers "were assured that: 'Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account.' "
What the Web sites didn't adequately disclose is that consumers would be charged the $79.95 annual fee if they didn't cancel within 30 days, the FTC said.
"ConsumerInfo billed the credit cards that it had told consumers were 'required only to establish your account,' and, in some cases, automatically renewed memberships by rebilling consumers without notice," the agency said.
As part of the settlement, the FTC required ConsumerInfo.com, an Experian company, to "give up $950,000 in ill-gotten gains."
Experian also has agreed to provide refunds to consumers who purchased credit-monitoring products and ordered a free credit report between Nov. 1, 2000, and Sept. 15, 2003.
"It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection.
"It wasn't an attempt to mislead at all," said Peg Smith, an Experian executive vice president. "We absolutely deny any wrongdoing." She does acknowledge that consumers may have been confused.
"To the effect that our product offering has caused that confusion, we certainly regret that," Ms. Smith said. "We encourage consumers to read the language in any disclosure on any Web site, including our own."
The FTC also requires ConsumerInfo.com to state clearly that its free credit report offer isn't related to the federal program." http://nl.newsbank.com/nl-search/we/Archives?p_action=list&p_topdoc=21
The reality is that no one credit report or combination of three credit reports by and of themselves is sufficient to educate oneself about where you stand as a consumer in the eyes of a lender. Imagine a high speed race boat zooming across a lake at top speed without a steering wheel. Where it is going is a complete mystery but one thing is for sure, it will crash and crash quickly unless you get control. That's right, you. Because without your credit scores and the knowledge about what they mean, how they were calculated or how a lender views them, you are headed for a crash.
No bank, credit card issuer, mortgage company, retail store or any other credit provider will grant you any item, service or product without looking almost exclusively at your credit scores and the average person has no idea what their scores are and even if they did, many if not most, wouldn't know what they mean.
For example, most people don't even know that repeated "pulling" of your credit reports by potential credit grantors lowers your scores by as much as four points per "pull". You start "shopping" around for the best rate on a credit card by allowing each credit issuer to run a credit report on you and your score will take a dive. The difference between a 699 score and a 700 represents thousands and thousands of dollars in interest.
Often, credit issuers don't make it perfectly clear that your credit history is being accessed when you respond to their offer for a new card over the phone. The call center sales representative also doesn't explain and state clearly to you, that your credit history will show an "official inquiry" which counts against your scores whether you are accepted or rejected.
Most people don't know that a maxed out credit card lowers their scores even if they pay on time every month. Many don't know until it is too late that one late payment on one credit card will cause the interest rate charged to skyrocket not only on that card but any other cards that have a balance! Most also don't know that a credit card balance showing less than thirty per cent of the available balance improves the score. Most don't know that in calculating credit scores, your payment history counts as 35% of the score, amounts owed count 30% of the score, length of your credit history counts 15% of the score, new credit is 10% of the score and types of credit in use is 10%.
What is the truth about free credit reports? The truth, is that consumers need to read the fine print very, very carefully and get educated. The truth about credit reports in general is that only part of the story is being told by one. The truth, is that knowledge is power and without it your money is being taken from you, your buying power and therefore your future is being dictated to you rather than by you and that the cost of everything including insurance is based on your scores.
If asked for my advice to the average consumer? Worry less about getting a "free" report and more about the real cost of being ignorant regarding credit. Worry more about the immediate and long term costs of not taking control of what is reported on your credit report both the correct and incorrect. Gain some credit knowledge. It is easy to do and will literally save you a fortune. One thing is absolutely for sure, your money and future and your children's future will be severely impacted by your credit. How, is up to you.
Author Bio
Pat Hicks is the Managing Partner for www.Iwantafreecreditreport.com, a web site providing online shopping, reviews of and links to some of the top web based credit reporting sites. A statement regarding the truth about free credit reports is found there as well as the link to www.annualcreditreport.com.
Article Source: http://www.ArticleGeek.com
Is Bankruptcy The Right Way To Go? You Decide.
Is Bankruptcy The Right Way To Go? You Decide
By: Frank Hague
For businesses, relying on issuing credit, the new personal bankruptcy law is doing great, reducing personal bankruptcy claims from the thousands to double digits (in the short run).
However, lawyers working with the actual people filing for bankruptcy say that the new law is seriously flawed because it puts more financial burdens on already broke clients and reduces potential debt repayment to small businesses.
And then of course you have the credit card companies charging high interest rates which in quite a few cases caused the bankruptcy in the first place. According to some financial specialists, much of the debt people accumulate is a result of keeping up with the Joneses and not thinking ahead.
For 80% of clients counseled each month, the debt is credit card related and averages $32,000 - a result of six to eight cards. Consumer credit organizations say the new law provides debt-reducing strategies for those considering filing bankruptcy and curbs abuse.
Under the new law it has become a requirement that the person filing bankruptcy obtains credit counseling both before and after filing for which that person will be charged.
So now the consumer would then know the advantages and disadvantages of declaring bankruptcy. Yet it seems merely another expense for an already financially stressed individual.
People filing bankruptcy in general are not overspenders, but merely faced with temporary financial disasters such as medical costs, layoffs, a divorce, gambling debts or other crises. Before you can file bankruptcy,you are now required to complete credit counseling with an agency approved by the U.S. Trustees office.
This credit counseling is designed to help you determine whether or not bankruptcy is appropriate.
Once you complete your bankruptcy, the law requires you to attend another credit counseling session.
These are new requirements, before this law was passed the law did not require a person to go through counseling either before or after the filing of bankruptcy.
Second, under the old law, a person could decide to file under Chapter 7 or Chapter 13. Under the new law, the court will look at your monthly income and apply a means test relating to the state in which you live. If your income is less than or equal to the medium income then you will be allowed to file Chapter 7 which in effect will give you a clean slate.
This medium income can vary from $28,000 in Missouri to $56,000 in Alaska. If your income is greater, you may be forced to file Chapter 13 unless you can demonstrate you do not have enough disposable income.
Under Chapter 13 you will not get a clean slate but will have to make payments on your debts.
Also, your attorney now has to personally certify that your bankruptcy filing is accurate. This means more work for the attorney, with higher legal fees.
Advantages of declaring Bankruptcy:
If you analyze credit card expenses for most people you'll see that they often include medical bills and day-to-day expenses for the elderly or those earning low or fixed incomes.
Records show that 50% of credit card holders do not pay their full credit card bills every month.
33% of the population can't afford medical insurance so have to charge their prescription drugs. With the recent Medicaid cuts and rigid bankruptcy legislation who knows what is going to happen to these people.
There are some who say consumers are abusing creditors. The irony is that credit card companies are begging for customers and offering large amounts of unsecured credit, yet at the same time, lobbying for stricter debt controls.
Author Bio
Frank Hague is interested in Bankruptcy Laws
Article Source: http://www.ArticleGeek.com
By: Frank Hague
For businesses, relying on issuing credit, the new personal bankruptcy law is doing great, reducing personal bankruptcy claims from the thousands to double digits (in the short run).
However, lawyers working with the actual people filing for bankruptcy say that the new law is seriously flawed because it puts more financial burdens on already broke clients and reduces potential debt repayment to small businesses.
And then of course you have the credit card companies charging high interest rates which in quite a few cases caused the bankruptcy in the first place. According to some financial specialists, much of the debt people accumulate is a result of keeping up with the Joneses and not thinking ahead.
For 80% of clients counseled each month, the debt is credit card related and averages $32,000 - a result of six to eight cards. Consumer credit organizations say the new law provides debt-reducing strategies for those considering filing bankruptcy and curbs abuse.
Under the new law it has become a requirement that the person filing bankruptcy obtains credit counseling both before and after filing for which that person will be charged.
So now the consumer would then know the advantages and disadvantages of declaring bankruptcy. Yet it seems merely another expense for an already financially stressed individual.
People filing bankruptcy in general are not overspenders, but merely faced with temporary financial disasters such as medical costs, layoffs, a divorce, gambling debts or other crises. Before you can file bankruptcy,you are now required to complete credit counseling with an agency approved by the U.S. Trustees office.
This credit counseling is designed to help you determine whether or not bankruptcy is appropriate.
Once you complete your bankruptcy, the law requires you to attend another credit counseling session.
These are new requirements, before this law was passed the law did not require a person to go through counseling either before or after the filing of bankruptcy.
Second, under the old law, a person could decide to file under Chapter 7 or Chapter 13. Under the new law, the court will look at your monthly income and apply a means test relating to the state in which you live. If your income is less than or equal to the medium income then you will be allowed to file Chapter 7 which in effect will give you a clean slate.
This medium income can vary from $28,000 in Missouri to $56,000 in Alaska. If your income is greater, you may be forced to file Chapter 13 unless you can demonstrate you do not have enough disposable income.
Under Chapter 13 you will not get a clean slate but will have to make payments on your debts.
Also, your attorney now has to personally certify that your bankruptcy filing is accurate. This means more work for the attorney, with higher legal fees.
Advantages of declaring Bankruptcy:
- Legal protection from creditors
- Takes care of all or most if not all debt
- In some cases, can keep home and car
- May stop complete financial ruin
- Provides a fresh start
- May have to repay partial debt load and return collateral to creditors
- May lose assets, including house and car (If the house is worth more than a certain amount)
- Bankruptcy becomes public record, and
- Remains on credit record for seven to 10 years
If you analyze credit card expenses for most people you'll see that they often include medical bills and day-to-day expenses for the elderly or those earning low or fixed incomes.
Records show that 50% of credit card holders do not pay their full credit card bills every month.
33% of the population can't afford medical insurance so have to charge their prescription drugs. With the recent Medicaid cuts and rigid bankruptcy legislation who knows what is going to happen to these people.
There are some who say consumers are abusing creditors. The irony is that credit card companies are begging for customers and offering large amounts of unsecured credit, yet at the same time, lobbying for stricter debt controls.
Author Bio
Frank Hague is interested in Bankruptcy Laws
Article Source: http://www.ArticleGeek.com
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Is Bankruptcy the Right Way to Go? You Decide.
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Is Bankruptcy the Right Way to Go? You Decide.
The Truth About "Free" Credit Reports
Sunday, January 20, 2008
Saturday, January 5, 2008
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