credit card debt relief

[roni]

Is anyone familiar with the credit card debt relief services? I hear the adds on the radio all of the time but I really haven't paid it much attention. There is a lady that I work with who is getting ready to have one of these companies help her with her credit card debt. I was worried about her. I am not real familiar with any of these companies and what they do. Can anyone shed any light on this? Thank you!

 

[Renee750il]

She'd better do her homework! Several of these companies are under investigation for their deceptive practices. It's not uncommon for credit card companies to be willing to work with you directly, you just have to be willing to work your way up the chain of command until you get to someone who can actually make a decision.

There will be less wiggle room in the future if the bankruptcy "reforms" pass Congress.

 

[Vickih]

I second everything Renee has said. They arent the type of people I'd consider working with!

 

[Gustav]

Yeah, some of those companies can be really shady!! I've heard the best thing to do is to transfer the balance to another credit card (some comapnies will do this free of charge) with a 0% APR and fixed low interest rate and pay it back that way!
Btu as Renee said she really needs to do her homework or you can be in more trouble than you were to start with!

 

[roni]

Renee - thanks for the info. I was concerned because they made it sound so simple. BUT, when they asked her for a voided check that threw up a RED flag. They want to deduct their "fee" first (over so many months). Wouldn't you think you would see results before you pay them for their services? I will tell her to try contacting the credit card companies direct. She is getting no where with her monthly payments due to high interest rates. Renee - also what did you mean about the possible bankruptcy reforms?

 

[Renee750il]

I haven't had the time to read them thoroughly, but there is legislation pending to change the bankruptcy laws to make bankruptcy much more difficult for the small, personal Chapter 7 bankruptcy. It will purportedly also make large, corporate bankruptcies much more painless . . . You know, like Enron . . .

 

[Renee750il]

Oh, and by the way, that cancelled check ploy is one of the things that is supposedly a red flag to look for . . . good call.

 

[roni]

Thanks...I just hate to see someone who is already in a bad situation end up worse. Especially when they are trying to make things a lot better. Credit cards...BAD!!!!

 

[bogolove]

I also work in an attorney's office who handles bankruptcy, and those comapnies ruin your credit pretty bad, just like not paying the bills would. Tell her DO NOT DO IT. I know someone who did it and just tried to buy a car and could not find anyone to seel her one, and if she did they were going to charge an interest rate of 23%. That is a LOT of interest. She had to get someone to co-sign for her on getting a cheap new car at 28 years old. I know you need it sometimes when you are younger to establish credit, but it doesn't look so good when you are out of college. A lot of companies that hire check credit also to see how responsible you are.

 

[Renee750il]

What kind of materials are you guys getting on the impending changes in the bankruptcy laws, Bogo?

 

[bogolove]

Do you mean with filing it or the actual laws? I am sure you know, we have had to go to electronic filing and they will no longer accept paper filing. The attorney has to set up an acocunt through the Bankruptcy Court and then we had to buy special software in order to file it electronically, but you still ahve to print it out and let the client sign it and send it in so they have an offical signature on file. Then they send you back a confirmation notice that they received your filing. I love the software though, because it is so organized and you can pull it up and find it at the drop of a hat and it helps to make sure that you leave no corner unturned. It is pretty easy too, we print out a blank copy and have the client fill it out and then I just enter it into the software, print it out for signature, and we send it on it's way once we have verifed all the information with the client. Luckily, we have not done a lot of them lately.

I have not seen any actual information come through here on the change of the laws, but I was watching the news about the change and how it was going to be much harder to file. I would like to read on it so I wish we would get something about it. I have not done one in a few months.

 

[Renee750il]

The old Westlaw software I used was so easy - did all the figuring, plugged in values everywhere they needed to be, prompted you, and the thing I really liked was it was linked to bankruptcy codes so if you had a question you could look at the statute.

Do you mean to tell me you actually have clients who can fill in the papers! OMG! I always got the ones that had to be taken through everything step by step, explain about ALL the outstanding debts, explain what the personal expenses were, value the individual items on the household exemption . . . I'd literally end up spending hours with them, on the phone and in personal work sessions, late hours so they wouldn't have to miss work . . .

 

[bubbatd]

I echo all the above!!!! They will bleed you !! Much better to try to "work things out" with each debt. Credit card debt is bad all around. The only thing I would put on a card that I knew I couldn't pay off the next month would be a huge Vet bill . If you can't afford it, don't charge it.

 

[avenlee]

A bankruptcy overhaul bill the Senate passed by a 74-25 vote on Thursday would require people with incomes above a certain level to pay credit-card charges, medical bills and other obligations under a court-ordered bankruptcy plan.

Between 30,000 and 210,000 people from 3.5 percent to 20 percent of those who dissolve their debts in bankruptcy each year would be disqualified from doing so under the legislation, according to the American Bankruptcy Institute.

The legislation would set up an income-based test for measuring a debtor's ability to repay debts. It would require people in bankruptcy to pay for credit counseling and stiffen some legal requirements for debtors in the bankruptcy process.


------ From Good Morning America/ABC News

*** Apparantly they are trying to get rid of the people who claim bankruptcy and abuse the system over and over and over to escape their debts ****

 

[bogolove]

Thanks avenlee!


Renee - the new software I am using is Best Case Bankruptcy. Yes for the most part the clients have been filling out the paperwork, now granted, I do have to go back a lot and correct things, but at least they can get the basic info right for me.

 

[Renee750il]

http://judiciary.house.gov/

The text of the bill is here. I haven't had the attention span necessary to digest it yet. One thing is glaring obvious though - it is aimed at the consumer; Chapter 11 - business and corporate bankruptcy - is not addressed at all. Apparently Corporate America doesn't abuse bankruptcy or use it as a shield to hide behind while the last monies are siphoned out.

All but two of the bankruptcies I can remember working on were the working poor (thinking they were middle class) forced over the edge by crushing medical expenses. There were some idiotic debts on there too, but if not for the medicals, these people could have dug their way out from under in a reasonable fashion.

If you do a search on "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" all sorts of fascinating things turn up . . .

 

[avenlee]

Just like the Welfare program. The real abusers ruin it for the people who truly need the relief.

 

[Renee750il]

Amen to that, Avenlee! My old boss used to sit down with potential bankruptcy clients and go through things with them. Many times he was able to pick up the telephone and call creditors, getting them to agree to cram downs and reduced interest rates, elimination of some of those awful, exponentially increasing fees and fines and making it possible for the client to get out from under without going through bankruptcy.

He never charged them for doing that either - a lawyer with a heart.

 

[bogolove]

One of the ones I have done recently was because the mother did not have insurance the son broke his arm and a hospital was charging like $17,000.00 for everything and she could not afford it, but she was willing to make a reasonable offer (some money she was able to borrow from her parents) to wipe it out and they would have none of it, so she had to file.

Another was a woman who was divorced and her husband ran up HUGE bills in her name (and his but he didn't care about his credit).

 

[avenlee]

That's exactly how my boss is. He should be shoveling in the dough but doesn't bill on an hourly basis. I'd be running back and forth to the Housing COurt or Registry free of charge. He's a kind soul too. I've been working with him for 12 years. Heck, we're like an old married couple LOL