Recently American Express, Discover Financial Services and Chase have been sending many of their delinquent accounts to the national collection law firm, Zwicker & Associates. This has led many people to wonder what will result from their delinquent credit card account being placed with Zwicker & Associates. Well, oftentimes representatives of Zwicker & Associates can be difficult with which to deal, but each account will be resolved differently, depending on a number of factors. For instance, I’ve successfully reached settlements as low as $0.30 on the dollar with Zwicker & Associates for some Chase accounts, while others have been settled for as much as $0.55 on the dollar. Also, you may hear from Zwicker & Associates that your Discover account cannot be resolved for less than $0.80 on the dollar. Is this statement true? Sometimes, it is - other times, definitely not. The same holds true for American Express accounts; some are negotiated for a settlement of $0.50 on the dollar, while others are settled for as much as $0.60 on the dollar. If you’ve received communication from Zwicker & Associates, it’s important to do your homework, and even hire a professional to negotiate on your behalf. Donaldson Williams, Inc. doesn’t charge their fees up front, and can begin working for you immediately. Please visit www.donaldsonwilliams.com or call 586.566.5930 for more information regarding your options.
Debt Settlement
Discuss and learn the pros and cons of debt settlement
Debt Collection Tactics
If your bills are delinquent and you’re receiving calls from “unknown caller,” toll-free call,” or “out of area” you can safely assume this is a bill collector calling. Beware, because if you should decide to answer the phone you’re very likely to be confronted by an obnoxious, rude and threatening bill collector.
Unfortunately, the tactics used by some debt collectors can very often make consumers fear the worst. Believe it or not, some bill collectors threaten arrest, wage garnishment and lawsuits. This type of debt collection is considered to be an aggressive and deceptive unfair practice, and has been known to have the potential to lead to personal bankruptcy, marital problems, job loss and invasion of privacy. Knowing your rights under the Fair Debt Collection Practices Act (FDCPA) can help you to be prepared so that you can stop these bullies from harassing you any further.
I once received a call from a client who was in an absolute state of panic as a result of a call she received from one such bully. The bill collector threatened to call my client’s employer to inform them of the debt my client owed. Needless to say, this particular client was fearful of losing her job. Fortunately, I was able to calm her nerves with a speedy FDCPA course. The fact is, debt collectors are prohibited from revealing that a consumer owes a debt to anyone other than the person who actually owes the money. This includes written correspondence, as well. Debt collectors are not allowed to send postcards or use language and symbols on an envelope that may indicate the sender of the contents is in the debt collection business.
If you’re being harassed by an aggressive or abusive bill collector, with constant phone calls to your home, you have the right and ability to get these calls discontinued. You see, if you simply notify the debt collector in writing that all further communication is to be ceased, the debt collector is prohibited from contacting you unless it is to advise you that their collection efforts are being terminated, or to inform you that a specified remedy will be invoked.
If you’re receiving calls at your place of employment, this communication, too, can be stopped. Once you inform the collection agency or debt collector that your employer doesn’t allow such communication, the debt collector is prohibited, under the FDCPA, from any further calls to you at your place of employment.
There are many, many horror stories relating to abusive behavior from ruthless debt collectors, and under no circumstances should you ever allow yourself to be intimidated or harassed by any such individuals. The use or threat of violence, obscene or profane language, and repeated continuing phone calls meant to annoy or harass are simply not tolerated under the FDCPA. Additionally, debt collectors may not use false, deceptive or misleading representation in connection with the collection of any debt. This includes the false representation or implication that the debt collector is an attorney and/or the threat to take any action that cannot legally be taken. It’s not unusual to hear the term “wage garnishment” from debt collectors. The fact is, your wages (and/or bank accounts) simply cannot be garnished without a judgment in place. So, unless you’ve received notification of a lawsuit you can be relatively certain that no judgment exists, which means absolutely nobody can touch your earnings or savings.
In fairness to the “good” bill collectors, it’s important to know that not all individuals employed in the collection industry are ruthless and lacking basic humanity. As a matter of fact, the majority of bill collectors I deal with are more interested in resolution and results than in non-productive harassment and arguments. If, however, you are on the receiving end of any type of unacceptable communication from a non-results-oriented bill collector, don’t hesitate for one moment to report this person to the Federal Trade Commission and/or your Attorney General. And don’t be afraid to inform the collection agency with whom you’re dealing exactly what your intentions are. The FDCPA is intended to protect consumers from the abuse of bill collectors – if you need it, use it.
If your bills are delinquent and you’re considering debt settlement to remedy this problem, please visit www.donaldsonwilliams.com
The Economy, Bank Bailouts and Debt Settlement
I’ve recently received several inquires from clients and prospective clients regarding banks’ positions on debt settlement in today’s economy. Many people assume that because the economy is so terrible here in 2009, that banks are going to be more receptive to negotating consumers’ debt.
Not true. The majority of banks have always been receptive to working with creditors to settle debt; the amount of savings that consumers can typically realize is what tends to vary. And most people (myself included) would think that banks would be willing to cancel a larger portion of debt during these very difficult financial times, thus resulting in a larger savings for consumers.
Unfortunately, I’ve noticed some trends in recent months which lead me to believe that this just is not so. For instance, one of the largest banks in the nation previously settled delinquent debt for just $0.20 on the dollar - and sometimes as low as $0.10 on the dollar. More recently, however, I’ve noticed that it’s extremely difficult to reach this type of settlement with this particular creditor. Rather, now we’re seeing more settlements in the $0.30 on the dollar range. Don’t get me wrong; this is still a significant savings to the consumer, but it seems that this is a trend noticed with manycreditors these days.
I’ve been told this is due to the fact that the government is now overseeing bank practices, which limits the bank’s ability to continue with their previous guidelines. True? I’m not sure, and it really doesn’t matter; what matters is what amount of savings can be realized through debt settlement during this unprecedented period of time.
Fortunately for many people who find themselves in a very difficult financial predicament, paying anything less than 100% of the balance is going to help. So, yes, significant savings can still be realized, but you may be looking at paying approximately 5%-10% more than you would have six months ago.
For instance, American Express has recently been sending many of their accounts to a national collection law firm, Zwicker and Associates. I happen to have several good contacts at Zwicker, so my clients are fortunate that they are receiving the best possible settlements they can; however, several months ago American Express accounts were sent to collection agencies whose guidelines were not as strict and my clients’ savings were more significant.
In summary, yes, we would all think that banks might be willing to cooperate more during this recession, and accept less than they would during a boom. But, this is just not so, and we’ll all need to hang in there and hope that policies will change (and they always do).
For more on debt settlement visit www.DonaldsonWilliams.com.
Debt Settlement Pros and Cons
Credit card debt settlement has increasingly become a popular choice in recent months as the solution to financial hardships experienced by many people. Learn the true facts of debt settlement to determine if this is an option you should be considering.
- What is Debt Settlement?
Debt settlement is a process whereby individuals (or the debt negotiation firm they hire) negotiate with their creditors to reduce the pay-off balance on the amount of debt they owe. Depending on your personal circumstances, creditors will usually agree to accept 50% or less of what is actually owed. Once the agreed-upon funds have been received by your creditor, no further balance is owed and your account is “zeroed out.”
- Does Debt Settlement Affect Your Credit Score?
If you’ve been paying your bills on time, with no delinquencies on your record, yes, it’s highly likely that debt settlement will have a negative impact on your credit score. You see, before a creditor will agree to look at the possibility of accepting less than the full balance as payment in full, your account must be in a delinquent status. After all of your accounts are “settled,” and your credit report reflects a zero balance on each account, your credit score will begin to return to a number which is acceptable to obtain a conforming mortgage, auto loan, etc. This usually occurs within a few months of completing the entire process of debt settlement. For most people, however, peace of mind takes precedence over a temporarily reduced credit score.
- Is There a Tax Liability as a Result of Debt Settlement?
When a creditor agrees to settle an account for less than the full balance, they are required by the IRS to report the canceled debt on Form 1099, if the amount of the forgiven debt is $600 or greater. There’s also a good possibility that you may not be required to pay taxes on your forgiven debt if you can prove that you were “insolvent” at the time you settled your debt(s). In order to be classified as insolvent you need to have a negative net worth. In other words, you would owe more money than you’re actually worth and your liabilities would exceed your assets.
If you’re required to pay taxes on your forgiven debt, however, you may want to approach this topic from a different angle. For instance, if you save $30,000 through debt settlement, and are required to pay income taxes on this amount, it’s only because you saved a significant amount of money. If someone were to offer you a gift of $30,000 that you may be required to pay income taxes on, would you deny the gift simply because of the income tax liability? I think not.
- How Do You Know if Debt Settlement is Right for You?
Debt settlement is best utilized by individuals who can simply no longer afford to meet their monthly financial obligations. If you’re considering bankruptcy, debt consolidation or consumer credit counseling, debt settlement is an option you should definitely explore. This is especially true if you’re reluctant to commit to a long-term payment agreement, as would be required through consumer credit counseling. Also, understandably, many people simply want to do all they can to avoid bankruptcy, and if there’s a possibility that you qualify for debt settlement, you can indeed avoid a bankruptcy filing.
Hopefully this information has provided you with the answers necessary to make an informed decision regarding debt negotiation. As with all of the options available to those who find themselves facing financial hardship, debt negotiation should be examined closely. If you find that this is the answer for you, and you decide to hire a firm to negotiate on your behalf, please choose carefully and be certain that you’re being well represented. Many firms will work on a contingency basis, and won’t expect payment until a satisfactory settlement has been reached with your creditor.
Learn more about debt settlement by visiting www.DonaldsonWilliams.com