Stop Bill Collectors! » General Info

Federal Debtor’s Prisons Making a Comeback for Credit Card Debt

Janice — Mon, 30 Aug 2010 20:34:49 +0000

Federal Debtor’s prisons–outlawed in 1833–are making a comeback in these tough times.

Texas is one state that’s cracking down on people caught speeding too many times: hitting them with “surcharges” and throwing them in jail if they don’t pay up. That’s according to this article on debtor’s prisons, which tells the many ways you can be jailed in the United States for the crime of not having enough money.

Not paying your child support? Expect to be jailed if you don’t cough up the cash. You can also be jailed for not filing your federal taxes or not paying those taxes once you’ve filed.

But perhaps the most surprising way that you can find yourself in prison is not paying your credit card debt. Thanks to over-zealous attorneys and collections companies hit by the financial downturn and resorting to borderline tactics, you might find yourself in the county jail without any fair warning. In many states (like Florida), all a credit card company has to do to notify you of court action is to send you a first class letter. If you don’t receive that letter (say, they send it to your old address), you could find a nasty surprise next time you check your credit report–a judgment against you. That civil action could lead to an arrest warrant if you don’t pay up.

Technically, you can’t be arrested for not paying a debt. But you can be arrested for contempt of court–and the collection agency lawyers want this to happen, because a person sitting in jail will generally pay up a lot faster than someone sitting at home and not answering the phone. A judge may order you to pay several thousand dollars within a day–and he won’t care if you have to skip a mortgage payment to do so.

Check your credit reports regularly, comply with court proceedings, and you may find yourself able to keep out of jail. But if the government–or a collections agency–thinks you have the means to pay (even if you don’t), be alert for that knock on the door: it could be the sheriff’s department coming to take you away.

How to Stop a Debt Collector From Freezing Your Bank Account

Janice — Wed, 10 Feb 2010 15:51:04 +0000

When you don’t pay your bills on time, don’t respond to the calls from the collection agencies, and live under cover, you could wake up one day to find your bank account temporarily frozen. That will be a bad day if it’s the day your rent or mortgage is due! You may have missed the judgment notices in the mail (or maybe you moved). You may not even know your creditors went in to court and sued you. You have no idea they got a judgment against you and used it to empty your account. When the creditor follows legal procedures, your account may not be garnished immediately. Instead it might be temporarily frozen.

You won’t be able to get any money from your bank account, but can make deposits into it (as if you would want to). This has a major impact if you write checks for all your payments, because once your account gets frozen by a court, the checks will start to bounce. What you want to know is how to stop a debt collector from freezing your bank account in the first place. Take calls from credit collections agencies as a warning sign and do the following to stop or avoid your bank account getting frozen by a court order.

1. Make small payments towards the debt. Even if it’s $10 a month, it might be enough to stop them suing you. (Think about this, would you rather send them $10 a month or wake up one day to find your account frozen?).

2. Ask the debt collections agency to validate your debt. Do this multiple times: it’s a great weapon that can get your debt cleared. Just send a letter to the agency asking them to validate the debt. That’s it.

3. Stop using your checking account. This is the ONLY certain way to stop a creditor freezing your account, if they have a judgment against you.

Remember: be proactive! If they have a judgment and have already frozen your account, it’s too late to hold onto your money.

*http://www.stopbillcollectors.us/articles/how-to-avoid-being-sued-by-your-creditors
*http://www.indianajustice.org/Data/DocumentLibrary/Documents/1053360095.22/do c_0105bank%20seizure.pdf

How to Stop a Garnishment Without Filing for Bankruptcy

Janice — Mon, 08 Feb 2010 15:27:19 +0000

If you have creditors who file a judgment against you for debts owed to them, your wages could be docked. While the laws on wage garnishment differ from state to state, generally once creditors have a court order against you, they can take 25 per cent from each pay check. Once a creditor has filed a judgment against you, there are very few options (besides bankruptcy) available to you. Therefore, the trick is to stop a garnishment before a creditor obtains a court order.

There are two types of claims you may be able to use to stop a garnishment.

Claim of exemption. You need to file this if you are not able to cover basic living expenses like food and housing. The form for this claim is available from your local courthouse.
Head of household exemption. This is for people whose wages support a spouse and family. If you intend to file for this exemption, you will need to write a letter and file it at your local courthouse. Not all states have a ‘head of household exemption’, so you will need to check the laws for your state of residence.

If you are not eligible to claim either of these exemptions, you can try tackling the problem by contacting your creditor directly. Call your creditor and explain your situation. Offer to pay a percentage of the debt and then ask if you can establish a fortnightly or monthly payment plan and obtain any agreement of this in writing.

Seeking advice to consolidate your debts will also help to stop a garnishment. Debt reduction programs are mainly concerned with helping you to pay back unsecured debts, like credit cards. With a debt reduction program, you agree to pay over time and the interest (and sometimes, principal) is reduced, so you pay less per month. The idea being that you pay back the debt in full over a period of three to five years. This means that your creditors are still being paid, so they won’t pursue wage garnishment.

Unfortunately, the only other way to stop a garnishment is to pay the debt in full. Making a full payment is the easiest and simplest way to stop a garnishment once it’s under way.

How Long Can You Go Without Paying Your Bills?

Janice — Mon, 08 Feb 2010 15:19:22 +0000

Being in debt is not the nicest thing in the world. It can get you down and it can even cause medical problems such as stress, depression and sickness. A lot of people who owe money to creditors worry that they will be thrown in jail but this very rarely happens. This doesn’t mean it won’t happen: Here are a few notable examples of when you can end up in jail for money problems.

So how long can you go without paying your bills? Creditors will usually exhaust all possible methods to get money out of you before taking legal action and this can last up to a year or more. They will send you letters and hound you by phone. Don’t ignore the problem completely: they will eventually file a dispute with the courts and this could lead to a garnishment on your account and the addition of very high court fees. A friend of mine saw their $8,000 judgment double in court with the addition of legal fees and court costs!

The safest amount of time to go without paying your bills is two to three months. Your creditors will begin to request the money in this time via phone or letter but there will be leeway. During this time, you should take the opportunity to consider your options.

If you can, try to set up repayment plans with your creditors; after all, they will usually accept a small payment you can afford each month rather than nothing at all. One of my friends, Cal, pays $10 a month on a $100,000 medical debt. She told me that in Texas, they can’t take you to court if you’re making payments, so she sends them ten bucks a months, every month (and she’s been doing that for the last 8 years!).

If you cannot afford to do this, then your only option might be to declare yourself bankrupt. This will clear any outstanding debts you owe and put a serious dent in your credit score. If you choose bankruptcy, then you will find it very difficult to open any new bank accounts or get credit. You should only consider this option if you have no other choice.

Don’t hide away because the problem will not disappear on its own. Take action: pay a small amount, file for bankruptcy, or judgment proof your assets. There are three things you can be certain of in life: taxes, death, and tenacious bill collectors.

How To Fight a Garnishment Without a Lawyer

Janice — Mon, 08 Feb 2010 14:15:37 +0000

The dictionary defines garnishment as “a court order to an employer to withhold wages or send money to court or to the person who has won a lawsuit against an employee.” You don’t need to hire an expensive lawyer who will charge you hundreds of dollars an hour for his services to fight a garnishment. There are ways in which you can fight for yourself and win.

Before you begin to fight a garnishment, there are a couple of things that you will need:

a telephone
the courage to speak to your creditors (without losing your temper).

Contact the company that put a garnishment on your bank account or your wages. Don’t bother calling your bank to find out this information (you’ll be sent in circles). If you don’t know who took your money, go to the court (most likely it’s your local county civil court) that processed the garnishment, and ask to take a look at your file.

Offer to pay a fraction of what you owe (low ball them as much as you can). A garnishment takes money to process and they would much rather receive a payment from you voluntarily.

If offering to pay doesn’t work (or perhaps you can’t afford payments), fight the garnishments by moving your cash around so they can’t find it. Don’t use that bank account again, because they will dip into it again (when you are least expecting it). This is almost impossible to do with a wage garnishment: you have fewer options.

If you are subject to garnishment, bankruptcy may be your only option. Once a garnishment is in place, even credit counseling won’t help. Don’t do nothing, because if you ignore the garnishment order, you’ll wake up one morning to an empty bank account and a bunch of bounced checks. Don’t let that happen to you!

Remember: creditors record everything. You don’t want to be in court and have a judge hear you call the debt collection agency a $%^ker (even if they deserve it). Keep your cool.

Cease and Desist Letter: Vital Information Often Overlooked by Debtors

Janice — Tue, 02 Feb 2010 16:56:23 +0000

Thinking of writing a cease and desist letter to your creditors? (See this article for a sample cease and desist letter). It’s not as simple as writing a letter to your creditor telling them to stop calling you. Here are 5 vital facts you need to know before you send the cease and desist letter to stop creditors from hassling you.

Cease and Desist Letters Can’t be Sent to Original Creditors. Cease and desist letters only apply to third party collection agencies. That means if Sallie Mae is calling you about your student loan every week, Bank of America is calling you every day about your overdue mortgage, or Citibank is calling you ten times a day about your overdue account, there’s exactly nothing you can do about it. You’ll have to wait until the original creditor turns your account over to a collection agency (usually in about six months).
You must send the cease and desist letter by certified mail. Otherwise, the credit collections agency will keep calling you, and deny that they ever got your letter. They are trained to ignore non-certified cease and desist letters, so make sure you beat them at their own game.
Don’t give the agency an excuse to say they couldn’t match the letter with an account. Include the current date, your name, address, phone number(s) where the agency has been calling you, and your account number. If you don’t have your account number, make sure to include your full name and date of birth.
Never put your social security number on a cease and desist letter, even if you don’t know your account name. Chances are, the collection agency doesn’t have your social security, and you do not want them to have it. If the agency gets hold of your social security number, they can use it to locate all of your assets, including bank accounts, property, and cars.
Keep a copy of your letter. If you don’t, you have no record of what you sent the agency to show in court (should you decide to sue them at a later date for FDCPA violations). The agency could claim you send a check, or another item in that certified letter. That’s another good reason to date your letter!

Debt Collector Harrassment: Craig Cunningham’s Secret Weapon

Janice — Mon, 01 Feb 2010 14:40:58 +0000

If you are being harassed by debt collectors, take a leaf out of Craig Cunningham’s book. Cunningham owes $100,000 in debt, and he’s inundated with calls from debt collectors. But he doesn’t mind: he’s earned a whopping $20,000 by answering bill collector calls: every penny of it has come from the debt collectors themselves! Most people who receive calls from debt collectors dread picking up the phone, but not Cunningham. He’s beat debt collectors at their own game by catching debt collectors violating federal law, and suing them in court.

How to Start Making Money by Answering Bill Collector Calls

Cunningham’s first money making call ($1,000) came from Equinox Financial Management Solutions, a third-party debt collector. The collection agency threatened to garnish his wages if he didn’t pay, and put a lien on his house. Luckily, Craig knew that the Texas Debt Collection Act forbids debt collectors from making those types of threats. Cunningham sued the agency, and two months later was awarded $1,000.
Cunningham’s next suit was over auto-dialed and prerecorded calls to his cellular phone (a Telephone Consumer Protection Act violation worth up to $1,500 per event). He also filed complaints that agencies were not investigating inaccurate information in his credit report that he brought to their attention ($1,000 per violation) and filed 15 other, similar lawsuits against debt collectors.

The Simple Technique That You Can Use to Sue Debt Collectors

Know your rights: learn everything you can about the Fair Debt Collections Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA) and the Fair Credit Reporting Act (FCRA), and any debt collections acts that your state has enacted (like the Texas Debt Collection Act). These laws are highly technical and the schleps that work at the agencies aren’t usually that well trained (there’s a high turnaround in debt collection agencies because let’s face it, who wants to work at a job 9 hours a day where your only goal is to squeeze money out of people who can’t afford it?). Use that fact to your advantage and study the law.

Debt Collectors Will Settle With You

Know that agencies will settle, rather than fight you in court: That’s right, debt collection agencies will send you a check rather than fight the charge that they violated the act. Why? Because it’s cheaper to send you a $1,000 check (settling out of court) than it is to pay a lawyer $350 an hour to fight a charge they will probably lose anyway. Debt collection employees are not highly trained people, and they routinely make mistakes.

How to Sue Debt Collectors

Not sure how to file a lawsuit against a debt collector? It’s simple: read this article on How To Sue Debt Collectors The Easy Way (and Win).

Reference: The Dallas Observer:Better off Deadbeat

How to Stop Creditors From Finding Your Assets

Janice — Mon, 25 Jan 2010 18:25:39 +0000

Debt collection agencies use every technique they can to collect judgment. They’re like The Terminator: they have one goal, and that is to collect. They will use every technique allowable by law (and sometimes, ones that are illegal), top con, trick, coerce, and cajole you to giving up personal information. While you should not ever talk to a bill collector (sure, go ahead and call once, to see if they are being reasonable. Trust me, they’re not going to be). But in order to really deal with debt collectors you’ll need to know how they operate. Here’s the top ten tricks they use to get you to divulge your security number, which they will use to find hidden assets and report you to the credit bureaus.

Trick#1: They call you and ask you to “confirm” your Social Security number.
Trick #2: They send you a form, offering a settlement, or reasonable terms, or asking you to provide some innocent info. There will be a blank space for your name, address, birth date and Social Security number. Their hope is that maybe your spouse or other relative will fill it in, thinking it’s legitimate.
Trick #3: They use a government database called PACER to pull your public records. If you’ve put your social security number on anything public (deed, mortgage note, marriage license, arrest records, bankruptcies etc.), they will find it. All they need is to know your address (they will pull credit reports to do this), and they have access to all of your public records.

Your social security number isn’t as safe as you thought is was. You can take proactive steps for the future (like never putting your social on public records), but you can’t hide your current assets from a creditor. They will find them.

Stop Creditors: Stash your Cash in Switzerland

Janice — Thu, 14 Jan 2010 17:08:04 +0000

If you are reading my blog, you are probably here because you’ve got creditors knocking at your door. Maybe you are looking at losing your home, your car, or even your furniture. While there are solutions to your problems, many are dramatic (like bankruptcy) or expensive (like moving to Florida and purchasing a homestead). To avoid worrying about creditors stealing your hard earned money and selling your assets out from under you, you should stash your cash somewhere safe. And the safest place to stash your cash? Not surprisingly, Switzerland. In these internet days, all you need to set up a Swiss Annuity is an internet connection.

If you live in Florida, your annuities (even annuities between family members) are generally considered safe. There are exceptions, which is why Switzerland (and Liechtenstein) are great choices: their annuities are like an impenetrable fortress–their laws protect annuities from creditors in outside countries like the United States. You’ll sleep better knowing that your future is safely held by a country long known for its reasonable asset protection laws.

Jean-Francois Meillard, a chartered accountant from Switzerland and author of The Consumer’s Guide to Swiss Annuities
calls Swiss annuities “worry free saving.” A Swiss annuity is one of the safest forms of investments, no Swiss bank has ever gone out of business (unlike here in the United States), and Switzerland’s tough consumer protection laws have been in place for over 100 years.

You can think of an annuity as part life insurance, part retirement savings. Once you reach a certain age, the annuity will pay out. But unlike a traditional retirement plan, your annuity is safe from creditors, no matter where you live in the US. You must purchase the policy at least one year before any collections proceedings take place (so you can’t use it to hide assets once a judgment has been issued).

How to Avoid Being Sued by Your Creditors

Janice — Tue, 12 Jan 2010 19:17:55 +0000

This post should probably be (more accurately) called How to Stop Bill Collectors From Seizing Your Car, Your House, and your Personal Belongings. If they win a judgment against you, they will take your stuff. They will get a nice police office to come to your house and empty it of your belongings, and there won’t be a thing you can do about it.

You’re behind on your bills, the credit card companies and debt collection agencies are calling, and you’re at your wits end, worrying about when the court will order you to sell your car or garage sale off your furniture and clothing. You’ll only be allowed to keep your state exemptions. See this article on bankruptcy state exemptions for what you’ll be allowed to keep, and what the bill collectors will take.

It’s impossible for me to say for sure whether a credit collection agency will sue you. They might threaten to take you to court, but a lot of the time it’s just lip service.

Creditors are less likely to sue under these conditions

You make voluntary payments, even small ones (one of my friends pays $10 a month toward a $100,000 hospital bill).
You dispute the debt and come up with a reasonable defense
You owe less than $1000
You live more than two hours away from the creditor or credit collection agency
The creditor doesn’t generally sue people

On the other hand, some creditors are irrational, and will will sue for pitiful amounts of money. There are several situations where the bill collectors are more likely to sue you. If any apply to you, it’s not going to be enough to stop collectors from calling: you’ll need to take evasive action.

Reasons why you are more likely to get sued

The closer you live to a bill collector, the more likely they are to sue you in court and obtain a judgment.
You owe an amount of money more than it would cost them to sue you (usually around the $1,000 mark).
You haven’t paid anything on your debt. If a creditor thinks you might pay…even a little, they probably won’t bother with legal action.
You are dealing with your original creditor. JCPenney, Sears, and Littletown Credit Union won’t sure you. But GC Services and other shady collections agencies will.

In other words, if you owe a collections agency in California a thousand bucks, and you’re an hour’s drive away, they will sue you in bulk. One of their lowest ranking lawyer’s will be assigned to take a group of potential judgments (including yours) to the local courthouse. One way to avoid this is to find out where the collection agencies are located, then move. You don’t have to physically move: you just have to make them think you’ve moved. I wrote a whole article about tricking collection agencies into thinking you live somewhere else, you can find it by clicking on the link.