Hi,
For various reasons, many people find themselves faced with a sizable deficiency balance from a car, camper, trailer home etc., loan. In most instances, deficiency balances could be settled for far less than the amount represented by the creditors, or, in many cases, third party collection agencies. The keys to negotiating a successful settlement on a deficiency balance are:
1) The length of time the deficiency balance has been owed. If the deficiency balance has been accruing interest for many years, the creditor will take substantially less money to settle.
2) The payment history on the loan prior to the deficiency balance being created factors into the willingness of the creditor to negotiate a settlement on the balance.
If only one or two payments have been made on the loan prior to repossession, it is unlikely that the creditor will be willing to offer much of a settlement.
3) When a creditor receives a settlement offer, one of the first things the creditor does is analyze what he or she believes to be a reasonable settlement offer and the ability of the debtor to repay the deficiency balance in full. It is necessary to give all the pertinent details as to why the settlement offer is legitimate and is the best that can be done by the debtor.
4)If the deficiency balance that is owed is being handled by a third party, and the third party refuses the settlement offer, be sure to contact the original creditor and offer the same settlement to the creditor. In most cases, the creditor will accept a reasonable settlement.
5) If it is not possible to come up with a lump sum settlement, offer a payment schedule that can be kept. Once again, if the third party refuses the payment schedule, contact the original creditor and explain why that is the only available solution to handling the deficiency balance.
When negotiating any deficiency balance, keep in mind that the creditor is entitled to 100% of the balance and will only accept a settlement if it is financially justified. As soon as a deficiency balance is created, be sure to get in touch with the creditor, as communication is the key. A Performance Bond guarantees the faithful performance of the contract and payment of materials and labor by the contractor to all subcontractors and material suppliers.
Until later,
Alan
Showing posts with label creditors. Show all posts
Showing posts with label creditors. Show all posts
Tuesday, September 4, 2007
Tuesday, May 22, 2007
Judgments
Hi,
The purpose of this blog entry is to take some of the mystery out of judgments. A creditor's last option in collecting a debt is very often done by obtaining a judgment. When a creditor obtains a judgment, it means that a court grants the creditor an order containing multiple remedies to collect an unpaid debt.
To obtain a judgment, a creditor must do the following:
1) Creditor files a lawsuit in the jurisdiction where the debtor lives for the amount of the debt.
2) The lawsuit must be served on the debtor. This is usually done by a process server. If the debtor is successful in avoiding the process server for a period of time, sometimes the creditor may obtain service through publication in a local paper.
3) In most states, the debtor has 21 days to respond in writing to the lawsuit.
4) If no response is given, a default judgment may be granted to the creditor by the court.
5) If, after service, the debtor disputes any part of the amount that the creditor is claiming, he or she may do so through the courts. The matter will be resolved through the courts before judgment may be entered.
Following are some of the remedies available to a creditor if a judgment is obtained against a debtor:
1) Any real property owned by the debtor in the county that the judgment is entered will automatically have a lien placed against it. The creditor also has the right to register the judgment in any county in the state in which the judgment was granted in which the debtor might own property.
2) The creditor may garnish the wages of the debtor.
3) The creditor may garnish the debtor's bank accounts.
4) The creditor may seize any assets that are free and clear of liens or encumbrances.
5) The creditor may have the debtor brought in for examination and deposed of any other assets.
6) If the debtor moves out of state, the creditor may register the judgment in the debtor's new state of residence and proceed against the debtor.
This list of actions is not all inclusive, but gives an idea of liabilities which a debtor may incur if a creditor is awarded a judgment.
Until the next time,
Alan
The purpose of this blog entry is to take some of the mystery out of judgments. A creditor's last option in collecting a debt is very often done by obtaining a judgment. When a creditor obtains a judgment, it means that a court grants the creditor an order containing multiple remedies to collect an unpaid debt.
To obtain a judgment, a creditor must do the following:
1) Creditor files a lawsuit in the jurisdiction where the debtor lives for the amount of the debt.
2) The lawsuit must be served on the debtor. This is usually done by a process server. If the debtor is successful in avoiding the process server for a period of time, sometimes the creditor may obtain service through publication in a local paper.
3) In most states, the debtor has 21 days to respond in writing to the lawsuit.
4) If no response is given, a default judgment may be granted to the creditor by the court.
5) If, after service, the debtor disputes any part of the amount that the creditor is claiming, he or she may do so through the courts. The matter will be resolved through the courts before judgment may be entered.
Following are some of the remedies available to a creditor if a judgment is obtained against a debtor:
1) Any real property owned by the debtor in the county that the judgment is entered will automatically have a lien placed against it. The creditor also has the right to register the judgment in any county in the state in which the judgment was granted in which the debtor might own property.
2) The creditor may garnish the wages of the debtor.
3) The creditor may garnish the debtor's bank accounts.
4) The creditor may seize any assets that are free and clear of liens or encumbrances.
5) The creditor may have the debtor brought in for examination and deposed of any other assets.
6) If the debtor moves out of state, the creditor may register the judgment in the debtor's new state of residence and proceed against the debtor.
This list of actions is not all inclusive, but gives an idea of liabilities which a debtor may incur if a creditor is awarded a judgment.
Until the next time,
Alan
Friday, April 20, 2007
Unemployed: Some Debt Strategies
Hi,
When we find ourselves unemployed, it is important not to neglect our financial responsibilities. We need to make a list of our outstanding monthly expenses starting with our basic survival needs. We need to make another list of all available funds that we have to meet expenses. Here are some suggestions:
1) We need to call the mortgage company if we are having doubts as to whether or not we can make the next mortgage payment to explain the situation in detail and see what options the mortgage company offers. Some of the options available are extending the payment until the end of the mortgage, making partial payments, or making interest only payments. Keep in mind that the mortgage company wants to work out the problem and does not want to have to foreclose on the house.
2) If we rent, we need to call the property management company as soon as possible to explain the situation and work out a livable solution. For instance, if we know unemployment is going to come in two weeks down the road, we can ask the rental company if we can make our payment then.
3) We need to call all the utility companies and work out suitable financial arrangements. Inquire about whether or not there are any programs in place for short term help.
4) We need to examine our monthly expenses in the food and entertainment areas and cut back as quickly as possible.
5) We need to call our remaining creditors and request deferrals on our monthly payments. If we are able, we should send them a good faith payment. We need to assure them that we will contact them periodically to let them know the status of our employment and our ability to resume making full payments.
As always, one of the most important things we need to do regarding our debt is communicate with our creditors. It is in our best interest and their best interest to work out all situations.
Next week I will start talking about credit/collections and small business.
Until then,
Alan
When we find ourselves unemployed, it is important not to neglect our financial responsibilities. We need to make a list of our outstanding monthly expenses starting with our basic survival needs. We need to make another list of all available funds that we have to meet expenses. Here are some suggestions:
1) We need to call the mortgage company if we are having doubts as to whether or not we can make the next mortgage payment to explain the situation in detail and see what options the mortgage company offers. Some of the options available are extending the payment until the end of the mortgage, making partial payments, or making interest only payments. Keep in mind that the mortgage company wants to work out the problem and does not want to have to foreclose on the house.
2) If we rent, we need to call the property management company as soon as possible to explain the situation and work out a livable solution. For instance, if we know unemployment is going to come in two weeks down the road, we can ask the rental company if we can make our payment then.
3) We need to call all the utility companies and work out suitable financial arrangements. Inquire about whether or not there are any programs in place for short term help.
4) We need to examine our monthly expenses in the food and entertainment areas and cut back as quickly as possible.
5) We need to call our remaining creditors and request deferrals on our monthly payments. If we are able, we should send them a good faith payment. We need to assure them that we will contact them periodically to let them know the status of our employment and our ability to resume making full payments.
As always, one of the most important things we need to do regarding our debt is communicate with our creditors. It is in our best interest and their best interest to work out all situations.
Next week I will start talking about credit/collections and small business.
Until then,
Alan
Thursday, April 19, 2007
Making a Budget After The Divorce is Final
Hi,
It's now time to assess whether or not our income meets our monthly expenses. It's relatively simple to determine this. We total our monthly bills and compare the total to our monthly income. In many cases, people find that their expenses are higher than their income. Here are a few suggestions to reduce expenses:
1) Look at areas in which one can reduce costs, such as paring down a cell phone plan, cancelling cable, club memberships, subscriptions etc.,
2) Consider using public transportation whenever possible.
3) Consider eliminating some credit cards.
4) Examine the amount of money spent on entertainment/eating out every month. Check the library and Internet for free or inexpensive entertainment.
5) If expenses far exceed income, call creditors to set up repayment plans that work for both parties. Do not represent a payment plan to the creditor which cannot be kept.
For the twelve months following a divorce, it is important to be financially prudent and adjust lifestyles when necessary in order to transition into a solid financial future. Revisiting one's budget every three months and making adjustments as needed is recommended.
Tomorrow I'm going to write about what to do with your debt if you find yourself suddenly unemployed.
Until then,
Alan
It's now time to assess whether or not our income meets our monthly expenses. It's relatively simple to determine this. We total our monthly bills and compare the total to our monthly income. In many cases, people find that their expenses are higher than their income. Here are a few suggestions to reduce expenses:
1) Look at areas in which one can reduce costs, such as paring down a cell phone plan, cancelling cable, club memberships, subscriptions etc.,
2) Consider using public transportation whenever possible.
3) Consider eliminating some credit cards.
4) Examine the amount of money spent on entertainment/eating out every month. Check the library and Internet for free or inexpensive entertainment.
5) If expenses far exceed income, call creditors to set up repayment plans that work for both parties. Do not represent a payment plan to the creditor which cannot be kept.
For the twelve months following a divorce, it is important to be financially prudent and adjust lifestyles when necessary in order to transition into a solid financial future. Revisiting one's budget every three months and making adjustments as needed is recommended.
Tomorrow I'm going to write about what to do with your debt if you find yourself suddenly unemployed.
Until then,
Alan
Tuesday, April 17, 2007
Managing Debts During The Divorce Process
Hi,
When a divorce is filed, it is easy for the parties involved to adopt the belief that their debts can wait until the divorce is finalized. Putting this belief into practice can severely damage the financial future of both parties. Any financial obligations that either party takes care of during the divorce, that could in turn be ordered the other's responsibility, will be adjusted accordingly by a judge during the final divorce decree. Showing financial responsibility during a divorce may influence numerous decisions made by the court. Now that we have gathered all financial information available to us on debts for which we are liable, we need to notify our creditors of the situation. Different states have different laws in respect to who is responsible for marital debts in the event of a divorce. When calling creditors, it is important to establish a paper trail that:
1) The name of the person paying the debt after the divorce is filed is documented.
2)Credit cards such Visa, MasterCard, Discover or American Express etc., need to be notified that we wish to have our name removed, and that we are not responsible for any charges incurred after the date of our phone call to them. In most cases they will request that we follow up the phone call with a letter. At the same time, we can inquire about getting a card issued to us in our own name.
3)If we are the homemaker in the marriage and do not have an income to pay on any debts for which we are responsible, it is important to immediately contact our creditors. When contacting creditors, we need to explain the situation and let them know that we have no means of paying the debts at this time. We will keep them advised of our future financial situation once the divorce is finalized and our financial status is clarified.
As always, it is imperative to get the first and last names of any creditor with whom we speak. If we find ourselves blindsided, and left without any means to manage the situation, we need to ask a trusted friend to help us locate any available resources in our area. Tomorrow I'll talk about financial life after a divorce.
Until then,
Alan
When a divorce is filed, it is easy for the parties involved to adopt the belief that their debts can wait until the divorce is finalized. Putting this belief into practice can severely damage the financial future of both parties. Any financial obligations that either party takes care of during the divorce, that could in turn be ordered the other's responsibility, will be adjusted accordingly by a judge during the final divorce decree. Showing financial responsibility during a divorce may influence numerous decisions made by the court. Now that we have gathered all financial information available to us on debts for which we are liable, we need to notify our creditors of the situation. Different states have different laws in respect to who is responsible for marital debts in the event of a divorce. When calling creditors, it is important to establish a paper trail that:
1) The name of the person paying the debt after the divorce is filed is documented.
2)Credit cards such Visa, MasterCard, Discover or American Express etc., need to be notified that we wish to have our name removed, and that we are not responsible for any charges incurred after the date of our phone call to them. In most cases they will request that we follow up the phone call with a letter. At the same time, we can inquire about getting a card issued to us in our own name.
3)If we are the homemaker in the marriage and do not have an income to pay on any debts for which we are responsible, it is important to immediately contact our creditors. When contacting creditors, we need to explain the situation and let them know that we have no means of paying the debts at this time. We will keep them advised of our future financial situation once the divorce is finalized and our financial status is clarified.
As always, it is imperative to get the first and last names of any creditor with whom we speak. If we find ourselves blindsided, and left without any means to manage the situation, we need to ask a trusted friend to help us locate any available resources in our area. Tomorrow I'll talk about financial life after a divorce.
Until then,
Alan
Monday, April 16, 2007
Divorce and Debt
Hi,
In almost every divorce, the debt of the married couple turns into a problem. When the divorce is bitter, debt is totally ignored as each party believes that the other should be responsible for it. This is the equivalent of joint financial suicide. Even if the divorce is uncontested and emotions are in check, how efficiently the marital debt is handled during the divorce process can save both parties financial headaches in the future. The first step we need to take in order to efficiently manage debt during a divorce is to gather financial information in the marital estate and identify debts for which we are responsible. It is important to remember that even if we feel reasonably certain that the court will order some of these debts to be paid by our spouse, that we still need to deal with them until that time. This will assure our credit rating to remain intact once the divorce is final. If emotions are running amok in a particular divorce, it may be a good idea to solicit the help of a trusted friend or third party to gather as much information as possible on one's behalf. In situations in which all financial information isn't readily available, banks and mortgage companies will disclose pertinent needed information over the phone such as balances, monthly payment due dates etc., Another way to identify creditors of the marital estate is by running a credit report on both individuals. Tomorrow I will talk about some short term steps to take once the information has been gathered.
Until then,
Alan
In almost every divorce, the debt of the married couple turns into a problem. When the divorce is bitter, debt is totally ignored as each party believes that the other should be responsible for it. This is the equivalent of joint financial suicide. Even if the divorce is uncontested and emotions are in check, how efficiently the marital debt is handled during the divorce process can save both parties financial headaches in the future. The first step we need to take in order to efficiently manage debt during a divorce is to gather financial information in the marital estate and identify debts for which we are responsible. It is important to remember that even if we feel reasonably certain that the court will order some of these debts to be paid by our spouse, that we still need to deal with them until that time. This will assure our credit rating to remain intact once the divorce is final. If emotions are running amok in a particular divorce, it may be a good idea to solicit the help of a trusted friend or third party to gather as much information as possible on one's behalf. In situations in which all financial information isn't readily available, banks and mortgage companies will disclose pertinent needed information over the phone such as balances, monthly payment due dates etc., Another way to identify creditors of the marital estate is by running a credit report on both individuals. Tomorrow I will talk about some short term steps to take once the information has been gathered.
Until then,
Alan
Friday, April 13, 2007
Creating a New Budget After The Death Of A Spouse
Hi,
Each person's situation is different. These are some general suggestions which may apply to someone who is creating a new budget following the death of a spouse. After identifying all existing assets, liabilities, and expected income sources, we should have a better idea of what needs to be done and what steps need to be taken. If one owns an house and decides to move, one has three options available:
1) sell the house through conventional means
2) sell the house and carry the contract, which will generate a substantial monthly income
3) rent the house, which will produce a monthly income (Investigate a property management firm to handle property if one is unable to manage it alone, but want to keep the house as an investment)
If one's investment portfolio contains only stocks, talk to the broker about moving investments into a monthly income producing investment vehicle.
Now that we know when funds will be received from life insurance, property sales, and investment portfolios etc., we can communicate with creditors to tell them approximately when we will be able to resume payment. In order for the surviving spouse to maintain future credit standing, it is important to communicate with creditors as soon as possible to let them know the status of the situation.
For people who don't have an estate, and the funds are not available to make the monthly payments of the deceased, creditors need to be contacted as soon as possible to be notified of the situation. Request that they freeze the interest on the bills until such time as the funds are available to resume payment. If income is reduced to the point that it seems as if funds will never become available to handle these debts, one should talk to one's banker or trusted friend familiar with finances, to formulate a plan to seek sound professional help.
It's important to take some time to identify the approximate expenses which will be incurred on a monthly basis. In some cases there will be no leeway and in other cases, significant leeway of what monies can be used for monthly expenses. In certain instances it might be necessary to spend less time eating out than is habitual. Weekly activities which cost money may need to be replaced with economical or free ones. Check the library and Internet for local activity listings. Reduced income might necessitate paying attention to the cost of goods and services as someone transitions into a new lifestyle.
Next week I'm going to write about the economic impact of divorce.
Have a good weekend!
Until then,
Alan
Each person's situation is different. These are some general suggestions which may apply to someone who is creating a new budget following the death of a spouse. After identifying all existing assets, liabilities, and expected income sources, we should have a better idea of what needs to be done and what steps need to be taken. If one owns an house and decides to move, one has three options available:
1) sell the house through conventional means
2) sell the house and carry the contract, which will generate a substantial monthly income
3) rent the house, which will produce a monthly income (Investigate a property management firm to handle property if one is unable to manage it alone, but want to keep the house as an investment)
If one's investment portfolio contains only stocks, talk to the broker about moving investments into a monthly income producing investment vehicle.
Now that we know when funds will be received from life insurance, property sales, and investment portfolios etc., we can communicate with creditors to tell them approximately when we will be able to resume payment. In order for the surviving spouse to maintain future credit standing, it is important to communicate with creditors as soon as possible to let them know the status of the situation.
For people who don't have an estate, and the funds are not available to make the monthly payments of the deceased, creditors need to be contacted as soon as possible to be notified of the situation. Request that they freeze the interest on the bills until such time as the funds are available to resume payment. If income is reduced to the point that it seems as if funds will never become available to handle these debts, one should talk to one's banker or trusted friend familiar with finances, to formulate a plan to seek sound professional help.
It's important to take some time to identify the approximate expenses which will be incurred on a monthly basis. In some cases there will be no leeway and in other cases, significant leeway of what monies can be used for monthly expenses. In certain instances it might be necessary to spend less time eating out than is habitual. Weekly activities which cost money may need to be replaced with economical or free ones. Check the library and Internet for local activity listings. Reduced income might necessitate paying attention to the cost of goods and services as someone transitions into a new lifestyle.
Next week I'm going to write about the economic impact of divorce.
Have a good weekend!
Until then,
Alan
Tuesday, April 10, 2007
Experiencing Short Term Financial Problems After The Death Of A Spouse
Hi,
If there aren't enough funds on hand to take care of immediate needs after the death of a spouse, these are some steps one can take:
1) Notify the mortgage lender to ask for the month's mortgage payment to be deferred. Contact a property management company to ask that the month's rent be adjusted.
2) If there are insufficient funds to make full utility payments, contact the companies to ask for suitable payment arrangements.
3) If your transportation needs involve a car loan, and you need all, or a portion of the car payment extended, call the financial institution holding the loan. They are usually happy to cooperate under these circumstances.
If the deceased had any connections to the military or employee based membership societies (Police and Fire for example) contact related organizations (Veteran's groups etc.,) to see what help they have available for spouses of newly deceased former members.
It's important to have our trusted friend authenticate any unusual or questionable bills by calling the creditors to ask for the specifics involved in the goods or services provided to generate that particular bill. Unfortunately, predators abound in times of tragedy, and submitting false bills for payment is a scam used when they think they can take advantage of a person's inability to focus.
Tomorrow I'm going to talk about intermediate financial actions which need to be taken after the death of a spouse.
Until then,
Alan
If there aren't enough funds on hand to take care of immediate needs after the death of a spouse, these are some steps one can take:
1) Notify the mortgage lender to ask for the month's mortgage payment to be deferred. Contact a property management company to ask that the month's rent be adjusted.
2) If there are insufficient funds to make full utility payments, contact the companies to ask for suitable payment arrangements.
3) If your transportation needs involve a car loan, and you need all, or a portion of the car payment extended, call the financial institution holding the loan. They are usually happy to cooperate under these circumstances.
If the deceased had any connections to the military or employee based membership societies (Police and Fire for example) contact related organizations (Veteran's groups etc.,) to see what help they have available for spouses of newly deceased former members.
It's important to have our trusted friend authenticate any unusual or questionable bills by calling the creditors to ask for the specifics involved in the goods or services provided to generate that particular bill. Unfortunately, predators abound in times of tragedy, and submitting false bills for payment is a scam used when they think they can take advantage of a person's inability to focus.
Tomorrow I'm going to talk about intermediate financial actions which need to be taken after the death of a spouse.
Until then,
Alan
Thursday, March 15, 2007
The Collection Process Continued
Hi,
The perfect scenario in a collection agency would be to receive an account, turn it over to a collector, and, in one call, resolve the account with payment in full. Unfortunately, this scenario does not happen very often. I'd like to identify some of the reasons which keep accounts from being quickly resolved:
1) The contact information for the debtor is obsolete. This requires the account to go through the skip tracing department to try to locate the debtor. In many instances, this is a lengthy process that may involve contacting previous next door neighbors, other creditors, past employers, and any personal referrals listed on the credit application. If these avenues fail, written communication to last known addresses may be used in the hopes of getting a forwarding address.
2) Phone calls to the debtor are ignored and initial notification letters are thrown away by the debtor. In these cases, if there is no other known way to contact the debtor, and follow up letters are ignored, these accounts may be turned over to the collection agency attorneys. Many times collection agency letters are ignored, but legal demand letters from a law firm bring debtors out of the woodwork.
3) Payment arrangements are reached and are broken by the debtor after one or two payments. This requires additional communication with the debtor to usually inform the debtor that the full balance is now due.
4) In some cases a debtor may request a call back from the collector after the initial call to give the debtor time to make a settlement proposal or suitable payment arrangement. This may require the collector to make numerous phone calls before the collector makes contact with the debtor again.
5) Collection agencies receive a much higher than average number of NSF checks. As a result, collectors have to make follow up phone calls to try to collect on the checks.
6) If a debtor proposes a settlement offer to a creditor, it is necessary for the collector to get the approval from the creditor and then get back in touch with the debtor. This can be a time consuming process.
These are some of the reasons why collections can be a long difficult ordeal. Tomorrow I will finish my discussion about the collection process.
Until then,
Alan
The perfect scenario in a collection agency would be to receive an account, turn it over to a collector, and, in one call, resolve the account with payment in full. Unfortunately, this scenario does not happen very often. I'd like to identify some of the reasons which keep accounts from being quickly resolved:
1) The contact information for the debtor is obsolete. This requires the account to go through the skip tracing department to try to locate the debtor. In many instances, this is a lengthy process that may involve contacting previous next door neighbors, other creditors, past employers, and any personal referrals listed on the credit application. If these avenues fail, written communication to last known addresses may be used in the hopes of getting a forwarding address.
2) Phone calls to the debtor are ignored and initial notification letters are thrown away by the debtor. In these cases, if there is no other known way to contact the debtor, and follow up letters are ignored, these accounts may be turned over to the collection agency attorneys. Many times collection agency letters are ignored, but legal demand letters from a law firm bring debtors out of the woodwork.
3) Payment arrangements are reached and are broken by the debtor after one or two payments. This requires additional communication with the debtor to usually inform the debtor that the full balance is now due.
4) In some cases a debtor may request a call back from the collector after the initial call to give the debtor time to make a settlement proposal or suitable payment arrangement. This may require the collector to make numerous phone calls before the collector makes contact with the debtor again.
5) Collection agencies receive a much higher than average number of NSF checks. As a result, collectors have to make follow up phone calls to try to collect on the checks.
6) If a debtor proposes a settlement offer to a creditor, it is necessary for the collector to get the approval from the creditor and then get back in touch with the debtor. This can be a time consuming process.
These are some of the reasons why collections can be a long difficult ordeal. Tomorrow I will finish my discussion about the collection process.
Until then,
Alan
Wednesday, March 14, 2007
Starting the Collection Process
Hi,
Let's discuss how an account is handled once it reaches a collection agency. After the account is entered into the system, an initial letter is generated notifying the debtor of the obligation, and the necessity to resolve the matter as soon as possible. Many collection agencies have collectors that specialize in a particular type of collection. This allows the collector to become knowledgeable about documentation supporting certain types of debt which enables the collector to communicate clearly with the debtor and develop a good working relationship with the client/creditor. After an account is received by a collector, he or she reviews the financial information provided by the creditor and any previous communications with the debtor. This allows the collector to become familiar with the debtor's capabilities and to formulate an approach suitable to that account. Caller ID has made it necessary for a collector to be as effective and efficient as possible on the initial call, as in many instances, it might be the collector's last verbal contact with the debtor. Unlike many other types of negotiations that take days, weeks, and in some cases, months, a collector needs to go from start to finish in one phone call. This is the reason collectors prefer to receive a lump sum payment on an account rather than a long drawn out monthly payment arrangement. This is not to say that when the need is apparent for monthly payments on an account, a collector will not be more than happy to accept the arrangement. It is important to remember that if a payment is broken with a collection agency, that the full amount will become due with no further payment arrangements accepted. Resolving a debt with a collection agency might prevent legal action against the debtor, or at the very least, significant damage against the debtor's credit report. Tomorrow, I will continue talking about the collection process.
Until then,
Alan
Let's discuss how an account is handled once it reaches a collection agency. After the account is entered into the system, an initial letter is generated notifying the debtor of the obligation, and the necessity to resolve the matter as soon as possible. Many collection agencies have collectors that specialize in a particular type of collection. This allows the collector to become knowledgeable about documentation supporting certain types of debt which enables the collector to communicate clearly with the debtor and develop a good working relationship with the client/creditor. After an account is received by a collector, he or she reviews the financial information provided by the creditor and any previous communications with the debtor. This allows the collector to become familiar with the debtor's capabilities and to formulate an approach suitable to that account. Caller ID has made it necessary for a collector to be as effective and efficient as possible on the initial call, as in many instances, it might be the collector's last verbal contact with the debtor. Unlike many other types of negotiations that take days, weeks, and in some cases, months, a collector needs to go from start to finish in one phone call. This is the reason collectors prefer to receive a lump sum payment on an account rather than a long drawn out monthly payment arrangement. This is not to say that when the need is apparent for monthly payments on an account, a collector will not be more than happy to accept the arrangement. It is important to remember that if a payment is broken with a collection agency, that the full amount will become due with no further payment arrangements accepted. Resolving a debt with a collection agency might prevent legal action against the debtor, or at the very least, significant damage against the debtor's credit report. Tomorrow, I will continue talking about the collection process.
Until then,
Alan
Tuesday, March 13, 2007
Entering the World of a Collection Agency
Hi,
In yesterday's blog, I discussed some of the types of people collection agencies deal with on a daily basis. Now let's look at the mission statement of a collection agency and examine some of the common misconceptions about collection agencies. The mission statement of a collection agency is to recover as much money as possible on any account given to them by their clients. Their goal is to achieve this under any means possible allowed by the Fair Debt Collection Act. Some of the common misconceptions about collection agencies are:
1) Collectors enjoy harassing people at home and at work. Fact: Every collector on the planet would like to resolve an account with one phone call. The only reason for additional phone calls on an account are due to broken payment arrangements.
2) Collectors are unreasonable when it comes to accepting settlement offers on accounts. Fact: Creditors have already lost anywhere from 15%-50% on their bill, and as a result are much more unlikely to accept low settlement offers. As collectors are paid a small salary plus commission on the amount they collect, they are highly motivated to take any reasonable settlement and offer it to the creditor.
3) Skip tracers practice unethical business behavior. When skip tracing professional deadbeats, skip tracers on occasion might represent themselves to neighbors, coworkers etc., as a friend of the debtor to obtain pertinent contact information.
4) Collectors are hard nosed and inflexible. Fact: Due to the nature of the business, collectors are constantly under a lot of stress. Certainly they have their bad and good days as do all of us. But, they are primarily paid on commission and are very interested in resolving accounts as quickly and efficiently as possible.
It's important when dealing with a collection agency to remember that the collector you are talking to is used to broken arrangements, broken promises, and in many cases, verbal abuse. If you communicate honestly, he or she will be more than happy to resolve your account as quickly as possible to your mutual satisfaction. Tomorrow, I'll write in detail about the collection process.
Until then,
Alan
In yesterday's blog, I discussed some of the types of people collection agencies deal with on a daily basis. Now let's look at the mission statement of a collection agency and examine some of the common misconceptions about collection agencies. The mission statement of a collection agency is to recover as much money as possible on any account given to them by their clients. Their goal is to achieve this under any means possible allowed by the Fair Debt Collection Act. Some of the common misconceptions about collection agencies are:
1) Collectors enjoy harassing people at home and at work. Fact: Every collector on the planet would like to resolve an account with one phone call. The only reason for additional phone calls on an account are due to broken payment arrangements.
2) Collectors are unreasonable when it comes to accepting settlement offers on accounts. Fact: Creditors have already lost anywhere from 15%-50% on their bill, and as a result are much more unlikely to accept low settlement offers. As collectors are paid a small salary plus commission on the amount they collect, they are highly motivated to take any reasonable settlement and offer it to the creditor.
3) Skip tracers practice unethical business behavior. When skip tracing professional deadbeats, skip tracers on occasion might represent themselves to neighbors, coworkers etc., as a friend of the debtor to obtain pertinent contact information.
4) Collectors are hard nosed and inflexible. Fact: Due to the nature of the business, collectors are constantly under a lot of stress. Certainly they have their bad and good days as do all of us. But, they are primarily paid on commission and are very interested in resolving accounts as quickly and efficiently as possible.
It's important when dealing with a collection agency to remember that the collector you are talking to is used to broken arrangements, broken promises, and in many cases, verbal abuse. If you communicate honestly, he or she will be more than happy to resolve your account as quickly as possible to your mutual satisfaction. Tomorrow, I'll write in detail about the collection process.
Until then,
Alan
Monday, March 12, 2007
The Next Step: Collection Agencies
Hi,
Over the next few blogs, I will be investigating various aspects of collection agencies. First it is necessary to get a general idea about the types of accounts collection agencies receive from their clients. About 10% of the accounts received consist of debtors who have overlooked, ignored, or forgotten to pay a small bill and have the means to pay it. 25%-30% of the people who have bills sent to collection are folks that have some financial difficulty and have chosen to ignore these particular bills due to frustration, lack of being able to arrive at a suitable payment arrangement with their creditor, and naivete about the collection process. The next 35%-40% are people that have severe financial difficulties, and in most cases, no ability to service their debts. These people need long term work- outs, and or settlements. Repeated attempts by creditors to deal with these people have resulted in numerous payment arrangements which have not been kept. The remaining 15%-20% are, in most cases, "professional deadbeats." These people have intentionally run up as much credit as they could with absolutely no intention of repayment. In most instances the addresses, phone numbers etc., provided to the creditor are not valid, and, in fact, accurate information was never given in the first place. When creditors send accounts to collection agencies, usually they also send comprehensive payment histories which include all communication with the customers and any broken repayment arrangements. Tomorrow I'm going to start talking about how a collection agency operates.
Until then,
Alan
Over the next few blogs, I will be investigating various aspects of collection agencies. First it is necessary to get a general idea about the types of accounts collection agencies receive from their clients. About 10% of the accounts received consist of debtors who have overlooked, ignored, or forgotten to pay a small bill and have the means to pay it. 25%-30% of the people who have bills sent to collection are folks that have some financial difficulty and have chosen to ignore these particular bills due to frustration, lack of being able to arrive at a suitable payment arrangement with their creditor, and naivete about the collection process. The next 35%-40% are people that have severe financial difficulties, and in most cases, no ability to service their debts. These people need long term work- outs, and or settlements. Repeated attempts by creditors to deal with these people have resulted in numerous payment arrangements which have not been kept. The remaining 15%-20% are, in most cases, "professional deadbeats." These people have intentionally run up as much credit as they could with absolutely no intention of repayment. In most instances the addresses, phone numbers etc., provided to the creditor are not valid, and, in fact, accurate information was never given in the first place. When creditors send accounts to collection agencies, usually they also send comprehensive payment histories which include all communication with the customers and any broken repayment arrangements. Tomorrow I'm going to start talking about how a collection agency operates.
Until then,
Alan
Tuesday, February 20, 2007
Risks Associated With Other Personal Unsecured Loans
Hi,
Some other unsecured personal loans take the form of charge cards for department stores, gas stations, credit cards for home improvement stores, small businesses which have open charge accounts, etc.,. There are inherent risks associated with each one of these. Many times we find ourselves purchasing goods at a department store or home improvement store, because that is where we have a credit card, even though the same items might be available for less at another store. The same scenario applies to gas purchases and is particularly important due to the large fluctuations in gas prices from one station to another. Also, charge cards influence us to use convenience as a value when buying, rather than price. These are some examples of various unsecured loans we grant ourselves. Using these types of loans can become risky if we are experiencing financial difficulty. When experiencing financial trouble, it is imperative to contact these creditors as soon as possible.
Tomorrow I will discuss secured loans.
Until then,
Alan
Some other unsecured personal loans take the form of charge cards for department stores, gas stations, credit cards for home improvement stores, small businesses which have open charge accounts, etc.,. There are inherent risks associated with each one of these. Many times we find ourselves purchasing goods at a department store or home improvement store, because that is where we have a credit card, even though the same items might be available for less at another store. The same scenario applies to gas purchases and is particularly important due to the large fluctuations in gas prices from one station to another. Also, charge cards influence us to use convenience as a value when buying, rather than price. These are some examples of various unsecured loans we grant ourselves. Using these types of loans can become risky if we are experiencing financial difficulty. When experiencing financial trouble, it is imperative to contact these creditors as soon as possible.
Tomorrow I will discuss secured loans.
Until then,
Alan
Friday, February 2, 2007
Talking About Debt
Hi!
Before you can talk about your debt, you need to get all the current balances on your existing debt. If you don't have your statements on hand right now, most information can be obtained from creditors electronically, i.e. the telephone or web sites. If you've lost your account numbers, usually your creditors will be able to access your accounts using your social security number. Once you get all your bills together, take out your monthly living expenses. We will address those first. In general, these bills do not have any emotional attachment to them, and as a result, are easy to talk about. However, if they are not handled properly, they will affect your entire household. Basic monthly living expenses include rent or mortgage payments, sewer, water, garbage, electricity, telephone, food, heat, internet connection service, medical co-payments, insurance, transportation costs, etc. If you're behind in any of your utilities, call the companies and make payment arrangements with them. If you are late in your mortgage or rent payments, you might consider asking your mortgage company or landlord for a different payment date. If making rent or mortgage payments is an ongoing problem, I will address that situation in a future blog. You will have a much brighter financial future by handling your monthly expenses in a timely manner, and quickly communicating with your creditors if you can't, due to the positive impact it will have on your credit scores.
Tomorrow we will talk about the other pile of bills.
Until then,
Alan
http://olympicdebtspecialists.com/
Before you can talk about your debt, you need to get all the current balances on your existing debt. If you don't have your statements on hand right now, most information can be obtained from creditors electronically, i.e. the telephone or web sites. If you've lost your account numbers, usually your creditors will be able to access your accounts using your social security number. Once you get all your bills together, take out your monthly living expenses. We will address those first. In general, these bills do not have any emotional attachment to them, and as a result, are easy to talk about. However, if they are not handled properly, they will affect your entire household. Basic monthly living expenses include rent or mortgage payments, sewer, water, garbage, electricity, telephone, food, heat, internet connection service, medical co-payments, insurance, transportation costs, etc. If you're behind in any of your utilities, call the companies and make payment arrangements with them. If you are late in your mortgage or rent payments, you might consider asking your mortgage company or landlord for a different payment date. If making rent or mortgage payments is an ongoing problem, I will address that situation in a future blog. You will have a much brighter financial future by handling your monthly expenses in a timely manner, and quickly communicating with your creditors if you can't, due to the positive impact it will have on your credit scores.
Tomorrow we will talk about the other pile of bills.
Until then,
Alan
http://olympicdebtspecialists.com/
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