GMR 107: 4 Options for Debt Repayment
Episode 107
You're ready to tackle your debt. Great! In this episode of Getting Money Right, we'll reveal the four possible financial situations people find themselves in, and provide the four available options that will get you out of debt for good. These options will ensure you eliminate your debt once and for all.
SHOW NOTES
Most American adults—224 million, or 89 percent—have a credit file. Using a random sample of credit file holders, it is estimated that 31.6 percent of them, or 71 million US adults, have debt in collections reported in their credit files.
4 Debt Scenarios and 4 Options to Paying Off Debt
Enough to pay the debt, great …. Pay it … better yet, attack it!!
Not enough to pay all your monthly debt payments, but can pay a portion
Pro-rata + lots of communication & sharing info with creditors
Pay on pro-rata everyone, if someone doesn’t accept the smaller payments, stop sending them the money and instead store it up
Not able to pay monthly payments, and they won’t work with you…
You’ve defaulted on the original debt, now they’ve sold the debt to an independent collections agency.
Save up cash to negotiate and settle with the collections agency
Fair Debt Collections Practices Act
The Fair Debt Collection Practices Act statute added in 1978. Its purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act.
Prohibited conduct by Debt Collection Agencies
The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:
Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time;
Contact after being asked to stop: contacting consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further contact or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted;
Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number;
Contacting consumers at their place of employment after having been advised in writing that this is not acceptable;
Contacting consumer known to be represented by an attorney;
Contacting consumer after request for validation: contacting the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer's written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor's name and address;
Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer;
Publishing the consumer's name or address on a "bad debt" list;
Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law;
Threatening arrest or legal action that is either not permitted or not actually contemplated;
Abusive or profane language used in the course of communication-related to the debt;
Contact with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney) or threatening such action;
Contact by embarrassing media, such as communicating with a consumer regarding a debt by postcard, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business;
Reporting false information on a consumer's credit report or threatening to do so in the process of collection.
Aggrieved consumers may also file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney's fee and court costs) from third-party debt collectors. The FDCPA is a strict liability law, which means that a consumer need not prove actual damages in order to claim statutory damages of up to $1,000 plus reasonable attorney fees if a debt collector is proven to have violated the FDCPA.
RESOURCES
Budget Forms and Tools
David’s New Book - Jesus on Money
David’s New Website - www.stewardshippastors.com