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  • Beware of Debt Settlement Scams

    ftc logo 430If you've maxed out your credit cards and are getting deeper in debt, chances are you're feeling overwhelmed. How are you ever going to pay down the debt? Now imagine hearing about a company that promises to reduce – or even erase – your debt for pennies on the dollar. Sounds like the answer to your problems, right?

    The Federal Trade Commission (FTC), the nation's consumer protection agency, says slow down, and consider how you can get out of the red without spending a whole lot of green.

    Debt Settlement Companies

    Debt settlement programs typically are offered by for-profit companies, and involve the company negotiating with your creditors to allow you to pay a “settlement” to resolve your debt. The settlement is another word for a lump sum that's less than the full amount you owe. To make that lump sum payment, the program asks that you set aside a specific amount of money every month in savings. Debt settlement companies usually ask that you transfer this amount every month into an escrow-like account to accumulate enough savings to pay off a settlement that is reached eventually. Further, these programs often encourage or instruct their clients to stop making any monthly payments to their creditors.

  • Debt-buying industry and lax court review are burying defendants in defaults

    financial trouble

    After more than four decades as a commercial litigator, Ward Benshoof was shocked at what he learned two years ago while handling a post-judgment debt-collection case. What had been accepted as evidence seemed to have no more substance than the shadow of smoke. And as he later learned, it also was not evidence at all.

    His pro bono client’s life had been seized up in such fear that she pawned her wedding ring to feed the maw of a default judgment against her in Los Angeles County Superior Court, obtained by one of the nation’s biggest debt buyers.

    It was too late to undo the judgment, but Benshoof sued the debt buyer, alleging that its repeated phone calls to the woman were harassing and illegal. The company turned over phone recordings in discovery that showed the calls weren’t as heated as the woman thought.

  • Don’t Let Bankruptcy Kill Your Credit Forever

    credit scoreYou won’t be surprised to find bankruptcy on the list of credit killers you want to avoid. When you choose to file for bankruptcy protection from your creditors, the impact to your credit scores will be devastating and long-lasting. The temptation of walking away from overwhelming debt may sound appealing, but it is important to only use bankruptcy as the absolute last resort.

    How Bankruptcy Impacts Credit Scores

    Bankruptcies will have a negative impact on two different sections of your credit reports. First, it will show up in the public record section of your three credit reports.  In addition to the public record, each debt that was included in the bankruptcy will be noted as such on your credit reports. Each account will be considered a serious derogatory.

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  • Fastest Ways to Raise Your Credit Score 100 Points

    credit repair

    While everyone understands the value of improving your credit scores, there is no single strategy to improving it quickly. If you want to raise your credit score by more than 100 points, you have to understand what is causing your credit scores to be lower in the first place. Here are three strategies that may help to point you in the right direction in your quest toward credit score improvement and help you raise your credit score.

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  • Federal Judge speaks on misconceptions about Bankruptcy

  • Payday Loans in Alabama could soon be much tougher to get

    payday loans

    Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt," said CFPB Director Richard Cordray. "By putting in place mainstream, common-sense lending standards, our proposal would prevent lenders from succeeding by setting up borrowers to fail.

    The CFPB research showed that median fee on a payday loan is $15 per $100 borrowed with a median loan term of 14 days, resulting in an annual percentage rate of 391 percent on a loan with a median amount of $350. Those fees generated $3.6 billion in fee revenue in 2015 for the estimated 15,766 payday loan stores across the U.S.

    Lenders would still have the option to loan up to $500 to consumers without a full-payment test but only to consumers without any outstanding short-term loans. Long-term loans would also be available but the interest rate would be capped at 28 percent and the application fee could be no more than $20.

    Read the entire artice: AL.com