I was recently retained by a client who – like many people struggling nowadays – tried to tackle their mounting financial problems by going to a debt settlement company. I’ve said it once, and I’ll say it again: debt settlement companies are a rip-off. The proof is in how empty my client’s wallet is now, and where my client is now.
Posts Tagged ‘credit card’
Facing Bankruptcy with Nagging Regret
Wednesday, January 20th, 2010
I recently met with a bankruptcy client who had a lot of credit card debt, almost no equity in their home, and were unable to meet their obligations.
After getting some information, and assessing their situation, I learned that they had lived in their home for almost 25 years, but in the last 12 years had refinanced their home 3 times. The client told me that in no uncertain terms he would not be contemplating bankruptcy if he was able to refinance their home to pay the credit card debt.
Clearly, that wasn’t going to happen.
But then I started thinking, how does someone who has lived in a home for 25 years in the same home have almost no equity to show for it?
Relearning How To Buy Stuff
Tuesday, January 19th, 2010
When I meet with a debtor who has expressed a desire to file bankruptcy, once of the first things I start discussing is their use of credit. Many times, their use of credit also turns to their relationship with credit. If you’re going to file bankruptcy, you need to stop using credit cards. That seems like a bit of a no-brainer. But recently, I had a conversation that went something like this:
“You cannot use credit cards any more,” I told my client. “You need to start operating on a cash basis.”
I saw my client thinking about this, and then after a momentary pause, I heard this reply:
“But how will I buy food?”
Here’s Another Reason Why You Actually Need to Read Credit Card Agreements
Friday, April 3rd, 2009
After reading a 9th Circuit Court of Appeals decision issued yesterday, I’ve been struggling. There’s an important legal issue to discuss, but at the same time, I’ve been struggling with the title. I wanted to use a title that was little kitschy, because after all, that’s what makes a blog even moderately entertaining and worth visiting. I think. I also thought the issue justified my resorting to something profound. Something that makes the reader go “hmmm…so true.” Then, there’s a part of me that just wants the decision to speak for itself. So here goes.
In July 2001, Robin got a Providian credit card. The terms of the account – on that slip of paper that people have a tendency not to read required that it be governed by New Hampshire law. If you have not heard of Providian, spend some time on the net searching them out. You’ll get the sense that they weren’t a particularly consumer-friendly company, unless your idea of being consumer-friendly is only to pretend to be friendly. But I digress.
She defaulted on the card in November 2001. We don’t know why she defaulted. Don’t know if it was a lost job. A health matter. Don’t know if she was just being irresponsible. We just don’t know and I cannot assume what I do not know (and what’s not discussed in the decision). Her bill was about $3,000 with an interest rate that was high enough to be flirting with 25 percent. The New Hampshire statute of limitations on credit cards is three years.
In December 2004, more than three years later, Robin received a letter from a debt buyer attempting to collect the debt. The debtor buyer than sued her. After that suit was voluntarily dismissed, she sued the debt buyer claiming violations of the Fair Debt Collection Practices Act for attempting to collect a debt that was time-barred.
Thinking about Debt Settlement? Think about this…
Thursday, June 7th, 2007
People explore all of their available options before filing bankruptcy. Bankruptcy is not for everyone struggling with debt. Some may benefit from credit counseling, while others may benefit from loans from family members. However, there is one option that I am pretty sure does not work for most people I meet: “debt settlement” companies. In many cases, I have represented people who unsuccessfully tried this option and only ended up losing their money and adding to their stress. A conversation I had today with a prospective client reminded me that these “debt settlement” companies are still lurking out there, and people struggling with debt need to think about these issues before signing on the dotted line.
You and Your Credit Card Terms: What You Don’t Know may Bite the Ones You Love.
Saturday, November 12th, 2005
You get yourself a new credit card and think, ‘hey, my kid is going off to school….I’ll give him one too.’ Or perhaps ‘I’ll give one to my elderly mother, just in case of an emergency.’ Then you encounter some financial problems, and end up defaulting on the credit card agreement. You may even contemplate bankruptcy. But you’re confident that your mom and your son won’t get stuck with the credit card bill. After all, you signed it. You applied for it. You made the decision to give it to them. Indeed, you even paid the bill….when you could. They are not going to try and collect it from them.
Think again.
Just In Time For The Holidays
Monday, September 26th, 2005
Just in time for the holidays, more and more credit card companies are increasing the minimum monthly payments on credit card bills. Of course, that is both good news, and bad news for credit card users.
