June 23, 2008
Don't Fall For These Credit Card Debt Scams
Are you in over your head with credit card debt? You may be tempted to do one of these things:
- Stop paying
- Go to a credit counselor
- File for bankruptcy protection
All valid choices. But recently there is something else cropping up: the notion that you don't need to pay these debts. You can get out of them because the debts are somehow illegal. I won't quote from these bogus sites because I don't want to get threatened or sued but you can find them all over. This reminds me of the folks who used to claim that you don't have to pay Federal income taxes because there is no legal authority for taxing you.
There is some truth to what these "debt invalidation" people say, but mostly there is a lot of untruth.
Just think about it.
Banks are highly regulated. The credit card lending system is regulated by states and also Federal law. There are thickets of lawyers at these banks who do nothing but study consumer law. Every ad, every piece of mail, every statement is checked and re-checked by competent lawyers. How could banks possibly lend out billions of dollars, even hundreds of billions, with this type of heavy regulation, and be scamming everyone?
Does that make any sense? Logically it does not.
Naturally, this firm wants to get you to pay them to write letters challenging the legality of your debts. They want to do this for you because they have the secret sauce that you need to "give them a chocie of a lawsuit or the option of facing a compliance audit/validation review."
If you have credit card debt, there are certain things you can do to challenge the debt with the card company if it is not right. There are other things you can do to challenge a credit bureau that has an erroneous report about your credit. But other than that, the notion that credit card debts are invalid and can simply be challenged away is not something I have found to be true.
What I have found is that credit card debt can be settled. The usual pattern is that if you stop paying, you will often be able to settle credit card debt for 20 cents to 50 cents on the dollar, usually between 120 and 180 days from the date of first delinquency.
The card companies know that after this, they must charge off your debt. They still try to collect, but they would rather collect before they charge the whole debt off.
There are a pitfalls in this credit card debt settlement process. But it isn't rocket science. It is something you can easily do yourself. And you can settle for payments if you can't afford a lump sum. Even credit reports that have been made can be erased through a "pay for delete" process and this can be included in your settlement.
Don't fall for the periodic scams and please get my exclusive videos and other help on mortgage short sales, credit card debt settlement, the nine day house sale, and much more.
Please watch this video on short sales and foreclosures. This is a screen shot — just type in your email and I'll get you to the real video. It's geared to homeowners and Realtors who want to know everything they can about short sales. And it is the tip the iceberg…
Photo CC http://www.flickr.com/photos/eliazar/archives/date-posted/2008/03/19/
4 Comments on Don't Fall For These Credit Card Debt Scams »
June 24, 2008
Richard Geller @ 6:23 am:
On Tue, Jun 24, 2008 at 12:21 AM, ANONYMOUS wrote:
richard, i have not signed up with yet, but i am interested in a company that claims they can completely illiminate my debt! here is there link, [link deleted for legal reasons. Is this a scam or not?
———–
Thanks for emailing me.
It is a total scam. It preys upon people who want to believe. They charge a lot of money to screw people up.
Does it really make any sense that your debts are illegal somehow? I know a lawyer who works for the banks and she does nothing but approve every single piece of info that bank puts out to the public, and she does so in order to assure the bank complies with 50 state laws and federal law.
She and other lawyers who work for that bank are not "bought off" and they are doing nothing but following the law.
It is beyond ridiculous that banks would lend hundreds of billions of dollars without complying with the law, is it not?
Money was loaned out. Now the consumer must either pay it back or settle the debt for less than the amount owed. In rare cases there may be a truth in lending issue.
That may be extra leverage for the borrower but it isn't done on a wholesale basis in the credit card industry. (It was done for awhile in the mortgage industry, as we know.)
The credit card issuers are very careful about compliance and everything they do is done centrally, reviewed centrally and approved centrally with the law in mind.
I have at least one subscriber who used this type of service (not sure if it's this one or another one) and she regrets it very much. As I recall, now she has spent $2500 and is facing imminent judgment by the courts.
The credit card companies get angry and while only 1% of credit card delinquent debts normally get litigated, in this case they are litigating. I can fully understand why — they are hit with legalese letters and threats and they simply hit back.
The name of this game is to settle your credit card debts if you cannot pay them back. Settle for less than the amount owed but get a deal where the credit card company or collection agency removes past derogatory reports about you. They may say they can't do this, but they can and do all the time.
regards
–Richard
September 7, 2008
jack h @ 7:54 am:
I too have reviewed several so called elimination programs, after many years I have amassed over 127K in CC and personal loans, due to the economy and a job loss I am now at a point that I will have to default on these as my income is about 1k less a month than my bills. Yes the idea of walking away is a good dream. bankrupcy (13) is just as bad. They will leave you in poverty for 5 years, ruin your credit. The court will determine what you will pay regardless. You will have no disposable income to save for the future issues that may arrise, if you smoke you will not be able to afford to, If you have satalite TV and cell phones they go away too. Bankrupcy will leave you with hardly enough to eat on. Plus if for some reason you lose your income during the process you have to start all over again or file chapter 7 thus lossing everything. The revised laws in I think 2005 did nothing to help consumers. There are companies on the net now that offer frendly liens to protect you but this is also risky bussiness. their hope is that after 6 months the debt will be wrote off or sold as in either case then you have chance at setelment or invality as the actual original debt has been paid and the new debt with the collection company has no real valitiy as you never signed a agreement with them. I am not sure what way to go as they all are risky.
I wouldn't write off bankruptcy. A Chapter 7 filing in the right situation can let someone get a new start.
On the other hand, many folks settle their debts for as little as ten cents on the dollar. The advantage here is that you avoid bankruptcy and can have better credit, more quickly, than you can if you file for bankruptcy. It saves the whole bankruptcy process too.
By the way, there is also a "no pay" Chapter 13 where sometimes you are in the plan for the required 5 year period but do not have to make any payments, because your after-expense income is non-existent. This lets you keep your stuff, which a Chapter 7 often doesn't.
See a good bankruptcy lawyer. Consider doing a debt settlement. Avoid like the plague people who say you should pay them and they'll use their magic system. Debt settlement is easy and you don't need to pay anyone an arm and a leg to do it for you.
warmly,
–Richard
September 12, 2008
graeme @ 2:47 am:
we have recently moved and with the cost,s of everything we,v ended up putting 15,000 on visa cards , however we,v been aproached by a firm claiming to wipe off our credit debts within 6 to 9 months.with a fee of 495 first, then when the debt is wiped off we only pay 30%of wat we owed to this company at 0%.please help is this a scam.
November 5, 2008
robert @ 9:59 pm:
how can your program helh a realtor like mysely generate some income using your program?