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For American people just starting out, the most current analysis of trends in our economy points to the fact that incomes are decreasing. Many financial experts and leaders in the collections industry have reason to believe that this paradigm shift will be a permanent one. Out of all of the demographics in the United States, young adults are the most uninsured when it comes to health care coverage. A staggering thirty percent of these individuals have absolutely no insurance. And even though a large portion of uninsured young people are employed, many have just begun their careers and work at low wage jobs for employers who offer limited or no health care benefits.

From the perspective of the collections industry, this new economic progression has the capacity to have massive ramifications. With this many young adults currently scrambling to pay for day to day expenses, let alone medical bills, experts are predicting that their personal debt will grow to massive proportions. As health care prices spike it is crucial to bear in mind that uninsured young people are twice as likely as those with privatized health insurance to have no education beyond high school. Not only will these people not have coverage, but their lack of education will limit their earnings potential in the future as the job market grows more and more competitive. This, coupled with young people's financial inexperience makes them prime territory for debt collectors.

Yet another factor is the credit industry itself. With the CARD Act and America's financial woes, stricter credit standards have been imposed and will most likely make it more difficult for many young people to get credit or loans for "good debts," any type of productive debt that could improve an individual's situation such as a mortgage for a home or a loan for post graduate education. As bill collectors scramble to wrap their heads around all of the economic changes, advances in technology make bill collection practices and their regulations (The Fair Debt Collection Practices Act) seem dated and ambiguous. One blaring example of this fact is the existence of cell phones. The FDCPA was written in the 1970s and as a result does not have stipulations guiding cell phone calls, and it is estimated that over forty percent of consumers do not have landlines at this moment. Out of everybody, young people are the least likely to have landlines and therefore the hardest to get in touch with.

One way that collection industry leaders are trying to address this issue is by crafting more methodical profiling systems to help debt collection companies when they are trying to collect on these accounts with an active cell phone number. Better, more efficient communications with credit bureaus will aid them in figuring out if the debtor has obtained a new address or phone number.

Because this is a time to think outside the box, the collections industry can be likened to the wild west. It seems that these days, anything goes. But one thing is for sure: with changes accelerating faster and faster, the smartest debt collection agencies are gearing up for younger adults, attempting to use the ways that these individuals prefer to do business and communicate. Some debt collectors are considering text messages, and many agencies have recently added online systems to their businesses that permits debtors to make payments over the internet, rather than deal with a debt collector in person or via United States Postal Mail.

According to the new Treasury Secretary, Timothy Geithner, the infamous Internal Revenue Service will be stepping up its efforts to collect what they are owed as taxpayers complete their 2009 returns. That’s right. Today’s IRS is even meaner and more powerful than ever before. According to the IRS, billions of dollars in income tax assessments have not been paid by American citizens. If they are not collected, yearly taxes that go unpaid will continue to accumulate each year with penalty and interest charges. These all ball up together to create an inventory of “tax debts” which approached a massive three hundred billion at the end of the fiscal year.

 

As many of us are painfully aware, the IRS has a complicated process to collect on taxes that have gone unpaid by getting in touch with taxpayers through telephone calls, foreboding notices, and in person. Treasury Secretary Timothy Geithner,  himself an accused tax evader estimates that a total of three hundred and thirty two million dollars will be devoted to the new IRS enforcement efforts. That includes one hundred and twenty eight million dollars to add about eight hundred new IRS employees to go after tax evaders.

 

 

In these hard economic times where even Uncle Sam owes a massive amount of money, this all makes sense. “The US Treasury is desperate for cash and the IRS has been informed to get tougher in collecting old debts” says Anthony E. Parent, founder of IRS Medic. And they mean business. The IRS has hired a number of new and very forceful Revenue Officers to come to people’s houses, businesses, or even crash a Rotary Club meeting or two in hopes of finding suspected delinquent tax payers. Parent warns us that these new employees may be overly aggressive in hopes of impressing their superiors and obtaining a promotion.

 

For the first time in American history, taxpayers’ primary residences can now be harvested by the new, lean, mean IRS. They were not able to seize retirement accounts in the past, but this too, has changed. “The IRS is getting bolder” says Parent. “They can and will clear out a taxpayers entire retirement savings.”

 

The moral? Anybody that owes money to the IRS needs to take a proactive stance not wait for the IRS to come and get them! “We have had clients who have approached us after the IRS has gone after them. This makes helping them a great deal harder” he says. “If you get help early in the game, you have more options. Never ignore the IRS.”

As of 2009, bankruptcy filings that were new increased by over thirty five percent in only one year. Although it may seem like a dismal sign, one good way to look at it is that all of these people are on their own paths to rebuilding their credit scores and ultimately, financial freedom. We have all seen the commercials with "people just like you and me" prodding us to visit whatever website and find out what our credit score is. We know that if the number is high, it's a good thing. It it's low, it could mean trouble finding a loan, getting a job, or a new place to stay. But just what is a credit score?

Your credit score is summed up in one (hopefully!!!) three digit number that is formed from a statistical analysis of your personal credit file. Credit scores are here to give you a major headache, and for the banks to determine your ability to take on debt and repay a credit obligation. That's why credit card businesses and banks will assess your score to figure out how much credit they want to offer you and at what interest rate.

So how is your score determined, you may be asking? The Fair Issac Corporation, or as you may know them, FICO, was the first group to come up with a scoring system in 1958. The report recently underwent a makeover (FICO 08) but it's not used by all credit reporting agencies. In this new, improved FICO 08 version, minor credit delinquencies are not stacked against you when you for the most part do a good job repaying your money.

A credit score asks five questions. What is your payment history like? How much money do you currently owe? Just how long have you had credit? How many times have there been credit inquiries made on your report? And what type of credit do you have? So let's say, for the sake of example, that you screwed up. Just how long will negative marks have an impact on your credit score? Well, that depends on the type of information. Plain old negative information can stay on your credit report for up to seven years. In the case of bankruptcy filing it can stay up to ten years. Here's where we get into the creepy big brother aspect of credit reports. Every individual has a personal credit file, and what this means is that the impact from person to person will affect each differently.

If you are considering filing for bankruptcy, concerned about your financial situation, or just want to know more and feel more secure, it is in your best interest to seek out the advice of a financial planner. One that works for a fee is preferable, because they will have your best interest at heart and not their commission instead. Good luck in your financial journey!

If you are being inundated with phone calls from debt collectors demanding money, and advertisements that blare "get out of debt now," debt consolidation and debt settlement businesses may be looking very good to you at this current moment. With debt settlement and consolidation centers, you combine your debts and pay a portion of the total. However, many of these businesses may be just too good to be true.

Any debt consolidation place that seeks to satisfy your debt for "cents on the dollar" should be considered dubious. After all, it is difficult, near to impossible to make and keep a promise like that without being aware of the details of how long you have owed the money, how much money you owe, and to which creditors. These debt consolidation companies aren't aware of your past payment history. They don't know what creditors you owe. Also, each person has different assets that can be used to satisfy their own debts. You can never make a blanket statement.

Debt settlement centers that guarantee that you will be debt free in three months should also be taken with a grain of salt. Again, the business is unaware of how much you owe, or who you owe it to. Additionally, some obligations, such as student loans, child support and back taxes cannot be covered in a debt settlement plan.

Companies that claim that you can not obtain help without paying an upfront fee or deposit may be less than reputable. While some debt consolidation businesses may accept an upfront fee of as little as fifty dollars, generally, the person in debt pays the debt settlement company a percentage of the debt owed, often fifteen percent, for negotiating the deal.

Generally, the firm will negotiate a payment between you and the businesses and people you know and will accumulate enough money to make that payment. The debt settlement company will hold on to the money until you reach the settlement amount.

In the meantime, your creditors are not being paid. Unfortunately, while you are accumulating that payment, you are not paying your bills and you may be delving further and further into more debt. Instead of taking this gamble check out a not for profit credit counseling firm that might charge you only twenty dollars, if anything. Instead of billing the debtor, these non profit counselors will generally get what is called a fair share percentage payment from your creditors after your debts have been paid.

Finally, and most important, do NOT automatically trust in the debt settlement counselor who let's you know that "We will handle everything. You should stop communicating with your creditors." Despite the thought that the idea of not speaking to creditors and ignoring their mail sounds like it could be a real load off of your back, ultimately, it is your debt, your money owed and your credit score at hand. Never send in a change of address form directing all creditor mail to a debt settlement company.

It is important to bear in mind that the creditor is the one with whom you signed your contractual agreement. When all of your statements are being sent to the debt settlement company, you relinquish that control. You do not know how much in interest and late fees are being tacked on. You also won't know if your debt has been moved into collection.

A few final words of wisdom. If you believe that you need debt settlement, try debt management first. Call up your creditors and request suspended payment, reduced interest or any other payment terms that may suit your financial situation in a more favorable light. Even though it might seem like a long shot, or a pain, it is always very important if you are about to miss a payment to call your creditor and say "Listen, I can't make this month's payment. I'd like to work something out with you."

Financially, times have been tough for all of us. Organizing your budget and giving your finances a good spring cleaning could be very helpful right about now. Below are fifteen tips for getting started. First, we will tackle your debt situation, or dig up some additional cash, then we will figure out ways to utilize that new found money.

1.      Check your credit card interest rates. Even if you pay off your credit card bills each month, it is a good idea to double check your rates in the case that you hit a rough financial patch and have to delay paying your cards in full for a couple of months. Many credit card companies raised their rates in the last year, but as a result, they did lose a lot of customers. A few of these companies are trying to win customers with a good history back, so you can find a good bargain out there with the help of internet search tools like bankrate.com.

 

 

2.      Set up autopay on your debts. This is something you want to get on right away. Just one late payment can hit your credit tremendously, and you could end up seeing your interest rates shoot sky high. Even though the new credit card law puts more controls on credit card companies, they can raise your rates for at least six months when you pay late.  Additionally, you have the capacity to even earn points if you pay your bills on a credit card with reward points. If you are not allowed to use credit to pay some of your debts, set up an autopay utilizing online banking. That way, you will never have to worry about a late payment.

 

3.      Check your reward cards. Many credit card companies reduced their reward benefits before the new credit card bill took effect, but some have introduced cards with better rewards as they look for the best customers. So if you do have good credit, take advantage of it and compare your rewards with the new cards on the market.  

 

4.      Review your cable deal. Cable companies are constantly running new deals that introduce new channels or internet services. Go to their website and check out the deals that are available now. You might be able to get a better one!

 

5.      Review your wireless bill. Look over your wireless usage and be sure that you have a plan that meets your needs. Can you lower the amount of minutes you use, resulting in a lower bill? Or should you buy extra time instead of letting those extra minutes rack up?

 

6.      Check the deal on your home phone. Nowadays, more and more telephone companies offer unlimited long distance. Also, many offer package deals that include wireless and cable. Figure out which one is the best considering how much you use wireless, landline and cable services. 

 

7.      Look over your home and car insurance policies. With home prices plummeting, you might be able to save some cash by lowering your insurance to match the current value of your home. You might also be able to lower costs by increasing deductibles.

 

 

8.      Shop for new home and auto policies. After you look over your policies, take a while to shop for new policies. You might discover that you can save money by switching insurers. Check with Insurance.com begin your search.

 

9.      Spend your gift cards. Don’t let them just expire because you forgot about them! Use them to buy items you may need right away.  If they hang out in your wallet too long, you could even end up losing them. Look at it this way: if you don’t spend the money, consider it a gift to the store or credit card company from which it was bought.

 

10.  Check your credit reports. For free, once a year by using annualcreditreport.com. It is much  easier to fix a problem the sooner you catch it. Also, it will help you to be vigilant on your watch for identity theft.

 

11.  Fix any credit problems. If you do find any errors, or questionable accounts in your credit report, work on it immediately. You will receive instructions that explain how to question errors on your report when you receive your copy.

 

12.  Increase your retirement savings. Now that you have a little more money, increase your automatic savings into your retirement account! An increase as small as 1% a year can really make a difference.

 

13.  Review your investments. Look into them, see how they are doing and see how your investments add up.

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14.  Rebalance your investments. Make sure you have the right percentage invested in stocks or stock mutual funds, bond mutual funds, or bonds and cash.

 

15.  Set up an appointment with a financial planner. It is a good idea to sit down with a financial planner once a year to look over what you are doing with your money, set achievable goals and make sure that your money is in the right spots so you have the opportunity to meet those goals. Seek out a planner who is fee based rather than commission based. When a planner receives money based on commission, you may be getting advice that helps the planner earn more money, not you.

 

Looking through and organizing your finances this year is a lot more important as we bounce back from one of the worst downturns this country has ever experienced. While it is a good idea to look over your finances every year, it is crucial to review them now.

 

 

 

In a mind-blowing turn of events, bill collectors from Advanced Call Center Technologies LLC have to shell out a whopping one point five million dollars for rude and vulgar voicemails that were sent to a man's mobile phone. According to sources, the company sent out eight threatening and demeaning voice mails on Allen Jones' phone attempting to collect what it claimed he owed on a credit card.

Most of the voice mails were ridden with rude language and horrifying racial slurs. "This is your mother (curse) wakeup call you little lazy (curse) (curse)," a collector was quoted as saying in one message. "Get your (racial slur) (curse) up and go pick some mother (curse) cotton fields," said another. Jones is African-American."This isn't acceptable. No one should have to experience what I had to go through," he said.

Mark Frenkel, one of Jones'' attorneys was quoted as saying: "If we did not have the messages on tape, no one would have ever believed that this happened." "This is without a doubt, definitely, the most disgusting collection lawsuit I have ever seen," Dean Malone, Jones'' other lawyer, added. Jones took Advanced Call Center Technologies to court over the harassing calls. And last Friday, a Dallas County jury awarded him of the biggest verdicts of its type - 50,000 dollars in mental anguish and one point five million dollars in punitive damages.

"We made a statement today" said Jones, "and the statement is we will not tolerate abusive debt collectors." According to the attorneys, employees from Advanced Call Center Technologies confessed to the calls, but it remains unclear if they are still with the company and whether it will appeal.

All the while, Jones has always disputed the debt and alleges that he paid it, and the sum in question was a small amount of two hundred dollars. It seems unfathomable that this man had to suffer like this for such a minuscule amount, and now, thanks to the American court system, and justice, it is.

Divorce, coupled with bankruptcy can pose serious problems for those involved. When a married couple who no longer wants to stay together have debts piling up and are heading for divorce, bankruptcy may be one way to sort out the financial problems. Bankruptcy has the capacity to be filed by just one spouse, or jointly. The effects of bankruptcy on divorce proceedings? Abrupt at best. An automatic stay will put a stop to all activities on divorce proceedings.

Although one lawyer may seem trying in a time of stress, two lawyers may be necessary to sort the matters out, a bankruptcy attorney and a divorce lawyer to work things out between the unhappy couple. A bit of good advice to take would be to quickly find a bankruptcy lawyer to guide you through your finances, additionally to the attorney who is assisting you through your divorce. The expert guidance with alimony, child support, property settlements, and other financial issues is key when you are suffering from the stress of bankruptcy and divorce simultaneously.

If the unhappy couple owes a large deal of shared debt, filing for bankruptcy jointly is a good option. This can even simplify the divorce settlement, and filing bankruptcy jointly is cheaper. If you are a spiteful ex, filing individually for bankruptcy is one way to send the creditors after your spouse.

Then there is the issue of property that you have accrued during marriage. That's marital or community property. If you are filing jointly for bankruptcy, and your former spouse has marked some of your separate property as marital property, you should take these actions. First, you should prove what is yours is not community property. The bankruptcy court will release the exempt property, and the remaining property that you share will be part of the bankruptcy estate and therefore will be utilized for paying off debts.

After the bankruptcy court has determined which property is exempt from bankruptcy, the divorce court can dole out the property between the divorcing couple equally. The non exempt property will be sold by bankruptcy trustees (representatives) to pay off the money that you owe.

A different way to steer clear of financial loss on account of your former spouse's debt is to attach a property of your spouse as a security lien. This lien will permit you to take hold of the property and utilize it to pay off your spouse's loan if he or she is thinking of ditching and letting you pay. The property with a lien may get you less than the market price, but this is still a good way to protect yourself.

And in conclusion, you have the ability to work an indemnity clause into your divorce decree. This will help guard you from creditors who are coming after you to pay for your ex spouse's debts after the divorce. If your husband or wife files for bankruptcy, don't worry. The judge will enforce it to protect you and your finances.

Even though it's an oldie, apparently it's still a goodie. Enjoying a recent boost in popularity, the fake debt collector scam still fools unknowing victims.

First, you will get a phone call from a number that will not be recognizable. Sometimes, it will seem legitimate, but ultimately, not familiar. When you get the call, the person calling will let you know that they are a debt collector with so and so debt collection agency, and that this is an attempt to collect debt. At times, the phonies have been known to claim that they are working in addition to a local lawyer to get your delinquent account settled. The conman will tell you that you have accumulated a large amount of debt from a previous account. Typically, the crooks will tell you that you potentially owe them thousands, but if you are willing to settle, they will "settle: for, oh say, five hundred dollars. And could you wire the money via Western Union?

An interesting hint of ingenuity on the part of the scam artists is that many times these calls will arrive on a late Friday evening, or afternoon. When they call at these times, any government offices that you might report this to will be closed.

On numerous occasions the phony debt collectors will be calling from outside of the United States. An example of this was a recent scam involving a call center in India. Using services in order to mask their number, call centers located outside of the country may even choose a number from an area code nearby to where you live.

If you have gotten a call from a bill collector that you feel might be a scheme, it is important to be vigilant. Ask your debt collector for a written statement of your debt. If they won't provide you with written proof, don't fork out any money to this suspicious agency. If you feel as though you may have been victimized by a phony bill collector scam, it is necessary to file a report with the Attorney General's office in your state. It is important to collect as much information as you can to provide more details in your complaint.

There is no denying that text messaging is becoming a major medium for exchanging data. Fast, painless, no speaking on the phone. No wonder that according to the latest statistics that are available there were almost 750 billion text messages sent in the U.S. in 2009, nearly double the number from one year before. Actually, technology and research firm executive Jacob D. Almeida recently predicted that money transfers will be the number one mobile application by 2012.

Debt collectors have stayed out of this field for now; The Fair Debt Collection Practices Act was a landmark legislation that went into effect in the late 1970s and has strictly outlined how debt collectors can call and when. Seeing as this act is even older than a stereotypical "Saved by the Bell Cell phone" from the 90s, it might be due time to adjust the law. But analysts are saying that any change in this area would have to come from consumers seeking change, not collectors.

Under the FDCPA, communications with consumers need a notice that the message is in fact from a debt collector, which leads to issues with the 160 character maximum length of money transferring texts. Another problem is figuring out who will pay the message. There is no current way for a collection firm to know if a consumer has a plan that includes unlimited text messages; the kicker being that if a contact is paid for by the debtor, it is illegal.

Another potential problem for debt collection agencies is determining the ownership of the device itself. The debtor might be utilizing a company owned wireless device for example. Said company might be monitoring the usage of the device, leading to third party disclosure issues if there were communications based in text regarding a debt.

Sadly, Congress has to vote on health care, the budget, cap and trade and many other issues first before it can get down and tackle this text message issue. So time will tell.

 And you thought your collection agency was bad. It has been revealed in recent news that an Irish gangland boss has found a new calling- debt collection. This criminal prodigy has been associated with twelve deaths; a threat even more looming than a collections letter.

Most of the time, legit creditors who aren't gang members will hire out third party collection agencies to retrieve debts. Bill collectors work on commission, where they receive a percentage of the amount of money that they collect. Oftentimes collection agencies will purchase debt from the creditors so that they can collect the entire sum of money owed.

The Irish gang members seemed to have gotten inspiration from this practice, but the similarities end there. The boss of the disreputable Irish gang has created his own collection agency, purchasing debt and using his notoriety to bully his way into gathering the money owed. The unlucky debtors are drug users who are unable to repay dealers.

Reputable collection agencies will usually start with a gentle "reminder letter." If the debtor is antagonistic or evasive, the letters will become more serious. Telephone calls will be used as well as a reminder to those who owe money to pay up. If these ploys fail, the company has the right to report a debt to credit bureaus, or file a lawsuit.

On the other hand, the Irish gangland bill collection agency will utilize its reputation as a group of ruthless murderers and crooks to intimidate debtors into paying back drug money. Thankfully, the head of this operation has been arrested, and the Justice Minister of Ireland has promised to do everything in his power to guarantee that the accused will be brought to justice.

So next time you get a telephone call from a bill collection company, try to keep things in perspective. And if you are ever in Ireland, it is probably not a good idea to take out a loan with a heartless gang.