Monday, October 25, 2010

My debt settlement company is not answering their phone! This will not be a very surprising statement after October 27th when the new Federal Trade Commission rules on how debt settlement companies may market their services as well as how they may charge their fees becomes law. Harvey Warren, author of Drop Debt: Surviving Credit Card Hell without Bankruptcy states that this will be "a game changer for the debt settlement industry and many companies have already closed shop. Some of the bigger operators are going to try to survive, but most experts agree that debt settlement companies will likely meet the same fate as the loan modification providers that have all vanished under the weight of tough regulations.

If you are lucky, or smart, the debt settlement company you chose is not in control of your money in a settlement account. If they do have your money, and you can't get them on the phone, you need to make a call to the Attorney General's office in your state immediately. If you have been saving money to make a settlement with your creditors in your own account, all is not lost. If you have one or two creditors you are working with, you should simply call them and ask them what they can do to help you. Be warned. The collector may get very aggressive with you. That's okay. That's their job. Your job is to make sure the collector knows your financial facts. What they want is not important: what you can afford is.

If you have more than a couple of accounts, having a conversation with multiple collectors can become very challenging. All of you creditors will likely demand more than you can afford and they are almost certainly going to demand it all at once. I recommend you call a bankruptcy attorney and ask for a free consultation. Most bankruptcy attorneys will give you a free 30-miunute review of your situation. Caution: bankruptcy attorneys usually recommend that debtors should file bankruptcy. I have never met a single person who wanted to file for bankruptcy. Most bankruptcy attorneys will confirm that. It is important that you be clear with counsel about what you want to do. Bankruptcy attorneys can also negotiate settlements for you, especially if you have some money set aside to make a realistic offer to your lender. Just because they recommend filing, does not mean you should or have to do that.

Or, you can do it yourself. If you are in debt settlement program no doubt you already have a taste of the collection process. You have probably had some pretty disturbing discussions with collectors on the phone. The reason people hire debt settlement companies in the first place is because the collector process is so difficult. It doesn't have to be that way. The Association of Credit and Collection Professionals, International, the trade association for the vast majority of debt collectors has established a website www.askdoctordebt.com that contains valuable information on consumer rights and tips on how to talk to collectors without losing your mind. Learning the language of the collection process and your rights, either from Ask Doctor Debt or from a number of good books on the subject, is the first step to putting this crisis behind you.

Harvey Z. Warren, author of Drop Debt, Surviving Credit Card Without Bankruptcy, has worked with debt settlement companies, credit counseling agencies, banking officials and the collection industry to innovate a win-win approach to helping consumers drowning in debt. Warren, who contributes to Ask Doctor Debt suggests, "You and the collection agent have the same goal – to avoid bankruptcy. When you begin the discussion with that common goal in mind it changes how things go. If you begin the discussion believing the collector is going to abuse you and you're thinking you're going to evade him – prepare yourself for a bumpy ride. The high road of stating the facts and being responsive will usually get the problem solved."

Complaints about debt settlement companies that are not responsive should also be made online at

www.ftc.gov.

For media interviews with Harvey Warren contact Promotion in Motion at 323-461-3921 or

brad@promotioninmotion.net