Any person that uses credit cards, owe money on a personal loan, or pays a home mortgage is a "debtor." Taking loans and making payments has become a standard practice among homebuyers, people looking to purchase a car, or attending college or university. When a person falls behind in repaying his or her creditors or has an error in their accounts, they may be contacted by a "debt collector." When this happens, generally most people tend to become very distraught and undergo a lot of anxiety and anguish. To alleviate this kind of anxiety, it is very helpful, empowering, and educational to know what your rights under the Fair Debt Collection Practices Act, which requires that debt collectors treat you fairly and prohibits certain methods of debt collection.
Under the Fair Debt Collection Practices Act, debts that are covered include personal, family, and household debts. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts. Debt collectors are people that regularly collect debts owed by other people and they can include attorneys. Debt collectors frequently contacted people in person, or via telephone, fax, or mail. Under the Act, a debt collector can only contact you between regular hours from 8am-9pm. Any other times are strictly prohibited unless the person gives permission to the debt collector to contact them. Also debt collectors cannot contact you at work unless you give them permission. Debt collectors can be prevented from contacting people if the person in reference, writes a letter requesting that the collector stop contacting them. Once the collector receives the letter, they may not contact the person again except to say there will be no further contact or to notify the person that the debt collector or the creditor intends to take some specific action. Writing a letter of course, does not eliminate the debt. It only eliminates any harassment incurred from creditors or debt collectors. A debt collector can also contact the attorney of the person involved and also investigate the person's background further, to obtain information such as the telephone number, the residence, and place of employment of the person concerned. Debt collectors are allowed to contact such third parties one time and are prohibited from further intrusions upon the said person's privacy.
Within five days after the person is first contacted regarding their debt, the collector must send the person a written notice telling them specifically how much money they owe, the name of the creditor to whom they owe this money; as well as what action to take if the person does not believe that they owe this money. A debt collector is also by law, not able to contact the person again, if within thirty days of receiving the written notice, the person writes a letter stating that they do not owe the money. A debt collector can renew collection activities if they are sent proof of the debt, such as a copy of a bill for the amount owed.
Debt consolidation is when you take a bunch of loans and credit card balances and combine them into a single lower interest/longer term loan. In fact it is possible to get a lower interest rate, making it easier to pay off the debt faster, and more flexible terms, which again could help make it easier to pay off faster.
Debt consolidation loans for homeowners though are offered at lower interest rate. It helps the debtor since unsecured loans, like credit card balances, come at a high interest rate, whereas a secured loan, like a loan on a home or property, comes at a substantially lower rate.
Even if you qualify for a loan, bad marks on your credit can change the interest rate a company is willing to offer you. It is very easy to get misled, especially if you have a bad credit record.
Reducing Your Debt
Just like you can't build a house with only a hammer, debt consolidation must be used with sound financial management practices. As the name refers, debt management is a process that helps debtors to manage their debts. One of the most effective techniques of debt management is debt consolidation.
The average American has about $8,000 in credit card debt--and most of us would like to reduce it. You've probably heard that debt consolidation can help you get control of your money and reduce your overall debt. Debt consolidation is becoming an increasingly popular debt management tool used to help people get a handle on their debts.
Debt consolidation is a good way to get out of debt if you can substantially reduce your interest rate and stay away from overspending. Low cost debt consolidation loans can minimize not only the cost on the previous loans but also reduce the size of your monthly repayment.
Debt Counseling
Many credit counseling companies have come up with debt consolidation programs to help people like you and me who are in over our heads with debt find a way out. There are so many options that you can take to sort out your debts that it may seem overwhelming and a debt consolidation credit counseling service can help you to decide which is the best route for you to take. There are literally hundreds of debt consolidation credit counseling agencies and it is important to choose the best one for you.
This counseling helps you keep your finances on track so you don't end up in the same financial trouble ever again. They offer you continued counseling services to help you understand why you got into financial trouble in the first place, and to ensure that you don't fall into the same trap ever again.
Debt Reduction Services
If you find yourself constantly making late payments on your credit cards and fear sinking into a cycle of only paying the minimum on your balance each month, it may be time to start looking at debt reduction services. If you're like many of today's consumers and even close to being in over your head with to much outstanding debt then chances are good that you've probably heard of or have been approached by a debt reduction service.
Your creditors already work with several debt reduction services on a regular basis, so they are a great place to find a recommendation for a debt reduction service. Non-Profit debt reduction companies are not looking for your money, so they will be honest in their opinion of your situation.
Debt Relief Now
If you lie awake at night worried about your amount of debt, it is probably time to get some help. Your debt needs to be brought under control, along with your spending habits (more than likely).
It is better to get help now, before it gets any worse. Ask around for a reputable debt counselor or debt management service today.
Both Graeme Notega & Carol Stack are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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