How hard should you have to work to pay your bills? No, not to make enough money to pay your bills, but to actually give your money to someone else? Reader Matt has been trying to convince Capital One to take his money for several months now. They’re not taking his money, or his calls, but they are willing to send him to collections! Check out his story, inside.
debt
Woman eBays $103,254.11 In Debt
By 4.26.08
This lady is trying to eBay her family’s $103,245.11 in debt. It comes with her house and car (loving family not included). I guess it could be useful if you’re trying to decrease your tax liability, or you just want to feel part of the credit crunch crisis. Maybe you could work out a Prince and the Pauper thing.
By 4.25.08
../../../..//2008/04/25/american-express-profits-fell-6/
American Express’ profits fell 6% as more Americans defaulted on their credit card debts. [NYT]
U.S. Debt Collecting Being Outsourced To India
By 4.24.08
The New York Times looks at the blossoming foreign market for debt collection services, and describes a call center in India where the employees are reminded to bring up the 2008 stimulus checks when they call U.S. households, and where everyone claps three times when the first “deal” of the day is made (“”Rajesh, for $35 a month for three months,” the supervisor yells across the center.)
Sallie Mae Stops Student Loan Consolidation, Will No Longer Pay Origination Fees On Stafford Loans
By 4.15.08
Consolidation loans are no longer profitable for Sallie Mae, so it’s saying goodbye to them. SmartMoney points out that ultimately this shouldn’t matter for students taking out new loans, since the original point of consolidation—converting lots of variable rate loans into a nice predictable fixed rate loan—is no longer relevant (all federal student loans are now disbursed with fixed interest rates.) SmartMoney says if you still have variable rate loans you need/want to consolidate, check out the government’s consolidation offering—”You’re likely to pay the same consolidation rates you’d pay if you did so with Sallie Mae,” they write.
You Have $2.54 Trillion In Consumer Debt
By 4.7.08
The amount of new consumer debt is increasing more slowly than in previous months, growing only $5.2 billion in February, says Bloomberg. It sounds like a lot of money, but it’s a much slower rate of growth than the $10.3 billion increase in consumer credit seen in January.
Exclusive: AOL's Collections Guide Encourages Agents To Lie And Deceive
By 4.5.08
An anonymous tipster sent us AOL’s 153 page internal collections guidebook for prying money out of delinquent account holders. The guide shows that AOL is following some of the debt industry’s most egregious collection tactics by encouraging agents to deceive and lie to customers. After the jump we present AOL’s scare tactics, tricks to negotiating a substantial discount, and the full collections guide.
By 4.4.08
../../../..//2008/04/04/more-debtors-are-behind-their/
More debtors are behind their loans than at any time since 1992. [American Banker’s Association]
GMAC And Car Dealership Scam Old Lady For Nearly $8,000
By 4.2.08
A volunteer in Chicago claims that her client, a 65-year-old woman with dementia, was given a GMAC auto loan for a new 2007 Pontiac, even though she only makes $900 a month and has no driver’s license. Now the car has been repossessed and the car lot is saying she owes them nearly $8,000.
At What Point Is A Recession Really Just A Depression?
By 4.1.08
Vigeland: What are the traditional definitions of a recession first and also a depression? How are they different?
Confessions Of A Debt Settlement Company Worker
By 3.31.08
After spending a year (one of the worst of my life) working at a debt settlement company, I feel that I am obligated to warn as many consumers as possible about how badly you can ruin your financial situation by using one of these companies. My new job is at an all natural bakery, I no longer wish to swerve my truck into a tree on the way to work. Debt settlement is the process of eliminating your debt by ceasing payment to the creditor, and then negotiating with the card companies or collection agency to pay less than the balance owed. The debt settlement company charges a rather hefty fee for this service; however, the consumer should be saving money on the deal because they are paying significantly reduced balances to clear their debt. This is how it is supposed to work. This is not how it usually works.
38.6% Of Reported Debt Collectors Demand More Money Than Is Legal
By 3.28.08
Debtors have rights, and sometimes they get violated. The FTC released its annual Fair Debt Collection Practices Act report, part of which documents the number of complaints they get about debt collectors violating consumers rates. FTC received 70,951 DCPA violation complaints in 2007. Of them:
Should I Get A Debt-Consolidation Loan?
By 3.26.08
Consumer advocate radio show host Clark Howards thinks most people are kidding themselves when they spring for a debt-consolidation loan:
It’s been my experience that when people do a debt-consolidation loan, all they really end up doing is rearranging the deck chairs on the Titanic. With one transaction, their credit card bills suddenly stop, and those people then say, “Oh, how nice, it’s all so tidy now, I now just have everything on one convenient bill.”
Most Americans Say They Will Not Spend Their Stimulus Checks
By 3.24.08
Jared Bernstein, an Economic Policy Institute senior economist, notes that taxpayers have in the past spent half to two-thirds of their rebate checks. However, he points out that the current economic conditions are unique.
Buffalo, Where The Debt Collectors Do Roam
By 3.23.08
Who would’ve guessed that credit card debt and the subprime meltdown would be the saving grace for one of New York’s decaying cities? Buffalo now hosts over 100 collection agencies that employ 5,200 people who spend their days prodding delinquent consumers to pay their bills. The cottage industry relies on the “strong work ethic [and] even-handed temperament” of Western New Yorkers, who once powered long-departed industrial giants like Kodak and General Electric.
Getting Back On Your Feet When You Have Lots Of Bad Student Loan Debt
By 3.21.08
Reader Jennifer sent the following letter to a few lawyers looking for some help with SallieMae. They told her that there was nothing she could do and to negotiate with the lender and to start making payments:
Debt Collectors Don Sheep's Clothing
By 3.14.08
“[Debt] Collectors actually care about consumers… They want to teach consumers how to get out of debt. They’re trying to put themselves out of business.” – Rozanne Andersen, general counsel of ACA International (formerly the American Collectors Association) as quoted in this morning’s NYT article, “Debt Collectors Try to Put on a Friendlier Face.” As times get tougher and the options for borrowing from Peter to pay Paul shrink, more accounts are becoming delinquent. This means booming business for debt collectors, but increased activity could bring scrutiny from politicians and regulators, as well as consumer backlash. So, infamous for harassing debtors with abusive and threatening language and incessant calls (all violations of Federal regulations), the industry is trying a new tactic: playing Mr. Nice Guy. They’re conducting personal finance management courses, writing columns about how Abraham Lincoln couldn’t pay his debts, and opened a full-time lobbying office in Washington DC this month.
How To Go 30 Years Without A Credit Card
By 3.7.08
I recently reached what I bet is a rare milestone: I have now gone 30 years, basically my entire working life so far, without a credit card.
