Debt Crisis Management

Essential Elements of A Collection Lawsuit in Florida

Short Selling an Underwater Property

Florida bankers move to dramatically speed up the foreclosure process - St. Petersburg Times

If bankers get their way, Floridians facing foreclosure could be kicked out of their homes in as little as three months.

Gotta admit, we saw this one coming. Bankers, frustrated that the Florida court system is completely gridlocked with mortgage foreclosures are attempting to move the legislature to adopt a nonjudicial foreclosure procedure. While I do not think that moving to a nonjudicial process is likely, it is important to know that this is happening in the background and if we see any movement, we may want to talk to our congressmen.

I cannot imagine a scenario where it is better for the consumer when the mortgage holder can foreclose on a property so quickly. Often, when we defend someone in foreclosure, we are trying to get our client over a financial hurdle, be it a job loss, medical issue or divorce. Once the bump in the road is over, our clients can often fix the problem and keep their home. A nonjudicial process eliminates the consumers ability to overcome a brief financial hurdle and simply lose their home.

New Credit Card law already backfiring on consumers

What will happen to the millions of financially strapped consumers and small business owners who've become dependent on credit cards in times of crisis?

via finance.yahoo.com

The new Credit Card Act goes into effect on February 22, 2010. This law was designed to protect consumers from the ravages of the credit card industry, however, the credit card industry simply reacted before the bill went into effect and lowered credit limits, instituted new fees and canceled some accounts. How much the industry will be effected is unknown. However, as Laura Rowley points out, many consumers who now need the access to credit cards can't get it. We are in difficult economic times and credit cards were one method people used to stay afloat while their business sagged or they were unemployed. It is unfortunate that needed reforms came at this difficult time and were not more well thought out.

Financial woes overtake ex-Lion Elliss | detnews.com | The Detroit News

Elliss, 36, who was paid almost $11.6 million from 2000-04, is relying on area churches and friends to pay bills, his savings depleted. He lost one home in Utah to foreclosure and the married father of 11 plans on walking away from his Oakland Township home due to lack of income and high mortgage payments.

via www.detnews.com

Just a reminder that greater income will not necessarily lead to to a better life.  Ellis, a former pro football player, lived a lavish lifestyle for a short period and did nothing "wrong".  No drugs, alcohol, affairs that we know of.  He simply made bad investment decisions and now it is all gone.  This can happen to any of us at any time.  Live for today.  Focus on what is important to you.  Live on less than you earn.  Save a few bucks for a rainy day.  Keep it simple.

What happens after a debt is charged off and is given to a lawyer to collect

As a housekeeping matter, "charged off" is typically a term used in the collection of credit cards.  Credit card companies may only charge "over the limit" and :late fees" for 180 days after the last payment of the card holder.  On the date of "charge off" over the limit fees and late fees stop accruing, although interest still continues to accrue.  The interest will not stop until a debt is settled or paid, but may vary depending on the status of the debt, whether it is the contract amount or a state set rate, for example.

I Sat Down With Channel 10 in Tampa to Discuss Debt Settlement Companies

Debt Settlement Companies Are Very Rarely a Good Choice

I recently had the opportunity to help Channel 10 in Tampa in their assessment of Debt Settlement Companies.  I was not very positive regarding those companies:

""When you're in that situation, you'll believe just about anything anyone tells you," said Tampa-based lawyer Patrick Vincent, who says he has been recruited by companies looking to make a quick buck in Florida. "Debt-settlement companies (are trying) to get $7,000 to $9,000 per customer. And that's a lot of money. And that could pay off a lot of debt."

"Ten years ago, there were day traders. Five years ago, there were mortgage brokers. Day traders became mortgage brokers. Mortgage brokers are now becoming debt-settlement guys. It's a progression of where the money is," said Vincent of opportunistic businessmen.

He also said most people in debt - and there are a lot - can do the work themselves that companies are advertising.

"Your best bet is to get on the phone and call these folks," he said of creditors. "Ask them, 'Is there anything we can do TODAY to make sure I can pay back in the long-term?'"

Vincent says many credit card companies will negotiate to eliminate some - or all - of the late payments and interest owed on an account if you make arrangements to pay back the principal. And if negotiating with the company doesn't work, he suggests contacting a real non-profit credit counseling service.

He also suggests calling the Attorney General or Florida Bar for tips on how to find a trusted debt-settlement defense attorney."

Ignore FreeScore.com

On the heels of the investigation of freecreditreport.com has been the launch of freescore.com, another site claiming to give consumers access to their credit report and score for "free".  Turns out, this site is not fee, either.  There is an upfront nominal fee and a monthly fee if you do not cancel within the 7 day trial period.

If you need a copy of your credit report, go to annualcreditreport.com.  This is the government run site that is actually free.  Look at each of the three major bureaus credit report once a year.  If you are not experiencing an identity theft stuation, this should be enough.  You can also purchase your FICO score at that time.

For some reason, consumers have become obsessed with their credit report.  Credit report repair companies that charge exhorbitant fees are thriving.  We need to educate ourselves on our credit reportss uses and understand if something on it adversely affects us and why.  I was watching CNBC the other day, and a woman called in who owed double her salary in credit card debt.  The hosts began a discussion on how to pay down the debt to protect her credit score.  They completely glossed over the fact that the woman could not afford to buy food because her credit card minimum payments were so high.

Focus on paying your bills on time and living within your means.  Everything else seems to sort itself.

Credit Cards Are Getting Cancelled With Little or No Notice

"It is unclear how many consumers have been hit by instant card cancellation, but cardholders at AmEx, Bank of America Corp., Citigroup Inc. J.P. Morgan Chase & Co. and HSBC Holdings PLC also say they have recently had their active cards canceled before they received notice."  This from the Wall Street Journal.

This is the beginning of the shakeout regarding the new Credit Card Legislation coming soon.  Credit card companies are clearing their books in anticipation of the new law.  Consumers are attempting to use their card and finding out it was cancelled.  While notice to the consumer is required, notices are often missed or ignored in the sea of junk mail.  There is little consumers can do to fight back and they must be aware this can happen.