Maxed out credit Cards? Read this before calling Credit Associates, National Debt Relief and others first!

READ ALL OF THIS !!!!!!!

 

A blog for you to read with a solution FINALLY that i found for those of you smart enough to read this.

 

** let me start by of course pointing the standard disclaimer that these blogs are my opinion and my opinion only. I ALWAYS point out tell me your situation and I will tell you what I would do if I was in your specific situation given the knowledge I have accumulated over the last 14 years in the credit and finance industry.

 

Earlier in the year I saw a credit associates commercial one too many times and snapped. Being in the credit industry for almost a decade and a half it drove me nuts that they lie with literally the first sentence.

I called them twice acting like a possible customer to see what they tell people calling them for help and do they lie as much on the phone as they do in their commercials. As for all the details you can look back into my archive blogs in 2018.

I was bombarded with email responses….

Many were people who saw an ad about either the two companies above or many similar ones and read what my seasoned opinion was as PERSONALLY I do not care if you hired them or not I was pointing out what I did not like them doing as certain things they were saying were manipulating them and taking advantage of people who were in a tough spot for a variety of reasons and their whole point was there to help them not trick them into hiring them WITHOUT giving them the full story or what will happen OR not fully painting the exact picture of what they are doing.

PLUS I found out that most of these companies charge 20% of their services so if they get you a 50% discount its really 70% you’re paying which is only a 30% and you could do that yourself.

So there were basically 4 groups people were in that emailed or called me looking for help or calling for nonpartisan advice on their SPECIFIC situation.

NOTE: I have classified everyone into 4 groups that everyone should fit into to help you put together what I need to best direct you below and at the end of this blog.

 

Group 1:

ALL or most credit cards are maxed out, they are only able to pay the minimum and the statements show it will take 15-30+ years to pay off. The credit score is still above 660 + so it’s only the debt that is killing them and their credit score and they do not need credit repair

Some make very good income, others make good income.

 

Group 2:

Most or all credit cards are maxed out, the monthly bills coming up they are not able to pay them or pay a part of them or all of them (or very soon). The credit score is still above 660 + so it’s only the debt that is killing them and their credit score and do not need credit repair.

Some make good income or very good income.

 

Group 3:

Payments are at least over 30 days since paid, credit score has taken a major hit and unable to see any daylight to get out of this.

Income can be good but just too much month and the end of the money with all that credit card interest being paid. If late payments are the start of their problem then paying someone for credit repair is a waste of money.

 

Group 4:

Have not paid any of the credit cards from 4 months plus, Credit score is destroyed and just not sure what to do and exploring if debt settlement can help them. They definitely need credit repair but they also have several other immediate issues that need to be addressed that they are unaware of.

Income varies.

 

*** the one thing all groups have in common was they were smart enough to be hesitant when talking to these types of companies and realizing that they are making it seem like all their problems will go away once they are hired.

 

As with most people, If they could just get all of these bills consolidated into one payment and not get killed with the monthly interest they could get back on track (group 4 is excluded from this part).

 

The first thought by all groups is to get a debt consolidation loan. The problem is they are going to get declined. This was recently mentioned to me last week. The gentleman who I did find an avenue for ( will share in next blog “Debt Consolidation Loans” has a 740 credit score. He Is 95% maxed out on most if not all credit cards (I can’t remember exactly) and the bank told him no.

The reason: His credit cards are too maxed out…..

 

WTH????

 

Isn’t that the darn (not word I wanted to use) point? To consolidate all the credit card debt into one loan.

It’s the typical B.S that we all know about the banks and the banking system, they want to lend money to the people who don’t need it and not the ones who need it and could make the most use of it.

 

Thus began my research into this oh so fun world to help those reading this find a path that’s best for them and not the sales persons company that they are talking to.

Below is a mini chart to help you classify possible options based on the way I grouped people and their situations.

My email is listed below so when you email me please include the answers to the questions needed to best direct you.

I do this because just like a thumb print every credit report is different and thus there is no clear cut if this is the problem then this is the solution as a full financial snapshot is needed to properly give you solid advice that can become a game plan/way out for your situation.

Group 1 info needed:

  • A breakdown of how many credit cards you have, total amount owed and minimum payment and the monthly finance charge.
  • Yearly income ( if 1099 then what is claimed to government)

 

Group 2 info needed:

  • A breakdown of how many credit cards you have, total amount owed and minimum payment and the monthly finance charge.
  • Yearly income ( if 1099 then what is claimed to government)
  • Do you own a home, if so what is owed and value.

 

  • As you can see group # 1 & 2 are similar just like groups 3 & 4 are very similar but there are differences based on other aspects of financial snapshot.

 

Group 3 info needed:

  • A breakdown of how many credit cards you have, total amount owed and minimum payment and the monthly finance charge.
  • Do you have any money saved in order to pay these if you had to (we know you do not want to but we have to ask).

 

Group 4 info needed:

  • What is total amount you owe and how many credit cards are there.
  • When was the last time you paid on them?
  • Have you been sued on any of them? (Listed on credit report as a judgment under public records).
  • If you had to do you have any money saved to pay/settle them IF you had to.

 

 

If you are in groups 1 or 2 I will be discussing what I will be posting about debt consolidation loans and the problems as to why the banks will not give you that loan so you will be able to get ahead start to see a light at the end of the tunnel.

The reason… I finally found a solution to benefit you

(And man it was not easy..)

 

 

* Want to learn more about how the credit system works?

   Have questions about your credit where you may need my help?

Or

  Buy my book for easy to understand concepts of how the credit system works and how lenders look at you.

 

Wayne @ wayne the credit guy.com    (REMOVE ALL THE SPACES)

 

 

Debt Settlement VS Bankruptcy

When I started including my thoughts on debt settlement and writing some blogs about them I was amazed at the response and the views so thank you to everyone reading them.

Many times I was able to point them in the direction they needed for their benefit not some companies benefit. So far I have estimated that 2% of the people calling me or contacting me after reading them were clients for me that I could in good conscience help and save A LOT of money (ranging from 17k-80k).

Some just needed the right direction but I had someone that wanted to know why not just file bankruptcy and wipe it all clean.

Which leads me to this blog Debt Settlement vs Bankruptcy

If you have seen, heard or look at advertisements/commercials paid for by of course lawyers who want you to pay them to file bankruptcy they paint the prettiest of pictures to make all your problems go away in a snap.

Since most people reading these blogs are not qualified candidates for me then I believe I can give a real non bias opinion and lay out the pros and cons for each and give you the tools to make an educated decision.

So let’s start with the Pro’s BUT first let’s break it down as there are 2 MAIN types of bankruptcy. Back in the old days (prior to October 2008) you could file bankruptcy in the blink of an eye, but now you need to QUALIFY for it. So it makes sense to understand the two.

  1. Bankruptcy Chapter 13

Chapter 13 allows those with enough income to repay all or part of their debts an alternative to liquidation. It’s bankruptcy for those whose biggest problem is dealing with creditors’ demands for immediate payment, not lack of income.

An example of this is if the bank is getting ready to take your car or home, filing bankruptcy chapter 13 can actually be done on your own and it staves off the wolves so to speak, at least for a month which buys you some time for other options.

An over simplified way to understand this is think of the courts cutting your bills in half and then a structured payment plan is paid out to the court from anywhere from 1-5 years.

  1. Bankruptcy Chapter 7                                                                                                                                                          Is the most popular one for a variety of reasons, it allows you to walk away free and clear of any debt submitted to the courts with the exception of money owed to the government and student loans.

However now after the new laws kicked in after October 2008 you have to be “assessed” to see if you qualify for chapter 7 bankruptcy as you can no longer “just go file”. There was a means test created that you can google to read more so check that out if you are so inclined.

 

Bankruptcy chapter 7 stays on a credit report for 10 years, many future lenders look at this public record filing with different eyes. I recently had a client who filed Chapter 7 9 years ago and had a credit score now in the 700’s and he was denied for a credit card and the bankruptcy was the reason why. Now is that like that with all credit cards…. No. But it gives you an idea how future lenders look at bankruptcy and its given a more serious look as opposed to bankruptcy attorneys make it seem to be the ultimate tool to be free and clear.

PLUS from a credit standpoint what you need to understand that a bankruptcy is literally the worse mark you can have on a credit report. Plus from a mortgage lender position to buy ( or refinance ) if you have any more credit “hiccups” such as a collection or late payment lenders do not typically want to deal with you as they see this as  a continuous problem.

 

Now Debt Settlement

Debt Settlement can be considered an unofficial version of Bankruptcy chapter 13 without the public record on your credit report.

It’s basically a renegotiation of the original contract but without the bankruptcy stigma attached to it.

The quality of the debt settlement depends on the company involved. Many of the ones out there wait for the credit card companies to contact them and they take the 1st offer that is given to them which is usually about 30% of what the balance was.

I just found out that company I have never heard of (which means nothing as there are thousands out there) was charging the people I am currently guiding 20% of the debt owed! Wow!!

And they operate like I have typically heard with others, they come up with a number that you pay into an account of sorts and when the pot gets large enough they say they go after accounts for you for settlement but as I mentioned they just look at the letters and see who offered what and then say “hey we got one taken care of for you and save you …..”!

In this companies specific case if they saved them 30% of the balance but they charge 20% for their fees, so they saved you 10%?????????

 

Typically the “bigger the company” which they like to brag about to you the worse you are treated or once the agreement is solved the phone calls do not get returned like before you signed up with them as they have moved onto the next person/revenue/paycheck.

I don’t want to go into more stories but I typically help get an average of 60-70% of a discount and the absolute worst I have ever helped people with was 50% discount.

But that will be the difference between uneducated people who are basically just looking to get as many people into their program and take the deal offered to them as opposed to someone who teats your money as if its theirs and fights for every dollar as there is a BIG difference between a company’s profits and a family.

 

Feel free to contact me at wayne @ waynethecreditguy .com

(remove all the spaces, I just did that to avoid getting spammed)

 

If you have any questions and PLEASE be as detailed as possible with your situation, such as what your current credit score is, are you on-time with payments or late and if late how late and amount owed

 

Wayne Sanford is a credit and finance expert with over 13 years’ experience in the industry. He has reviewed over 16,000 credit reports and appeared on local and national TV on CBS and is a contributor to many online publications as well as being an Continuing educational provider for the Texas Real Estate Commission.

 

NOTE: 

I just felt the need to point this out but if i believe that after a conversation with someone after being told their complete situation and i feel that filing bankruptcy is the best option for them then i will suggest that and then discuss  all the pros and cons that come along with that choice.

And i have done that, but of course while i have to make the standard disclaimer that everything i discuss with people cannot be construed as financial or legal advice i will put myself in their situation and then let them know what i would do if in that position and give them the information and then they can make their own choices based on that data.

 

****  UPDATE:

When I was getting ready to post this blog this morning a perfect example just got emailed to me. A lady was told by a bankruptcy attorney she can’t file Bankruptcy 7 because her husband (the household) makes too much money.

Per his advice which baffles me greatly as the attorney should have asked these questions at the start since it’s not rocket science and now he is not taking/returning her calls. But now gave her advice that puts her in an even worse position now so will be talking to her later today to give her all her current options for her to decide what they think is best for their family.

I have said this for YEARS…. Just because your first name is “DR.” or last name is “ESQ.” does not mean they know EVERYTHING! It truly drives me nuts.

I learned a long time ago to doubt everyone and get several opinions, make sure I understand them and then see what is best for me and I use that to help people like you reading this and I hope it does.   =)

Credit Associates Flat out lies in commercials a MUST READ

I had originally posted this in December 2017 and then my awesome computer skills somehow deleted it so i am re-posting it, read as see for yourself!

 

As we get older we seem to fall into certain patterns or habits, so for me every morning I wake up and as I get ready for work I have the morning news on. This somehow happened to me a few years ago, I think it’s automatic the moment you cross over the age of 40.

One of the consistent annoying commercials is one from the debt settlement company called “Credit Associates”. I always get amazed at how TV networks don’t get sued for airing what is flat out lie to the public.

They start almost from the beginning by saying “there is a secret the credit card companies don’t want you to know, if you have more than $5,000 worth of debt you have the right to settle that debt for a fraction of what you owe”.

NOTE/LIE # 1: there IS NO secret…..

NEWSFLASH for consumers reading this ANY book, commercial or Ad if you even see or hear the sales person saying they have a secret that banks don’t want you to know it is such a lie it’s crazy. Example, how can it be a secret if they are advertising to tell you?

It’s a gimmick trick to get you to call so they have a chance of selling you so don’t be a sucker.

Back to my point….

There is no law that says any debt over $5,000 gives you the right to settle on the debt based on what they say in their commercials.

$5,000.00 is probably their bottom line that they can charge before they can make any decent sort of profit that is worth their time and expense on the consumer while dragging out the process.

While I have no clue how they get away with lying like this what I can say is I actually got a solicitation call from them so I jumped up for joy and pressed “1” to talk to a representative.

My representative was named “John” he did not sound like anyone I know named John. I will point out and I said I was interested but I was super curious as is my nature and wanted to know what was “the secret” or law that allowed me to save thousands like their commercial said since I was never aware of or heard about.

Wouldn’t you know it but John didn’t seem to know what I was talking about and went into his script.

I kept interrupting him to say I want to know first what this law is first before seeing what his company can “do to help me”. He kept trying to read through the script and I said “ hey if this information is above your paygrade then that’s no big deal so put me on hold or transfer me to a supervisor so I can get the answer and then back to you to move forward”.

I was giving him EVERY option available to get me the answer (if there was one) and he would not or should I can could not answer the question. I then started saying “listen your company advertises this so why are you not prepared to answer this question which is in the first 10 seconds of your companies commercial or at least be able to transfer me to someone who can at least tell me the answer”?

As I had some time at the moment and justified however long I dragged this out for utilizing the time for this blog I must have been on the phone for at least 15-20 minutes.

Towards the end of him trying to push past my question and finishing his script and I said to “John” that if your incapable or unwilling to answer the simplest question on the 1st sentence of your companies commercial it’s obvious this company is a scam company so answer the question the next time you speak or I am hanging up the phone.

Shocking result of what happen next? I hung up the phone.

What most of these companies do is basically take advantage of your unwillingness to talk to your creditors. The collectors can be jerks and some are nice. Once a bill has gone past the 120 day mark creditors are open to ‘re-discuss” the original terms of the agreement. Now of course to get to that mark your credit score is destroyed and you may be a candidate for credit repair but maybe not as your credit report is file specific. Think of the term different strokes for different folks.

Without any knowledge whatsoever you should be able to get them to give you a minimum of 20-30% discount off of the current debt owed. An experienced person in this industry can go much lower, I have gotten an average when helping clients with this issue anywhere from a 70-90% savings.

Quick story to end this blog, had a client ask me to look at what their in-laws got themselves into and said sure will be happy to give my opinion. It was a debt settlement program, they had several credit cards and they were paying $375 a month into a “pot” so to speak and when the funds grew large enough they would go in , settle one account and so on.

The issue was in all of the fine print and there was a lot of it but on the page with the fees etc it was CLEARLY marked that this “company” was charging “$221.00 a month” to take their money as their fees that they have not performed and would not perform until these particular clients had at least $1,000 to settle debt # 1.

So they were only saving approx. $154 a month towards settling their bills. They were in shock but I said I didn’t understand why they were as this was clearly printed and they said the person didn’t tell them that and they didn’t look at the paperwork and only signed where he said they needed to sign.

I then said, you mean the “Sales person”??

They got silent really quick, and I gave them advice on what to do but said they have no recourse as they signed the papers and the fees were clearly marked.

You can do this yourself and save some money if you want to or if you choose to hire someone make sure you get some solid numbers and make sure you’re getting some good savings. I had a guy who owe $127,000 in unsecured debt and got everything settled for less than $40,000 which included my fees so he saved over $80,000.

That was one heck of a job and time consuming but normally do not deal with something that large typically.

Moral of this story, READ what you sign and NEVER make an impulse buy/decision. If your being constantly called about your decision then it seems they NEED your money, go with the person who makes you feel comfortable, has a background that can be validated by outside parties and follows up with you when YOU ASK THEM TOO.

 

 

 

* Want to learn more about how the credit system works?

Or

Have questions about your credit where you may need my help?

Or

Buy my book for easy to understand concepts of how the credit system works and how lenders look at you.

 

email me today at: wayne@waynethecreditguy.com

If you email me, to make it easier as i am getting a lot of emails and i respond to all of them please provide me a summary of your situation. Include are you paying the bills on-time, have you not paid them in 3 months, how much you owe and what are the total monthly credit card bills you are paying.

MOSt of the people contacting me i am directing to places i have already vetted that i have identified as places that will do what is best for you and your family and not some company.

 

 

 

When Life happens (Murphy’s Law)

When Life happens (Murphy’s Law)

Murphy’s Law definition:

The rule that states, “If something can go wrong, it will.” An addition to this law reads, “And usually at the worst time.” The identity of “Murphy” is unknown, but the saying was first used during the 1940s.

So why mention this is a credit repair blog you ask?

Life of course…..

However in relation to credit which is my specialty and I can state I am an expert in the matter I want to talk about things I see that may be able to help you avoid people like me for this particular situation.

Starting out on the subject of life many times if you are making a certain amount of money ( or finally do ) for your income you start making a lifestyle that fits that income.

Many times I have people coming to me who end up paying the minimum amounts on these credit cards due to fact of several possibilities such as:

  • Income was cut either your own or a spouses
  • Job loss so not making what you were & took time to find another job so playing catchup.

Both of these are life changing events unless you have a healthy amount of savings tucked away that you can tap into to cover bills until your back on your feet. No one likes dipping into savings but at least it’s there.

Many people do not have this option thus the domino effect starts.

As a life example many, many many years ago (probably longer than I care to admit) I joined a direct sales company (aka: network marketing) they became publically traded and was solid so I joined. And actually they had a product a few years later which became the catalyst for getting me into the credit industry.

Regardless of those details I met an airline pilot for a major airline and we became friendly. This was around the time that the airline filed for chapter 11 bankruptcy and many were laid off and incomes cut. At the time he was making $300,000 a year and was cut 30% to $210,000.

When he told me that the look on my face at the time basically said, “Yeah, you still make over $200,000 a year”.

He saw the look at you could tell it wasn’t the first time and said the problem I have is I have a lifestyle that needs a 300k income to support.

SO THAT IS TODAYS BLOG TOPIC FOR THIS WEEK!

Many times I have clients come to me with so much credit card debt it sometimes blows my mind. I have seen some credit reports with people owing $7,000 to Macy’s or JCpennys. And I think how can you buy so much from a clothing store or let it get to that high an amount?

Ultimately it comes down to discipline. Many consumers just do not have it and it’s something you may need to work on if this blog applies to you. You cannot negotiate with the credit card companies as they have all the leverage.

If you want to settle with them for less you have to trash your credit. Until they have not received a payment for 90-120 days they will do nothing to help you.

I have a friend who lives paycheck to paycheck and have all of her credit cards maxed out so she is a good example of a possible game plan. She finally got a standard 3% raise which only gives her an extra $50 per paycheck but it’s better than nothing.

Her company finally put together a bonus plan if they reach certain goals set for them.

She hit them 2 months in a row totally at moment $1,200. She needed to catch up on a few things, treat herself as well and put a money back into a separate account to start building her savings again. I explained to her which she hates when I do this but she knows it’s needed, if she gets an average of $600 per bonus and does that every other month at least but she expects to hit that every month she needs to put half of the bonus in savings and the other half towards her credit cards starting with the small cards first to get rid of them quicker.

She has 3 credit cards with approximately $600 on each. So within less than six months she can have those 3 cards paid off. Then when she gets excited at how that is progressing she may decide to start taking the full bonus towards paying the bigger one and have that one paid off in a few months.

In her situation she could have all of her credit cards paid off in a year depending on her discipline and goals.

Now in order to get her to focus on that goal other than the freedom of no credit card debt she has a certain car that is her dream car.

I told her after assessing her finances that  these cards are paid down her credit score will jump up tremendously and she could qualify for that car easily.

NOTE: it’s going to be a 1 year pre-owned which she won’t care about as the mileage will be low and will still be exactly what she wants.

This is what you need to do to yourself. Other than being debt free you need to have an additional goal or treat if you want.

Many times it is just not enough, everyone will be different so it has to be something you want so you have to decide on what will give you the determination to be discipline enough to focus on paying down your debts.

As I always say to all future credit repair clients, “I will tell you the truth whether you like It or not”. One of the reasons why I have such a good reputation in the industry is I’m honest and direct.

That combination is not really found in our industry, plus combined with the fact I have been doing this over 12 years the odds are if I can’t help you can’t be helped in the credit repair industry so I may need to guide you towards a different professional to do what’s best for you and your family.

Want to learn more? Contact me at the email below to buy my book “The Real World of Credit” or go to www.bn.com and get the digital version.

Any questions just contact me on the number at the top of my website or email me at: wayne@waynethecreditguy.com

My credit cards are paid off so that’s not a problem… or is it?

My credit cards are paid off so that’s not a problem… or is it?

My credit cards are paid off so that’s not a problem… or is it?

As a credit expert I always get clients telling me exactly what their credit issues are. Now for a small portion of them who do not have many issues a portion of them are correct. After all if you’re currently a 680 credit score then you may only have one or two issues that are hurting you.

However many times there are many other factors affecting their score so I will always tell them what you look at is most likely not what I am going to be looking at.

This is a huge advantage when you have been doing this for over 12 years and have analyzed over 16,000 credit reports in that time frame. Dissecting them, analyzing how the underwriting process behind the scenes looks at them and approves or denies them.

All of this behind the scenes underwriting reviewing is all for your benefit to help you achieve your goals for you and your family.

Many times I have clients that have made recent late payments on their credit cards or car loans, mortgage etc.. (basically recent late payments).
And then if it was a credit card for example which majority of the time it is, they tell me I don’t have to worry about it as its been paid off so it’s no longer a problem.

This is where the education portion of my program begins and I start explaining to them it does not matter that the car is paid off and it is a problem. Explaining the issue to them during the conversation as why it is an issue they will understand it but many times the information leaves them once the conversation is over.

So what I like to do is create a visual picture as most people are visual so painting a picture helps them retain the information for the future.
Think of your credit score in the same way as a crystal ball “works”. The concept is to predict the future. So if a credit score operates along the same lines then a recent late payment gives the lender an indication there may be a financial problem as they are looking at lending you money in the hopes of you paying it on time for the next few years or even the next 30 years if it’s a mortgage.

It’s a math equation, granted a very complicated one but still a math equation. So if you were delinquent in making an arranged payment on time they have no clue if that was a one-time slip up of a foreshadowing of future issues.

They see it two different ways, the first is there is some financial challenges you are going through which of course would give anyone pause on lending you money or lending you money at a low interest rate as those loans are for people who don’t make late payments.

The 2nd you are not going to like a may even take it personally but you can’t argue with a mathematical equation so it’s looked at as if your financially incapable of paying your own bills on-time. Another way it can be called is you’re financially incompetent (at least at this time).

An excuse I hear people say is they never got a bill. The answer which I try to say with a good deal of tact is the credit scoring system reads it as:
“But you know you owe that bank money and that you make payments every month so why didn’t you call them”. It’s not their responsibility to remind you of your financial obligations.

Is it harsh? Yes it is, Realistic in how the world works, yes it is also. What you need to understand is these banks do not know you, they look at how past bills are paid in order to identify if you will pay future bills on time.

I also get people saying they have had excellent credit for 10 even 30 years. And then I have to inform them “that’s great and I will guess that if you even needed to get something during that time you benefited from that great score but you do not have that score now and then lender thinks there could be a future issue now that you did not pay something”.

The hardest thing in credit repair is removing late payments or what is nicknamed “slow pays”, ESPECIALLY when it’s on a current open account as it’s very easy to prove.

So many times I have heard clients tell them that other credit repair companies said it’s not a problem at all so they signed up and paid them money only to later find out months later they were lied to.

UNDERSTAND, when it comes to your credit report and your credit score when it relates to qualifying for a loan and even when credit repair is added to the mix that even if you paid the credit card (for example) down or off does not mean the problem has been fixed.

The RECORD of you not paying that bill on time for that particular month is marked in your credit report and depending on how recent it is will reflect as to how damaging it is to your credit score.

The older it is, the less it affects your credit score as how you pay your bills today counts a lot more than how you paid them 5 years ago.
I hope this helps to increase your credit knowledge when it comes to how the credit system works and the issue with this situation in relationship to credit repair.

But if the late payment is an honest mistake on the banks part while you may get incredibly frustrated to how little help you get to rectify the late payment on your credit if that’s the only issue then the credit repair company should only charge you a small fee after going through a series of questions to create an investigation on the matter.

Want to learn more about how the world of credit works? Contact me today and get my book in full blown color. No nonsense direct answers and easy to understand.

How the “Real world of credit” works:
wayne@waynethecreditguy.com

And of course if you need some credit work to increase your credit score then call me today to discuss!