National Debt Relief Investigation and a story (PART I)

As I always mention at the beginning I am only documenting my opinion on these debt settlement companies as I am entitled to my opinion.

As a finance specialist for over 13 years with debt and credit I reflect back to the beginning when I knew nothing about this industry at all and as I mention and use an analogy for your legal rights it applies the same with this:

“If you don’t know your rights, then you have no rights”.

“If you don’t know your options, then you have no options”.

 

Companies in the debt settlement industry like Credit Associates that started me writing these kinds of informative blogs thrive on a consumer’s lack of knowledge. In fact that lack of knowledge is what keeps them in business.

I personally believe Credit Associates is one of the worst out there. As someone with a knowledge base of over 13 years I can spot the lies that are done in their commercials or advertising spots so I felt the need to point them out so someone doesn’t get taken advantage of.

A gentleman called me and said they read my blog about them and agreed with my assessment and then also spoke to National Debt Relief and then told me a rather shocking story that I will pass along to you today.

He said he had a business credit card at about $20,000 he is being forced to make the decision to let go.

The “Representative” he spoke to (you know… the salesperson) asked if he had any other debt and he said he stated he had a personal target credit card for about $5,000 and another credit card for about $4000.00 but they have been paid on time. It was only the business card that had started to slip.

They told him they would have to do “all 3 cards” in order to help him. They chatted about it and he said how much could you save me on the cards?

I of course was curious myself and when they told him they could get it all down to $21,000.00 there was a bit of silence on the phone as I had trouble believing such a pathetic amount and repeated what he told me to make sure I heard him right. That s right, he owed $29,000 and said they could only get him a savings of $8,000.00.

What scares me is this is possibly the norm. After all is it not the job of sales people to maybe exacerbate how much they could save? If that’s them bragging then oh my, what is their average?

 

HINT—see PART II of this blog (coming next week)

 

I asked him if he had a lump sum to get this all handled to go away and he said he did but not a ton of money of course. I informed him it was idiotic to add the 2 perfectly good paid cards he had to let them go and destroy his personal credit and after some conversation he wanted to work directly with me.

NOTE— This is a 2 part story as I also contact them as a potential client to see what they could do for me.

 

As I always say, a credit report is like a thumb print…. And every thumbprint is different so generic advice that is attached to your financial well-being is not the smartest move. Only by having a full and complete picture of what is going on is the way to truly get the best advice for you and your family.

 

Back to the Story!

I told him to keep his personal credit cards paid and to keep them paid and good. In less than a month I had the company agree to a settlement of $8,000.00

Now the thing you need to be informed about is while reading this is if the bank takes a hit on what you owe them they can 1099 you and the IRS considers that “undeclared income” and you have to give that to your CPA.

That of course sucks but it’s still a hell of a lot cheaper that paying the debt owed. Plus you can always set up a payment plan for it if necessary.

 

AN ADDITIONAL FYI is the bank has to 1099 you if they do in 3 years. If not then they lose the opportunity to take a tax break on it. we had a client get 1099’d 4 years later and a simple general dispute to the IRS got it dismissed and saved the client an additional $1,500.00 of their hard earned money.

 

So why was there such a money difference you may ask? It’s rather simple actually, if you don’t think you can get anything and you get told you can save $8000.00 you are very happy!

But when you don’t know you could actually save $12,000.00 then the $8,000.00 sounds pretty good.

As I always say, the bigger the company the bigger the overhead so you’re not a client you’re an amount.

They will take the 1st offer the bank gives them and then sell you on how good of a deal it is and how it benefits you so they can move onto the next client.

 

So that’s the end of part I of this blog, the next one may be short but it will be from my own direct experience of calling and emailing National Debt Relief as opposed to detailing you the story from a 3rd party person.

 

NOW I want to say that while this person’s experience with National Debt Relief may not be typical if they read this and say that’s not how we do things is possible. I would find it rather improbable that this client just happen to tell me the one bad representative that they have out of the possible hundred (more or less). Especially when it’s combined with my own experience listed in PART II.

 

I will note that the rep never told him how bad this will hurt his credit score and how future lenders will look at him which I feel is a disservice to the consumer.  Now it is possible they were never trained on that but as a credit and financial professional for over 13 years, isn’t that one of the reasons why you would be calling them???

 

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.

Have a question?  Send an email to Wayne      wayne@waynethecreditguy.com

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?

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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.

 

 

 

Update to Previous Debt Settlement Blog PART I

UPDATE to the PREVIOUS Debt Settlement Blog PART I

 

So welcome back, I have to tell you I have never received so many phone calls in regards to a blog than this one AND AFTER SOME OF THESE CALLS NEVER REALIZED JUST HOW SLIMEY THESE COMPANIES ARE.

 

So email me with questions and your experiences with companies and their names, I will review the email, make my own call to them to verify the kind of tactics they use and let all who read these know what is done and why they try to do it to you!!!

 

Let’s just dispense with the standard chit chat and talk about what has occurred and been asked of me over these last several weeks. And I will also throw out some specific information and company names along with some of the company’s ways they “explain” the process and what they tell and don’t tell you.

That information will not be coming from me but from people that have emailed me with their stories (keep them coming!),  so if a debt collector reads this if it mentions their company name you can take a leap as I have proof of what was said and it wasn’t me making up stories.

Now that I got that part out of the way, let’s recap and point out the one question you can ask that slaps “Credit Associates” (And most likely others if they say this also) in the face with a bold face lie on TV.

Their commercial says “if you have more than $5,000 in credit card debt you have the right to let us settle that debt for a fraction of what you owe”.

Now they also mention “there’s a secret the credit card companies don’t want you to know”.

So mini recap – Tell them that you have a question first before you explain your situation. What is the right/law/rule that allows you to settle your debt for a fraction of the money owed?

Possible answers:

1) The Fair Credit Report Act (FCRA)

WRONG—- that has NOTHING to do with money you owe or settling it. It is in regards to the reporting and accuracy of information reporting on your credit file.

2) The Fair Credit Billing Act (FCBA)

WRONG—- this is basically to protect people from unfair billing practices regarding billing statements NOT debt settlement.

3) The Equal Credit Opportunity Act (ECOA)

WRONG—- protects consumers from discrimination based on race, color religion, etc.

4) The Fair Debt Collection Practice Act (FDCPA)

WRONG— this deals only with Collection Companies and their practices when trying to collect debt and what they can and cannot do.

 

The above is just a few popular laws that may be quoted and how you can respond to them to see their response and I guarantee you will see them moonwalk backwards and get back to trying to SELL YOU and should be pretty apparent to you that they are.

 

I just recently spoke to a gentleman we will call MIKE, he contacted a company called National Debt Relief. Mike owed $20,000 on a business card he used and had 2 other cards in good standing totaling with the first card $29,000.

He told me the company said they would have to take all 3 cards to help….                           REALLY?

When he asked what they think they could help get it down to they said approximately $21,000.

WOW!  That is sad….. I just had a $70,000 debt a client had and helped get it down to $15,000.

 

INSIDE INFORMATION

What these companies don’t talk about or “forget to verbally disclose to you” but its most likely in the fine print of the contract is what this method would do to his good standing cards is not pay on them for 3-4 months (destroying his current 750+ credit score) .

Here how this works…..

This is basically a game of leverage, if there is too much month at the end of the money and you’re paying on time or going 30 days late every so often then if you think about it what leverage do you have? Why would they lower the rate, you’re paying them and they actually want you to pay for years as look at your statement. It should have how long it will take to pay off and how much money they will make.

Once the money stops coming in and they stop getting paid and you hit the 90 days late part they really start to worry about their business agreement with you so now they are interested in doing a settlement but they don’t tell you how the process works so they hit you with what they call their payback plan or whatever term they use which typically does not benefit you at all.

What you need to understand is you can ask for discounts, now of course someone who deals with these people all the time is better qualified than you. As the companies you’re calling are trained to do this so while yes, you can try to do it yourself and “wing it”. But it does make sense that the more you do this the more you know how each company works behind the scenes.

 

IF the companies brag about being an A rated with the Better Business Bureau (BBB) then you may want to google the ABC investigation of the Better Business Bureau. It shows how they are a paid member and how members get more favorable ratings. The general public thinks this is done for free but it is a ploy, there are statements all over the internet where business owners say the “Sales” reps said we can help you with your rating if you become a member.

Most business owners hate the BBB as they have created the illusion of how they work for the public, but they just leverage their own made up “rating” system with what they think and just recently starting allowing consumers to rate the businesses.

Take me for example, the people who rated me 5 starts on the BBB site told me they and I have their affidavit’s saying so but as our business is filled with slime-balls even though I have 8+ years with NO Complaints and all reviews are 5 stars they rate me a C+?

I’ll keep you up to date as when I have a little time I will be suing them so that will be an interesting blog.

With the holidays coming I should be able to get in at least one more blog in but hoping for two so please email me your stories and experiences and if you need to speak with me my number is on the website.

I promise to give direct and straight advice, I may not be able to help if you do not fit the guidelines I use BUT I will point you in the right direction.

NOTE:

If you email me, then please send me a synopsis of your situation so i can be of more help to answer your questions…    =)

 

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

(NO SPACES as that was done to prevent me getting spammed).

 

And of course if you need some credit work to increase your credit.

Student Loan Mail Scam

Student Loan Mail Scam

For this week’s blogs we are going to talk a little about Student loans and what to look out for. I like many Americans have student loans and will have them for many years to come.

Things to be discussed this week is to understand how some companies try to take your money because you’re afraid to call, others to take over the loan and make a lot of money off you over the years. And just the general things about student loans and how it affects your credit in more ways than one.

I recently received a letter in the mail talking about student loan consolidation and it was in pink and labeled “FINAL NOTICE”, and if I had issues about my loan. I didn’t of course since I know how they work and the details of it. BUT at the very bottom of the letter where disclosures have to be made in a font size I would classify as maybe 6 a font it stated basically that what they are doing you can do yourself all for FREE if you called the loan people and asked about your options that are available.

NOW… the issue with calling the student loan people is if you have read these blogs before talks about how little most customer service people care about their jobs and the amount of training they have or have not had. So understand they do not care about your story or situation, their job is to get money from you monthly when you call so be ready for them to want to get financial information from you asap. BUT remember, YOU DO NOT HAVE TOO, tell them you’re calling to discuss all potion on the table and later decide what is best for you (not them)

Back to the letter, So there are companies out there that charge hundreds of dollars to look at a list of maybe 3-5 different options concerning your student loans, then take some financial information from you and submit it on your behalf.

Think that was worth it? Awesome to hear you have that money to give to someone for some advice on a short list you could read yourself. Remember, they are YOUR student loans after all so it probably would make sense that you pay some attention to them to know what’s going on with them. Now it is totally normal for people to bury their heads in the sand and put things off time and time again but don’t be afraid, take a deep breath and call them. You are one of millions of millions in the same situation so it will be ok.

So the smartest thing for you to do is call your student loan people and have a pad and a pen ready to write things down or if your computer literate be on their company web page so they can direct you to where to go to get what you are looking for. If you never set up an account before, do that now and verify it so you can be logged in when you call them.

AGAIN, when you call their job is to get you to pay them TODAY!

NOW do not let that worry you or deter you, no one is holding a gun to your head.  So just simply tell them you are doing research first on the matter before you decide what option is best for you just like I mentioned before.

Once they go over the different options and you have the details of them and then ask the rep what option do you think is best for me if:

Option#1:

If your student loans are in good standing then simply ask them which option is best for you and your finances.

Option #2:

If you student loans are not in good standing (meaning delinquent or default) and ask them which option do THEY think is best for your finances AND your credit.

 

IMPORTANT…

Thank them and tell them you will check back with them to get the ball rolling. THEN hang up and call back in an hour or so (even the next day and go through the same thing with another rep to see if they reach the same conclusion. That is really the only way to make sure which option is best suited specifically for you.

If your loans are in default or delinquent understand that calling them is like calling a collection company. They have monthly ”quotas/goals” they are supposed to meet and need to pull in dollars the moment you call.

They do not care if paying today continues to screw up your credit report and score.

AND GUESS WHAT?  If you start paying them today and you’re in default for an example it’s still reporting in a negative light on your credit the entire time.

IF the representatives say it will stop the negative information reporting on your credit then it will be NO PROBLEM to send you a letter saying that PRIOR to you making a payment.

Once you have any type of negative account or reporting think of it as NOW you’re in the system. And that means nothing but red tape and BS. Nothing anymore is simple and could take much longer than you expect to get out of it.

FOR FUTURE HOMEOWNERS:

If you are trying to get an FHA loan and have student loans in default then you will fail what is called a CAIVIRS check which is a federal database of loans to the government as they guarantee the FHA loan so be aware of that and getting out of default could take almost a year.

As I always say credit is the cornerstone of the economy and your credit score is your financial good name. And credit repair is a necessity if you have had any life challenges and of course isn’t that why they call it life?

Being in this industry now for over 12 years and approaching 13 years which is hard for me to imagine sometimes and through those years I believe I have seen almost every scenario there is and sometimes a new one pops up but due to the nature of it I am of a way around it or at the very least know how to mitigate it to affect someone the least way possible.

Feel free to send me an email to (going to break it up for spam purposes)

Wayne @ wayne the credit guy.com   (of course no spaces when you use it)

Thanks and talk to you next week!

 

Too much Month at the End of the Money

Too much Month at the End of the Money

This week’s educational blog covers two areas, one is about the recent horrible natural disaster known as Hurricane Harvey (and now IRAA), the other while a part of it talks about what happens when there is too much month at the end of the money.

While I will not go into over the top great detail on both and may at a later date what is needed now is an overview and solid understanding of what has happened what can happen and hopefully how to get you to start doing something now to prepare.

In 95 % of the American population this is a typical issue. Studies have shown that almost 80% of families are one paycheck away from considering bankruptcy and that is a scary thought.

With the natural disaster of Hurricane Harvey looming over America’s heads as well as for the victims going through it as we speak and will continue to go through it for at least the next year trying to recover just like from Katrina.

Now is a time to stop and think, how many of those people in Houston and the surrounding cities & most of the State of Florida were paycheck to paycheck? And now throw this into the mix, imagine what they are going though and what future problems they have in front of them, especially with their credit and finances? And for most that is the LEAST of their problems but will soon become the biggest issues.

I remember seeing the results from the hurricane Katrina problems, what did these lenders (car, credit card & mortgage) do to help?
NOTHING of course, they continued to post late payments and all they did to “help” was post in the comments section “Affected by natural disaster”.

It talks about how you “MAY” be able to arrange for deferred payments. MAY?? Really, how about you CAN.

Now to understand what a deferred payment is as many people I have spoken to do not know what it is. It typically applies to finance only NOT leases. Think of deferred payments as skipping a few (depending on what lender tells you) and put it on the back end. But watch out for additional penalties.

BUT…
You typically have to do that immediately and with what’s going on people have more important things to be concerned about. As once your behind then you have to “catch up “in order to qualify for a deferment. But with what’s going on now in 2 major states, eating is a tad more important and seeing if your house is still there.

Now… I could be wrong and lenders may have adjusted the way they handle these natural disaster issues but I doubt it as they are good at paying for commercials stating they care but it’s all about the dollar.
Now the link below from Experian’s site explains how these codes “help” But if you read it it’s just like the credit bureaus to have many loop holes in these “explanations”.

http://www.experian.com/blogs/news/2013/05/24/protect-preserve/

And remember the credit bureaus can only suggest the lender do that as it’s ultimately the lender that has to report it.
SO…

After all this let’s talk about the reality of the world you are living in and its relationship to credit scores, your personal credit file and your funds.
Just recently I have had several high net worth clients hire me and the way out brain works is if you make 400k a year (individually or as a couple) you create a lifestyle that supports that income.

And that’s when we call life for what it is, and you all know the saying about how “things” happen.

Once couple took over 180k from their 401k to pay for credit card debt (within 2 years’ time) and such and while I hope the best for them like I do will all clients my concern is the reality of how they don’t seem concerned with having a budget has hit them yet.

Many reading this most likely do not make that kind of money. And quite possibly live paycheck to paycheck or a little ahead of that number.

When you get tight on money you typically look for a loan to get you by.
NOW, one of the worst things I will say are Payday Loans… BUT I will explain both sides after you read this next part.

Had a client send us the paper work received from lender show a $700 loan with a 640% interest rate!!!

No, I did not mistype that…. State’s do not regulate or cap out the interested allowed by payday loans like they do car loans (24% in TX).

Now how can someone bring themselves to agree to that you ask, typically desperation and not knowing if there may be another way.
No one wants to sit down and create a budget or cut or limit what they can or cannot do, but ask yourself after watching the news… what if that happened to me?

So other than the standard check out other phone companies like metro pcs to cut a possible $150 monthly bill to $100 and start saving that for a year but did you know:
There are things called focus groups where you can get paid anywhere from $50-$125 for your opinion? That’s right; companies if you’re in the demographic they are looking for will pay you.

Try checking out to start www.focusgroup.com to start, there are many other companies like these so you could alone make $200 or more monthly.

Go to google and also put in your local city to see what’s available.
How about doing good and getting paid? Donate blood or plasma monthly and that could pay an extra $50 a month and have ability to possibly save a life?

Now imagine cutting your phone bill down by switching carriers (ONLY IF YOU ARE NOT UNDER CONTRACT), participating in focus groups twice a month and donating lifesaving plasma and do that for one year and put money into a savings account.That could add up to over $3,600 in one year. That’s just one way to save a little extra for a future budget in case disaster strikes.

If you can just start that and then commit for one year you will mentally get yourself to a place where you look at somethings and say I don’t need it but do I want it really or just want it on an impulse.

That’s it for this week’s blog, remember when it comes to credit and your credit score paying bills on time is all it takes but as life happens on in this week’s blog when mother nature happens you need to know the ramifications of what it will do to that perfect credit score.

In the 12 years of doing this and being in the trenches of the credit industry there are so many other things that are linked to your credit when you are trying to get things that without a good credit repair person to help you and guide you are obstacles to make sure you are doing what’s best for YOU!

You would be surprised how what seems logical may not be the best thing for you.

Want to learn more about the credit system? Email me about getting my book as currently having an issue with the website page.

wayne@waynethecreditguy.com

Talk with you all soon!
Wayne