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Pensacola Consumer Protection Blog

Floridians with balances on credit cards are not alone

Being in heavy credit card debt might lead Floridians to feeling isolated. The sense that they are drowning in their financial challenges can be overwhelming. That belief that they are by themselves in their issues with credit cards and the inevitable creditor harassment can force them to make decisions the might not want to make like considering bankruptcy. However, there are alternatives available and the first step is to realize that there are others - many others - in the same circumstances throughout the U.S.

According to a new study, approximately 29 million adults in the U.S. have had a credit card balance for at least two years. That is close to half the population. A survey of more than 2,000 people found that of those people with debt, more than half have had the debt for a minimum of five years. Most prominently featured in these statistics are people between the age of 63 and 71 with 63 percent and those 72 or older at 57 percent.

Claims for Wells Fargo fake accounts now available

The scandal involving the creation of fake customer accounts at Wells Fargo rocked the financial world. Worse yet, it violated the trust of consumers, and in some cases, billed customers for unknown fees or negatively impacted credit scores. The fallout could continue for years to come, but consumers could have some closure soon.

Claims process now open

To help compensate customers, Wells Fargo was ordered to pay $142 million via a class action lawsuit. Now through Feb. 3, 2018, consumers who were affected by a fake account can begin making claims against the bank for monetary compensation. Money from a class action lawsuit is available to anyone who fits certain criteria, known as a "class." 

Non-bankruptcy ideas to clear financial challenges in Florida

The word bankruptcy is like a stop sign for many Floridians who have no interest in taking that step to clear their financial challenges. For many, bankruptcy is a viable alternative, but if a person wants to find another way to get out of debt, there are ways to do it without having to move forward with the personal and financial turmoil that often accompanies any form of bankruptcy. Having an idea of the options available is the first step.

Some people might have the chance to consolidate their debt. Because interest rates accrue with multiple credit cards and many people make little more than the minimum payments because of their financial situation, a consolidation can give them some room to get the debt down and reduce the interest. There are three common ways in which people can achieve this: a debt consolidation loan; transferring their debts to a lower interest credit card; or getting a home equity line of credit.

Debt settlement companies might not overcome financial challenges

Many Florida debtors who are fearful of filing for bankruptcy to clear overwhelming debt might think about using a debt settlement company. Their advertising campaigns are saturating the market with alternatives to filing for bankruptcy and helping to settle consumer debt. It might be an intriguing possibility, but it is imperative to understand how these companies operate. Sometimes it is preferable to get legal assistance before taking a step that can make matters worse.

These companies will make offers in which they will negotiate with creditors to lower what is owed. It is vital to remember that a debt settlement company can be exorbitantly expensive. They will tell the debtor to stop paying their bills - often a step that is totally against what many debtors believe. Doing this will increase the attempts on the part of the creditor to collect what is owed along with more contact, but it will lead to late fees and penalty interest. Creditors are not obligated to work with these companies and the debts might not be settled even if the entire process is completed.

What are important points about contact from creditors?

A major concern for Florida debtors who are having financial challenges is the constant contact from creditors. The debt is worrisome enough without the stress of those collection calls. Those who are struggling with debt should be aware that they have certain rights and there are things that creditors and debt collectors are not legally allowed to do. With debt collector contact, it is vital to remember that consumers are protected. If their rights are violated, it is the debt collector who can face problems due to their activities in the interest of collecting a debt.

Debt collectors are not allowed to call or make contact anytime they want. They are limited to calling between 8 a.m. and 9 p.m. They cannot contact the debtor at work if they have been told not to. A debt collector can make contact through telephone, email, regular mail and text message if they adhere to the rules. Debtors might want to try to see if a plan can be worked out to pay for what is owed before taking steps to stop the contact. After that, the debtor should tell the debt collector in writing to stop making contact.

Creditor harassment and disputing or denying a debt

Floridians who are having problems with debt will often be targeted by unscrupulous debt collectors and outright scammers to try and get money from them even if they do not owe what the alleged collector says they do. Some collectors will make claims on debtors that the debtor does not believe he or she owes or would simply like more information about. While having financial challenges can be a fearful time, that does not mean that people who have significant credit card debt should allow themselves to be taken advantage of. Knowing what to do if the debt is not believed to be theirs or they would like more information is vital.

The debtor should send the collector a written request to dispute the debt. There can also be a written request to garner more information about the debt. The Consumer Finance Protection Bureau has letters that a debtor can use as a guide as to what they should say in the letter to the creditor or collector. When sending it, the debtor should keep a copy.

Am I protected from false representations by creditors?

Floridians who are in debt and are unsure of how to get out of it will frequently experience bouts of fear and worry and not know what to do. Making this worse is when creditors and debt collectors contact the debtor and use various tactics to try and coerce them into paying. Certain forms of this constitute creditor harassment and, under the Fair Debt Collection Practices Act, are illegal. When the creditor or debt collector makes these false or misleading representations, it is important for the debtor to know how to recognize it and take steps to put a stop to it.

Debt collectors cannot use false or misleading representations to collect a debt. They cannot say that they have been bonded, are vouched for or have an affiliation with the United States or the state. They cannot use a badge, a uniform or a replica of these. They cannot make a false representation of the character, the amount that is owed, or the legal status. They cannot falsely represent services rendered or compensation that can be lawfully garnered by the debt collector when the debt has been collected.

Understanding the negatives of filing for bankruptcy

When Floridians are overwhelmed by consumer debt, the easy answer they will often get is to file for bankruptcy. The most common chapter for people with credit card debt and other issues related to it is Chapter 7. This is a liquidation bankruptcy that is supposed to clear the debts and give the person a fresh financial start. While that may or may not be fully accurate, it is not a solution to all financial challenges. Once the process is done, many people regret it and wish they had considered and found another alternative.

Bankruptcy all but destroys a person's credit. Filing for Chapter 7 will remain on the person's credit report for as long as a decade making it difficult to get new credit, get a mortgage or a car loan. Any property that is not exempt from being sold will be taken by the trustee for the bankruptcy and sold to pay back creditors. A person who owes child support and spousal support might be under the mistaken impression that filing for bankruptcy will clear these debts. It does not. These expenses are not covered under bankruptcy and they will still need to be paid.

Is Your Student Loan Assistance Company On The Watch List?

If you have student loans that have been difficult to pay, it may be tempting to accept an offer from a for-profit company promising to help reduce or even erase your debt. But according to an investigation by NerdWallet, many of these companies engage in questionable practices that may make matters worse for you.

Check the list

Legal help in dealing with credit cards and massive debt

Floridians who are in tough financial straits and are not interested in filing for bankruptcy might think they are at the mercy of credit card companies and debt collectors who will simply not leave them alone. They call constantly and engage in creditor harassment, allude to what can happen to a person's credit and property if they do not pay off their credit cards and generally make their lives difficult. What debtors might not be aware of is that they have certain protections available to them and can get the creditors to back off if they hire a qualified debt lawyer who understands how to handle credit card debt.

Companies and collections agencies will try to get debtors to pay whatever they can to settle a debt and continue with the harassment on an ongoing basis. In some cases, they try to get payments for debts the person does not even owe. Having legal assistance is vital as it can make the company prove that the debt belongs to this person. It can also result in the company negotiating to reduce or even eliminate some of the debt.

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