Coloradans struggling to stay afloat in a tough economy are using debt management companies more and are spending more time under contract with those firms, according to a report by the Colorado attorney general's office. Debt management companies fall into two categories: credit counseling and debt settlement. Credit counselors negotiate with creditors to waive or lower interest, fees and payments; consumers make monthly payments to the counselors that are distributed to creditors. Debt settlement companies contract with consumers to set up regular payments into a bank or trust account rather than directly paying creditors. After a certain amount of funds accumulate, the debt settlement company uses consumers' contributions to negotiate a lump-sum settlement of the debts.
State Attorney General Darrell McGraw is suing a Texas company, accusing it of ruining the credit of at least 21 state residents who paid more than $30,000 collectively for help lifting them out of debt. Able Debt Settlement Chief Operating Officer Ralph Lewis said his company did nothing of the sort. He said Able Debt provides credit- processing services and does not usually negotiate with creditors.
Debt collectors have agreed with government to give 30 days' breathing space to borrowers struggling to repay debts. The new 30-day rule, agreed with the Credit Service Association (CSA), which represents UK debt collection agencies, will start once an accredited debt advisor has been appointed. The new 30-day rule is being written into the CSA's existing code of practice which governs its members. This will allow an accredited debt advisor to negotiate with creditors and the collection agency so that a plan for repaying the debt can be agreed.
West Virginia Attorney General Darrell McGraw is suing a Texas company, accusing it of ruining the credit of at least 21 state residents who paid more than $30,000 collectively for help lifting them out of debt. Able Debt Settlement Chief Operating Officer Ralph Lewis said his company did nothing of the sort. He said Able Debt provides credit processing services and does not usually negotiate with creditors.
A credit repair company could require arbitration when sued by a customer for allegedly failing to deliver promised services, the 11th Circuit has ruled in reversing an order denying arbitration. When the plaintiff fell behind on her bills, she contracted with the defendant to negotiate with her creditors for a reduction of her debts and affordable payment plans. The plaintiff sued for violations of the Credit Repair Organizations Act when the defendant's alleged inaction resulted in the plaintiff defaulting on certain accounts.
The Columbian Publishing Co. continues to negotiate with its creditors this month in advance of a Chapter 11 bankruptcy court date on July 1. The publishing companys reorganization bankruptcy case appears to hold no surprises.
The credit card industry has been in an uproar for years complaining that they're losing billions of dollars because of the debtor's ability to file a Chapter 7 bankruptcy, thus avoiding making payments on unsecured debt. Unsecured debts are primarily credit cards and medical bills. Interesting to note that the top two reasons people file for bankruptcy protection is because of medical bills and credit card debt. Given the fact that lawmakers were unwilling to make sweeping changes to the bankruptcy law in prior years, many of the major creditors created relationships with the consumer credit counseling type of companies. In fact, to this day, many of the major creditors contribute up to 85 percent of the funding generated by consumer credit counseling type of companies. Consumer credit...
...They both negotiate a payment plan with your creditors. You make payme...
Linens 'n Things Inc., the housewares retailer controlled by buyout firm Apollo Management LP, hired restructuring firm Conway Del Genio Gries & Co. to weigh options, including bankruptcy, say people with knowledge of the agreement. The chain is seeking to negotiate with creditors, including General Electric Co., said the sources, who declined to be named because the discussions are private. The Wall Street Journal reported Friday that Linens 'n Things may file for Chapter 11 bankruptcy protection by Tuesday.
* Put all of your credit cards on "ice." Take every credit card out of your wallet until you have retired the total dollar amount of the debt. This may mean keeping your cards "cooling" through the spring and beyond. * If you don't feel comfortable contacting the CCCS, contact your creditors. Talk with them to negotiate an acceptable payment schedule. Most creditors are willing to work with you and appreciate your honesty and integrity.
When Nicaragua offered commercial creditors a 95.5% haircut on $1.4 billion in commercial debt as part of a workout, the deal appeared to be more of a scalping. According to the Nicaraguan government, the workout will slash its public external debt to 57% of GDP from 161% of GDP reported in 2003, allowing for greater spending on poverty-alleviation plans and social programs. Most creditors, mainly US financial institutions, joined the Nicaragua International Creditors Association to better negotiate with the government as a group.
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