Debt Relief Blog and Resources

Guest Post by Lyle Solomon It is common for people struggling with debt to receive notices and calls about overdue payments on their debt. It is advisable not to ignore them because they can become more stressful than managing your debt. Debt collectors try to contact the debtor multiple times before filing a lawsuit against them.  Having a debt collector file a lawsuit against you can be stressful, and most people don't know how to address situations like this. The most crucial thing to do here is to respond to that lawsuit. Although you think you do not owe the debt you were sued for, you have to respond by either sending a letter or appearing in court by the deadline. Yes, debt collectors can take you to court Many people don't know that debt collectors can file a lawsuit to get their money back if they haven't paid off their debts. When people don't pay the debt they agreed to, collection agencies often file a lawsuit against them for breach of contract. To file a lawsuit, debt collectors must prove that they are the legal owners of the account in question.  In most cases, debt collectors acquire ownership rights to unpaid balances when they purchase the accounts from the original credit card companies or other unsecured creditors. Many creditors will sell a debt overdue for 90 days or more to debt collectors for a small fraction of what they are owed. If this occurs, the affected person's credit report will include a "charge off" notation for the account in question.  If a creditor "charges off" an account, the debtor has stopped making payments on the balance owed. When a debt is charged off, many people wrongly assume they are no longer responsible for paying it. Even if the original debt collector has sold your account to a new company, you are still responsible for making the required payments.  What happens when a debt collector sues you? You should understand the debt collection process when you're being sued by a debt collector, even though timelines vary from person to person. However, if your timeline does not match the timeline stated below, you should verify the debt to ensure it is legitimate to avoid debt collection scammers.  The debt collector contacts you by phone or sends you a written notice of their intent to collect the debt. The debt collector usually tries to contact you after a debt has been overdue for 180 days. A debt collector has only five days from the time they first contact you to send you a debt validation letter detailing the amount you owe, the name of the creditor, and the steps to challenge the debt if you believe it is not yours. Debt collectors are legally required to provide verification letters if you dispute the validity of the claimed debt. The debt collector has to send the verification letter within 30 days of the validation notice. If you owe money and the debt is valid, you must cooperate with the collector and work out a payment plan. The debt could be settled in full, partly, or through another arrangement. You can take the help of debt settlement services that can help negotiate your debt settlement. Your debt collector can file suit against you if you fail to settle the debt or make payments. You will have received a court date for your appearance by this time. The judge will probably side with the debt collector if you don't show up for your court date. The court will probably issue a default judgement or order against you in this case. As a result, a lien could be placed on your property, or the debt collector could garnish your wages. On average, a default judgement is entered 20 days after the lawsuit was served. Make sure you check the statutes of limitations on your debt The statute of limitations regulates how long a creditor or debt collector must file a lawsuit in court to get money from you for a debt. The statute of limitations is a time limit set by each state. Thus, the statute of limitations during which a creditor can attempt to collect from you varies. A creditor cannot file suit against you after the statute of limitations has expired.  Many people wrongly believe their debt is no longer an issue just because they haven't heard from collectors in a long time. Contrary to popular belief, this is not accurate. Inactive debt, also known as "ghost debt" or "zombie debt," cannot be "resurrected" after the statute of limitations period has passed.  However, in recent years, many collection agencies have started pursuing ghost debts. Debt buyers try to collect on debts no longer legally collectible by the original creditor by purchasing debts past the statute of limitations. Debt collectors often use threats and intimidation to coax people into paying debts they are not obligated to by law.  Statutes of limitations are highly discretionary and vary significantly from one state to the next. The typical statute of limitations period is between three and ten years. When a person stops making payments, the statute of limitation usually begins to run.  Individuals should exercise caution when communicating with debt collectors. If the debtor makes a payment, the clock resets to the last payment date. A debtor can ask a creditor to stop contacting them about an old debt by formally requesting it in writing after the statute of limitations has passed.  There are options available to people harassed by debt collectors, whether they are scammers or legal entities. Any collection agency that resorts to abusive or harassing tactics to get at a debtor can be held responsible under the Fair Debt Collection Practices Act. The FDCPA is a federal law that shields consumers from collection agencies that engage in harassing behaviour. Individuals may initially file complaints with the Consumer Financial Protection Bureau and the Federal Trade Commission.  The bottom line When a debt collector sues you, you should ensure the debt is valid. If it is legitimate, respond within the given time frame, or challenge the lawsuit if you feel the debt is not valid. If needed, seek the help of an attorney who can help you understand your rights.  If you are asked to pay off your debt, you can enlist the help of debt settlement or debt consolidation services to help you pay off your debt efficiently. You should never forget your rights, and remember that the FDCPA is in place to protect consumers from fraudulent and harassing debt collection agencies.  Lyle Solomon has extensive legal experience, in-depth knowledge, and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998 and currently works for the Oak View Law Group in California as a principal attorney.

August 2022 — Best Company recently awarded Freedom Debt Relief its 2022 Expert's Choice Award. About the Expert’s Choice Award Every year, the Best Company vertical expert highlights one company that they think stands out among competitors, regardless of overall category ranking. The Expert’s Choice Award is given to a top company in an industry based on the Best Company expert's analysis and discretion. Freedom Debt Relief did not apply for, nor pay to receive this award. About Freedom Debt Relief {%company-card vertical="debt-relief" company="freedom-debt-relief"%} Best Company User Star Rating — 4.7 (out of 5) Accreditations — AFCC, IAPDA Year Founded — 2002 Freedom Debt Relief has resolved billions in consumer debt since opening its doors in 2002. The debt relief company boasts over 12,000 positive 5-star reviews and continues to receive high praise for its attention to quality service. FDR is a clear standout in the debt relief industry and an easy choice for this award. As a debt settlement company, Freedom Debt Relief works with creditors to settle debt amounts for lower than what was originally owed. The company's time in business and industry accreditations speak to its expertise in debt negotiation. With services available in 40 states across the country, Freedom Debt continues to please customers by helping them alleviate debt burdens and move forward with more financial peace. Company insight Awards and accomplishments Freedom Debt Relief has received multiple awards and recognitions for achievements on Best Company. Here are some of the awards FDR has received in the last year:  2022 5-Star Rating Award — The 5-Star Rating Award is given to companies that have higher than a 4.5 star rating on Best Company. (See full press release) 2022 Great Customer Service Award — The Great Customer Service Award is presented to companies that have a 4+ average service sentiment with a minimum of 50 user reviews on Best Company. (See full press release)  10,000 Reviews — This recognition is given to companies that have 10,000 reviews on Best Company, and as of 2022, FDR is 1 of only 6 companies to have achieved this milestone. Freedom Debt Relief reviews Freedom Debt Relief customers are eager to agree with our expert's choice; 81 percent of reviewers gave FDR 5 stars for its services. The company also averages 4.5 stars in each of Best Company's subcategories: value, quality, service, and trustworthiness. Former and current Freedom Debt Relief clients frequently mention the company's genuine care for and loyalty to its clients, excellent customer service, and thorough explanations of services offered.  Here is a recent positive review for Freedom Debt Relief: The bottom line It's not just one thing that sets Freedom Debt Relief apart — it's an impressive array of accolades, reviews, and industry know-how, all combined in a well-established debt settlement company. If you are seeking to get out of debt and don't know where to start, we suggest you set up a free consultation with a debt professional at FDR. Read more about Freedom Debt Relief

Do your thoughts about taking your family on vacation automatically trigger feelings about your current debt status? Do you want to treat your family to a quality getaway without risking putting yourself further in debt? If so, you are not alone. Consumer debt reached approximately $4 trillion at the end of 2018, with the average debt being roughly $12,000 per capita. This means that mounting debt is a factor for many American families. The cost of taking the family on vacation can add a considerable amount to the debt level of American families. According to NYU, 30 percent of families spend an average of $2,000 to $5,000 on family travel. This statistic shows that the fear of family vacations adding to the debt is genuine for many Americans. Here are ten tips to help you plan a budget-friendly family vacation. 1. Decide on a family-friendly destination When deciding on a vacation experience for your family, begin by narrowing down your vacation to a specific destination. This process begins by compiling a list of potential destinations that would be ideal for family travel. Do your research on the family-friendliness of the destination and discuss each option with your loved ones. 2. Avoid peak travel seasons When you book a vacation during the peak travel seasons (spring break, summer vacation, winter break), you can expect to pay the premium across the board for everything from car rentals to lodging. Avoiding these times will yield significant savings on your family vacation. 3. Establish a vacation budget Plan ahead by establishing budget goals for your trip. Decide how much you need to save and how long it will take. Create a weekly or monthly saving plan to cover your trip expenses. 4. Save by planning short trips You can save a ton of money by planning short trips that are packed with fun and excitement. Spending an action-packed weekend can be just as entertaining as spending a full week if you properly plan all aspects of your trip. 5. Look for great deals Hunt for the best deals you can find on luxury destinations, and take your family on a dream vacation for less than you thought you could. You can get a cheap package on a vacation to an exotic destination by looking for a great deal. 6. Get group discounts There is strength in numbers. You can increase the power of your dollar by planning a group vacation with other families. Travel agencies, resorts, and cruise lines often offer discounts for groups. 7. Get creative with lodging options Thinking outside of the box can yield tremendous benefits when planning for your lodging accommodations. Resorts, bed-and-breakfast locations, and the like, may give the enriching, yet cost-efficient options for the lodging you seek. 8. Manage your family’s expectations When traveling, family members can be quite demanding. If you are not careful, meeting the numerous minor demands and requests of your family can end up sending you way over your proposed budget. Avoid this by discussing exactly what is in the plan before leaving for your trip. 9. Plan your activities ahead of your trip Plan plenty of fun activities and get your family’s input during the planning process. This will help create a dynamic experience without the need for excessive spending. This will also help to manage your family's expectations. By planning, you can make sure your family gets a chance to see the best that the destination has to offer. 10. Be flexible Deals will often come in unexpected ways. You may be able to secure tickets at an unbelievably low price or pay half off on some other aspect of your vacation if you are willing to be a bit flexible. Flexibility may mean that you are willing to take your trip on a specific date determined by the deal provider. Many deals are not frequently offered to the public, but with a little inquiring, you may be surprised what you can secure with a few friendly questions. Find out if there are any special time-sensitive rates when planning your trip. The bottom line Don’t let the fear of mounting debt keep your family from enjoying a luxurious vacation in the destination of your choice. Careful budgeting and creative planning can provide the perfect opportunity for your family to set sail on the vacation you all deserve.

June 2022 — Best Company recently announced the 12 debt relief companies that earned the 5-Star Rating Award in 2022. About this award The 5-Star Rating Award from Best Company is given to companies that have higher than a 4.5 star rating on Best Company.  The debt relief companies on this list did not have to apply for this award. Rather, they qualified based on positive reviews from their past clients, specifically regarding the overall impression their clients have of their brand, customer service, and experience with the company. Award recipients The companies listed below are the debt relief recipients of the 2022 5-Star Rating Award. These companies are not listed in any particular order. {%company-card vertical="debt-relief" company="pacific-debt-inc"%} Pacific Debt has been in business since 2002, helping people get out of debt for as little as possible. The company's minimum debt requirement is $10,000. {%company-card vertical="debt-relief" company="consolidated-credit"%} Based in Fort Lauderdale, Florida, Consolidated Credit has been helping clients sort through complicated debt issues since 1993. It is a nonprofit, credit counseling organization. {%company-card vertical="debt-relief" company="accredited-debt-relief"%} Accredited Debt Relief typically charges between 15 and 25 percent of your enrolled debt for its services and is accredited with the AFCC. {%company-card vertical="debt-relief" company="american-credit-card-solutions"%} Offering debt settlement services in 17 states, American Credit Card Solutions has been in business for nearly 15 years and is headquarted in Frederick, Maryland. {%company-card vertical="debt-relief" company="century-law-firm"%} Century Law Firm was founded in 2007 and offers debt settlement services out of Jacksonville, Florida.  {%company-card vertical="debt-relief" company="new-era-debt-solutions"%} New Era Debt Solutions has an average completion time of 27.73 months for client cases, and offers services nearly nationwide. The company was founded in 2000. {%company-card vertical="debt-relief" company="debt-rx"%} Offering debt relief services in both English and Spanish, Debt Rx has over 20 years of industry experience under its belt and services 38 states as well as Washington, D.C. {%company-card vertical="debt-relief" company="consolidation-plus"%} Consolidation Plus offers consolidation loans to help clients work towards paying off all of their debts in one place. The company is based in Tempe, Arizona. {%company-card vertical="debt-relief" company="fast-track-debt-relief"%} With a minimum debt requirement of $10,000, Fast Track Debt Relief boasts over 100 positive customer reviews and operates in 35 states. {%company-card vertical="debt-relief" company="freedom-debt-relief"%} Freedom Debt Relief is an industry leader in the debt relief space and costs between 15 to 25 percent of the client's enrolled debt. {%company-card vertical="debt-relief" company="americor"%} Based in Irvine, California, Americor has relieved more than $2 billion in debt since its founding. {%company-card vertical="debt-relief" company="curadebt"%} CuraDebt offers both debt relief and tax relief services and is accredited with the AFCC and IAPDA. The bottom line A 5-star rating isn't just about the numbers. These debt relief companies consistently offer superior customer service and provide professional and timely help to their clients seeking relief from their debts. If you or someone you know is in need of debt relief services, we recommend scheduling a free consultation with any of these highly rated debt relief companies.

Guest Post by Lyle Solomon Most of us will incur debt at least once in our lifetime, be it student loans, mortgage, or credit card debt. Depending on your financial situation, debt can be good or bad. However, all debts are not the same, therefore managing these debts is not the same.  Mainly, there are two types of debt: secured and unsecured debt, with other subtypes of debt coming under each or both. It's essential to understand how each kind of debt works, if you'll be able to manage it along with the rest of your obligations, and how it can affect you.  What is debt? Debt is defined as something, usually, money, loaned from one party by another. Many corporations and individuals use debt to make large purchases that they would not be able to make under normal circumstances. A debt agreement allows the borrowing party to borrow money on the condition that it be paid back later, generally with interest. Let's understand the different types of debt:  Secured debt A secured loan is one backed by tangible assets. A credit check is essential to obtain a secured loan since it determines the borrower's repayment capabilities. If the borrower doesn't pay back the loan, the lender is protected by collateralized assets. The property can be seized by the lender if a loan is not repaid on time. If the confiscated collateral does not pay the entire debt, the creditor can sue you to reclaim the remaining amounts. Secured loans can help you acquire a large loan. The lenders know they will be paid back because of the collateral. Secured loans offer lower risks for lenders than unsecured loans, so you may be able to acquire a low-interest rate. Examples of secured debts: Mortgage Home Equity Line of Credit (HELOC) Installment loan Car financing Revolving credit Unsecured loans  Unsecured loans are loans that you can get without any collateral. Loans without collateral are made solely based on a borrower's ability to repay and their promise to do so. In an unsecured loan, you don't have the risk of losing any of your assets. Lenders review a person's credit record to see if they qualify for a loan.  But not all debts are equal. Lenders analyze your payment history, current debts, credit scores, total income, debt-to-income ratio, etc. In general, a higher credit score means more options. A good credit score can earn you a low-interest loan. As a result, unsecured loans are granted faster than secured loans. However, it may be challenging to get approved if you don't have a good credit score or credit history. Even if you get approved, you might get a higher interest rate. Examples of unsecured loans: Most credit cards Student loans Personal loans Payday loans Medical bills Installment loans Revolving credit Debts that are both secured and unsecured A few debts fall under both secured and unsecured loan categories. These loans are referred to by different names in each major category. Revolving debt Revolving debts are open lines of credit. Here, you borrow up to a certain amount, also known as a credit limit. You can keep borrowing from that line of credit as long as you make the minimum monthly payments. The best example of an unsecured line of credit is a credit card, and a secured loan is a home equity line of credit. Installment debt When a loan is paid back in regular installments, it is called an installment debt. Payments are usually made in equal monthly installments, with one part being interest and the other part being the principal amount. As this is also known as an amortized loan, the lender must create an amortization schedule outlining the payments made over the life of the loan.  Customers prefer installment loans for bigger purchases such as homes, cars, and electronics. Lenders like installment debt because it provides a consistent flow of cash to the issuer over the life of the loan, with monthly installments based on a predetermined amortization schedule. Best ways to handle debt A single debt might be intimidating, but having many debts can be even more stressful. Debt management can become a challenge if there is no understanding or planning in place. Budgeting and debt management to pay off debt can be done in various ways. Let's explore a few of them: Budgeting If you have a favorable debt-to-income ratio, budgeting may help you better manage your debts. The best way to make a budget is by dividing your income into three portions:  50% of your income is for your needs. Rent/mortgage, car loan payment, insurance, health care, groceries, debt payments, and utilities fall into your "need" category; these are your essentials. This category may also include your "must-haves" like Netflix, takeout, coffee from Starbucks, indulgences, etc.  30% of your income is for your wants. Your wants or non-essentials include going out to eat, seeing a movie or sporting event, taking a trip, purchasing a newly released device, purchasing designer clothing and shoes, or joining a gym. Even though they are wants, you are not dependent on them. 20% of your income is for your savings. This last 20% of your income goes into your emergency fund, mutual funds, IRA contributions, investments, etc. This portion of your money helps you build more money.  Debt consolidation When you are stuck with multiple debts and don't know how to manage all of them, debt consolidation is your friend. Debt consolidation uses numerous forms of financing to pay off your debts and liabilities, such as taking out a new loan to pay off existing debts. Multiple debts are frequently combined into a single larger debt, such as a personal loan, with more desirable repayment terms, such as a lower interest rate, a lower monthly payment, or both. You can consolidate credit card debt, student loan debt, payday loan debt, mortgage payments, etc. You can do debt consolidation through any of the following options:  Balance transfer card Debt consolidation loan Debt consolidation program Debt management A debt management plan can be useful to help you pay off your debt. A debt management plan's goal is to reduce the debt's interest rate and monthly payment amount, as well as to assist you in creating a budget to accommodate the payments. You can receive debt management plans from non-profit or for-profit credit counselors.  Credit counselors work on your behalf to negotiate lower interest rates and lower monthly payments with your creditors. A debt management strategy is often a component of a larger debt reduction strategy, such as a debt consolidation strategy. Three cardinal rules to follow when repaying debt 1. Never be late on your payments2. Do not miss any payments3. Always pay a little bit more than the monthly payment amount The bottom line Knowing and understanding the different types of debt can help you manage your finances better in the long run. You have a choice: either you let your money control you, or you take charge of your financial situation and manage it effectively. The main distinction you have to figure out is which debt suits you best. You should always do research and have a plan to handle the debt before you sign the dotted line.  Lyle Solomon has extensive legal experience as well as in-depth knowledge and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific's McGeorge School of Law in Sacramento, California, in 1998, and currently works for the Oak View Law Group in California as a principal attorney.

May 2022 — Best Company recently announced the 14 debt relief companies that earned the Great Customer Service Award in 2022. About this award The Great Customer Service Award from Best Company is presented to companies that have a 4+ average service sentiment with a minimum of 50 user reviews on the review site. Companies did not have to apply for this award. Rather, they qualified based on positive reviews from their past clients, specifically regarding customer service and how well they treat their clients. Award recipients The companies listed below are the recipients of the 2022 Great Customer Service Award. These companies are not listed in any particular order. {%company-card vertical="debt-relief" company="americor"%} Based in Irvine, California, Americor employs more than 400 individuals and helps clients with at least $3,500 in debt. {%company-card vertical="debt-relief" company="accredited-debt-relief"%} Accredited Debt Relief is available in 32 states and accepts clients with at least $15,000 in debt. It is based in Houston, Texas. {%company-card vertical="debt-relief" company="credit-associates"%} CreditAssociates specializes in credit card debt and is based in Dallas, Texas. {%company-card vertical="debt-relief" company="consolidated-credit"%} Since 1993, Consolidated Credit Solutions, Inc. has been helping clients in all 50 states find debt relief. The nonprofit is based in Fort Lauderdale, Florida. {%company-card vertical="debt-relief" company="curadebt"%} CuraDebt, a California-based debt relief company, has a minimum debt requirement of $5,000 and holds accreditations with the AFCC and IAPDA. {%company-card vertical="debt-relief" company="pacific-debt-inc"%} Pacific Debt is a national leader in the debt relief space and charges 15 to 25 percent of the total debt you enroll for its services. {%company-card vertical="debt-relief" company="american-credit-card-solutions"%} Based in Maryland, American Credit Card Solutions services 17 states and has been in business for nearly 15 years. {%company-card vertical="debt-relief" company="freedom-debt-relief"%} Freedom Debt Relief has resolved billions in consumer debt since its founding in 2002. It holds all major industry debt relief accreditations and is based in Arizona. {%company-card vertical="debt-relief" company="century-law-firm"%} Century Law firm was founded in 2007 and offers debt settlement services in 19 states. {%company-card vertical="debt-relief" company="fast-track-debt-relief"%} With a minimum debt requirement of $10,000, Fast Track Debt Relief offers a variety of debt relief services and is based in Florida. {%company-card vertical="debt-relief" company="new-era-debt-solutions"%} Since 2000, New Era Debt Solutions has helped hundreds of clients resolve over $200 million in debt. The company is based in California. {%company-card vertical="debt-relief" company="national-debt-relief"%} As one of the largest debt settlement companies in the United States, National Debt Relief has a $7,500 minimum debt requirement and is accredited with the AFCC. {%company-card vertical="debt-relief" company="debt-rx"%} Debt Rx was founded in 1998 and is based in Maryland. The company charges 15 to 25 percent of your enrolled debt for its services. {%company-card vertical="debt-relief" company="consolidation-plus"%} Consolidation Plus offers unsecured personal loans to help debt settlement clients pay settlements sooner. The company is based in Arizona. Customer service note Companies with great customer service continue to win out in the minds (and wallets) of consumers. Especially in an industry like debt relief that is so closely tied to clients' financials and livelihoods, excellent customer service is a must. We commend these 14 debt relief companies for leading the way in customer service and continually pleasing their clients from first interaction to case closure.

  Guest Post by Jeremiah Heck  The short answer: yes, you can still settle your debt even if a creditor sues you.  The longer answer: the settlement is often less than the amount owed, and in some circumstances, you might have grounds to sue the creditor (or take other legal action).  Read on to learn about your consumer rights in a debt collection lawsuit, debt settlement, and potential legal defenses when you find yourself facing unpaid debts.  Before You Settle, Verify According to Forbes, 70 million American consumers have credit issues ranging from collection agencies to lawsuits. Debt settlement — negotiating with creditors to settle for an amount less than you owe — is an effective way to avoid litigation.  Before you pay anything, however, verify that the debt is accurate. Don’t assume that the credit card company, collections agency, or law firm has a valid complaint. Creditors and collections agencies have been known to sue the wrong person for a default payment. Get It in Writing The Fair Debt Collection Practices Act (FDCPA) gives you the right to ask a company to verify a debt. Mail a certified letter (return receipt requested) asking for verification in writing. Mailing it in this manner ensures that the creditor (or the company suing you) received your letter. It might protect you from additional late fees or interest. Did Someone Steal Your Identity? If you’re the victim of identity theft and have fraud prevention through your bank, credit union, credit card company, or a third party, you might not have to pay anything. If you don’t have these protections, you could negotiate with the creditor. Even though you end up paying for something you didn’t purchase, the creditor can clear your name — your real identity — so your credit score doesn’t suffer. Negotiate a Settlement Credit card companies prefer to settle rather than litigate, depending on the amount owed. Even a partial repayment is better than nothing. They want to avoid costly attorney fees and the time it takes to chase an unpaid debt could be used on more productive activities.  You have the right to negotiate a settlement with the creditor, even when they’ve filed a suit against you. Negotiating Tips from Uncle Sam The Consumer Financial Protection Bureau (CFPB) offers these suggestions when negotiating a debt settlement: Write down a summary of your monthly expenses, including the amount you want to repay and your take-home pay. Set aside a small amount for unexpected expenses (like a flat tire) or emergencies (such as an injury). Explain your plan to the collection agency, creditor, or law firm that’s suing you. Ask if you can record the conversation to avoid any miscommunication or misunderstandings. Ask the creditor to waive late payments that add hundreds of dollars to your debt. Ask about removing additional interest on the remaining balance. Don’t pay more than you can afford. Don’t sign any agreement until you fully understand the terms and conditions. You have the right to bring an attorney with you to negotiate on your behalf. How Much Will You Have to Pay? By the time your financial struggles reach the point of being sued by a creditor, it’s clear that you probably cannot repay your debt in full. How much you will have to pay depends on the creditor, the amount, and the age of the debt. In general, debt settlements are 25 to 50 percent of the original amount. However, this amount could change if you don’t abide by the repayment schedule. Defend Yourself Some consumers successfully resolve a credit dispute through the judicial system. One of the more common defenses is challenging the creditor’s right to sue. It’s common practice for the primary creditor to sell debt. You have the right to determine if the plaintiff has the right to sue you. To challenge the creditor’s right to sue, ask for the following: A credit agreement signed by you Documentation of the debt’s chain of custody beginning with the original creditor Check the Statute of Limitations Each state has its own statutes of limitations, or deadlines, on how long creditors have to bring a lawsuit against debtors. This deadline usually starts on the last day you were active on an account. If you prove that the creditor filed a lawsuit after the statute of limitations expired, the court will likely dismiss the case. File for Bankruptcy Filing for bankruptcy is usually the last option when you’re facing a creditor’s lawsuit. However, a petition for bankruptcy with the court stops all debt collection activity. Bankruptcy can wipe your debts away, but it also makes it challenging to borrow money in the future while your credit score recovers. It is in your best interest to explore other options before filing for bankruptcy, such as debt settlement or even debt consolidation. Can You Sue the Creditor? Creditors have the right to take legal action for a valid debt. You have the right to pursue legal action under the Federal Debt Collection Practices Act (FDCPA). When a creditor or their authorized representative uses unethical or unlawful collection methods, you might have grounds for legal action for FDCPA violations. Debt Collection Actions with Legal Consequences for the Creditor According to the FDCPA, creditors may not: Call you at your job or home during inappropriate hours (usually, between 9:00 p.m. to 8:00 a.m.). Make repeated phone calls (for example, calling you three times in a day). Call after being informed that you cannot pay your debt, or an attorney is representing you. Use verbal or physical threats to force you into paying. Make your delinquent debt public (or threaten to). Impersonate an attorney or imply that they are an attorney. Threaten you with arrest or imprisonment. Deposit or threaten to deposit a postdated check before the written date. Closing Thoughts You can settle your debt when a creditor sues you or takes one of the other actions outlined above. However, the one thing you absolutely should never do is ignore a legal summons or complaint. If you fail to respond to the lawsuit, the creditor will probably get a default judgment against you. You might have to pay for the creditor's legal fees, court costs, and interest on the balance due. Worse, the creditor might be allowed to garnish your wages or intercept a tax refund. Remember, there’s no shame in falling behind on loans or credit cards. You have several options to climb out of a financial hole, including working with a bankruptcy and debt relief law firm.  Award-winning attorney Jeremiah Heck focuses primarily on consumer law and legal representation in real estate, employment, and personal injury. His firm, Luftman, Heck & Associates, defends individuals in many types of consumer protection cases, including debt settlement and bankruptcy. He offers a legal perspective on consumer protection issues for SmartMoney.com, a prominent online financial website. 

  Guest Post by Ben Walker Everyone deserves a vacation. Or at least that’s a common sentiment. But travel doesn’t come cheap, and it can seem like an unreachable goal if you’re in debt. According to the Federal Reserve, U.S. household debt balances climbed above $15 trillion in 2021. This included debt from mortgages, HELOCs, auto loans, credit cards, student loans, and more. If you’re dealing with paying off debt from any of these sources, you might find it difficult to understand how you can also work toward other goals, such as traveling. Rather than trying to do both things, consider removing your debt once and for all. It likely won’t be easy, but it’s possible. Here are a few steps to get started: 1. Identify your debt If you want to get out of debt, you need to know what type of debt you have and how much you’re dealing with. Before the start of any journey, it makes sense to get organized so you know how to get to the end. For your debt journey, you want to know exactly what you have to pay to get out of debt. This might be easy if you only have one major debt, such as a home mortgage. You simply have to check how much you’re paying each month and multiply that amount by the months remaining in the loan term. But if you have multiple debts, including credit cards and other loans, it could take more time to gather the information. Write down each type of debt you have and how much you owe. Another detail to add could be to organize each debt by how much interest you’re paying. Depending on your plan for paying down your debt, you might want to pay off the debts with the highest interest rates first (more on this below). 2. Create a budget Now it’s time to identify and organize everything to do with your income and expenses. To properly tackle the challenge of paying off debt, consider how much money comes in and how much money goes out on a monthly basis. This includes identifying all sources of income and your total income amount, as well as finding your total expense amount. Knowing exactly how much money you make and what it’s spent on might give you ideas on how you can spend less of it. For example, you might not realize how many monthly or annual subscriptions you pay for — are they all necessary? Is there another area of your budget where you didn’t realize you spend as much as you do? Take a focused look at your finances by searching bank and credit card statements. This can help you identify where changes might need to be made. Then it’s down to making decisions, such as cutting certain expenses so you can save money. And then your saved money can go toward paying down debt. Learning how to budget provides you with a lifelong resource. In one situation, it could help you pay off debt. But applied in different scenarios, budgeting could also help you avoid getting into further debt, including avoiding debt while traveling. 3. Start a saving habit Now it’s time to save, save, save all the money you can in an effort to be rid of your debt as quickly as possible. Part of starting any habit is setting goals to help you get there. In this case, your ultimate goal is to pay down your debt and, hopefully, stay out of debt in the future. Achieving this goal could pave the way for reaching other goals, such as traveling the world. But what should your saving goals be? It likely depends on your total debt and how much money you can afford to save each month. Because you already know how much debt you’re in and you’ve gone through the budgeting process, you can calculate how long it will take to be debt-free. The key here is to stay consistent, hitting your monthly saving goal or even exceeding it. How can you exceed it? Make more money so you have more savings. Picking up a side hustle or finding ways to decrease your expenses are options to help pad your monthly savings. 4. Choose a plan There are many different strategies and plans for paying off debt. Here are a few to consider: Debt avalanche — Make the minimum payment for each debt you have and then put any remaining funds toward the debt with the highest interest rate. Once that debt is paid off, move onto the debt with the next highest interest rate. Paying down your debts with the highest interest rates first could help you save the most money in interest charges in the long run. Debt snowball — Make the minimum payment for each debt you have and then put any remaining funds toward the debt with the lowest balance. Once that debt is paid off, move onto the debt with the next lowest balance. Paying down your debts with the lowest balances first could help keep you motivated to continue working toward your financial goals. Debt consolidation — With debt consolidation, you typically combine all your debts into one location, which could be a new loan or a balance transfer credit card. The purpose is to help organize your debt, reduce your number of monthly payments, and potentially get a lower combined interest rate. There’s not necessarily a best plan for paying off your debt. The best option for you is typically the one that helps you stick to your goals. Helpful travel tips It’s important to keep a few things in mind if your goal is to travel after paying off debt. Because traveling can be expensive, make sure paying for a trip doesn’t severely change your budget or put you back into debt. Here are some tips to consider: Use travel credit cards. As long as you never carry a balance and make on-time payments, using the right credit card can make all the difference for travelers. The best international travel credit cards offer useful benefits and rewards to help offset your travel expenses and enhance your experience. Use travel apps. Technology, including certain travel apps, can help keep your travel stress-free and more enjoyable. From Google Maps to Uber and beyond, there’s likely an app you can use to find activities, research hotel options, or solve another one of your travel needs. Consider travel insurance. Travel isn’t always predictable, which is unfortunate considering how much it can cost. But with travel insurance, your investment is more protected. The bottom line It’s possible to travel while in debt, but it might not be the best option depending on your situation. Because traveling typically costs a fair amount of money, it likely makes sense to pay off big debts before you travel. This can help remove the burden of debt from your shoulders so the only stress you have is planning a trip to your dream destination. Ben Walker is a credit cards and travel writer at FinanceBuzz who loves helping others make informed and financially sound decisions, especially when it comes to traveling the world. He does this by explaining key principles involving credit cards, budgeting, banking, insurance, investing, and more.

  Guest Post by Lyle Solomon Debt relief scams are rampant in the country, and perhaps this is why the Federal Trade Commission (FTC) issued new rules to protect consumers on September 27, 2010. Even though a decade has passed, many Americans are still not aware of the debt relief laws passed by the FTC for their protection, and that's unfortunate. Scammers take advantage of their ignorance and milk money without providing any service. If you owe money on your credit cards and are planning to work with a debt relief company, it's essential to know the provisions of the Telemarketing Sales Rule first. The provisions clearly explain the debt relief laws companies have to follow throughout the country. Here are a few significant debt relief laws that all the settlement and consolidation companies must follow. Debt relief companies can't charge advance fees Suppose you owe a significant amount of money on cash advance loans and need instant payday loan relief. You are spending sleepless nights thinking about it. Finally, you decide to work with a debt settlement company and get rid of your payday loans. After preliminary research, you make a list of debt settlement companies and call them one by one. The debt settlement companies promise to help you out. But there is a catch. You have to pay an advance fee before they settle your debts. You pay the fees, but the company doesn't deliver the services. To help consumers get fair deals, the FTC introduced a new law wherein debt relief companies can't charge advance fees before they settle a debt. This would prevent fraudulent companies from taking money based on false promises. Debt relief companies can't charge a fee unless they have made at least one payment to a creditor. They can charge fees after settling at least one of the consumer's debts. Debt relief companies have to create a proper fee structure Debt relief companies can't charge abnormal fees from consumers, and they need to have a proper fee structure. If a debt relief company settles multiple debts, the fee for a single debt should be in proportion to the total fee charged by them. If a debt relief company charges a fee based on the specific percentage of the total money saved by the consumer, then the percentage charged should be in proportion to each debt. It should be the same for each debt. Debt relief companies must open a dedicated account in an FDIC-insured bank As per the laws, consumers will keep their savings and fees in a dedicated account. The debt relief company has to open a dedicated account in an FDIC-insured bank for the consumers to set aside money for settling bills. Consumers will control the funds, and they can withdraw the money at any time without any penalty. The debt relief company can't be affiliated with the bank or charge any referral fee for this. Debt relief companies can't misrepresent facts Debt relief companies can't give false information to consumers. They can't make impossible promises and then break them. They have to provide a written agreement and specific disclosures to consumers. Consumers should get enough time to read and understand them. The written agreement has to be signed by the consumer and the creditor. Furthermore, before a consumer starts working with a debt relief company, they have to give specific disclosures regarding the following things: How do they plan to settle their debts How long it may take to pay off the debt The overall cost of the debt relief services The potential impact of debt relief programs on credit score Necessary information about the dedicated accounts It's important to note that the debt relief laws apply to the following companies: Debt settlement companies Debt relief companies Debt consolidation companies Credit counseling agencies      The law applies to for-profit companies. It does not cover non-profit organizations. Debt relief companies can't make false claims regarding their success rates and non-profit status. If you believe a company has violated debt relief laws, you can file a complaint with the FTC or file a lawsuit against the company directly. The bottom line Too many debt relief companies take money from consumers and put them in bigger financial trouble. Debt relief laws are in place to stop this harmful practice in its tracks.  Before signing any agreement with a company, check if it follows the debt relief laws. If it charges advance fees or refuses to provide you with specific disclosures, this should raise a red flag. Avoid companies that promise to settle your debts within a week. It's impossible. Best debt relief companies follow all the laws to avoid lawsuits and fines. Your aim should always be to work with these companies.  Lyle Solomon is a principal attorney for the Oak View Law Group in California, where he specializes in consumer finance. He has also written several articles on financial well-being. Connect with him on LinkedIn or tweet him at @lyle_solomon.

Guest Post by Lou Antonelli This global pandemic has placed an untold amount of stress on people trying to enjoy this "most wonderful time of the year," specifically related to the spent money on holiday shopping. A 2020 Credit Karma survey highlights that as well. More than half of consumers (54%) feel "more financially stressed about the holidays than they did last year." As we near the end of the second year of COVID-19 and are now dealing with national supply chain issues, the stress still lingers. Yet hard-working people are still going holiday shopping despite the pressure they feel. Holiday shoppers may suffer from Acute Financial Stress (AFS), according to one of the most regarded psychotherapists in the country, Dr. Galen Buckwalter. He is working with Beyond Finance to help clients understand their relationship with finances while going through the debt resolution journey. Managing financial stress makes a difference, but where do you begin? More than 56 million people over the age of 18 struggle with AFS. Many people silently suffer from fear and anxiety when dealing with their money, so it is essential to help people deal with not just their debt but the behaviors that led to it. In the end, you’ll be able to better recognize some triggers of financial stress, understand its detrimental effects, and prevent it from overtaking you this holiday season and beyond. Triggers of financial stress AFS is an active stressor in the lives of many hard-working Americans. Specifically, research has shown three principal areas where financial stress attacks people the most: Thoughts — Financial stress can cause persistent negative thoughts, such as beating yourself up over past mistakes. Feelings — Financial stress can cause feelings of fear, worry, or regret related to money. Behaviors — Financial stress can cause abrupt changes in behaviors, like avoiding social occasion. "We need to help take the edge off and help people learn about emotional patterns linked to money and finances. That way, we can all have better control of emotional responses. It's all about the person." — Dr. Galen Buckwalter People from all walks of life experience financial stress. Feeling financially uneasy during the holidays can lead to a heightened sense of low self-worth or despair. Many differing circumstances lead to financial stress, and if those dreary times happen during the holidays, it could make the anxiety even worse. Regretfully, debt accumulated at any time during the year can spiral out of control, and that's when debt relief is needed the most. Numbers of financial stress The annual "Holiday Season Tracker" from Morning Consult already shows signs of escalated stress: About 50% of people who have started holiday shopping have faced supply chain issues The most extensive section of American shoppers plan only to spend $100–$499 for gifts Millennials, the largest cross-section of the population, are "just getting by" (46%) or are behind on their finances (37%) 1 in 5 adults will shop on a "Buy Now, Pay Later" (BNPL) method Stress during the holidays is natural, namely as it pertains to personal finances. Without money, the festivities seem bleak. Without options to substitute for something to spend, more BNPL options like layaway or applying for credit cards increase the worry. A recent PYMNTS survey unveiled some more numbers that may shed some light on the reasons for that Yuletide fretting: 125 million U.S. adults believe they are living "paycheck to paycheck." 60% of Millennials earning more than $100,000 annually are "struggling to get by." 40% of Baby Boomers and seniors have said the same Reality of financial stress For most people struggling with debt, it becomes them. People living paycheck-to-paycheck begin to believe debt is who they are, not what they have.  There are ways out of debt, and they all begin with changing your behavior toward money. If you can't manage finances effectively during the holidays or throughout the year, how could you handle the stress associated with finances when things become uncontrollable? Money can create potent stressors, and people should learn about them. Dr. Buckwalter found the triggers of financial stress are like that of Post-Traumatic Stress Disorder: "Acute Financial Stress creates many of the same negative stressors as PTSD. This is why we teach leveraging mental strength to temper our physical response to chronic stress," says Dr. Buckwalter. "If you have experienced the nagging collector calls, the pain is familiar. Have you seen a stack of bills piling up and no income to stop it? You know the painful effects of financial stress. Any program focused on financial stress should help people to learn to manage that emotional anguish." The relationship between Americans and money has been strenuous for decades. More than 70% of people believe it is the number one stress in life. The reasons for that could be lack of financial literacy or inability to manage funds. Whatever the cause, Acute Financial Stress is real. Its triggers are real. And the impact on any quality of life is real. However, this can be managed and mastered. Prevention of financial stress Debt relief companies like Beyond Finance can aid clients in finding financial and emotional well-being through debt resolution. If people are successfully educated and empowered, they can finally focus on what matters to live the debt-free life they deserve. To manage and ultimately prevent holiday shopping stress, a life of debt relief and resolution will take work. This month, you are already consumed with where to get the gifts, what exactly to get, and thanks to the supply chain issues, how will I be sure my gift even gets here in time? There are ample reasons for your blood pressure to skyrocket already. You don't need a surprise credit card bill. You can't afford to make it worse. Beyond Finance and other reputable organizations can help if you need debt resolution. However, let's see if you can't avert the holiday blues first with these simple tips: Buy from the heart. Just because you spend half of your paycheck on one gift doesn't mean it will be valued more. Stop guessing and be sure you purchase something that is wanted rather than what you think. The gift is for someone you care about, so be sure it shows when that person unwraps the gift — regardless of how inexpensive it may be. Write your holiday honey-do lists. Don't get caught spending more than you have with a last-minute purchase. Make a checklist of everyone you want to get a gift and how you intend to afford it. Stick to that list. Check things off with satisfaction. And know your limits because staying within those boundaries now will save you a financial headache later. Take care of yourself first. People often spend more than they have and don’t stop to consider the cost this will pose to themselves. Self-care is crucial during the holiday shop-a-thons. How do you manage stress? If you don't know, there's no time like the present to find out and make improvements. Make credit card partnerships. Numerous credit cards compete for your attention, so take advantage of that. The ones that provide you the best rewards (i.e., points, cashback, airline miles) should be the cards you use — if you choose to use them at all. Those rewards aren't an excuse to go crazy. Stick to your budget, and the rewards will come. Sometimes determination and focus can help people get out of debt. What's essential is that other times, credit has been damaged, and loans aren't possible, so other options should be considered before bankruptcy becomes a stark possibility. Debt resolution companies can be trusted, and if you count on the process, you can even learn to trust yourself with your finances. And what a holiday gift that would be. Lou Antonelli is Chief Operating Officer of Beyond Finance, which is one of the largest debt resolution organizations in the country working to move their clients beyond debt.