Debt Collection Horror Stories

Debt collector horror stories abound: There are threats to dig up the dead relatives of those who couldn't pay their funeral bills, promises to imprison debtors or take their children into custody -- even warnings that pets will be killed.

Under the Fair Debt Collection Practices Act, collectors are prohibited from threatening violence, using profane language, calling incessantly, inflating a debt and implying they are attorneys. And they can't tell consumers they will arrest them or garnish their wages or property unless they actually plan to take that action and are legally able to do so through a court order. Many states have their own rules governing debt collector practices as well.

These are some of the latest outrageous allegations of abuse:

Threatening to take away children: Last week, the Federal Trade Commission shut down a Texas-based debt collector, Goldman Schwartz, for using deceptive and abusive scare tactics to force people to pay their payday loan debts. Among the alleged offenses: collectors called consumers incessantly, saying "we can take you to jail" or "we'll send the sheriff's department to your job and take care of this the hard way," even though they had no legal basis to do so.

Collectors went so far as to tell consumers that when they go to jail, police or child protective services would take their minor children into government custody, according to the FTC. Goldman Schwartz hasn't responded to the complaint filed by the FTC, and its attorney declined to comment on the case.

Posing as a law firm: To scare consumers into paying, Goldman Schwartz also allegedly posed as a law firm or claimed to work with law enforcement authorities -- even charging unauthorized attorney's fees that it referred to as "juice."

One consumer, who asked to remain anonymous, filed a complaint against Goldman Schwartz claiming its collectors pretended to belong to a law firm one day, and the next day said they worked for local law enforcement. After calling her incessantly over a $300 payday loan debt -- which she said she already paid -- a collector even called her workplace and told her coworkers he was going to come arrest her and they would have to pick her out of a lineup.

Pretending to have legal authority has become a popular tactic among debt collectors. In a separate lawsuit filed by the Pennsylvania Attorney General that's still pending, a debt collector, Unicredit, was charged with decorating an office to look like a courtroom and holding fake court proceedings. The attorney for Unicredit's vice president said "he was not personally involved" in the activities that the lawsuit alleges, and the president's attorney did not respond to a request for comment.

Threatening to dig up dead bodies: Another collection agency, Rumson, Bolling & Associates, was fined more than $700,000 last month for taking harassment to a whole new level. One of the worst offenses listed in the FTC's lawsuit: collectors allegedly threatened to dig up the bodies of debtors' deceased children and hang them from a tree or drop them outside their door if they failed to pay their funeral bills. The defendant's attorney, Christopher Pitet, said the company's owners did their best to ensure collectors complied with the law -- so if any wrongdoing was done, it was done by employees and was against company policy.

Promising to hurt pets: The harassment didn't stop at dead bodies, according to the FTC. Collectors at Rumson, Bolling & Associates also allegedly threatened to kill a debtor's dog. Specifically, collectors told a woman they would have her dog "arrested ... shoot him up and ... eat him," before sending the police to her house to arrest her, the FTC claimed.

Collecting debts owed to other companies: Along with all the harassment, the FTC has seen a new collection scheme pop up: scam artists are stealing customer information from payday loan websites and then disguising themselves as debt collectors and going after the loans customers take out, said Tom Pahl, an assistant director at the FTC.


 In one case, a phony California-based debt collection outfit run by a man named Kirit Patel allegedly collected more than $5.2 million in debts that were owed to payday loan companies -- or weren't owed at all, according to the FTC. The defendant's attorney, Andrew Steinheimer, said Patel was duped into opening the company by someone else and was unaware of any wrongdoing.

The case was referred to the Justice Department, and a federal grand jury indicted Patel last year. If convicted, Patel will face up to 20 years in prison or a fine of $250,000 (or both).

"[These debt collection agencies] continue to taint the professionalism of the vast majority of collectors that do it the right way -- respectfully and in compliance with federal and state laws," said Mark Schiffman, a spokesman for debt collection trade association ACA, which represents more than 3,000 debt collectors.


source: dailyfinance.com

Calculating Your Net Worth

Your own personal net worth is something that can serve as a truly useful tool in measuring the financial progress that you have made from one year to the next. What your net worth is, is essentially just a grand total of all of your assets, with liabilities subtracted. There is no magical number when it comes to net worth because everyone is different. Just make sure that you are using your own personal net worth in order to track your financial progress from one year to the next, and hopefully you will see some improvements in the process.

Calculating your own personal net worth is not difficult at all, and it only really requires a little bit of financial information regarding what you own, how much money you have and how much debt you owe.

Step #1 - You should begin this process by listing out all of your largest assets, such as your home and any vehicles that you may owe. Make sure that you are using accurate estimates in the current amount of dollars.

Step #2 - Next what you are going to want to do is to gather all of your latest financial statements for the assets that you have that are more liquid in nature. This is going to include your checking accounts, savings accounts, cash, investments, CDs and retirement accounts for example.

Step #3 - Third, what you are going to want to do is to consider listing any personal items that you have, that have some kind of value to them, such as jewelry, collections, musical instruments and so on and so forth. You do not have to itemize absolutely everything that you own, but you should definitely be listing any items worth more than $500.00.

Step #4 - Now what you are going to want to do is add all of your assets together from the first three steps, creating your "total assets".

Step #5 - Now you want to look at your liabilities. Again, you should be beginning with the major outstanding liabilities, including the balance on your loans or your mortgage.

Step #6 - Now, you should list other personal liabilities such as student loans, credit cards and any debt that you have to pay off.

Step #7 - Add up all of your liabilities, coming to a "total liabilities" number.

Step #8 - Now what you should do is to subtract the total liabilities from your total assets in order to come up with your net worth number. It does not matter what your net worth is, it just matters that you work on improving it from this point on. Repeat this process every year, comparing the new number with last year's number to find out if you are moving in the right direction or not financially.

source: richcreditdebtloan.com

Should You Be Scared Of Inflation?

More than anything else, the financial markets are driven by fear.  Investors fear large, unexpected moves in the markets.  They fear missing out on opportunities.  And, most of all, they fear losing money.

Of course, fear becomes a real factor in the financial markets when a major crisis occurs, such as the bank bailouts in 2008.  Fortunately, these types of events don’t happen all that often.

On a more consistent basis, nothing generates investor fear like the threat of inflation.  Year after year, analysts and experts of all kinds warn of the adverse effects inflation can have on an investment portfolio.

Basically, inflation means the costs of goods and services are rising over a period of time.  As such, each dollar you earn can purchase less and less of those goods and services.

So what makes inflation such a big deal?

Well, if your income level doesn’t keep up with the pace of inflation, you’re essentially taking a pay cut when inflation occurs.  On a limited basis, it’s not a major concern. However, over a long period of time or in large amounts, inflation can be a real issue.

What’s more, severe inflation can lead to social unrest and other major sociopolitical issues.  Clearly, that’s the kind of stuff no one wants to deal with.

With that in mind, you might be wondering if the recent Fed stimulus is a reason to worry about inflation.  After all, many of those critical of the Fed have been citing inflation concerns.  Their argument is that with the Fed “printing” so much money, it will devalue the dollar to the point of significantly eroding our purchasing power.

Here’s the deal with the recent round of quantitative easing (QE3): yes, it should result in some inflation.  However, it’s actually supposed to create inflation.  You see, a certain amount of inflation is actually good for the economy – especially during a recession.

Let me explain…

There are actually several positive benefits to inflation when it is sits at a reasonable level (from 2% to 4% depending on overall economic conditions).

First off, reasonable inflation levels benefit the labor market.  The thing is, companies don’t like lowering wages because it upsets the workforce.  Instead, they can let inflation do their work for them.

Without getting too technical, companies can leave wages flat in tougher periods and inflation will function as a sort of pay cut.  Eventually, this means companies can hire more workers sooner than if inflation wasn’t occurring.

Second, inflation means money sitting in the bank is losing its purchasing power.  So, it makes sense for companies to go spend that money on capital investments, such as plants and equipment.  This capital spending then leads to economic growth.

Finally, when inflation is occurring, it means deflation is being avoiding. Deflation is very bad, even worse than high levels of inflation.  Just think of the Great Depression versus the high inflation of the 1970’s.  Everyone agrees the Great Depression was far worse than the 70’s.

What’s more, the Fed has a good track record of dealing with high inflation – particularly over the last 25 years.  On the other hand, a deflationary spiral is much harder to recover from.

Here’s why this is important to investors…

The first two reasons I mentioned about how inflation can be good are also good for your portfolio.  If a company is doing well enough to hire more workers or purchase capital goods, it should also be posting higher earnings.  And of course, that should translate to a higher stock price.

Let me break that down a bit further.

Suppose we’re in a recession or slow growth period with inflation running a modest 2%.  A company that makes widgets will raise the price of their widgets in line with inflation.  However, they’re holding labor costs steady due to the recession.  That means higher revenues with roughly stable costs (yes, materials costs will also rise, but in most cases labor is the far greater expense).

So what does higher revenue mean if costs stay the same?  Bigger profits.

Now, let’s say our widget company also has $100 million in the bank just sitting there.  If inflation is at 2% and short-term interest rates are paying 1%, then the company is effectively losing money.

So what will they do?  Well, they could buy another widget factory, buy more advanced equipment, acquire another company, expand into a new product, and more.  The payoff from these types of activities is almost certainly higher than what they’d earn saving the money.

Of course, any sort of expansion or addition to the company should result in higher revenues – and likely higher profits as well.  And, that’s exactly what investors are looking for when they buy stocks – in other words, higher stock prices.

Keep in mind, the benefits of inflation have an overarching effect on a portfolio as a whole.  Over time, it will benefit a cross section of companies.  It’s not necessarily the sort of reasoning investor use when purchasing one specific stock.  However, since most investors’ portfolios contain multiple stocks or mutual funds, healthy inflation is a positive for a vast majority of investors.

Bottom line, inflation isn’t nearly as bad as many investors think, especially during a recession.  Just keep an eye on inflation expectations.  As long as the number doesn’t exceed 3% to 4%, there’s nothing to worry about.  Even better, it should actually benefit your portfolio over time.

source: excessreturn.net

5 Smart Ways to Avoid a Cash Crisis

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.

Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.

If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.

Here are five easy ways to protect your company’s precious cash life line.

No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.

No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.

No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.

The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.

No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.

No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.

There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.

source: foxbusiness.com

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.
Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.
If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.
Here are five easy ways to protect your company’s precious cash life line.
No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.
No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.
No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.
The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.
No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.
No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.
There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.


Read more: http://smallbusiness.foxbusiness.com/finance-accounting/2012/11/15/5-smart-ways-to-avoid-cash-crisis/#ixzz2COXjczLv

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.
Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.
If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.
Here are five easy ways to protect your company’s precious cash life line.
No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.
No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.
No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.
The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.
No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.
No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.
There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.


Read more: http://smallbusiness.foxbusiness.com/finance-accounting/2012/11/15/5-smart-ways-to-avoid-cash-crisis/#ixzz2COXjczLv

Getting a Loan With Bad Credit

In today’s struggling economy, a lot of people have low credit scores and loans are more difficult to get. Your credit score is based on payment history, outstanding debt, credit age, and new credit. To keep your credit score up it is important to pay bills on time and keep your credit card balances low. Your credit score determines how much your can borrow for a loan. If you have bad credit, you can still get a loan, it is just tougher with limited options. Websites like www.badcreditloans.com make it easy for people to get loans regardless of their credit history.




Personal loans are usually considered to be a bad way to borrow money, primarily because of the very high interest rate that comes with them. However, personal loans are a reliable and affordable option for many people, particularly those with limited savings and credit options.

Before taking out a loan it is important to be educated on the loan process. The Bad Credit Loans website has a large selection of resources to help borrowers make the best loan decisions. There are informational articles including tips on when to take out a loan, spending a loan responsible, repaying a loan, budgeting, and more.

In order to be eligible to apply for a personal loan, you must be at least 18 years old, a United States citizen or legal resident, have a steady income of at least $1,000/month after taxes, and have a checking account in your name.

To apply for a loan, you just need to fill out a short application online. Once approved, you will be presented with a number of competitive loan offers from local vendors. Bad Credit Loans has a network of trusted lenders for a variety of loan types including personal, business, mortgage, home, student, and auto loans.

Comparing loans can be quite time consuming, but by using an online service like Bad Credit Loans you will save hours of valuable time by being able to review multiple offers within minutes.

If you decide to take out a loan only borrow what you can afford to pay back, avoid borrowing from more than one lender, repay the loan on time, and set up a realistic budget to help avoid the need to borrow in the future.

Once you decide on a particular loan offer, you are guaranteed to get the money directly deposited into your bank account within no more than one business day. To repay the loan, your lender will withdraw the loan amount, plus any fees and interest charges, directly from the bank account in which the money was deposited on the set repayment date, which is usually your next payday.

There is no fee to apply for a loan on the Bad Credit Loans site and there is no obligation to actually take out a loan. To learn more, go to www.badcreditloans.com.

source: 20smoney.com