Recession scams, theft, not-so-ethical tactics on the rise

With a sour economy comes greater opportunity to scam, steal and make business decisions that aren’t illegal but not in the best interest of the consumer.

Here’s just a few to beware of until our recession comes to a close:

1.  Gift cards are being sold by large retailers that are going out of business.  These bankruptcy filings have been filed, with planned closures in the first quarter of 2009.  Stores going out of business continue to sell gift cards that will have no value if they’re not used in time.  There’s a list of these stores floating around.  Obviously, we’re not going to publish it here but do your research and you’ll find it.

2.  Credit card companies are cutting credit lines and cancelling cards with very little notice (or in the fine print).  Cancellation of your credit card can cause liquidity problems while a reduction in your line can impact your credit score significantly.  If this happens to you, call your bank and ask that it be reversed.  You DO have a shot.

3.  ”this is not a bill”  You’ll see these coming in the mail from a variety of services.  The most recent scam we received was from a company stating our statement of information had not been received by the state of California for our corporation and that a fee of $250 was due within 10 days or the business would be shut down.  In fine print, buried in a paragraph was “this is not a bill”.  The seal at the top, address and letterhead made it appear to be from the state so be aware of this scam in your area.

4.  Foreclosure home break-ins and crime.  Foreclosed homes are obviously empty with no one to watch but a neighbor.  Thieves break in to steal copper, appliances, wiring, plumbing, wood etc.  If you have foreclosed homes in your neighborhood, keep an eye out for suspicious activity.  If you see someone call the police and the realtor listed for the property. 

Foreclosed homes are also being used for other crimes.  Recently we were informed that car thieves were stripping stolen vehicles in the garages of foreclosed homes.

5.  Increased prices for services.  Watch your bills for services like cable, satellite, internet phone etc.  These companies have very high default rates along with cancellations so they’re starting to raise prices and charge additional fees or they’re waiving previously promised promotions.

There are many more scams, theft and unethical activities occurring today.  Keep your eyes open and protect your money.  We also suggest checking your credit quarterly to ensure against identity theft.

How to stop collection calls > bankruptcy, credit card debt and the repo-man

Being in debt is stressful for anyone with the situation exacerbated if you have a family who counts on you to pay the bills.  But when times are tough and jobs are drying up, there’s little you can do.  Collection calls will start and given the environment they will start faster and be more aggressive.

This can be a horrible feeling to dread every time the phone rings and wonder if it’s another collection agency. Rarely are they kind on the other end.  This is because the caller is getting paid to collect the debt from you, typically by commission.  Understand that the person on the other end is probably struggling to pay their own bills.  If they don’t collect from you, they don’t get paid.  This is why they can cross the line and often violate the FDPCA or Fair Debt Practices Collections Act.  To better understand what a collection agency can and can’t do, visit the FDPCA directly and read the act.

One of the questions we receive often is how to stop collection calls.  We can tell you that as a consumer/debtor, you can ask them to stop and it won’t matter.  Remember, they get paid to collect from you.  The collection calls will continue so it’s best to acknowledge them.  Never ignore the calls and letters as it will only damage your credit and could force the collection agency to turn your account over to an attorney to file suit.  No one needs that additional stress.

So to stop calls you have a couple of options.  We’ll start with the most costly and potent one, Chapter 7 bankruptcy.  When you file for bankruptcy, which cost between $1500-$2500 for an attorney, collection calls will stop.  If they don’t, you simply need to inform the creditor that you have filed for bankruptcy protection and they will be required to stop contacting you.

Bankruptcy is expensive, extremely damaging to your credit and not as powerful a tool as it used to be.  This is due to legislation passed in 2005 that helps credit card companies collect some portion of what’s due to them.  If you’re considering bankruptcy, research all of your options.  For some, this may be the only option but for others there are alternatives.

Debt consolidation is a powerful tool in that the collection calls can stop in short order so long as you are on a plan and sticking with your obligations.  Debts can typically be paid within 1-4 years with lower interest rates.  A debt settlement can also be accomplished where a figure is agreed upon by both debtor and creditor.

You can try to manage your debts on your own by contacting your creditors to work out a payment plan.  If you’re emotionally tied to the events, too busy with work or don’t understand the process completely it might be best to work with a debt consolidation company.

One of the other top questions we get is about auto repossession.  Laws are different everywhere but we can tell you that a repo-man can’t break into your house/garage to take the car.  Typically they’ll knock on the door and request to take the vehicle because payments have not been received.  If you don’t answer and continually hide, you can plan on the county sheriff paying you a visit to surrender the vehicle.  We strongly suggest that you not let it get to this point.  If you’re struggling with your debts, explore your options and use them.  If you can’t pay for your car, don’t wait for them to send the sheriff.  This can be a scary or embarrassing experience that is often done in broad daylight for all of your neighbors to see.

Remember, debt collection calls can be stopped.  Reposessions can be avoided and credit card debt can be managed.  Contact a specialist to find out how.

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Los Angeles Bankruptcy Attorneys > How and why…

We’ve written quite a bit about bankruptcy and that’s because so many people call and write in to ask about it. Bankruptcy is one of those terms that most people know but probably don’t completely understand.  We’ll talk about Chapter 7 and the basics of how it works along with an attorney.

Chapter 7 bankruptcy basically gives an individual a second chance by wiping out their debts.  Eligible debts do not include student loans or child support for reasons that are obvious but they do include most other debts allowing the debtor to walk away debt free and with a fresh start.

There are hitches though.  First, you can only do this every six years, not something you should strive for. Second, the cost is extremely high, between $1500-$2500, plan on the higher number in Los Angeles.  Last, the bankruptcy laws have changed as of 2005 after credit card companies convinced Congress to not let borrowers completely off the hook.  This part gets complicated so you’ll have to ask your attorney exactly what you’re stuck with.  Last, this is a major “ding” on your credit that is considered a public record and remains for 10 years.  This ding decreases in importance as time goes on but it still hurts.

Speaking of attorneys you’ll need to find one.  There are thousands waiting to take your money and although it may be helpful and comforting to have an attorney, it’s still frustrating to pay money out that you probably don’t have ergo the need for bankruptcy.  In the end though, you want things to be done properly so your interests are protected.  This doesn’t mean the attorney you select will do the job properly so if anything you’re best looking for a referral.

Before going through the process of looking for a bankruptcy attorney in Los Angeles, you might consider your other options, yes you have other options.

You can attempt to work out your debts on your own.  It can be done and has been done.  You need to be comfortable contacting your creditors while also understanding how the process works.  If you’re holding down a full-time job (maybe 2) then this might not be the option for you.

If you’re not comfortable contacting your creditors leave it to someone who’s not emotionally involved, knows how the process works and has the time and resources.  A debt consolidation company can help you manage your debts for a fraction of what a bankruptcy attorney will charge and in the end your credit score (FICO) will not be affected or might even get better.

The typical debt consolidation company will help with debt settlement or debt management.  To learn more fill out the form below:

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Recession Yet? What about holiday shopping?

Holiday shopping is right around the corner and many retailers are anxious for relief some so anxious that sales have begun 26 days in advance of Thanksgiving.

K-Mart seemed to be the first to offer deep discounts but many others are lining up.  The idea is to spread the holiday shopping season out has much as possible because these retailers depend on the holidays to become profitable.  Will this holiday season measure up to those of the past?  History is on the side of the optimist so we’ll see but given recent auto sales data it doesn’t look good.  GM had a sales decline of 45% for the month while Ford posted a decline of 30%, mainly due to the lack of available credit.

Stimulus package picks up steam

We’ve been talking about the potential for a new stimulus package for a couple of weeks.  It’s starting to look more like this will become a reality.

The first stimulus package gave $600 to couples and an additional $300 per child.  Many used this to pay down debt, for gas and necessities like food.  We’re not sure what this new stimulus looks like yet but we do know it will need to be substantial to make an impact.

Currently this package has been developed by Ben Bernanke with tentative support from President Bush.

Another Stimulus Check on the Way?

The first stimulus package passed by Congress did little to stimulate our economy but it was still a pleasant surprise during tough times.  Couples received $600 with $300 additional per child.  The idea behind this package was to get people to re-invest that money into the economy by purchasing goods like TV’s, electronics, clothing etc.  However, most used this money to pay down debt, for fuel and other necessities like groceries.  During that period the cost of gas had peaked and was hurting everyone.

Now gas prices have come down and appear to be ready to go down further.  If another stimulus is passed will it helpt this time and how much will each of us get?

Another question to consider is what you would do with this check.  If you are in debt, it might be time to work on a settlement or find a way to better manage it, then when your next stimulus check comes you can actually use it in a more effective way to stimulate the economy!

 

Mortgage buyouts > will they help you?

The only clear thing in our recent meltdown of the American economy is that we all agree it’s in trouble.  We all agree it affects everyone and most people need significant help.

With the recent passage of the Federal Rescue Bill.  You can read the entire bailout bill in pdf form provided by CNN.com, none of us really knows how it’s going to affect us.

There are many people who have already lost their homes while others are in the process.  It is not likely that this bill will help to prevent further foreclosures.  If you are at risk, one of the best steps a person can make when facing foreclosure is to contact their bank and try to renegotiate the terms of your mortgage.  With foreclosure happening to so many people, it’s worth a try.

If your home is foreclosed on remember to take other steps to improve your credit.  This often is a difficult and frustrating task that is best left to a third party service that can negotiate payment plans for you with your creditors.

A foreclosure is difficult but the economy will improve.  New credit reporting laws place more weight on recent events.  This will actually work to your benefit if you start working to improve your credit now.

Government in the banking business?

This video from Fox News discusses how and why the U.S. government would buy into U.S. banks.  The primary reason mentioned is to “prop up” financial institutions, technically an investment that eventually would be paid back when the economy improves.

Many people are hurting from the current financial crisis and all have been affected in one way or another, even if it’s somewhat indirect.  Even those once considered rich have lost their homes, businesses and investments but the economy will improve.  Will you be ready when it does?

Plan now for economic improvement historical evidence shows will happen sooner or later.  If you are in debt and having problems contact a credit counselor.  They can and will help.  The best thing you can do is take action, don’t ignore notices and don’t wait another day.  You’ll be surprised at what can be done.