Sep 13, 2014

Keeping Your Head Above Debt

If you are drowning in debt, you are surely not alone. The Great Recession triggered a tsunami of financial problems for the American consumer. And, while big business has been the recipient of tax loopholes, government bailouts, and other forms of largesse, ordinary people have not been so lucky. But surrounding the facts about consumer debt is something that most people are reluctant to discuss: the feelings they have about being over their heads in debt. Unfortunately, debt collectors often prey on these feelings to attempt to put the squeeze on consumers.

From the ordinary person’s viewpoint, being in debt can lead to feelings of shame, frustration, and even desperation. No one plans on getting behind in his or her payments. Sometimes, life just happens. People get sick and run up medical bills, people lose their work and have to survive on unemployment, or the car breaks down and people are saddled with unexpected repair expenses. While we may not have been saving as much as we should, and we may have charged more or bought more than we should, the financial industry is an accomplice. In the run-up to the economic crash in 2008, financial institutions were extending massive amounts of credit to people who really could not afford it, whether in the shape of loans, mortgages, or credit cards. When it came time to pay, the economy had crashed and there was simply no jobs, no money, and no light towards the end of the tunnel.

The interest rates on the debt consolidation loansare reduced and less. This is biggest benefit of getting consolidation loans. It can allow you to save more money and to fulfill your requirements easily. From credit card debt management, you can merge all your bills in one single payment per month. This can improve your credit history and makes your credit score goes higher. Also other benefits like long time period to repay and the flexible terms are the reasons people are turning towards these management projects for the consolidation of their credit card debts.

If your credit card debt consolidating company asks for collateral, you need to be very careful because if you do not act wisely, you can lose your home or your car. The companies may offer you loans on zero interest rate and offer you more terms which are highly alluring. Make sure that the level isn’t offered for a short space of time because if it going on with you, you’ll definitely lose your asset. Mostly these zero interest loans are provided for six months which isn’t affordable by a common person. But debtors do not read the conditions and just by looking at zero interest rate, they take the loans and then lose their assets.

It’s understandable that this group of circumstances could give rise to frustration. But being in debt is not shameful, and those who owe money should not allow themselves to become victimized by the seedy underbelly of the financial industry, namely the debt collection industry. The position of many in the debt collection industry is that consumers who’re behind on their bills are deadbeats, and that they will go to any lengths necessary to collect every dollar.

Because money is so tight, an growing number of debt collection agencies are skirting the law-or broken the law-and using unsavory debt collection tactics. They count on the fact that the majority people feel shame or embarrassment about their debt, and leverage that to threaten or shame people into making payments that they cannot afford.

If you are being hounded by a debt collector, it is important that you know your rights guaranteed by the federal Fair Debt Collection Practices Act (FDCPA). You may owe money. However, you are likewise entitled to retain your dignity and respect. According to the FDCPA, debt collection agencies aren’t allowed to threaten you, to call you late at night or early in the morning, to misrepresent who they are, or to otherwise trick you into paying a bill.

There are a million and one horror stories of debt collection agencies that use illegal practices in order to gather money from unsuspecting consumers. These debt collectors pass judgment on those they harass, and believe that the end justifies the means. The bottom line is that it’s up to you to hold debt collectors accountable for their actions. The FDCPA includes provisions for consumers to sue debt collectors in federal court, and to receive up to $1, 000 plus attorney fees when a debt collection agency crosses the line.

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