The income based means test was introduced as part of the 2005 changes. It is a household income hurdle that must be cleared first. The allowable earnings are different from state to state.  You basically must earn less as a household than a set dollar figure. If you are over the median income amount, there may be allowable exemptions that apply to you that will help you clear the means test. A good bankruptcy attorney will be able to help you better evaluate any exemptions.

This income hurdle was supposed to push more people into a chapter 13 repayment plan, or possibly into a debt management plan (DMP) offered through nonprofit credit counseling agencies. That hasn’t worked out too well. There has been no substantial change to how many chapter 7 bankruptcies are filed versus chapter 13’s.

Another one of the changes in 2005 was the requirement for EOST approved pre and post filing counseling sessions. A certificate of completion is required, or your petition can be dismissed. I am sure the idea was that more people would be guided away from bankruptcy by credit counseling agencies (CCA’s)who partner with banks in order to get you to pay back your balances at a lower interest rate.

CCA’s can charge as much as 50.00 for the session. Most of the CCA’s quickly learned that live sessions were a waste of counselor resources and went to a more streamlined automated delivery system. Many sessions are now done online. One of the EOST approved vendors who can certify that you have met the pre filing counseling requirement now charges as little as $5.

So… credit counselors who are trained to operate a computer screen in order to fit people into predetermined criteria for a debt management plan has now been reduced to a 60 minute experience flipping through screen shots on a computer. While the former was never really equipped to provide any creative concepts or information to avoid bankruptcy, the latter is even less instructive.

A friend of mine recently filed chapter 7 bankruptcy. He used an online delivery system for the pre filing counseling requirement. One of the suggestions the system gave him to avoid bankruptcy was to quit smoking. He doesn’t smoke. Never has. He did not accidently answer a question about smoking. There were no questions about smoking.

The counseling session requirement was a bad idea to begin with due to how narrow the qualifications for credit counseling repayment programs are and the fact that banks don’t permit the CCA’s to offer anything other than a DMP. A poor concept has only become sillier with computer generated certificates that have no chance of delivering a meaningful evaluation of a person’s ability to avoid bankruptcy.

The vast majority of people who can qualify to discharge debts in a chapter 7 are going to find that bankruptcy is the least costly and quickest path to a financial fresh start. For those seeking an alternative to bankruptcy, a DMP offered through credit counseling companies may be an option if you can afford to make a monthly payment equal to about 2.2% of your combined balances on accounts you enroll into the plan. At the time of this writing less than 20% of the people who speak with a credit counseling outfit can qualify for a DMP.

You can also look to negotiate reduced balance settlements with creditors; enroll in hardship repayment plans direct with your creditors; or a combination of both.

Or… just quit smoking.

Very, but those doing the disclosing are not really helping with the little information they give.

When a person is struggling with debt and looking for outside help from a company or person, they should certainly have risks and rewards disclosed to them. Ideally, the disclosures would help a person to best evaluate which direction to take for help, and who to trust. A recent article by Elisabeth Rosenthal in the NYT: I Disclose… Nothing helps to underscore what I find to be the biggest shortcoming of disclosures in debt relief – No context.

From NYT article linked above:

“… disclosure laws — meant to elucidate — do not necessarily lead to greater transparency or prevent the things they were meant to deter.”

One or two sentence disclosures rarely do. Disclosures about the affects of a debt relief option to ones credit score are a good example.

Credit counselors and debt settlement companies offering legitimate services will disclose that there will be an impact to credit scores and those things will appear on the consumer’s credit report as a result of enrolling in their respective programs. If a consumer is hyper concerned about her credit score and credit report, but unable to pay the minimum monthly amount due on her Citi card, she may be more prone to try and avoid bankruptcy with a DMP than by opting for debt settlement. In this way, one would think disclosures about the impact to credit that this consumer read or heard – performed exactly as meant to. Nope.

The problem debt she has is a $17,000.00 balance with an interest rate of over 20%. A credit counselor offering a monthly payment of 357.00 sounds better than the 500.00 plus she cannot afford now, but the 357.00 monthly payments are going to be a stretch too. She enrolls in the DMP and scrambles up the 357.00 each month only to miss a payment in month 8.  She finds herself unable to get back on track the following month. The account was closed by the creditor when she enrolled in the debt management plan, she now has a 30 and 60 day late pay reporting, and she blew through 2500.00 in payments toward a solution she was not going to succeed with. That 2500.00 would have more than covered the cost of a chapter 7 bankruptcy that she was qualified to file. And, as it turns out, that 2500.00 was enough to settle the account with card services in month 7 after she fell off the DMP.

The messaging from credit counselors, the media and societal conditioning placed too high of importance on the wrong thing. Not just in this woman’s case, but likely in millions of cases. Her issue was debt she could no longer afford to pay. Not her credit score. Her score will bounce back from the settlement event in about the same amount of time it would have had she filed for chapter 7.

Disclosures made when she was originally trying to get a grip on her options lacked the detail needed for her to make a fully informed decision. The disclosures about credit impacts are often used as a bias forming selling point to the detriment of the individual relying on professional feedback. The lack of fully fleshed out disclosure details is not a mistake by omission. It is a purposeful strategy. One that is not just costly to the consumer in financial trouble, but to local communities and our national economy.

More from the NYT piece linked above:

“One fundamental problem is that disclosure requirements merely get information onto the table, but themselves demand no further action. According to political theory, disclosure is both a citizen’s right and a tool to ensure good government and consumer protection, because it provides information that leads to informed decisions. Instead, disclosure has often become an endpoint in the chain of responsibility, an act of compliance with the letter of the law rather than the spirit of transparency.”

A good example of this would be companies offering debt settlement disclosing the fact that nonpayment to creditors could result in being sued by a creditor in their attempt to collect. That lawsuit may result in judgment which could result in bank levy or garnishment. A consumer given this disclosure is now informed of a known risk. The company making this disclosure can feel that they covered their own butt because the risk was plainly stated to the customer in advance. However, if any real context were provided to the consumer about this known risk, it would involve much more detail – detail that cannot fit into a tidy paragraph or three, let alone one sentence. Being sued by a creditor IS a real risk. Do settlement companies and those who promote them state plainly that the risk of being sued increases the longer debts remain unpaid? Most don’t go into that type of detail as it would scare off a consumer from beginning the savings and settlement plan.

The kind of detail a consumer deserves to know on this critical disclosure is not provided because it would often lead to the consumer opting for bankruptcy where they are protected from collection law suits, or electing to gut out the repayment plan in a DMP over 4 to 5 years. Here again, the failure to provide consumers the type of debt advise and disclosure needed, that allows them to make informed and appropriate decisions, are a purposeful act of omission tied to a company or persons revenue goals.

More from the NYT article:

“Many disclosure programs today cloud rather than clarify a particular situation. As disclosure statements have become more numerous and more complicated, “consumers just ignore them or don’t understand what they say,” said Jeff Sovern, an expert in consumer law at St. John’s University.”

The type of disclosure context needed that provides an individual seeking debt relief a meaningful grasp of the issues they face; that educates and informs to the degree that would maximize awareness of the wrong and right steps to take; how to evaluate the immediate need for relief alongside concerns for ones future success and goals; that applies disclosures to the unique circumstances of the relief seeker – is simply not provided in the main by those offering alternatives to bankruptcy.

“While regulators and consumers see disclosure as a way to improve transparency, companies often regard it as a risk-management strategy. “Often the goal of disclosure is to reduce or eliminate the legal risk,” Dr. Weinfurt said. “It is so they can say, ‘Hey we told you so.’ ”

When it comes to the debt relief industry, companies and people provide disclosures in order to meet a minimum standard and to limit their own liability. Any substantive and informative discussion around disclosures to debt relief seeking customers that allows them to truly weigh and measure how the facts disclosed apply to them at the moment and on a forward looking basis, typically never happens. If meaningful discussion about key disclosures does occur, it would most likely be down the line when a disclosure item is triggered and after irreversible action steps in debt relief have been taken. This is where most of the headaches for debt relief customers and companies occur. Unhappy customers who were not fully aware of the implications of the decisions they were making at the time they enrolled in a debt relief plan. Customers of debt management & debt settlement plans may want to place blame on a service provider when things don’t go as planned. The service provider will want to point to a disclosure and say, “we told you this at the beginning”.

The consumer seeking debt relief is not shopping for a toaster oven. Companies and individuals representing they can help someone in need are selling something. That something is not as benign as describing the convection cooking features of a counter top oven. The responsibility debt relief service providers have to inform and educate the consumers they come in contact with cannot be underscored enough.

A friend of mine started a unique consulting service a couple years ago. He provides paid consultations with consumers in order to help them understand the debt relief options available to them. He does not provide settlement, debt management or bankruptcy services. What does he do? He provides detailed debt relief disclosures as they relate to the individuals set of circumstances that are not readily provided to consumers in any meaningful way by the companies who DO provide the services. He fills a niche that should not even exist, but it does, and will remain until disclosure gaps are filled with useful information, consumer education, and side by side comparisons.

There are tools and solutions available to legitimate service providers that can fill the disclosure gap. CRN offers educational tools and training to the debt relief services industry along side the products and services we provide direct to consumers in need of debt relief. We provide more detail about all of the debt relief implications than anyone else because we are not financially tied to the path you choose for relief. We are committed to providing the details that help you make good decisions right now and in the future. We provide this at a lower cost than currently can be found anywhere else.

Want to get fully informed? Would you like to work with a company that provides a satisfaction guarantee? Consider enrolling in CRN’s membership program.

One of, if not the largest shortcoming that exists in the current system designed to provide people struggling with debt an alternative to bankruptcy is – Information. That we have come through the “information age” and fallen short of including more of it in professional debt relief products and servicing is a failing that can and should be fixed.

A system that better educates and thoroughly informs consumers about their debt relief options; intervention steps available to them that can be accomplished on their own; through service providers charging only fair and affordable fees; all with a consumer first focus – Is Here.

In an effort to be a catalyst for continued industry change; deliver enhanced value to consumers; and to bring complete information and tools direct to consumers; CRN now offers industry professionals training and access to efficient and effective technology systems for our successful methods in educating and supporting consumers through the debt relief decision process and delivery of debt reduction solutions.

So – what’s on the table? Let’s dig in.

Program Design:

The initial focus of this education platform is to assist customers with reaching informed decisions about their options for managing debt they can no longer afford to pay weighed against current and projected income, individual hardship circumstances, and future financial goals.

The education, support and communication systems next place consumers in the best position to take actions steps to manage some or all of the debt relief activities on their own, while offering continued access to professionals and peers. Consumers can also connect with service providers directly when needed or requested.

Your customers will be subscribed to information and individualized support allowing them to:

• Reduce monthly payments via DIY DMP efforts or as provided by a CCA
• Negotiate debts for less than balance owed through DIY settlement or full negotiation services provided by attorneys who charge based on contingency and at a rate of 15% of savings
• Why bankruptcy may be the option of first resort, not last – as it is often referred to.
• Direct access to discounted bankruptcy assistance
• Cost/Time/Resource benefit analysis

Capitalize on existing market reach:

You can simply refer people into the system with confidence knowing that the education and information is supported by knowledgeable professionals with years of experience in delivering unique and tailored strategies to your customers who can depend on fair and honest experienced support beginning with assessment and continuing through implementation and ultimately – successful resolutions.

You will be able to monitor and track activity with access to reports set at intervals and frequency you choose.

Expand existing products and services:

Established industry participants have the opportunity to earn while you learn. We provide executive level, supervisor/manager, intake/consultant/counselor training that will allow you to manage your own platform delivery, product and servicing support. In this way, you can provide meaningful value and experienced support to your customers while your internal resources are acquiring skill sets and compenetncy levels consistent with your management, and control protocols.

Give yourself and your customers a competitive edge:

One significant market impacting attribute of this product and delivery system is the inclusion of proven upfront DIY settlement education that is supplemented with ongoing information and detail accessible to subscribers. This feature encourages consumers to:

• Confidently speak directly with their creditors in order to effectuate settlements without the need and expense of third party negotiation services.
• If direct debt settlement services are requested or needed they are available and offered by attorneys and established industry professionals at a rate of 15% of savings.

Access to proven DIY settlement strategies and support often lead to accelerated customer success because money is going to creditors instead of fees for services. With direct services available on an as needed basis, at half or less the cost of the industry norm, more customers will reach their debt relief goals.

Help people help themselves and connect them to affordable services:

Connect customers with your designated product and service partners. Whether you work with partners who deliver HUD or bankruptcy counseling, or provide same internally; where you connect those seeking bankruptcy or other competent legal resources; connect customers to debt and credit products and services of virtually any type – you have the ability to manage internal and external relations. If you need recommendations we can provide them.

The ability to maintain your internal and external work flow assists our partners with managing their reputation while maintaining current professional relationships or creating new ones, further economizing CPA and/or maintaining existing revenue channels.

Some of the partnerships you may already have, or may choose to connect with include:

• Bankruptcy attorneys
• Attorneys providing direct debt settlement services charging a performance fee of as little as 15% of savings
• Credit Counseling
• HUD approved housing counseling
• Judicial foreclosure defense (in court)
• Attorney managed loss mitigation
• FDCPA protections

Systems delivery and efficiencies using proven technology:

With over 500,000 custom lines of code, there are many features to outline. What follows are but a few.

• Custom Enrollment Package, program types, program length, and EP submission pages for the Sales team.

• The Create EP module uses actual settlement data history to calculate estimated settlement for creditors/collectors

• Electronically store documents

• Custom enrollment checklist with multiple categories and items

• Ability to group creditors for easy deployment of policy changes

• Access to hundreds of built-in letters and reports

• Ability to modify our built-in reports and request custom reports

• Easily print and export data to Excel

• Users can define their default searches and activity views

• Easy navigation through the use of tabs and context menus

• Ability to track changes made to customer data

Client Login:

• Educational links and courses

• Financial Analysis tools, including custom form for the client to submit or change their monthly budget

• Useful debt, credit, and financial related links, calculators and tools

• Custom Company Contact info page

• Real time access to their account status, including all enrolled accounts and current statuses

Tasks and Events:

• Add notes and create follow-up reminders

• Attach documents to the client’s file

• Set up appointments based on availability and easily check the availability of every specialist or counselor

• Easily set up your appointment slots several weeks in advance with recurring appointments if necessary

• Ability to schedule for follow-up for a specific date and time

• Link documents or other attachments to each issue note

• Customize your own To-Do lists and set up custom workflows for automatic redirection of work

Fees, ACH, Payments:

• Set up multiple due dates and disbursement dates

• Automatically calculate one-time fees and monthly fees

• View balance forecast of each account using custom dates

• Create and submit ACH debit files to your financial institution

Customizing to fit your needs and the needs of your customers is available

This partnership platform will be ideal for existing service providers to immediately help customers who do not qualify for programs you currently support while providing substantive upfront value. Given time and levels of market adaptation, this platform will usher forth broad and helpful impacts to:

• Debt relief industry servicers
• Marketing
• Financial services
• Media
• Regulatory oversight

The content and delivery platform is where the industry needs to be when informing and assisting consumers. This is where we as an industry should be given current and ongoing regulatory and oversight realities. The system provides lower cost efficiencies for current market needs while maintaining flexibility to adapt to future opportunities and realities.

Whether you simply wish to connect people to affordable and reliable resources when looking for answers and effective tools to deal with overwhelming debt, or would like to expand your available product and services, I invite you to ask questions and comment below. If you would like to schedule a time to learn more details you are welcome to contact me directly.

Working together we can build a more effective and productive debt relief industry future.

Michael Bovee

info@consumerrecoverynetwork.com

208-265-8884

I generally begin any consultation I do with people who reach out to my company in search of help with debt with this question: “What has you reaching out to a perfect stranger? What is going on with you financially”? Then, I shut up and listen. I am sometimes the first person the caller has ever spoken to about the situation they are in.

The responses I hear vary, as does the time someone will take to outline the details of their hardship. By listening closely, I am able to hear the stress and fear they have about their debt. I often hear the struggles they have gone through to try and keep current with credit card bills, or the difficulty they have had in communicating with creditors and collectors.

The other day, I heard one of the simplest and shortest answers to my initial question that I have had to date.

“My Debt Is Crippling Me.”

While this response does not provide details I generally look to key off of in order to identify the debt pieces or solutions to putting the person’s financial puzzle back together, it said a great deal in a very powerful way.

Struggles with debt DO feel crippling. In the very sense that someone with a physical disability is forced to deal with every day of their lives. The stress and fear with debt problems are debilitating and can often manifest into actual maladies. The worry and frustration about money, and the lack of money, carries over from one day to the next. What am I going to do at the end of the month when these other bills are due? When will I ever be out of credit card debt? How did I get trapped in a home now worth far less than I owe? What if I get laid off with no savings? How would I get by with maxed out credit cards and no income?

One of the overwhelming benefits to people we talk with is that we can reduce, or even remove the stress and fear they have about their debt problem in one phone call.

This gentleman did not feel crippled when we finished talking about his problem because I plainly laid out the facts of his finances (after several additional questions to be sure), and was able to point out to him the mathematical rational solution to his debt. His solution did not involve needing to engage my company for a product or service, as he was past the point of debt settlement or a creditor sponsored hardship plan being a viable option.

He learned that, unlike someone who has a physical disability for the rest of their life, his crippling debt could actually be cured and with little fuss or expense. He was not at all excited to know that his only real option was to file for chapter 7 bankruptcy, but he saw the wisdom in doing so and hung up the phone with no fear and less stress.

I asked him before we hung up from the call “How crippling is your debt now?”.
He replied “Not at all.”

There is always and answer to recover from debt. The answers do often involve tough choices and some action steps that are not exactly a thrill to take, but can be arrived at through the process of elimination. Generally, I can walk through the following things and eliminate 3 or 4 out of the 5:

• Creditor monthly payment concessions
• Debt Management Plans through a credit counseling group
• Bankruptcy
• Debt Settlement
• Doing nothing (sometimes the right thing for brief period – couple months)

Knowledge removes the fear of the unknown, and unemotional, boring, old arithmetic is the compass to find your way to healthier finances.

My advice to anyone feeling crippled with debt boils down to the “Four Gets”:

• Get real about your finances;
• Get informed about your options;
• Get a plan in place; and
• Get started

If you would like to start getting informed the same way the man who inspired this article did, think about enrolling as a CRN member. Click here to learn more: Debt Help

Media Contact:

Ken Luck

(336) 553‐1804

kluck@rlfcommunications.com

Debt Relief Companies Form New Consumer Advocacy Organization

Raleigh, N.C. (Feb. 9, 2011) – In an ongoing effort to raise standards in the debt relief industry and improve consumer protections, a diverse group of leading debt relief companies have formed a new organization devoted to consumer advocacy. The organization is spearheaded by Steve Rhode, aconsumer advocate and founder of the website GetOutofDebt.org. Membership is by invitation only to companies who promote transparency and have a demonstrated track record in properly helping consumers address financial hardships.

The American Association of Credit Counselors (AACC) will include nonprofit credit counseling agencies, debt management companies, debt settlement companies and other providers who are focused on serving consumers in financial distress. The AACC name reflects the revival of an organization that existed with a similar mission but has been defunct for more than 20 years.

This is the first debt relief association formed solely to find collaborative ways to work for the betterment of consumers rather than to lobby on behalf of the industry.

“We’re not an official association, we’re not a traditional industry group that anyone can join as long as they are willing to pay the membership dues,” said Rhode, one of the most vocal and active advocates for consumer interests. “We’re really a club, a club that only accepts the best companies who’ve demonstrated a commitment to the highest standards in serving consumers and who want to work collaboratively to protect consumers facing money troubles.”

All member companies in the AACC have agreed to a set of common standards, including:

• • Charging no upfront fees for debt settlement services;
• • Providing customers with good faith estimates before they enroll in any debt relief service;
• • Outlining the potential risks of a debt settlement or debt management program in easy‐to understand language;
• • Providing openness and transparency regarding performance results; and
• • Making top management readily available to their customers.

The group has adopted the motto “Putting Consumers First.”

“We are thrilled to be a part of this group, which is really focused on creating educated consumers and campaigning for their rights and protection,” said Chris Schornak, president of Debt Solutions Network, one of the founding members. “There are a wide range of debt relief options out there, but not every option will work for every individual. It’s exciting to see a group of companies standing up and saying that education is more important than deception and that the needs of the consumer are more important than a company’s bottom line.”

The genesis of the organization came out of an event Rhode hosted in late November called “A Group Conversation about Restoring Truth to Debt Relief.” The day‐long meeting brought together heads of debt relief companies, consumer advocates and regulatory agencies to discuss ways to improve consumer protections while still making debt relief services available to those in need and explore ways to increase the credibility of legitimate debt relief providers.

“That meeting created some great conversations among various debt relief providers about ways to better the industry as a whole and to make services from credible providers more readily available to consumers,” said Rhode. “Those discussions have continued over the last few months as these companies, while competitors, have found they have common interests and a shared vision for improving the industry. They felt there would be strength in numbers and have decided to work together for change.”

Charter members of the organization are:

• • Active Debt Solutions, a Florida‐based company that offers credit counseling, debt consolidations, bankruptcy referrals, and debt settlement programs;

• • Cambridge Credit Counseling , a Massachusetts‐based nonprofit that offers financial education and debt management services;

• • CareOne Services Inc., a Maryland‐based company that offers credit counseling, debt management and debt settlement programs and bankruptcy referral services;

• • Consumer Recovery Network, an Idaho‐based company which provides DIY instruction and offers debt settlement services

• • Debt Solutions Network LLC, a Michigan‐based company that offers debt settlement and debt consolidation services;

• • New Era Debt Solutions, a California‐based company that offers debt settlement services; and

“We take great pride in being part of a group that puts consumers first,” said Alex Viecco, vice president of New Era Debt Solutions. “This is something that has been lacking in this industry for a very long time.”

The original AACC was created in 1955 and disbanded in the 1980s.

About the American Association of Credit Counselors

The American Association of Credit Counselors was founded with the mission of “Putting Consumers First” in debt relief services. Membership in the organization is by invitation only and all of the members have agreed to meet specific standards and principles in offering their services. The AACC has eight members. For more information, visit http://newaacc.org/.

San Diego, CA (PRWEB) February 10, 2011

Consumers and small business owners are negotiating with their creditors and settling their own debt obligations without the need for professional third-party assistance, according to ZipDebt.com, one of the nation’s leading providers of self-help financial coaching for struggling consumers.

America’s economic recession has pushed millions of individuals toward bankruptcy with massive levels of debt. As small businesses fail and previously high-income households face the new jobless environment, credit card debt loads of $100,000 or more have become much more common. For people with such high debt balances, formal bankruptcy often means filing under Chapter 13, which can be a difficult five-year process that entails partial or full repayment of the debts. Debt settlement through creditor negotiation provides many of those debtors with a realistic alternative to bankruptcy.

According to Charles J. Phelan, founder and President of ZipDebt.com, consumers and small business owners can avoid Chapter 13 bankruptcy if they educate themselves about negotiating compromise solutions with their creditors. “Many of the people who come to us have very large debt balances, and none of the usual ‘one-size-fits-all’ debt solutions will work for them,” Phelan says. “We teach people a process called Fast-Track Debt Settlement™. It has the most successful track record compared to any other approach to debt settlement.”

Phelan recommends the “do-it-yourself with coaching” approach to debt negotiation and settlement because it gives consumers complete control over the process. Instead of paying thousands in fees to a professional firm, consumers can apply 100% of their available resources to eliminating problem debt. “There is no reason for someone who owes $100,000 to pay $15,000 in negotiation fees,” Phelan says. “We’ve taught thousands of people how to settle their own debts, and it’s a much faster process without the stiff fees.”

For additional information on debt settlement coaching for high balance debtors, a free report is available for immediate download at ZipDebt.com.

About ZipDebt.com

Charles J. Phelan has been helping consumers avoid bankruptcy since 1997. A former executive with one of the nation’s first debt settlement firms, Phelan launched ZipDebt.com in 2004 to provide an affordable alternative to professional debt services. ZipDebt.com’s audio-CD training course is supported with personal one-on-one consultation and follow-up coaching, and the program successfully helps debt-challenged consumers achieve professional results for a small fraction of the usual cost.

Not all are created equal.

Watered Down Content Sites

Some personal finance web sites have a great deal of exposure and publish a ton of material.  Some content heavy sites  barely scratch the surface on a particular topic because they are geared toward mass appeal. In other words, the more “milk toast” the message, the more reader applicability.

I can think of several really big sites with content updated daily, but that allow no interaction with their readers through open commenting. These sites also tend to have a lot of ads. Milk toast (bland) content with lots of web traffic to sell ads. Not a fan….

Informative & Innovative Sites

On the other side of the spectrum you have web sites with good content and large readership that allow and encourage comment participation. Some of these also have community forums that are a great place to learn even more specifics into a particular aspect of debt and credit.

One of the sites that I like and have frequented for several years is www.debtconsolidationcare.com. I in fact post in the forums on that site anonymously as time permits.

The DCC site offers many great self help tools and feedback for debt relief with a focus on debt settlement, debt management, dealing with debt collection, what you can do to repair and improve your credit, debt consolidation and more. Big fan….

I have connected with the site owner Vikas on several occasions. One of things that so impressed me about Vikas and his motivation and vision for the DCC site – his focus on providing free, or affordable resources for consumers who are already struggling financially. His goals are similar to what I endeavor to provide here on Debt Bytes and through my company, Consumer Recovery Network.

Over the years that I have participated by commenting in the forums at the DCC site, I have witnessed many people use the site as a resource for their own debt relief efforts very effectively and who then continue posting their experience and sharing with others long after their own personal financial storm had passed – Paying forward the help, feedback and support that was available to them.

The Debt Consolidation Care community is a stand out, as are other sites that I will cover in the future.

I encourage Debt Bytes readers to check out the DCC site and to openly participate when there.

Below is an announcement about Active Debt’s discount for services being offered to those consumers who have been left in a lurch by debt relief companies who, as I wrote about last August, have failed & bailed taking their customers money with them.

Of particular interest below, you will see where Active-Debt has long had the practice of providing steeply discounted performance based service fees to our military service members. THAT is something that catches my attention and further establishes this company is a cut above the rest and is working with people for the right reasons!

Active Debt Offer Huge Discounts & Consumers A Way Out of Their Old Contracts

Did you sign with a debt settlement company who charges all of their fees before service and do not know what to do? Are you afraid that they will take your money and simply close, leaving you with NOTHING? If you have been taken by a Debt Settlement company who you can no longer contact because they are out of business, or you are currently enrolled in a settlement program that you paid up front fees for their service and you feel stuck, we are here to help.

As a “performance based” debt settlement company, committed for four years to charging a settlement fee as percent of savings, we are announcing a huge discount to anyone who is currently enrolled in a plan (or was in the last 12 months) where they were charged the settlement fees before they received any service! We offer the same huge discounts to Veterans as well.

Any client of a firm that signed a contract charging you their fees up front, we will take your case and ONLY CHARGE YOU 10% of how much we save you at settlement! There are NO OTHER FEES. The bank charges $9.85 but we do NOT charge a monthly account fee and we are ONLY paid when we settle a debt.

Our typical fee is 30% of how much we save our client at settlement. Now, for consumers enrolled in a plan charging them front fees without service, we have reduced it to our Veterans rate of 10% of savings- a 66% discount. For example, if we settle a $5,000 debt for $1,500 we save you $3,500, our fee is $350!

We are making this offer for a limited time, as it has come to light that a significant number of companies have simply gone bankrupt over the last four months and we are certain many more will follow. This has left their settlement clients with nothing- they are out their fees and are receiving no service. These unscrupulous companies charge(d) hefty upfront fees for their settlement program, a practice generally outlawed by the FTC in late 2010. If you have any questions regarding the offer, please contact Sean Ryan at 866-720-7483 Extension 101 or email to sean@active-debt.com. Our contracts are viewable on our website. We are a founding member of the AACC, a small association of committed settlement companies who put American consumers first!

Mish has a post up today: Food Stamp Usage Up Nationally

It shows my state of Idaho having the largest year over year increase in residents receiving food stamps, or what is now referred to as SNAP. SNAP stands for: Supplemental Nutrition Assistance Program.

Reading the post was timely for me, as you will understand in a moment. After reading some of the comments to the above linked post by Mish, I was motivated to post a comment of my own.

I am writing this post and sharing the contents of my comment with readers of DebtBytes because many may not know the policy we at Consumer Recovery Network adopted to help feed those who often go hungry inside the communities of many of our customers across the nation.

Here is the comment I left:

“I have been reading Mish for years and assume this post is intended as a real time representation of deflation.

Reading the comments (and the fact that I am really hungry right now), prompted me to add to the discussion.

Today my family is participating in “Feel the Hunger“.
I made my daughters each a 1/2 cup of rice before school. It’s all they get to eat for the whole day. My youngest ate 2 tbls prior to leaving and took the rest with her. My oldest held off from eating any, but took the full 1/2 cup with her.
All I can think of right now is bacon…

There are many locals in my small North Idaho town participating.

This is a good learning tool for my daughters.

There are local answers to hunger, but they depend upon the participation of those better situated.

The work I do at my company focuses on assisting mostly middle class families in financial turmoil. For those suitable to use the approach we advocate, we provide a good alternative to bankruptcy (mostly alternative to chapter 13). Our fee since opening our doors for any direct hands on service is wholly contingent upon our success. In over 20 states we do not collect the fee, but still provide the service. In lieu of collecting the fee we encourage our customers donate the calculated fee to low income legal aid in their area, or to their local food bank in the form of nonperishable food items.

We are not a nonprofit. We like profit as much as the next guy, but we keep our fees low and our results and retention high. Our reputation is exemplary in an industry known to scam and leave people in a lurch.

We do the work we do, the way we do, for a myriad of reasons.

We do not advertise, as the cost would be borne by our customers who are not in the best position to fund higher fees. We mostly rely on word of mouth and organic exposure.

My point: Be part of the solution when and wherever you can.

Man… I could go for burger right now…”

The people we help here in Idaho and in Mish’s state of Illinois are included in that list of over 20 states where we encourage donations to those in need.

I will cover why we designate low income legal aid offices as donation recipients in a later post.

Companies like Consumer Recovery Network exemplify, in our chosen unique way, good corporate citizenship. If you have the ability, next time you stop for groceries, consider picking up a few extra food items and drop them off at your local food bank.

Oh, and if you happen to be in Sandpoint Idaho, I could go for a bacon cheeseburger right now….

Double Oh, check out Mish’s blog. He gives a rip about the state of economic affairs in this country.

Debts that go unpaid follow a relatively predictable pattern.

When first missing a payment, the phone rings… a lot.  After 30 days late your account is reported to credit reporting agencies (CRA’s) as such.

Next, the phone rings… a lot.

The pattern of the phone calls when you are 60, 90, 120 days late will often include offers of lower payment arrangements and hardship plans. Your credit report will continue to receive unsightly blemishes in 30 day intervals.

As you get nearer 180 days of nonpayment, some of the collection calls will take on a new tone. If you have not already thrown your phone out, changed your number, or continue to answer in your best disguised voice informing the caller that “um… that person does not live here”, you may get offers to settle the debt for less than what you owe.

At 180 days of delinquency (sometimes 210), something strange happens. Suddenly the background melody you became so accustomed to while watching television, or spending time with family, suddenly ceases. No more getting up to check the caller ID to see if you want to answer. No more checking messages for 10 minutes listening to “this call is for ____”, quickly followed by “message deleted”.

When you realize that the incessant phone calls have ceased seemingly overnight, you may even be compelled to dance a jig while singing “ding-dong, the witch is dead, the witch is dead” like scare crow traipsing down the yellow brick road in the Wizard of Oz.

Not so fast…. All that has happened is that your debt has been charged off and is in limbo while your creditor figures out which part of the collection pipe line they are dropping your account into.

Within a matter of days, or weeks, the monkey reappears and plants itself firmly on your back. He announces his presence daily, starting at 8 am and continuing through 9 pm. Riiiinnnggg… Riiiiinnnggg.

Your account has now been placed with a collection agency.

The pattern I present here typifies what will occur in the first 6 months of nonpayment with most credit card issuers. As you can see, there will be some opportunities.

For many people faced with the inability to pay their credit card bills on time, all the time, it can make sense to capitalize on these opportunities. You should look to optimize your success by:

• Following an intelligent design that can be tailored to your specific set of financial circumstances.
• Design a plan using information about what each of your specific creditors will do and when.
• Be prepared to adjust. Your creditors may change their recovery policies requiring you to tweak your plan.

You can learn more about how “charge off” can be friend or foe by following the Debt Bytes continuing series on the topic: Click Here

If you would like to speak with someone who can assist you in determining what your next best step to getting out of debt may be: Click Here to schedule a Consultation. A CRN specialist can assist you in learning the details you will need to consider once they know more about you. Consults are provided at no cost.