Your Money
Volume V Issue I January 2007
AAA Cook County Consolidation, Inc.
since 1961
AAA Cook County Consolidation
7366 N. Lincoln Avenue Lincolnwood, IL 60712 Ph: 800-865-HELP 847-933-8800 Fx: 847-933-8812 www.cookconsolidation.org One of America’s Oldest, most trusted Consumer Credit Counseling Agencies. Accredited by BVQi as an ISO 9001:2000 registered organization. A founding member of the AICCCA Association of Independent Consumer Credit Counseling Agencies. A member of AADMO American Association of Debt Management Organizations Licensed by the Department of Financial Institutions and fully bonded Member in Good Standing of the Better Business Bureau
When Negotiating With A Collection Agency You Should….
If a payment has been negotiated with a collection agency make sure you ask them to send you the payment arrangement in writing and keep copies. You should also ask for the representative’s name that you spoke with. This will serve as proof of the agreement if any problems occur in the future. Most collection agencies will negotiate a settlement, which would be taking less than the total amount due. This normally requires a one time payment in full. Be careful! A settlement may report negatively on your credit report. The IRS also considers a settlement taxable and treats the amount forgiven as income for tax purposes. Helpful Tips Do not make promises you can not afford. It will be worse if you agree to make payments that you can’t. Never give a credit card number or checking account information over the phone to a collection agency. They may take out more money than you have agreed to. An unpaid collection account is damaging to your credit report. The sooner you can pay it off, the better! Common Threats Made By Collection Agencies Most people are contacted by collection agencies over the phone. Some collection agencies will threaten you in order to receive a payment. They may say that they will tell your employer about the debt you owe. They may threaten to send you to jail or they may threaten to garnish your wages. These threats are illegal and violate Section 807(4) of the Federal Trade Commission Fair Collection Practices Act. You may contact the FTC to make a complaint at 1-877-FTC-HELP. Initial Steps To Take When An Account Has Been Turned Over Once you find out that your account has been turned over to a collection agency, you should contact the original creditor to make sure this is true and find out if there is anyway to have your account recalled. The original creditor may take the account back if a reduced payment can be negotiated. If the original creditor will not recall the account, try to work out an agreement with the collection agency. If you are experiencing any financial hardship explain this to the collection agency. If you can afford to pay some or all of the debt at this time, you should. What Is A Collection Agency? A collection agency is a third party hired by your original creditor to collect the debt that you owe. A creditor may turn an account over to a collection agency after the account has been behind three to six months. Any legitimate collection agency will send you a written notice with all of the terms included, upon your request.
AICCCA
Dealing With Collection Agencies Are You Constantly Receiving Harassing Calls From Collection Agencies? What Are Your Rights? Collection agencies may not contact you before 8 a.m. or after 9 p.m. Collection agencies may not contact you at work if your employer prohibits it. Collections agencies can not use obscene language or threats of violence. Collection agencies may not contact other people to ask questions about you, nor can they reveal how much debt you owe.
Collection agencies may not contact you at other residencies other than your own. Collection agencies can not make a call without disclosing the caller’s identity. Collection agencies may not call repeatedly with the intent to annoy or harass you. Collections agencies may not make a list of consumers who refuse to pay debts for publication.
Are You A Victim? If you have ever encountered a serious problem with a credit repair company, you CAN report them. You can contact your local consumer affairs office or your state attorney general. Check with your local directory assistance to see if a toll-free number is available. You can also contact the Federal Trade Commission (FTC) to report any situations. Although the Commission can not rectify individual credit problems for the consumer, it can act against a company if they see a pattern of possible law violations. If you feel a company has engaged in credit fraud you can send complaints to: Correspondence Branch Federal Trade Commissions Washington, DC 20580
Steps to Check Your Credit
You are entitled to see any information that the credit bureaus have on file about you. This is required by law. To find out what is listed on your credit report, you can follow these simple steps: 1. 2. 3. 4. 5. Contact the local credit bureaus. Obtain a copy of your credit report. There may be a small fee if you haven’t been denied credit within the last 30 days, during which time it is free. You can visit the credit bureau office to review your credit report in person. Review your credit report for any mistakes. If you do not understand something, you can ask. By law, the credit bureaus are required to explain your report to you. If a mistake is found, notify the credit bureau of the mistake and provide them with as much information regarding that problem.
A reinvestigation will be done to dispute the information (if legitimately incorrect) and make all necessary corrections needed. A corrected copy of your report should be sent to anyone who has received the incorrect version within the past 6 months. Your credit history is maintained by companies called credit bureaus? These are private companies that collect information that is reported to them by mortgage companies, banks, department stores and other creditors. These bureaus can legally report any accurate negative information for 7 years and bankruptcy information for 10 years. Any accurate negative items that are within the 7 (or 10) year reporting period cannot be erased from your report by anyone. Not even companies that advertise to “repair credit” can erase this information. Time is the only thing that will heal your credit report. By making consecutive payments when they are due, you will be able to show a more positive rating on your report, but your negative marks will not be removed. AICCCA
The Truth About Credit Repair …...
Have you ever heard this before? “Credit Problems? No Problem!” “Your Bad Credit Erased… 100% Guaranteed” If you have ever read this type of advertisement
BEWARE! There are numerous companies, throughout the United States, that claim they can “fix” your credit reports for a fee. In most cases they do little or nothing to fix your credit reports. What ends up happening is these companies take your money and disappear with it and you’re left with bad credit and less money in your possession. Many companies also, claim that they can create a new credit file for you by getting you a “New” Social Security number. This is illegal and never actually works. Myth Credit Clinics and/or Credit Repair Services can “clean up” your credit report. Fact No one can legally remove accurate information from a credit report. However, you can request a reinvestigation on any of the information in your file that you dispute as inaccurate or incomplete. You are entitled to a free copy of your personal credit report if you have been denied credit within the last 30 days. If you have applied for credit, insurance, or employment and have been denied due to the information supplied by the credit bureaus, the company you applied with must provide you with the name and address of the credit bureau they report to. You can dispute mistakes or outdated items for free. What you need to do is ask the credit reporting agency for a dispute form or submit your written dispute, as well as any supporting documentation you have. Note each item in your report that you wish to dispute, explain the reason for the dispute & request a reinvestigation. If the reinvestigation doesn’t resolve your dispute, you can request that your “version of the dispute” (100 words or less) be include in your file and in future reports.