Beware of Old Dead Zombie Debt Collections

Many consumers that have not paid their creditors in a timely manner will sadly experience their past due accounts moving to a collection status or even worse, sold to a third-party debt collector. After the first third-party was not able to collect from you they will then sell or transfer your account to another debt collector, and another, and another, until your account has been deemed by all previous collectors to be uncollectible, in the grave, or six feet under. Then finally come the scavengers; collection agencies that buy your previously uncollected dead debt (think of a corpse), and use intimidation and harassment as their tools in their attempts to collect on your account or deceive you to enable them to update your last date of activity (it lives again!), hence bringing value and the breath of life back into what was probably an uncollectible debt. These debts are given the nickname, Zombie Debt and should be dealt with accordingly and not ignored for the fact of the potential damage Zombie debt collectors could cause to your credit score and report. Zombie debt collectors will use scary words in their agency name. They’re calling from such and such litigation service, asset recovery, or asset liquidators to assert there is actually some seizure power to their collection attempt. In reality, they are no different from (and probably acting less legally than) almost every other type of company.

Zombie debt begins with a telephone collection call to your cell, work, or home phone number and is usually from 800 numbers or may be blocked or listed as an unknown number. With the recent advances in telephone technology, Zombie debt collectors can mask the phone number they are calling from and even make the calling number appear to be from a location that is far away from the caller. When you answer the phone, the Zombie will claim you owe a debt from your past. Thus begins the trap that the Zombie is attempting to set for you in the first few seconds of that call. Knowing how to thwart off the Zombie right then and every moment thereafter will save you heartache and a bundle of money. Even consumers that have filed for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy still may be the potential victims of a Zombie debt collector. You must avoid the Zombie’s traps and don’t become a victim of the Zombie’s very lucrative collection scheme.

Zombie debt collectors crop up overnight and use sophisticated software tools, including your credit report and public information to hunt you down in a process they call skip tracing (they are ecstatic when they have found you!). Just locating you can potentially reap big rewards if your account did not originally come with your contact information to them when they purchased a bulk of dead accounts. Every bit of your personal information they can glean from your phone conversations can potentially build actual cash value to your account should they decide to sell your account again, maybe to a even creepier debt collection zombie. This is why you must remain quiet and avoid the debt collection Zombies until such time that you can ascertain if the debt is collectible or even yours at all. In fact, paying these Zombie debt collectors may create a whole new set of long lasting credit issues that never existed before.

Even if you think you owe the debt, a few precautionary steps should be taken to request documentation of the debt, verify the debt even exists and that it appears on your credit report (why would you ever settle a debt not on your credit report?) The first step is to order you credit report from all three credit bureaus to accurately determine if the Zombie debt appears and is causing you harm.

The next step is to check your state’s Statute-of-Limitations, referred to some consumer attorneys to be SOL (or S**t—Out-of-Luck, get it?). When your account has reached your state’s SOL time period (usually 3 to 5 years), the debt cannot be legally collected from you anymore. For the most part, that time frame is where most of the Zombies hang out. The Zombies can call you in their attempt to harass you, your family members, even your neighbors, but we have discovered the absolute best way to stop Zombie’s collection calls in their tracks. In our experience, not even complaints to the FTC, Attorney Generals, or even your local authorities can come close to the proven method of stopping Zombie debt collectors. This method is so effective that it has forced some Zombies into premature retirement.

Be forewarned that a few Zombie debt collectors are even more rogue than others. Not only are they attempting to get you to pay a debt you might not owe, they pressure you when collecting your personal information, obtain your social security number, and horribly, your personal banking information. Even in the event that you have determined that the Zombie’s collection account is on your credit report and you then decide to settle the debt for much less than the balance by using proven debt settlement techniques, you must completely document the Zombie’s settlement offer by demanding your own settlement agreement letter. Every settlement letter must contain, at minimum, 10 crucial items to stop any future collection of the debt by other Zombies.

Most informed consumers already know not to expose their personally identifiable banking information to any creditor or debt collector, especially a Zombie debt collector that may have evil intentions of selling you out down the road. We highly suggest the use of a FDIC Insured Special Purpose Debt Settlement Account whereas the creditor or debt collector cannot see the funds you have available or get access to your Account.

Although there have been recent discussions held by the Federal Treasury Department, and Specially Appointed Congressional Members regarding stricter debt collection guidelines and enforcement actions when Zombie debt collectors cross the moral, ethical, and legal lines, the debate continues between government departments as to whom will manage and provide much needed oversight. Until such time that the Zombie debt collectors are forced to follow planned mandated operating guidelines, we will continue to produce our articles and shed some much needed daylight upon the burgeoning Zombie debt collection industry.

The Priority of Debts-Debt Survival Basic Training - Part 2

In our previous post, we proposed a priority for paying your debts. We categorized debts into a Highest Priority and a Medium Priority. In this post we discuss the Lowest Priority.

LOWEST PRIORITY

7. Unsecured Debt and Loans Secured by Household Items. Only after you can afford the basic needs of one (1) through six (6) from above should you worry about unsecured debt.

Unsecured debts and certain debts secured by household items take the lowest priority. If you cannot afford the above items, you will not be successful in making settlement with your unsecured creditors. We know other settlement companies don't give you any reality of prioritizing, but we feel a good reality check now, is better than learning later. Unsecured debts have a priority all their own, and are listed below. Which Debts Do I Pay First?

In basic terms, there are two forms of debt; secured and unsecured. Good examples of secured debts are home mortgages, car loans, and loans secured with household goods. If you are in the military, some debts may be secured, under an agreement you signed, by your paycheck. Secured creditors have collateral for the money they loaned to you. If you don't pay them, it is possible for them to take the collateral from you. Unsecured debts have no collateral and thus make it very hard for a creditor to collect unless you pay voluntarily.

Examples of unsecured debt are; credit cards, department store cards, hospital bills, doctor bills, legal bills, or money loaned to you from relatives and friends.

If you have questions about your debt, you can always contact us for a free, no obligation consultation.

The Priority of Debts-Debt Survival Basic Training - Part 1

Which Debts Do I Pay First?

In basic terms, there are two forms of debt; secured debt and unsecured debt. Good examples of secured debts are home mortgages, car loans, and loans secured with household goods. If you are in the military, some debts may be secured, under an agreement you signed, by your paycheck. Secured creditors have collateral for the money they loaned to you. If you don't pay them, it is possible for them to take the collateral from you. Unsecured debts have no collateral and thus make it very hard for a creditor to collect unless you pay voluntarily.

Examples of unsecured debt are; credit cards, department store cards, hospital bills, doctor bills, legal bills, or money loaned to you from relatives and friends.

When you are faced with financial difficulties, it is important to understand that your secured debts are generally paid first and all unsecured debts are paid only when you have taken care of secured debt and family necessities first. Remember, the loudest creditor or debt collector is probably one that has no collateral and thus cannot collect their money any other way. The following rules are what we call the Priority of Debts.

HIGHEST PRIORITY (Essential for Life)

1. Food and Unavoidable Medical Expenses (Prescriptions). Eating out, especially fast food, and eating pre-prepared food is generally two to five times more expensive than preparing your food yourself. Making good choices about the food you eat will probably ease your budget too. Regardless of quality, food must be paid for first.

2. Mortgage or Rent and Housing Expenses. You will need to maintain a roof over your head. If you pay on a mortgage and live in the home, you may consider adding real estate taxes and home insurance to your second priority. Taxes are generally paid in arrears and hold less emergency priority than insurance. If your taxes and insurance are escrowed with your payment, consider calling the lender and asking if you can pay those separate from your monthly mortgage. Many of are members choose to make real estate taxes a much lower priority as it could take years of non-payment (in most states) to tax foreclose on your home. Under that scenario, most members have a plan to sell their property and pay off any tax liens. If you own investment property or timeshares, you may want to prioritize those debts very low unless they provide you a positive income every month. If there is enough equity to cash out, sell the property and move on.

3. Electric and/or Gas Bills. You will notice that we did not include cable TV as a utility. Cut your cable to basic service. Hey, we are talking about survival here.

4. Autos. Only keep the car necessary for you to get to work. Boats, campers, RVs, second cars, motorcycles, jet skis, etc. need to be sold. Creditors may take a dim view of your settlement offer if they discover you have recreational assets. They have access to public records that indicate if you own any vehicle that has been registered (titled). If you still have a loan on the vehicle, it probably appears on your credit report. You should sell these items if possible or let them go back to the lender and apply any payments toward satisfying your debt.

5. Child Support and Income Taxes. Many states have very serious repercussions if you have child support obligations and choose not to pay. If you cannot afford to pay your income tax, at least be sure to file a tax return. The IRS is much more sympathetic and softer than in past years and generally will help you pay your back taxes in easy installment payments.

MEDIUM PRIORITY (Debts that do not go away.)

6. Student Loans. If your student loan was a subsidized loan, it will never go away. Generally, you cannot bankrupt the loan away or wait for the loan to drop off your credit report. If possible, refinance and/or consolidate these loans into a single payment.

In our next post, we will disclose the lowest priority debts.

Exposing the Debt Settlement Industry Piece-by-Piece

Part 2 in a 2 part series

In the right hands, debt settlement techniques are currently proving to be a very effective tool for consumers to pay off their account(s) for much less than they owe. Most creditors and debt collectors are very willing to settle with consumers in an attempt to salvage what they can from each account. They know that the longer they wait to collect, the less likely they will be to recover all or most of the account balance.

To help the consumer successfully settle their unsecured debts, such as credit cards, collections, department store cards, oil/gas cards, unsecured bank loans, personal loans, medical bill collections, and many more, without paying up front settlement fees or settlement fees based on the total debt owed, we are producing a series of very informative articles based upon our past debt settlements of more than 1,000,000 settlement transactions! Our first article examines the very first five (5) minute step that anyone considering debt settlement should complete. We are talking about how to recognize debts which may not need to be settled at all!

That’s right! In fact, it may be harmful to your credit score if you settle certain debts. Often ignored by the debt settlement industry, our article exposes the simple and fast method to determine what debts should never be paid, thus allowing you to apply more funds you might have mistakenly used to settle accounts with creditors and collectors that will probably offer you steep discounts if you pay them off sooner! (Hint: We will soon be publishing a statistical report from empirical data that will reveal which creditors and debt collectors tend to collect by legal means. That article will benefit you as you may then settle with those agencies first and possibly avoid legal actions altogether.)

For a limited time, we will offer free telephone support in the event that you need any assistance in recognizing what accounts should never be paid. To obtain this valuable article, the first in our series of exposing the debt settlement industry and simultaneously assisting you with understanding how a properly informed consumer will successfully complete the debt settlement process, click here.

Exposing the Debt Settlement IndustryPiece-by-Piece

Part 1 in a 2 part series

Consumers facing the anxiety and stress of their burgeoning credit card debt are turning to debt settlement companies for assistance, but are they really getting the help they need? Claims to “eliminate your debts”, “pay only 40% of what you owe”, or “cut your debt in half” can be appealing and irresistible for consumers looking for help, but those claims as well as the true results will be exposed here.

The vast majority of debt settlement companies advertising in the above manner are the exact same companies that deploy their horrific debt settlement fee structures to the consumer. Instead of charging a consumer the debt settlement fees based upon performance, they instead calculate their fees (usually 15% or more) based on how much total unsecured debt a consumer owes. Never pay debt settlement fees based on how much you owe (does this make any sense?)! Should you decide to engage anyone’s assistance in the settlement of your debts, always pay debt settlement fees based upon the amount that you have saved! Unfairly charging their settlement fees based on the amount you owe instead of how much you will save, however, is not the worst obstacle you may encounter when navigating through their debt settlement programs.

That distinction lies within the fact that they begin charging those monstrous fees from the first day you enter into their program! When paying them first, how are you going to save enough money to begin settling your accounts? The dropout rate for this advance debt settlement fee structure is purported to be at least 20% to 40% in the first three months alone! We must therefore conclude that consumers soon realize that by paying debt settlement fees up front, they will never complete their program and pay off all of their unsecured debt. Not a bad deal for the debt settlement company. Once the consumer “drops out”, the company is no longer obligated to service the account and has walked away with several hundreds or thousands of the consumer’s dollars that could have instead been used to settle the consumer’s debt.

Continued in Part 2