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Andrew Housser is co-CEO of Freedom Financial Network, LLC, a national consumer debt resolution firm serving more than 4,000 clients and managing more than $120 million in consumer debt. Housser holds a master of business administration degree from Stanford University and bachelor of arts degree from Dartmouth University.

Source: www.kfor.com  04-07-2006

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Tags: credit counseling firms, debt management plans, DMPs, Better Business Bureau, Freedom Financial Network, national consumer debt resolution firm, consumer debt, Stanford University, Dartmouth University life insurance

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Dear Debt Adviser: We need help! Due to medical expenses and a cross-country move, my husband and I have about $25,000 in credit-card debt. Recently, our credit was reassessed and, because of the balance-to-credit ratio, all of our interest rates have been raised to obscenely high amounts ranging from 15 percent to 32 percent.

Now, we can barely afford to make the minimum payments, let alone work on paying down the principal. I have called a credit-counseling service about consolidating with it, but because we have always paid our credit cards on time and aren’t behind on payments, the service won’t take us. However, we aren’t getting anywhere scraping by to pay the minimum payments. I don’t know what to do. I feel like we are stuck in a Catch-22. Any suggestions!?

— C.M.

Dear C.M.: I know how it feels when bad things pile up and it seems as though one problem feeds on another endlessly. Some say bad luck comes in threes. Based on my experience working with credit problems, I would say it’s even worse than that — it keeps on coming until you can start some positive actions that will begin to turn the tide. The good news is that once you get ahead of things, positive events will mount up, as well.

I have three suggestions for you to check out:

First, go back to the credit-counseling agency you contacted and tell it you want a plan to get out of debt. This may or may not be a formal debt-management plan where interest rates and fees are sometimes reduced, but it should at least be an action plan with specific steps for you to follow. Be sure the agency is associated with the Association of Independent Consumer Credit Counseling Agencies, or the National Foundation for Consumer Credit Counseling. If it is not, then find one that is.

You should expect to receive an action plan that will help you reduce expenses or increase income and will show what you can afford to pay and how long it will take to be debt-free. By the way, being current on bills is not a reason for a service to refuse offering you a debt-management plan. You may have run into either a lazy counselor or an uninformed one. Don’t give up on this option too soon; get a second or third opinion.

Second, if a debt-management plan is not for you, then, once you have an action plan that identifies all your income and expenses and what you can actually afford to pay on your cards, call your creditors. Explain about the medical emergency and ask for a hardship plan or an interest-rate reduction. Many creditors will respond favorably to a well-documented history that shows events beyond your control caused your situation. Be sure you have a dollar amount you can afford to pay each creditor before you call. Otherwise you may over-commit to the first few you call and not be able to satisfy them all.

Third, if suggestions one and two don’t work out for you, contact an attorney. I’d suggest two approaches for the attorney to pursue. First, ask that the attorney write and propose a repayment plan you can afford. Often, attorneys’ letters get good responses. Then, if that fails, ask about a bankruptcy. The new rules make it more difficult, but not impossible, for you to get relief this way.

One last tip: Your moving and medical expenses may be tax-deductible. If so, you may be able to reduce your withholding to free up cash or have a fat refund coming in 2007 that you can apply to your debts.

Even though right now it seems that paying your debts on time has worked against you, I think you will find in the end that you have been doing the right thing all along.

Good luck!

Steve Bucci is the president of Money Management International Financial Education Foundation and the author of "Credit Repair Kit for Dummies."

Source: www.metrowestdailynews.com  26-06-2006

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Tags: debt management, money management

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Defendants Will Pay Nearly $1 Million in Consumer Redress and Penalties

June 15, 2006

A credit counseling service and related companies and individuals have agreed to pay $926,754 to settle Federal Trade Commission charges that they made false claims about their debt management program and violated the FTC’s Do Not Call Rule.

According to the FTC, Credit Foundation of America, Inc. (CFA), and its associates sold debt management services nationwide through unsolicited, recorded messages left on home telephones, falsely claiming that consumers were pre-approved for a program to consolidate their credit card debts to a single monthly payment at a much lower interest rate.

When consumers responded to the calls, they were encouraged to enroll in a debt management plan, regardless of their individual circumstances. Many enrollees were not appropriate candidates for debt management plans and lost the large enrollment fees the defendants charged.

"When it comes to debt-related problems, a ‘one-size fits all’ solution should raise a red flag," said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. "Debt management programs work best when they are tailored to consumers’ particular circumstances."

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Tags: debt management, one-size fits all, debt management services, FTC

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18/06/2006 16:17 PM

By: Themba Gadebe

Johannesburg - An innovative programme is set to be implemented in Gauteng schools this year, to teach grade 10 pupils financial literacy and effective debt management, government news agency BuaNews reports.
The programme is intended to comply with national curriculum policy and appeals to the needs of learners and educators.

It is expected to begin with grades 10 this year, followed by Grade 11 and 12 in 2007 and 2008 respectively.

The project is a partnership between TransUnion ITC credit bureau and the Gauteng education department and is aimed at developing resources and learning tools to create a financially literate population.

According to the provincial head of department, Mallele Petje, incorporating this information into the curriculum, government and business seek to educate children on the responsible management of debt.

"We also want to ensure that we halt the spiral of over indebtedness and the deceptive practices they can fall victim to," he said.

Risk management leader, TransUnion ITC said this project would equip learners leaving schools with a "greater" awareness of the credit system and the importance of maintaining a positive credit report for greater financial mobility and independence.

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Tags: debt management

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By SUSAN TAM

KUALA LUMPUR: People who find themselves defaulting on loans due to unexpected circumstances, or their debts spiralling out of control, can seek help from Bank Negara. 

So far, at least 500 people have done just that – they have sought the services of the central bank’s Credit Counselling and Management Agency (CCDMA) in the two months of its existence. 

According to its chief executive officer Mohamed Akwal Sultan, the agency had been approached by debtors with an array of problems. 

An example was the man who was forced to default on his loans because he had to use the money on treatment for his terminally ill wife. 

“Others found themselves in a difficult situation when they lost their jobs. Some of the younger debtors who came to the agency for assistance were floundering as a result of bad spending habits,” he said in an interview yesterday.  

He revealed that some individuals who had several credit cards usually did not realise the consequences of uncontrolled spending until their bills had run into thousands of ringgit. 

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Debt management plans help individuals repay debts in a reasonable time frame. In exchange for this planned repayment, creditors will often reduce interest rates and eliminate late fees and over the limit fees.

Legitimate providers are licensed in some states, such as Wisconsin, but there are also unlicensed bad apples consumers need to avoid.

The Federal Trade Commission recently announced proposed settlements against Lighthouse Credit Foundation and related co-defendants for allegedly making deceptive promises to financially strapped consumers. The defendant allegedly solicited consumers using prerecorded phone messages and enticed consumers to enroll in debt management plans.

According to the complaint, the consumers agreed to pay large fees to set up these plans. The company reportedly agreed to pay $2,400,000 back to consumers and to cease making exaggerated claims for huge interest reductions.

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Bernanke says poor in need of advisement
By Jeannine Aversa Associated Press

WASHINGTON - Most American households are doing a good job managing their finances, although lower-income families face challenges, Federal Reserve Chairman Ben Bernanke said Tuesday.

Bernanke made his observations as families are coping with higher borrowing costs and lofty energy prices. And they must deal with an increasingly complex array of financial products that sometimes can seem bewildering when it comes to making smart financial decisions.

"U.S. households overall have been managing their personal finances well," Bernanke said. "On average, debt burdens appear to be at manageable levels and delinquency rates on consumer loans and home mortgages have been low," he noted.

Household net worth, which climbed to $53 trillion in the first quarter of this year, is at a fairly high level, Bernanke said.

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To improve awareness of debt management and to highlight the potential pitfalls surrounding debt management programmes, The Debt Counsellors have released The Debt Management Report.

(PRWEB) June 18, 2006 — Debt help experts The Debt Counsellors have released The Debt Management Report to raise awareness of debt management and draw attention to the potential dangers of debt management programmes.

The total of personal debt in the UK is in excess of £1.1 trillion and thought to be increasing at a rate of around £1 million every four minutes.

Because of this, debt management programmes, whereby a company takes control of someone’s debt and deals with the various creditors in return for a set monthly fee, are increasing in availability and popularity.

However, as The Debt Management Report points out, extreme caution should be employed before signing up to such an agreement because too frequently they serve only to make the debt problems worse.

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Taking loans is no easy job, it requires huge effort on the part of the borrower and a lot of sacrifices as well. That is the prime reason that all the borrowers no matter how comfortable they feel with their loans should be familiar with the concept of debt management.

Debt management is a technique and involves the ways in which a borrower controls or keeps a check on the financial matters of his. It is an effort on part of the authorities to make sure that all the borrowers are in nice and healthy condition in terms of their finances.

Few of the techniques of the debt management are:

Debt consolidation – in this the borrowers of the loans take a separate loans to cover up for loans that they have already taken. This way they can get better terms and more leeway in the loan terms this helps in keeping the finances in safe hands as well.

Debt negotiation – in this technique of debt management the borrower try to negotiate for debts with the creditors. This allows the borrowers to get terms more favorable and to their liking.

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