Automated Debt Collection Lawsuits

January 16th, 2012 by kevincraig | Comments Off | Filed in debt

After the initiation of automatic debt collection software, collection law firms are piling thousand law suits on the court room. Therefore, rates of filing law suits are increasing leaps and bounds.

Cohen & Slamowitz, at Woodbury, N.Y, is a decade old collection law firm that has been reported to file 80,000 lawsuits over the last year with only 14 lawyers on staff, each dealing 5,700 cases. This may look incredible but it is being possible only for using software called Collection Master manufactured by a company named Commercial Legal Software. Richard Rubin, a lawyer from New Mexico termed the procedure as ‘factory approach to practicing law’.

Usually a collection agency sends extensive database of the debt stricken consumers to the law firm. Then the firm employs the software to automatically run over the data and operates the entire legal system. The system replaces all the paper flow of traditional collection process and covers everything from sending out collection letters, summons to lawsuits via email. The information that a collection agency sends to the law firm is stored in an electronic data base. It contains the name of the consumer, his address, his outstanding balance on credit card and interest rate if any, accruing on his account.

Another type of debt collection software that law firms use is web based software that does not require installing any additional hardware or software system. Casetrackerlaw is one such web based solution that hosts online application and performs all the functions in a customized way. It helps a law firm manage debtor’s payment, collection fees, client fees and filing fees.

However, due to handling huge data, errors or questionable information are also getting processed into the system. So the Fair Trading Commission is now urging the state authority to make collection rules much more stringent. If any debtor challenges the amount of his debt, the collection agency must show substantial proof against him to validate their claim. This is now a growing debate how the debt collection law should function and to what extent.

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What is the difference between debt consolidation and settlement?

May 27th, 2011 by Ryan | Comments Off | Filed in Consolidation

Debt settlement and debt consolidation are the two most sought after debt relief options. You can opt for any of the two if you have started to face problems with the dues that you owe to your creditors. Both the processes make your monthly debt payments easier but the two debt relief processes work in a different way.

Difference between two options

The main difference between debt consolidation and debt settlement is the way in which these two lower your monthly payments on your credit accounts. Settlement lowers the outstanding debt amount while consolidation works the other way round. It lowers the interest rate on your

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debt and also reduces the number of debts that you have as a single large debt.

The only similarity between these two debt relief options is that these can help you in handling only your unsecured debts and not the secured ones.

Again, settlement is mainly for those people who have very large debts. in contrast to this, consolidation is mainly for those people who have several unsecured debts with high interest rates on those.

Another difference between the two options is that settlement hurts your credit while consolidation helps in improving your credit. In case of settlement, you are required to miss payments before the creditors agree to your settlement request. Now, as you miss payments, it gets listed on your credit report and lowers your credit score. Your payment history accounts for 35% of your credit score and so it is quite obvious that if you miss payments, your credit score will lower. Based on this concept itself, debt consolidation helps in improving your credit. First of all, in order to consolidate your debts, you are not required to miss any payments on any of your credit accounts. After you consolidate your debts and as you start making the payments on your consolidated debt, it actually helps in improving your credit score. So, many financial experts prefer consolidation to settlement.

However, another very important thing that is to be remembered while consolidating debts is that you should never close down all the credit accounts at the same time after the consolidation. If all the credit accounts are closed at the same time, the total credit limit lowers and the credit usage increases in comparison to that. So, it is better to avoid closing down all of the accounts at the same time.

As for the debt relief option that you can opt for will depend on the financial situation you are in and also the debts that you owe to the creditors. If you have very high debt amount and if you don’t have much money, it is better to opt for settlement even if it hurts your credit. But, if you have high interest rated debts, you can opt for debt consolidation.

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Unsecured Debt Consolidation Loans: A Debtor’s Savior

October 26th, 2009 by Ryan | Comments Off | Filed in Consolidation

For sure, many of us are aware that more and more people are falling into debt; and their number is rapidly increasing over the years. Now, to reduce the debt of these number of people, (and to earn more money of course) banks offer unsecured debt consolidation loans as their way of helping people who cannot afford to pay off all their credit card bills.

The good thing about unsecured debt consolidation loans is that it offers consolidation service without any collateral at all; unlike a secured type consolidation loan. This type of loan is more like a personal loan that aims to clear or payoff a client’s credit card or credit cards debt; paying them off entirely and allows the customer to pay them the balance in an installment basis with a low interest rate.

Provided that the rates they give are lower than the customer’s previous credit provider might make you wonder why. But for sure, even they offer help to their customers (specially the new ones), they do pure business and not charity! They offer the low rates to win their customers’ business to have them paying for them in the long run.

Most people who have experience having an unsecured debt consolidation option says that they recovered through it but some also says they don’t because of mismanagement and overspending. Well, this is apparently true because the moment you clear a debt from other banks, you will instantly have a credit line free of balances. Meaning temptation will float in the air enticing you to make use of your newly paid credit card for purchases. If you give in to this temptation you will certainly lose the battle! You’ll drown in debts again.

If you are considering having this option, search the web for trusted banks that offer the lowest rate possible. Compare their rates and ask them about important requirements you need to meet. The internet is a very helpful source of information about major credit providers and most of all hassle and tire free.

Having an unsecured debt consolidation will definitely payoff your balances with other banks. This option is a great tool to free you from the curse of never ending debt. But this option is also a double edged sword, it will make or break you so be very wise on handling your finances. Set priorities before you spend. Keep track of your due date and remember the number one rule when you have credits: Pay the Bills on time!

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Facts About Getting an Unsecured Debt Consolidation Loan

October 26th, 2009 by Ryan | Comments Off | Filed in Consolidation

Unlike before where people struggle to find ways of paying off debts systematically, we now begin to see more choices on how to better get rid of them! One of the options is the Unsecured Debt Consolidation Loan.  This type of loan gives all creditors relief and a light in a window ensuring all debts is possible to be paid off without the hassle of paying multiple creditors.

If you are good payer but remembering due dates is just a chore for you, you may need to have your debts consolidated.  It’s always easy to find companies to transfer all your balances to provided that the credit market is under stiff competition.  So when bills pile up on you, don’t think that paying your current multiple companies is the only option! Applying for an unsecured debt consolidation loan will help you bounce back to managing your finances; this time, a lot easier!

As the name “Unsecured Debt Consolidation” implies, the loan is unsecured and therefore does not require any collateral. You may not need to mortgage your properties to apply for this type of loan, but you sure need to have a good credit standing. A good credit record is required to assure your creditor that he will have return for his investments; all business needs a good deal right?

A high credit score reduces the risk that a company may loose valuable money to a delinquent client thus lending money to people with good credit standing is easier for companies to approve. However since this type of loan requires no collateral, you should expect an interest rate a bit higher that what secured loans will offer.

Unsecured debt consolidation is a great option for people who want an organized method of taking care of their finances. This type of loan consolidation is created to help debtors pay off their current bills to other companies in just one creditor freeing them from the hassle of meeting multiple due dates and paying off multiple charges. The risk of missing due dates will be reduced because you will now just pay one company.

But once the other creditors are paid off, your credit line will be open for purchases again so be extra careful with your spending decisions. If you are not wise enough to resist the temptation of using it, your finance trail will definitely be derailed instead of being organized!

To better have knowledge on getting the best consolidation option for you, an appointment with a credit counseling agency is a good option to gather more information on how to manage debts. These professionals are willing to answer questions and give advice on debt management.

Make sure to browse the internet to look for companies that will offer the best option for you and compare quotes first to know who will give you the best deal.

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