consolidate debt PAY DAY LOANS - WHO BENEFITS? Based on the warnings issued by federal and consumer organizations it is clear that using pay day loans or cash advances from these businesses can often lead to more debt and problems. Some sites were reported to automatically roll over the loan and only withdraw the renewal fee on the pay date. Other sites surveyed by the CFA required customers to agree in contract to not participate in class action suits or to file for bankruptcy. For those who are having debt problems it is recommended to seek no- or low-cost credit counseling from a local non-profit organization. These organizations can help with reducing current interest charges and lowering monthly payments. If the problem is budget, you should look to a financial planner who can help you to manage the money you do have and avoid using credit at all. Get Debt Collectors Out of your Life By Kenneth DeLashmutt This will be a pretty long lesson and will cover an integral part of validation which is the receipt of the initial or first contact with the debtor by a collector which usually gets thrown in the trash can if the debtor has not the funds to pay. That is a very serious mistake. One should never throw those collection letters away. They may very well be a vital part of your defensive strategy later down the road. This lesson is taken from a part of an FTC opinion letter on validation and tells us what that first letter must contain at the very least, and what it must do and must not do so this is an important lesson indeed. This course was originally designed for attorneys and was designed to teach them avoidance of problems. Naturally, we use their lessons against them and do all we can to get them to screw up so they can be sued. You will find a lot of ingenious tricks and traps can be devised to make them goof it up and lose their collection efforts and their cases against you. SECOND ISSUE: Where an attorney debt collector institutes legal proceedings against a debtor but has no prior communications with the debtor, are the requirements for the validation of debts set forth in Section 809 of the FDCPA supreme to state law or state court rules that otherwise prohibit the inclusion of the validation notice on court documents? In responding to this issue, the Commission notes first that Section 809(a) of the FDCPA, 15 U.S.C. § 1692g(a), provides: (a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing – (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. Section 803 (2) of the FDCPA, 15 U.S.C. § 1692a(2), defines the term "communication" as "the conveying of information regarding a debt directly or indirectly to any person through any medium." In its Staff Commentary, Commission staff stated that the term "communication" "does not include formal legal action (e.g., filing of a lawsuit or other petition/pleadings with a court; service of a complaint or other legal papers in connection with a lawsuit, or activities directly related to such service) " 53 Fed. Reg. at 50101, comment 803 (2)-2. Similarly, in the introductory portion of the Staff Commentary, Commission staff opined that "Attorneys or law firms that engage in traditional debt collection activities (sending dunning letters, making collection calls to consumers) are covered by the FDCPA, but those whose practice is limited to legal activities are not covered." (3) Id. at 50,100. Seven years after the Staff Commentary was issued, the United States Supreme Court held that the FDCPA's definition of "debt collector," Section 803(6), 15 U.S.C. § 1692a(6), "applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation." Heintz v. Jenkins, 514 U.S. 291, 299 (1995). In arriving at this conclusion, the Court explicitly considered and rejected Commission staff's introductory remark regarding the coverage of litigation attorneys. Id. at 298. In light of Heintz, the Commission concludes that, if an attorney debt collector serves on a consumer a court document "conveying information regarding a debt," that court document is a "communication" for purposes of the FDCPA. (4) If an attorney debt collector has had no prior communications with a consumer before serving a summons or other court document on the consumer, that document would constitute the "initial communication" with the consumer if it conveys information regarding a debt. The attorney would therefore have to include the written notice mandated by Section 809(a) (often referred to as the "validation notice") in the court document itself or send it to the consumer "within five days after the initial communication." According to the ACA's Request, some "state laws or state court rules prohibit the inclusion of additional language such as the validation notice on documents filed with courts." The association asks whether the requirements of Section 809(a) are "supreme to," and thus preempt, these state laws or state court rules. Id. Preemption cases generally proceed from "the starting presumption that Congress does not intend to supplant state laws." New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654 (1995). (5) According to the Court in English v. General Electric Co., 496 U.S. 72 (1990): State law is pre-empted under the Supremacy Clause, U.S. Constitution Article VI, cl. 2, in three circumstances. First, Congress can define explicitly the extent to which its enactments pre-empt state law. Pre-emption fundamentally is a question of congressional intent, and when Congress has made its intent known through explicit statutory language, the courts' task is an easy one. Second, in the absence of explicit statutory language, state law is pre-empted where it regulates conduct in a field that Congress intended the Federal Government to occupy exclusively. Such an intent may be inferred from a "scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it," or where an Act of Congress "touches a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject." . . . . Finally, state law is pre-empted to the extent that it actually conflicts with federal law. Thus, the Court has found pre-emption where it is impossible for a private party to comply with both state and federal requirements, or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Id. at 78-79 (omission in internal quotation in original) (citations omitted). The preemption provision of the FDCPA, Section 816, 15 U.S.C. § 1692n, provides: This title does not annul, alter, or affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to debt collection practices, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this title if the protection such law affords any consumer is greater than the protection provided by this title. The Commission does not believe that this section expressly preempts state laws and court rules that prohibit attorney debt collectors from including validation notices in court documents. The quoted provision makes express that Congress did not intend to preempt the field, but allowed only for conflict preemption. However, there is no conflict preemption here. First, there is no conflict preemption based on impossibility of compliance because it is possible for attorney debt collectors to comply with both the federal provision and the state provisions. (6) Instead of including such notices in court documents, attorney debt collectors in jurisdictions that prohibit validation notices in court documents may deliver the notices to consumers via some other medium -- either before serving the court document on the consumer or, if the court document is truly the first communication with the consumer, within five days of serving the court document. (7) Second, there is no conflict preemption based on state law standing as an obstacle to the full accomplishment and execution of Congressional purposes and objectives. As Congress declared in Section 802(e) of the FDCPA, 15 U.S.C. § 1692(e), the purpose of the panoply of protections under the federal debt collection statute is: to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses. The state provisions about which you inquire do not prevent consumers from receiving the full panoply of protections from abusive debt collection practices afforded by the FDCPA. The only FDCPA provision that could be affected by these state laws and court rules is Section 809(a). As noted above, an attorney debt collector who is prohibited from including the validation notice in court documents may deliver the notice to consumers before serving the consumer with the court document or, if the court document is the first communication with the consumer, within five days after serving the court document. Thus, even in a jurisdiction that prohibits validation notices in court documents, a consumer will receive the validation notice and learn, for example, that the debt collector must provide the consumer with written verification of the debt if the consumer disputes the debt within thirty days. State legislation that prohibits validation notices in court documents also does not stand as an obstacle to the promotion of "consistent State action to protect consumers against debt collection abuses." Consumers will receive their validation notices in jurisdictions that prohibit validation notices in court documents as well as in jurisdictions that permit the practice. After reviewing state laws and court rules that prohibit validation notices in court documents under a preemption analysis, the Commission concludes that such state legislation is not preempted by the FDCPA. By direction of the Commission. Donald S. Clark Secretary Endnotes 1. Section 809(b), 15 U.S.C. § 1692g(b), provides: If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. 2. In the Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50097 (1988) ("Staff Commentary"), and staff opinion letters, Commission staff have consistently read Section 809(b) to permit a debt collector to continue to make demands for payment or take legal action within the thirty-day period. See 53 Fed. Reg. at 50,109, comment 809(b)-1 ("A debt collector need not cease normal collection activities within the consumer's 30-day period to give notice of a dispute until he receives a notice from the consumer."); letter from John F. LeFevre, FDCPA Program Advisor, to S. Joshua Berger (May 29, 1997): We interpret the "thirty-day period" as a period within which consumers must dispute their debts in writing in order to avail themselves of their Section 809(b) rights, but not as a "grace" period. Thus, we believe that there is nothing in the Act that prevents you from filing suit during this period, so long as you do not make any representations that contradict Section 809(b). Kenneth M. DeLashmutt "Predatory Lending Defense Specialist" email: educationcenter2000@cox.net website: http://www.educationcenter2000.com Mr. Kenneth M. DeLashmutt is a recognized Predatory Lending Defense Specialist and an authority on the subject of predatory lending practices, foreclosure defense, consumer protection and debtor’s rights. He has more than 10 years experience in the area of consumer protection related to predatory mortgage lending practices and debt resolution. He has provided regulatory consulting services nationwide to financial institutions, consumers and regulatory agencies as well as real-estate and financial services organizations. Areas of Expertise include: Banking Operations and Administration; Lending Policies and Laws to Protect Consumers, Mortgage Brokers and Mortgage Lender Predatory Lending Custom & Practice; Credit Administration; Bankruptcy and Foreclosures; Trust & Fiduciary Issues / Operations; Real Estate Transactions; Consumer Protection Litigation and Foreclosure Defense. email: educationcenter2000@cox.net website: http://www.educationcenter2000.com Debt Consolidation for Homeowners By Ann Gibson You cannot understand the importance of being a homeowner until you enter the loan market for debt consolidation. Debt consolidation for homeowners is a responsible way of getting out of debt. Your financial statement is overflowing with debt. Debt management begins with debt consolidation. Being a homeowner will enable you to see dissolving your debts faster than any other debt consolidation hopeful. Every month your money is lost while paying for the loan amount you owe. And every month your peace is lost attending the harassing phone calls of the loan lenders. Homeowner debt consolidation seems a pretty good idea. You deal with one loan, one monthly payment, one loan lender, low interest rates –you are just going to fill that application form. But wait there is more to debt consolidation than that. Debt consolidation for homeowners is a secured loan, secured on your home. Being a secured loan, homeowner debt consolidation comes with great benefits like lower interest rates, lower monthly payments, easy repayment options and capacity to negotiate terms. The disadvantage is repossession can result in view of the fact of non repayment. If you don’t pay a credit card debt – all you get is bad credit. If you don’t pay homeowner debt consolidation – you are no longer a homeowner. Understanding your debts will enable you to know what kind of debt consolidation you will be requiring. Answer such questions as – What is your present debt amount? What is the nature of your debts? How old are your debts? What is your credit score? Do your creditors still have your account or it is transferred to collection agency? Credit score is decisive while determining loan rates. Since you are a homeowner, the emphasis on credit score will be less. But a good credit score can get you lower interest rates on debt consolidation for homeowners. Debt consolidation for homeowners is possible with bad credit also. But it will affect your chances of getting lower interest rates. On the internet there are various sites offering homeowner debt consolidation with bad credit. You can ask for quotes from these sites so as to know how much it might cost you. There is loads of information available on the net. Take this as your medium to finding the right homeowner debt consolidation. Debt consolidation can very easily be a source of further debt problems for homeowner. With no debt problems on hand, after debt consolidation, a homeowner might be tempted to spend more and get further into debt. Debt consolidation for homeowner usually has a loan term of 10-30 years. Therefore, your secured loan would mostly be spend in paying off your previous debts. It is strongly recommended that you try taking homeowner debt consolidation for shorter loan term. Even though your monthly payment is less, a longer loan term will cost you more. Debt consolidation is dependent on circumstances of a homeowner. So, not every debt consolidation plan would work for every homeowner. Debt consolidation for homeowners includes the formation of a debt management plan. This plan would be formed after carefully studying the income and expenditure of the homeowner. This affordable plan makes debt repayment possible without stretching the budget. Debt consolidation for homeowners is ideal for those who have debts exceeding £5000 with three or more individual creditors. Debt consolidation for homeowners would work if they have expendable income of £100 or more. Debt consolidation for homeowner is best for large amounts like £25,000. If you don’t have the necessary disposable income, then take small loan amounts. This way you would clear some of pending debts and be in a realistic position to pay back homeowner debt consolidation. If you have doubts about keeping up with monthly payments of debt consolidation for homeowners, it is better you take out insurance. You can find good insurance schemes elsewhere and don’t have to comply with loan lender for insurance policy. A good debt consolidation for homeowner would be that which fits beautifully in their financial situation. Stick to your plan and you will repay your debts. Otherwise you know where it will lead you. Right into the slippery surface of debts. So, how many benefits are there of being a homeowner? Keep counting till you are debt free. Loan borrowing is like once in a life time decision and much is at stake. It is indeed not a good thing that many people are misguided into taking loans that are not appropriate to their financial situation. This leads to many allied misgivings. As a financial consultant the only driving force of Ann Gibson is to provide proper knowledge. Because knowledge in respect to loan borrowing is power and exudes financial benefits.He works for uk debt consolidation web site uk debt consolidations.To find a uk debt consolidation loan,debt management that best suits your need please visit http://www.ukdebtconsolidations.co.uk Practicing Realistic Spending Get out of debt and stay out of debt, are words to live by for Editor Lisa Laskey and her family. "By the time I met the man who would become my future husband, I was in more debt than I could handle. After a few years together, my husband's thrifty ways and his parent's great financial modeling helped me learn the importance of living within our means and not planning to pay it off "next month." This may sound unexciting and not spontaneous to some, but it has gotten us through many lean years and insures that we will enjoy the extra income of the non-so-lean years."