Life After Debt: The “Real Life” Steps To Recovery

Life Afer Debt Post Image2 1024x681 Life After Debt: The Real Life Steps To Recovery

I just finished reading an article on the Huffington Post by Kevin Yu, one of the founders of SpringCoin and a certified credit counselor with the NACCC – The National Association of Certified Credit Counselors.  In the NACCC website, it says that their mission is to increase professionalism, standards, ethics, and positive recognition in the financial counseling industry. It says they believe that financial counseling represents an important consumer service and that education is the key for enhanced on-the-job effectiveness, employment satisfaction, and client retention. OK

I’m all for credit counselors having professionalism, standards, and ethics in the same way I’m all for collection agents to have professionalism, standards, and ethics.  Consider this post an endorsement of both the NACCC and ACA – The Association of Credit and Collections Professionals. icon smile Life After Debt: The Real Life Steps To Recovery

The Other Half Of The Battle?

Mr. Yu just penned an article titled, “Life After Debt: The Other Half Of The Battle.  In it, he opens up well by pointing out that there’s a reason why consumers fresh out of bankruptcy begin to receive credit card offers in the mail after they’re discharged; credit card companies have a deep understanding of consumer spending behavior and they realize it takes a drastic lifestyle change to reduce your spending habits.  In other words; they know you probably won’t!

Here’s where I think the article goes off the “real life” script.  He states, “It’s a surreal feeling once you’ve paid off your last credit card. You feel a thousand pounds lighter and finally feel liberated.”  You know what’s a surreal feeling?  Waking up on the other side of a $1.6 million dollar Bankruptcy and still having your family intact.  The release from stress of getting the IRS off your back after getting $164,000 dollars in federal tax liens released without losing your home.  Owning your family van outright after not having one, but two cars repossessed; happy in the thought that no one’s coming for it in the middle of the night.  That’s surreal!  A thousand pounds lighter? I felt a thousand lifetimes lighter!

He continued by saying, “if you haven’t already figured out how you got into debt in the first place; take a long hard look at your past. Stare debt in the face and be honest with yourself. You shouldn’t be ashamed of once being in debt, it happens to the best of us.”  Can’t argue with that and I’m talking from experience.  But here’s where the post turned simplistic.  He asked; why do people fall into debt?  His answer? “Simply put, it really just comes down to spending more than you earn and not creating a rainy day fund.”  Is that it?

Damn Technology!

He then went on to say, “Technology is growing faster than we can keep up with. We’re always being pressured to buy the latest gadgets: TVs, iPhones, tablets, or cars. Our friends and neighbors are buying it, so we succumb to it.”  Say what?  And then what; as pressured consumers we go bankrupt or seek out his services?   He goes on to say that there’s a line between spending carelessly and shopping frugally. A line?  What the hell is that?  Did he mean to write a ‘fine line’?  Because if he did, I’d tell him he’s wrong! There’s a world of difference between spending carelessly and shopping frugally.  I would refer him to Katy Wolk-Stanley’s blog – The Non-Consumer Advocate, to learn the difference.  Spending carelessly can ruin your financial life; shopping frugally will never ruin your financial life!  Like I said; worlds apart.

He goes on to say that easy access to credit is part of the problem and, “When we think about having a $10,000 credit line, some of us might tend to think of it as “free cash.” It’s easy to get sucked into paying small monthly minimum payments with the idea that you’ll eventually get out of debt.”  This is 100% on the money.  But, again he goes off the “real life” script.  He says the other half of the battle is staying out of debt and to start saving for “your rainy day and retirement fund.”   I disagree.

First Steps

The other half of the battle is not the challenge to stay out of debt and start saving for your rainy day and retirement fund because there isn’t another half; there are first steps to take after recovering from debt and credit issues.  Notice the plural use of the word ‘steps’ and there are many stages involved with those steps which he couldn’t possibly cover in an article as simplistic as his!  I can tell you that one of those steps is learning how to change your mindset.  If you haven’t already done so, read my post titled “It Is What It Is…But Will Become What You Make It.”  You can’t fix a problem with the same ‘mindset’ that helped get you into it.

I’ll leave it at this; the best points to take from his post are that it’s absolutely necessary to budget.  If you don’t have a plan, then you’re planning to fail; it’s just that simple.  The second one is to learn from your mistakes; which goes to my point of creating a new mindset!

If you’re recovering from debt and credit issues, what steps did you take, or are taking, to ensure that you don’t go down that path again.  For me it was living Katy Wolk-Stanley’s motto:  “Use it up, wear it out, make it do or do without” Are there any motto’s you’re living by? I’d love to hear it!



3 Reasons Why You Should Never Dispute Credit Errors Online

Slot Machine Dispute Online2 1024x681 3 Reasons Why You Should Never Dispute Credit Errors Online

One of the most stunning and nefarious things that can happen on the internet is the way people repackage content and spread it throughout the web as though it were their original content. In 2007, I penned the article you see below for N.A.C.R.A., The National Association for Credit Responsibility and Advocacy, of which I was the founder and creator of, titled “3 Reasons Why You Should Never Dispute Credit Errors Online”.

NACRA docstoc Report4 3 Reasons Why You Should Never Dispute Credit Errors Online

 

As you can also see in the photo where the red arrow is pointing, I was surprised to find it available at .docstoc, a reputable electronic document repository and online store.  Of course, I made an immediate complaint with their copyright department and filed an online Digital Millennium Copyright Act (DMCA) notice of copyright infringement and take-down request.

As you might imagine, upon doing a Google search for the title of the article and various sentences located within the article, I pulled up several people quoting the article verbatim.  I mean, they didn’t even bother changing a single word!  As far as I’m concerned, when you are trying to educate the public about any issue, chances are very high, unless you wrote the book…you didn’t write the book!

Meaning, throughout my videos and various writings, I will undoubtedly quote various experts and trusted authorities when discussing my topic.  For instance, there are many times I may quote legal testimony from a deposition given under oath by recognized experts in the Fair Credit Reporting Act like Evan Hendricks.  I do not repackage his content; rather, I tell you where I learned the information I’m writing about,  so you can do your own research.  Oh, by the way; Evan did write the book.  It’s called “Credit Scores & Credit Reports; How The System Really Works, What You Can Do.”

If you haven’t already done so, I ask that you please read my post titled, “Who Can You Trust When Taking Credit and Financial Advice”, and please read my Disclaimer below my About page to read what I claim, and do not claim, to be.  So without further ado, here is the updated version of my original report from 2007.

3 Reasons You Should Never Dispute Credit Errors Online

Reason Number One: Time

One important factor you have on your side when disputing errors in your credit report is time. By law, the credit bureaus have 30 days within receipt of that dispute to properly investigate your claim.  However, this only applies to reports other than one obtained for free at annualcreditreport.com.  In that case, the credit bureaus have 45 days to respond.  If you didn’t know this fact, you need to watch my free video series; the Better Credit Blueprint.

Reason Number Two: Shortcut The Process

The Credit Bureaus online dispute system is set up in such a way that when you use it, it makes their job that much easier. The information you put into their limited dispute fields falls right into their electronic verification system.  By using their online dispute system (E‐OSCAR), you have no proof of the dispute or a paper trail that certified return receipt requested would give you if you had mailed that dispute. An important aspect of accelerating the credit recovery process is keeping meticulous records.

If you catch the credit bureaus in violation of the Fair Credit Reporting Act or a collection company in violation of the Fair Debt Collection Practices Act, you’ll have the necessary ammunition to beat them in court and clear your good name should you have to go that route.

Reason Number Three: Revision Not In Your Favor

When the Fair Credit Reporting Act was revised by FACTA, they put in a section for “Expedited Dispute Resolution” Section 611a(8), also known as the on‐line dispute system. If you read this section, you will notice the following;

Expedited Dispute Resolution 3 Reasons Why You Should Never Dispute Credit Errors Online

Well paragraph 2 is the part that requires the CRA to forward your dispute and all related documentation you provide to the creditor or company furnishing the information to the bureau.   Paragraph 6 is the part that requires the CRA to provide you with written results of the re-investigation.   And paragraph 7 is the part that requires the CRA to provide you with the method of verification on request by you, the consumer.

So as you can see, by using the CRA’S online disputing system (E‐OSCAR), which by the way stands for Electronic Online System for Complete and Accurate Reporting (ha ha ha), you wouldn’t receive a notice from the credit bureaus telling you that the information you disputed has been verified as accurate, which, by receiving this notice is what allows you to request the method of verification (MOV).  The credit bureau then must provide you with this information within 15 days of your request.

Important Tool

As you can see, Method of Verification is another important tool to use and a very important part of accelerating the process of credit recovery should you need to delete an item discovered to be in error, incomplete, or unverifiable during the “Credit Audit and Verification” process.   So why would you give these rights up; voluntarily no less?

Additionally, the law is not specific enough and does not say “permanently delete or suppress”; herein lays the problem. The Credit Reporting Agencies (CRA) can “soft delete” a disputed trade line for 30 days and then the trade line can reappear when the furnisher (creditor or collector) reports it again in the next 30 day cycle. This is due to the fact that the CRA’s are not required to tell the creditor or collector that you disputed it at all, thanks to the “shall not be required to comply with paragraphs 2” if you decide to dispute an item online. Are you getting all of this?

Elementary, my dear Watson

As Sherlock Holmes would say, “Sleight of hand is afoot!”  This is a deceptive system in where we, the Amateur Consumer, think we may have succeeded in our dispute and gotten what is known as a “hard delete”, but in fact, it is only temporary. Since the creditor or furnisher of that information does not know the item was deleted, they will mistakenly re‐report it and then conveniently, the credit bureau will place the negative item back on your report. And if that isn’t bad enough, you lose the hard copy of the investigation results you would otherwise have received and been entitled to if the dispute had been sent via certified mail in the first place.

Again, by disputing in writing, as the FTC states you should on their website, the bureaus might temporarily remove a negative item (soft delete) until the information is verified as true but…if the information is verified to be true, they must then notify you in writing within 5 days of putting the item back on your credit report. If they don’t, it’s a violation of the FCRA and you could potentially sue them for $1,000.

Listen To The FTC

Look, there’s a reason why the FTC states right there on its website that you should dispute EVERY item you think is not accurate, incomplete, or unverifiable on your credit in writing and by certified mail, “return receipt requested”; it’s because you are protected as a consumer and by disputing online electronically, you lose many rights under FCRA.  So why would you ever do this?  The answer for anyone reading this blog post should be; I will never dispute an item in my credit report online so repeat after me: Now I know better!  At the end of the day, the moral of the story is; Gain knowledge, become confident, and become a better, more informed consumer moving forward.

UPDATE:

Less than 12 hours after filing my Digital Millennium Copyright Act (DMCA) notice of copyright infringement and take-down request with .docstoc about my original N.A.C.R.A. report in 2007, I received an email from their copyright department informing that they had in fact, removed the document from their website.  Below is a copy of the email as well as a screenshot showing the document removed from their site.

docstoc take down and removal approval 3 Reasons Why You Should Never Dispute Credit Errors Online

docstock website 3 Reasons Why You Should Never Dispute Credit Errors Online

All’s Well That Ends Well

As I have written in previous posts; all’s well that ends well, and this ended well.  I have no idea how much money this character made off my report since it was downloaded over 1200 times, but it is what it is.  I thank docstoc for taking it down so quickly and want everyone reading this post to know that I absolutely do not mind anyone sharing what they learn from any of my posts or from my free Better Credit Blueprint video series.  That’s the idea, isn’t it?  To share your knowledge and make a greater difference.  Just don’t try to pass it on as your own icon smile 3 Reasons Why You Should Never Dispute Credit Errors Online



Who Can You Trust When Taking Credit and Financial Advice?

Which Road To Take1 Who Can You Trust When Taking Credit and Financial Advice?Let me start this blog post by saying that it’s not a post about exactly whom you should trust and believe when it comes to taking credit and personal financial advice.  Rather, it’s a post about the process you should go through every time when reviewing any credit and personal financial advice, regardless of where and whom it came from.

If you were to Google the term ‘credit repair’ it would return 65,300,000 results.  Obviously you’re not going to visit every site but nonetheless, the point is there’s a lot of information out there if you’re proactively attempting to understand credit, credit reports, and how to accelerate the process of credit recovery.  Google ‘personal financial advice’ and it returns another 21 million plus results. [Read more...]