Are You in a Credit Emergency?*
Ask yourself these questions:
- Are you arguing with your spouse over bills?
- Is an increasing percentage of your income being used to pay off debts? Are you near or at the limit
of your lines of credit?
- Can you only make the minimum payments on your revolving charge accounts?
- Are you extending repayment schedules--paying bills in 60 or 90 days that you once paid in 30?
- Are you chronically late in paying your bills?
- Are you borrowing to pay for items you used to buy with cash?
- Do you put off medical or dental visits because you can't afford them right now?
- If you lost your job, would you be in immediate financial difficulty?
- Are you threatened with repossession of your car or credit cards, or with other legal action?
- . Do you know your total debt, or are you afraid to add it up?
If you said "YES"
to any of the above questions, you could be
in financial difficulty and should take steps to re-examine your priorities,
budget, and credit obligations.
What can you do if you
cannot meet a payment?
- It is to your advantage
to work with your creditors to find a way for you to pay off your debts.
- Call the credit manager,
merchant or lender. Explain the situation. Perhaps there has been a
job loss, sickness, or other family emergency that has made it difficult
to keep up with your payments.
- Discuss your future financial
prospects with your lender to work out a plan for repaying the debt.
- Do your best to follow that
- Make your plan realistic.
Don't make false promises that you will be unable to keep.
- Keep in continual contact
with your creditors until the problem is resolved.
What are your consumer
Federal legislation requires
that consumers receive information with regard to disclosure of credit
terms, discrimination, credit denial, as well as protection from errors
in credit billing, and from collector harassment.
The next section describes
the laws regarding credit disputes, errors in credit billing, and protection
from creditors who harass debtors.
Fair Credit Billing Act
The Fair Credit Billing Act
allows consumers to correct errors on their credit cards or charge accounts
in a speedy and effective manner. Consumers must dispute changes in writing
(other than on the bill) within 60 days. Payment should continue to be
made for the part of the bill not in dispute. The creditor must acknowledge
the written complaint within 30 days, investigate and notify the consumer
of the action taken within a maximum of 90 days.
Consumers cannot be billed
or forced to pay the disputed amount until the investigation is finished.
Nor do they have to pay any finance charges on the disputed amount while
it is under investigation. However, if it is determined the bill is correct,
then a consumer must pay the finance charges. During the investigation
of a disputed charge, the creditor may not report the consumer as delinquent
to a credit bureau.
Fair Debt Collection Practices
When a creditor employs an
outside collection agency to obtain the money outstanding on a delinquent
loan, the Fair Debt Collection Practices Act outlines legal debt collection
practices. The collection agency personnel cannot:
- Use abusive language to
coerce a consumer into making a payment
- Call at unreasonable hours--considered
to be before 8:00 a.m. or after 9:00 p.m.--or make excessive calls
- Threaten to notify an employer
or friends that a consumer has not paid his bills
- Use false pretenses to gain
entry to a home with the intent to identify or take something of value
- Attempt to collect more
than is owed
- Send a consumer misleading
letters that appear to be from a government agency or court of law
* Courtesy of The National
Foundation for Consumer Credit