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Debt Settlement

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NEWS
February 26, 2010
F or someone deep in debt, the offer may sound like a lifeline: Send payments to a debt settlement company, and it will negotiate with your creditors to get them to reduce what you owe by as much as half - without declaring bankruptcy. But if it sounds too good to be true, that's because it probably is. Complaints to the Maryland attorney general's office about companies making offers like that have spiked in recent years, as consumers have found too often that they wind up paying exorbitant fees and getting no benefits - all while their debts continue to mount and their credit scores plummet.
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NEWS
By Marceline White | March 30, 2011
Wouldn't you like to get something for nothing? That sounds too good to be true, but it's the business model the debt settlement industry has regularly used as it has taken money from tens of thousands of vulnerable consumers around the country and often done little or nothing to help them settle their debts. To stop such predatory practices, the Maryland legislature needs to strengthen the debt settlement bills now before the House and Senate and establish firm and reasonable caps on the fees the industry can charge consumers.
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NEWS
By Marceline White | March 30, 2011
Wouldn't you like to get something for nothing? That sounds too good to be true, but it's the business model the debt settlement industry has regularly used as it has taken money from tens of thousands of vulnerable consumers around the country and often done little or nothing to help them settle their debts. To stop such predatory practices, the Maryland legislature needs to strengthen the debt settlement bills now before the House and Senate and establish firm and reasonable caps on the fees the industry can charge consumers.
BUSINESS
By Eileen Ambrose, The Baltimore Sun | December 14, 2010
For the fourth year in a row, Maryland legislators will consider regulating debt settlements, and new recommendations in a report out this month might be the charm. That report, by state regulators with input from consumer advocates and industry players, found that consumer complaints about debt settlers in Maryland have more than quadrupled in the past three years to 95 complaints so far this year. Meanwhile, 39 other states have passed laws related to debt settlement, many of them limiting fees or requiring licensing.
BUSINESS
By Eileen Ambrose and eileen.ambrose@baltsun.com | January 5, 2010
T he number of debt-settlement companies nationwide has grown into the thousands as more strapped consumers are turning to them to help wipe away debt. But complaints are also on the rise, with some consumers saying they ended up in worse shape financially after going to a debt settler. Meanwhile, the companies go largely unregulated. This year, Maryland's General Assembly is expected to take up the matter for the third year in a row. Let's hope the third time is a charm.
BUSINESS
By Eileen Ambrose, The Baltimore Sun | August 3, 2010
Companies promising to settle debts for less than you owe soon won't be able to charge for their services until they do their job. The Federal Trade Commission announced last week that it plans to outlaw advance fees charged by for-profits pitching debt relief services over the telephone beginning Oct. 27. After that, consumers won't have to pay a fee until a debt is reduced. Also starting next month, debt settlement companies must disclose to prospective clients the cost of the program, how long it will take to get the results promised and any negative consequences of the debt relief program.
BUSINESS
By EILEEN AMBROSE and EILEEN AMBROSE,eileen.ambrose@baltsun.com | September 13, 2008
The debt-settlement industry is about to get a much-needed spotlight on it. The Federal Trade Commission is holding a conference this month to learn more about this fast-growing industry. Debt settlers advertise heavily online, promising to settle your debt for as little as 50 cents on the dollar. But there's a lot they don't tell you - such as that you can end up worse off than before. A few years ago, there were about 300 companies offering debt settlement; now there are at least 1,000, said Peggy Twohig of the FTC's division of financial practices.
BUSINESS
By Liz Pulliam Weston and Liz Pulliam Weston,SPECIAL TO THE SUN | July 14, 2002
After I lost my job, I got talked into using a debt-settlement service, the kind that helps you pay off your bills for less than what you owe. The company assured me and my wife that our credit would recover quickly after all debts were paid off. I now know we were naive to believe them. But how long will it take our credit to recover from what we've done? I'm now employed and have a good income, as does my wife. We own our home and have two credit cards, one with no balance and one for unplanned purchases that never has a balance greater than $500.
BUSINESS
Eileen Ambrose, The Baltimore Sun | July 19, 2010
Could student loans be the next financial crisis? College costs have risen faster than inflation, and more students are borrowing and taking out bigger loans just to keep up. Defaults are on the rise. "Something is going to have to give if costs keep going up and people keep stretching themselves," says Deanne Loonin, a staff attorney with National Consumer Law Center. "It's not sustainable for borrowers. " For those whose student debt load has reached a crushing level, help is in the works.
BUSINESS
By EILEEN AMBROSE | July 20, 2008
Have thousands of dollars of credit card debt and little money? The online ads for debt settlement might seem the answer to your troubles. They promise to settle your debt with creditors for 30 cents or 50 cents on the dollar. No damaging bankruptcy. You can be debt-free in one to three years. But there's a lot those ads don't tell you. Debt settlers can charge stiff fees. Creditors could refuse to settle. They might keep hounding you with calls or take you to court. You can get hit by taxes on debt that's forgiven.
BUSINESS
By Eileen Ambrose, The Baltimore Sun | August 3, 2010
Companies promising to settle debts for less than you owe soon won't be able to charge for their services until they do their job. The Federal Trade Commission announced last week that it plans to outlaw advance fees charged by for-profits pitching debt relief services over the telephone beginning Oct. 27. After that, consumers won't have to pay a fee until a debt is reduced. Also starting next month, debt settlement companies must disclose to prospective clients the cost of the program, how long it will take to get the results promised and any negative consequences of the debt relief program.
BUSINESS
Eileen Ambrose, The Baltimore Sun | July 19, 2010
Could student loans be the next financial crisis? College costs have risen faster than inflation, and more students are borrowing and taking out bigger loans just to keep up. Defaults are on the rise. "Something is going to have to give if costs keep going up and people keep stretching themselves," says Deanne Loonin, a staff attorney with National Consumer Law Center. "It's not sustainable for borrowers. " For those whose student debt load has reached a crushing level, help is in the works.
NEWS
February 26, 2010
F or someone deep in debt, the offer may sound like a lifeline: Send payments to a debt settlement company, and it will negotiate with your creditors to get them to reduce what you owe by as much as half - without declaring bankruptcy. But if it sounds too good to be true, that's because it probably is. Complaints to the Maryland attorney general's office about companies making offers like that have spiked in recent years, as consumers have found too often that they wind up paying exorbitant fees and getting no benefits - all while their debts continue to mount and their credit scores plummet.
BUSINESS
By EILEEN AMBROSE | January 5, 2010
The number of debt-settlement companies nationwide has grown into the thousands as more strapped consumers are turning to them to help wipe away debt. But complaints are also on the rise, with some consumers saying they ended up in worse shape financially after going to a debt settler. Meanwhile, the companies go largely unregulated. This year, Maryland's General Assembly is expected to take up the matter for the third year in a row. Let's hope the third time is a charm. Debt settlers promise to settle your debt with a creditor for a lump sum, say 50 cents or less on the dollar of debt owed.
NEWS
By James Drew and James Drew,james.drew@baltsun.com | January 26, 2009
Maryland district court officials want to give defendants in debt collection lawsuits new access to legal help and change the way that settlement conferences are handled, in response to criticism that hospitals, credit card companies and other creditors often have an unfair advantage. The courts are responding to an investigation into hospital debt collection practices published last month by The Baltimore Sun. That report, as well as a University of Maryland law school study released in November, found that defendants are confused by the court process, do not understand that they sometimes have legitimate defenses and assume that they must accept whatever terms are dictated by hospital lawyers in settlement conferences.
BUSINESS
By EILEEN AMBROSE and EILEEN AMBROSE,eileen.ambrose@baltsun.com | September 13, 2008
The debt-settlement industry is about to get a much-needed spotlight on it. The Federal Trade Commission is holding a conference this month to learn more about this fast-growing industry. Debt settlers advertise heavily online, promising to settle your debt for as little as 50 cents on the dollar. But there's a lot they don't tell you - such as that you can end up worse off than before. A few years ago, there were about 300 companies offering debt settlement; now there are at least 1,000, said Peggy Twohig of the FTC's division of financial practices.
BUSINESS
By EILEEN AMBROSE | April 10, 2005
NOW THAT regulators and legislators are taking steps to protect consumers from unscrupulous credit counselors, there's growing concern about the burgeoning debt-settlement industry. These companies, virtually all for-profit, differ from the nonprofit credit-counseling agencies that enroll debtors in repayment plans. Instead, debt settlers try to negotiate a reduction in the amount of debt owed to a creditor, usually a credit-card company. A negotiator might ask a card company to accept 40 cents for every dollar owed, which is probably more than the card issuer would get if the debtor filed for bankruptcy.
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