Are you in debt? 5 Warning Signs - Credit Law Center

Are you in debt? 5 Warning Signs- Credit Law Center

Do you hesitate to open your credit card statements each month, afraid of the debt you may be in? Are your credit cards allowing you to go further and further in debt? It is true paying cash gives a clearer picture of what we have and what we can spend. With credit cards being such a crucial part of building a credit history, it is important to remember you must still live within your means and not fall into this financial mess. Here are some signs you may already have a problem.


1.Are You Making the Minimum Payments

Making minimum payments to your credit card companies can be a sign you are in debt. Paying the minimum payments on even a minimal debt could mean you will be paying on it for years and years.

2.Large Minimum Monthly Payments.

If you add up all the minimum payments on all revolving debts,(credit cards, not home or auto loans), and the minimum payments of all debts equal 20% of your income or larger, you have too much debt. Exceeding 20% of your income risks you not being able to cover housing, food, or transportation.

3.Are Collectors Calling You?

Are Collectors or creditors calling threatening to garnish your wages or demanding payment? Not paying your credit obligations on time can be a sign you are in over your head. Even if you are just late on a bill, being organized and knowing what is due and when it is due can save you a late charge. Before you pay a debt collector, it is important that you know that this debt is, in fact, yours and you do owe it.

4.Robbing Peter to Pay Paul

If you are transferring money from one card to another or refinancing your house to pay off existing credit cards, this may be a sign that you are in over your head.

5.Being denied a loan

If you have been turned down for a loan or credit card, it is time to re-examine your situation. If high debt levels lead a lender to deny you the credit you probably have a debt problem. Anytime you are denied credit you are allowed a free credit report. According to the FTC, 79 percent of all credit reports contain errors, be sure to examine your credit report for errors.

These are just a few signs that may indicate you have a debt problem. It is important to stay engaged in your financial situation.

Identity Theft, Credit Repair $16 billion in 2016

Victims of Identity Theft Are Robbed of $16 billion in 2016

If you haven’t heard the term “identity theft” before you may have been living under a rock. A recent Identity Fraud Study was released this year by Javelin Strategy & Research; this study revealed that 15.4 million Americans were victims of identity theft. These crooks were successfully able to rob two million more victims and stole $16 billion dollars.

What is Identity Theft?

According to the Federal Trade Commission,(FTC), theft of an individual’s  identity occurs when someone uses your information, like your name, Social Security number to commit fraud or other crimes. Thieves are very talented when attempting to commit these types of crimes, and they look for obvious ways to obtain your information.

Ways Thieves obtain your Identity:

  • Stolen Credit Cards
  • Documents or receipts from the trash
  • Phone or email scams
  • Hacking unsecured and wireless networks

Types of Identity Theft?

Once a thief has gained access to your personal information they can obtain access to your existing credit cards, open new accounts, file fraudulent tax returns and more. Below we have named a few:

  1. Financial Theft
  2. Medical Theft
  3. Insurance Theft
  4. Criminal Theft
  5. Driver’s License Fraud
  6. Social Security
  7. Phishing Scams

Ways to Protect Yourself

1.Be Careful of What You Share. With social media and technology on the rise, these pesky crooks can find out a lot of personal information about just by doing a simple search. The information you share on Facebook, Linkedin and all the other media sites these criminals may be able to use the information you have shared to validate your identity. When you are sharing be careful of the information you share.

2.Keep Financial and Personal Information Secure. Here is another example of where technology can come back to bite us if we are not careful. Many Americans use their computers to pay bills, keep bank statements, financial planning and much more. If you do this the important thing to remember is to make sure your computer has a firewall installed; you should use anti-virus and anti-spyware software and secure your wireless network. Another important reminder is when you do have the actual hard copy of any financial or personal information dispose of it properly, and always keep them in a safe place.

3. Keep Your Cellphone Protected. Cell phones apps allow us to track our bank accounts, track your budget and finances, store credit card information, and just about anything else your heart desires. When downloading these apps make sure you are using a trusted and reputable company. Always check the ratings and reviews of any app you are downloading. Make sure you secure your device with a strong password, in case you lose it.

4. Make Sure Your Passwords Are Strong and Secure.  Create strong passwords, not easy to guess. Using passwords that contain, kids names, birth dates, maiden names or anything that may be guessed.

Are You a Victim?

If you believe your identity has been stolen, it is necessary to immediately contact any financial institutions we have accounts with and place a hold on them. You will also want to contact the FTC to file a formal complaint. Make sure to provide them with any and all questionable activity so they can thoroughly build a case.

Debt Collectors

Debt Collectors Are Required to Follow the Rules


Carrying outstanding debt is stressful enough, but when you add aggressive debt collectors to the equation, it can be a bit overwhelming. Have you ever sat back and wondered if what they are doing is legal? Debt collectors do have limits, and they are required by law to follow certain guidelines.

Debt collectors must comply with the Federal Debt Collection Practices Act, FDCPA; this act prohibits abusive, deceptive and unfair debt practices


Debt Collectors

The FDCPA defines a debt collector as a company or agency that is in the business of recovering outstanding money that is owed on a delinquent account. Debtors will hire debt collectors to collect money that owed to them, and in return give them a percentage of the portion that is collected.


Typical Debt Collector Violations

  1. Calling Before 8 AM
  2. Calling After 9 PM
  3. Using abusive or vulgar language
  4. Calling third parties, (debt collectors may contact your spouse)
  5. Communicate to anyone else that the collector is trying to collect
  6. Contacting you after you have submitted a written request to cease contact
  7. Continuously call you
  8. Use or threaten violence
  9. Threaten action they cannot take
  10. Failing to send a written statement validating the debt
  11. Continues to Collect before sending validation letter
  12. Contacting your employer if your employer prohibits it
  13. Debt collectors may often use false statements.
  14. Threatening to have you arrested or that you are being sued when no action has been taken
  15. Giving false information to the credit reporting agencies.
  16. Sending a letter that looks like an official court document if it isn’t
  17. Collecting interest, fees, or other charges on top of what you owe, unless it is in the contract
  18. Contacting by using a postcard.
  19. Repeatedly call you to harras you.

What to Do If You Believe A Debt Collector is in Violation of the FDCPA

If you feel a debt collector has violated the FDCPA you have the right to take action.
You may report any problems you have with a debt collector to your state Attorney Generals Office, the Federal Trade Commission, and the Consumer Financial Protection Bureau. You may also reach out to an attorney that practices law in these areas, you have the right to sue a collector within in one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered. The judge may also grant you up to $1000 even if you can’t prove that you suffered any damages.

If you feel you have been violated in the last year, Credit Law Center isn’t just a credit repair company. We have five attorneys on staff that handle situations like this every day. These laws are here for to help protect you.

Debt Top 10 Reasons

Top 10 Causes of Debt – Credit Law Center

Debt is the amount of money borrowed by one party from another. Consumers typically borrow money from credit card companies or private loans for purchases that they may not be able to afford upfront. Debts are acquired from a car loan, credit card, personal loan or even student loans. In June 2017, U.S. consumer debt rose 3.9 percent to $3.856 trillion. That surpassed last month’s record of $3.843 trillion. The key to debt is being able to pay it off without damaging your credit score.

Top Ten Causes of Debt

  1. Reduced Income With The Current Amount of Expenses
  2. Divorce
  3. Poor Money Management Skills
  4. Medical Expenses
  5. Gambling and Addictions
  6. Underemployment/Not Earning Enough
  7. Spending before you get Paid
  8. Not Saving Enough
  9. Inflation
  10. Financial Literacy


Examples of the top 10 causes of debt

1. Reduced Income with the current amount of expenses: Earning a lesser amount per year could be due to a job change. Outstanding bills don’t just go away with a job change. Your current bills will likely stay the same and possibly could increase. You may feel like you are unable to keep up with your monthly bills and wind up deeper and deeper in debt.

2.Divorce: As divorce continues to become more common and couples are spending a significant amount of money beating each other up in the court rooms. One thing is valid divorce, and family lawyers are not cheap, and the more time you spend battling it out in courts, the more you will spend on legal fees.

3. Poor Money Management Skills: Many Americans live paycheck to paycheck, and one little mishap can cause you to snowball. Keeping a monthly budget is essential when you have a debt to pay off. If you are not keeping track of your monthly income and the amount you are putting out in bills, you will wind up in financial trouble.

4. Medical Expenses: Medical services are often necessary to remain healthy, and depending on your situation can be extremely harmful to your pocket book. Many doctors, dentists, and hospitals require the payments at the time of service. A significant portion of specialists and dentists accept credit cards and offer to finance. Essentially this means more debt for you, not them.

5. Gambling and Addictions: Gambling and any other addictions can be downright dangerous financially! Gambling may seem exciting at the time, but dealing with the financial strain after you have spent your house payment, car payment and possibly drained your savings you may feel devastated. If you have a gambling problem or any other addiction that is draining your pocket book, reach out to a professional for help.

6. Underemployment/Not Earning Enough: This is very similar to #1. If you are underemployed, you may feel it is a temporary situation, and in a matter of time, it will work it’s way out. This can lead to a false sense of financial relief especially when you are collecting unemployment. Taking a break is great, but you will want to make sure you are making more money than your monthly bills and ending up in a financial hole.

7. Spending before you get paid: Counting your chickens before they hatch is never a good thing. Buying something today depending on tomorrow is never a good thing. Life can change in a matter of minutes, buying something in hopes of an upcoming bonus could leave you in a financial bind, if something unexpected happens and you don’t receive that bonus. Don’t spend until the money is physically in your hand.

8. Not Saving Enough: Putting aside money every month can significantly impact your financial health. It doesn’t matter how much you make monthly you will want to save something every month. Building a nest egg for emergencies is crucial. Ideally, you will want to try and save up to six months of living expenses in case of something bad happens, such as a layoff, you become ill or a divorce. Remember to “Pay yourself first

9. Inflation:  is often overlooked when it comes to debt. You may not realize how much the cost of living goes up every year. In recent times companies and administrations have struggled to stay afloat and are unable to give annual raises. With the price of housing, food, gas and other expenses increasing annually, this leaves the employees finding ways to supplement the cost increase. Look at the type of savings account you have your nest egg in, find ways to cut back on food and other expenses.

10. Financial Literacy: Many consumers do not quite understand how many works, how money grows, how interest rates function or how to invest in your futures. I am sure there is someone in your immediate circle who doesn’t even know how to balance a checkbook. Think back to when you were in school, were you taught this information? You are responsible for your own life and future, therefore taking charge is your responsibility. If you feel you are inadequate in these areas, take charge and educate yourself. Financial mistakes can be very costly and take you years to recover from being uneducated.