Debt resolution typically refers to debt settlement, also known as debt negotiation. Debt settlement involves negotiating lump sum settlements with creditors , normally credit card companies over consumer debt. That being said, debt resolution is typically used by people in the “debt help” industry to refer to debt settlement for debt incurred by businesses. Credit card companies treat personal debt quite differently than business debt, and this being the case, it is usually in the best interest of anyone considering debt negotiation for business debts to use a company that specializes in this area of debt settlement, especially if the debt was from a corporation.
There are generally three exceptions to this rule: 1) the debt is from a sole proprietorship or is personally guaranteed, 2) the business is no longer operating or has no assets, and 3) a lump sum is available to settle the debts quickly. Some corporate turn around companies are able to work with secured debt, while others specialize in debts in collection , credit cards, and deficiency balances.
Consumer debt resolution services specialize in credit card debts, repossessions, and medical bills, as well as collection accounts.
What Is Credit Resolution?
Credit resolution typically refers to the dispute process for debts on your credit report. By disputing a debt a creditor is required to respond within 30 days of the dispute with evidence that what is being reported is in fact accurate. If not, the credit bureaus are required to remove the entry from your credit until evidence is provided. The credit resolution process is required under the Fair Credit Reporting Act (FCRA).
To see if you have any errors being listed, you can get a free credit report at AnnualCreditReport.Com. Under the FCRA, Americans are entitled to one free credit report each year for this exact reason. This is also helpful to check to protect against identity theft. You are also entitled to a free credit report if you have been denied a loan or job based on any information included in your credit report. The catch is you must request a copy of your credit report within 60 days of the rejection. Other instances where you can get a free credit report:
- -You are unemployed and are planning to seek employment within the next 60 days
- -You are on welfare
- -You are the victim of identity theft
Help With Credit Card Debt & Collection Disputes
There two types of debt disputes. One relates to the process of disputing a debt with a credit bureau and the other involves challenging a debt with a debt collection agency, also referred to as debt validation. First, we will overview how to resolve disputes with the credit reporting agencies.
- -Send notification in writing to Experian , Equifax , or Transunion disputing the accuracy of any erroneous information being listed on your credit report.
If you have any documentation supporting your claims, include copies of them. Send this through certified mail with a “return receipt.” - -Wait thirty days. During this time period, the credit bureaus must forward your documentation and claims to the credit furnisher (the credit card company or collection agency), who in turn must investigate the validity of what they are reporting. If they find that it is inaccurate or wrong, they must notify all three consumer credit reporting agencies of this fact.
- -Once the dispute is resolved, whether it is in your favor or not, the credit reporting company must give you the results of the investigation. If the investigation results in a deletion or update to your credit report, the credit bureau must send you a credit report free of charge. (This does not change your ability to get the free annual credit report mentioned previously).
-For more information about any of the issues addressed above, you can also read the FTC’s publication about Resolving Credit & Debt Disputes.
Fight Debt Collection Accounts
The second type of debt dispute deals with debt collection agencies and your right under the Fair Debt Collection Practices Act to dispute the validity of a debt you do not owe. Under this provision, the consumer has 30 days from the first written communication from the debt collector to dispute the validity of the debt they are pursuing. You must do this in writing (sample debt validation letter), and the collector must respond with information verifying that the debt they are pursuing is in fact a) owed by the consumer for the amount they say, b) proof that they are entitled to collect the balance, c) copies of account statements or the original contract.
If the collector cannot adequately show that they are in fact entitled to collect the balance, they must stop pursuing the debt under the FDCPA. Beware, however, that using this tactic may also lead to escalated collection activities, and therefore, you should only use it in the even that you legitimately believe you do not owe the debt.
Where to Get Started
PayingPaul.Com can help you deal with your credit card debt problems by matching you with a qualified provider of debt management programs. Submit a form to get a free, no obligation consultation about your situation. Start today!