Pitfalls of Credit Counseling
The Internal Revenue Service and Federal Trade Commission announced a joint advisory, warning consumers of some of the pitfalls of Credit Counseling. They plan to team up to investigate both deceptive practices of the industry and the often-misleading nonprofit status of some of these credit-counseling agencies.
"Consumers who are struggling financially need to be careful not to lose even more money to someone offering a quick and easy way to fix credit problems," said Timothy J. Muris, Chairman of the FTC. "We want all consumers seeking help to take some common sense precautions."
The IRS, FTC, and state agencies urged consumers to be wary when choosing a credit counseling organization. A large number of complaints from consumer advocate groups have alerted these groups of some of the deceptive practices and hidden costs associated with some credit counseling agencies. Consumer complaints have centered on high fees, hidden charges, and the lack of actual help these organizations have been able to offer.
The IRS is concerned that some credit counseling agencies are abusing their status as "tax exempt organizations" in order to avoid state and federal consumer protection laws. Many credit-counseling agencies have been able to operate using deceptive practices and hide under their "nonprofit" status. As nonprofits, the agencies are now exempt from dozens of state and federal regulations.
The IRS also warns consumers that a "nonprofit" status does not ensure the quality of an organization; it is merely a tax code classification. Consumer groups have also criticized the large salaries of many of the credit counseling agencies' executives. "Consumers need to know not to read too much into not-for profit status - that's no guarantee that someone is legit," said a director of the FTC's Midwest Operations.
The IRS has begun auditing some credit counseling services to see if they meet the criteria for their nonprofit status. To obtain tax exempt status, a credit counseling agency must limit its services to poor customers or must primarily provide education and counseling to the public. Many credit counseling agencies have been criticized for focusing on higher profitability and just acting as a middle man funneling money to the creditor and just taking a cut of the payments. The IRS said that simply enrolling people into payment plans is not enough. They also plan to more aggressively screen new applicants from credit counseling organizations.
There is heightened concern as more and more consumers enter into credit counseling programs. The number of consumers involved in some sort of credit counseling sky rocketed to an estimated 9 million in 2002. This number is expected to grow as more and more consumers will be required to undergo some sort of credit counseling prior to filing bankruptcy under the proposed new bankruptcy laws.
Questions and Answers
Article Tags:
los angeles bankruptcy attorney
,los angeles bankruptcy lawyer
,los angeles bankruptcy lawyers
,los angeles bankruptcy attorneys
,los angeles bankruptcy law firms
,los angeles bankruptcy help
,los angeles bankruptcy
Warning: In direct violation of rule Rule 1-400 of the CALBAR Professional Conduct, some attorneys in the San Fernando Area have set up a commission based call center structure to increase earnings.
An option to help bankruptcy attorneys streamline the client intake process and develop consistency within their law firm operations.
Lawyer Referral Hotline 661-310-7999 approved by the California Bar Association. Find a pre-screened bankruptcy lawyer in your area.
Call 661-310-7999 to get a referral to a monitored Bankruptcy Lawyer in Los Angeles.
Bankruptcies in Southern California have risen in the past two years at an alarming rate. As a California bankruptcy attorney who has served Southern California for many years, Michael Shemtoub has seen first-hand the devastation the recession has wreaked upon average California families, and shows its commitment to clients new and old through two main promises: clients can discuss their case with a skilled Los Angeles bankruptcy lawyer during a free consultation and every call will be returned
Fraud by unlicensed bankruptcy attorneys and unethical lawyers in Los Angeles.
Students from both private and public universities all over the country may also provide low cost or free advice. The sessions will only achieve directing clients to the right legal path in filing the right papers. Note that with the new bankruptcy laws taking into effect making the bankruptcy filing process more difficult than usual, an experienced bankruptcy attorney will be worth your money.
Many people who enter the bankruptcy process worry about the fate of their credit. This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated. While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
Americans are now filing Chapter 7 or 13 Bankruptcy to get their debts under control. Bankruptcy in itself is designed for debt elimination. Chapter 7 bankruptcy functions to cancel out unsecured debt such as utility or medical bills, credit card, etc. Chapter 13 Bankruptcy on the other hand is designed to give individuals more time in repaying all their debts.
Filing for bankruptcy is good news whenever you are struggling with your credit card debt, mortgage or medical bills. Bankruptcy laws help families and individuals in their debt struggles. You have two options on how to deal with your debt problems, Chapter 7 (debt elimination) and Chapter 13 (reorganization). Always remember that you can regain credit again after successfully filing your bankruptcy.
Here is an easy way to know how to hire right attorney Mesa AZ. Many people in Mesa AZ have legal complications. The only savior to such situation is attorney Mesa AZ
The State Bar’s loan modification task force obtained the resignations of three more California attorneys as a result of misconduct related to their loan modification activities. It also placed another attorney on inactive status, charging his work poses a substantial threat to the public, and has undertaken similar efforts against two other lawyers.
Probably the most requested question on our Website involves the situation where the non-resident alien wants to enter the United States on either a visa waiver or visitor visa, for the purpose of marrying a United States citizen.
You may file a Workman's Compensation claim due to Stress At Work. Here are some tips to avoid stress before you seek legal help.
Carpal tunnel - a syndrome name so well known that nearly everyone has heard of it. Unfortunately, given this widespread familiarity, people often attribute any discomfort or pain in the hand or wrist to carpal tunnel syndrome. Carpal tunnel syndrome is quite common, affecting 4 to 10 million Americans, and usually very treatable. However, there are many other conditions which can cause similar complaints. It is important to know the difference.
The following information regarding Patents, Trademarks and Copyright is brought to you as a public service of 1000Attorneys.com- State Bar Approved Patents,Trademarks and Copyrights Lawyer Referral and Information Service. The material presented is general legal information intended to alert you to possible legal problems and solutions.
Discuss this Article
