What to Do When Your Credit Card Debt Has Been Charged Off

One of our readers, Ashok, sent us this question:

Sir, I am a credit card defaulter. I changed my address and likelihood of bank finding me is almost zero. But I feel guilty to do this and want to settle my account with bank, However, i am not in a condition to pay the full amount, but would like to get my name written off from bank’s defaulter list. How do I settle my account with bank? What kind of rebate i can expect? Is there any agency to help me out in this?

Thanks for your question Ashok!

You are wise to want to settle the account out for several reasons:
Credit card companies employ entire departments of people they call “skip trace”. Which basically means when someone skips out, they harass everyone you know until they find you.
The credit card company will keep reporting the debt to all three credit bureaus until they write it off. When they write it off, they will sell your debt to a new collection company, who will also report your debt to all three credit bureaus. When they give up on trying to find you, they will simply sell your debt to another company.
If anyone ever does catch up to you, you can expect them to sue you, and garnish your wages.

Now, assuming that they do not ever find you, you will still have to deal with the damage that delinquent account is doing to your credit score. So, you are exactly right to want to make good on the debt. It will begin the process of repairing your credit.

There is one thing you need to be aware of before you begin. Now, I do not know how old your debt is, but I can tell you that if your credit card company has written off your debt already, calling them will “re-open” it, and they will begin collections all over again. This could actually cause you to have multiple negative accounts on your credit report over the same debt – so do a couple of things first.

If you want to make good on your debt what you have to do is pull all three of your credit reports, and find out who currently owns your debt. From that point, you have two options:
Call the collection company who owns your debt now, and offer a settlement for a reduced amount.
Send a certified letter to the collection company that currently owns the debt telling them that you refuse to deal with anyone but the original owner of the account (the bank that issued the card.) This is your right by law.

There are pros and cons to both of these:

Collection companies are used to making settlements, and they will likely settle for less than your original bank will. However, they may have tacked on quite a few additional fees to your account that would not be charged to you if you deal directly with the bank that gave you the card.

The best way to know if fees have been added is to look at your credit report. Look at the amount your bank charged off, and then compare it to the amount the new collection company says you owe.

Settling the debt with the original bank will look better on your credit score because it will show a paid charge off. If you pay your original bank you can wait a few months, and challenge any negative information on your reports that resulted from the collection companies (not the original bank.)

As far as what kind of a settlement you can expect: it depends on how much you are willing to negotiate. In situations like yours, you should easily be able to cut the total by 50% if you are dealing with a collection company. If you deal with the original bank, upwards of 30% is a reasonable expectation.

As far as organizations that can help, yes, you will get the help you need from a credit counseling agency. Just be careful which one you choose, because not all of them do a good job. They will negotiate with your creditors on your behalf, and get the account settled for you.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Canada Scraps 'Millionaire Visa,' Sends B.C. Property Market Reeling

Real estate agents in Vancouver say property prices could take a hit, after Canada scrapped a program which allowed wealthy immigrants to fast-track the visa process.

The Immigrant Investor Program, launched in 1986, offered visas to business people with a net worth of at least $1.6 million who were willing to lend $800,000 to the Canadian government — for investment across Canada — for a term of five years.

By 2012, the scheme had to be temporarily frozen due to a huge backlog of applications from wealthy mainland Chinese hoping to come to B.C. Now, the government has announced it will end the program for good and scrap all 59,000 applications backlogged worldwide.

The decision came less than a week after the South China Morning Post published a series of exclusive investigative reports into the controversial scheme.

Property prices could take a hit

In West Vancouver, real estate agent Clarence Debelle is still receiving offers from mainland China for luxury property, but she’s concerned the end of the investor program will have an impact on the local economy and the high-end housing market.

“I deal directly with these people who bring a lot of wealth, who are creating lots of jobs for local Canadians — builders, trades, architects, realtors like myself,” said Debelle.

“Most of the buying is coming from Chinese immigrants who are wealthy, so if we make it difficult for them to come into this country, we have killed 80 to 90 per cent of the buying in West Vancouver.”
Immigration lawyer Richard Kurland agrees.

“When you suddenly stave off the intake of literally hundreds of millionaires in the Vancouver property market, prices can only go one way and that’s down,” said Kurland.

Market impacted by more than investors

Others aren’t so sure. Even with the investor program frozen, housing prices continued to rise.
Tom Davidoff with UBC’s Sauder School of Business says the market is driven by other things like low interest rates and the local and global economies.

“Given that in the last couple of years, we haven’t seen the market cool off, it’s hard to believe that freezing the investor market is going to kill even the high-end in Vancouver,” said Davidoff.

The government has also announced the end of the Entrepreneur Program, a smaller scheme for business people who plan to own and manage a business in Canada.

However, wealthy investors can still come to Canada through the Start-up Visa Program, which encourages immigrant entrepreneurs to partner with private sector organizations to invest in local start-ups.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

UPDATE 1-Canadian Housing Starts Slow Modestly In January

TORONTO, Feb 10 (Reuters) - Canadian housing starts fell more than expected in January, data released on Monday showed, reinforcing the view that the country's housing market is stabilizing after a recent boom.

Starts slowed to 180,248 units last month at a seasonally adjusted annualized rate, a report from Canada Mortgage and Housing Corp showed, shy of the 184,000 forecast by economists.

In December, starts were a downwardly revised 187,144. They were originally reported as 189,672.

The January figure continues a trend that has seen groundbreakings slow from 187,923 units in 2013 and the breakneck pace of 214,827 starts in 2012, when the housing market was at record highs and the government intervened to tighten mortgage lending rules.

Economists are largely predicting a softer but stable Canadian market this year as mortgage rates edge higher and the economy continues to chug along slowly.

"We anticipate that construction activity will continue to edge lower over the course of the year as the forecast increase in interest rates should restrain demand," David Tulk, chief Canada macro strategist at TD Securities, wrote in a research note.

"A smaller contribution from the housing market is consistent with the macro theme of domestic fatigue that will leave headline (economic) growth at or below its trend rate until net exports are able find their footing both in response to a weaker currency and a fundamentally stronger U.S. economy," Tulk added.

Multiple urban starts - typically condos - fell 6.0 percent to 102,289 units in January, while single detached starts rose 3.4 percent to 60,869 units, a modest rebound after two months of weakness.

Starts were down in British Columbia, Quebec and the Atlantic region, but rose strongly in Ontario and the Prairies.

RBC economist Josh Nye said unusually bad weather in December and January may have weighed on activity, and that housing starts could stage a small recovery in the next few months. Nye also noted that building permits outpaced starts in the fourth quarter of 2013 - 210,200 permits versus 194,500 starts - which could mean homebuilding will strengthen in the near term.

"However, we expect modestly higher interest rates as 2014 progresses will weigh on housing affordability and lead to some moderation in residential building activity going forward," Nye wrote in a research note.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

CANADA FX DEBT-C$ firms to 1-week high, helped by producer prices

The Canadian dollar strengthened to its highest level in a week against the greenback on Monday, helped by a bigger than expected rise in Canadian producer prices and as investors consolidated positions after the currency’s recent declines.

The loonie was also given a boost by U.S. data that showed a sharp drop in manufacturing in January, hinting at a slowing economy. That sparked investor speculation that the U.S. Federal Reserve may have to refrain from a further reduction of its stimulus program.

The Canadian dollar has come under pressure in recent months, with selling intensifying in January, as investorsturned increasingly bearish toward it. The U.S. dollar appreciated nearly 5 percent against the loonie in January.

“This is probably a move that had run very quickly and is looking just a bit fatigued as we take a step back and assess the landscape and try to figure out why exactly we moved so far so fast,” said David Tulk, chief Canada macro strategist at TD Securities in Toronto.

The possibility of a fast Fed wind-down of its stimulative asset purchases has typically boosted the greenback against the Canadian dollar and other currencies. But Monday’s weak U.S. manufacturing data made that possibility look more remote and the U.S. dollar took a hit,falling 0.4 percent against a basket of currencies.

“To see the Canadian dollar catch a bit of a break in that environment does make a bit of sense,” Tulk said.

Data at home showed the recent weakness in the Canadian dollar helped producer prices rise by 0.7 percent in December, with higher energy prices also contributing to the gain.Economists had forecast an increase of 0.3 percent. Rawmaterials prices also rose.

The figures were the first release in a busy data calendar this week, which will culminate with the closely watched unemployment report on Friday. Hiring in Canada is expected to have picked up in January after the economy unexpectedly shed jobs the month before.

The Canadian dollar ended the North American session at C$1.1097 to the greenback, or 90.11 U.S. cents, stronger than Friday’s close of C$1.1138, or 89.78 U.S. cents.

Data on Friday showed investors had pared back their shortpositions on the Canadian dollar.

“A lot of people have booked a lot of profits on the Canadian dollar weakness story, something that was quite compelling as a narrative to start the year, but just appreciating how far we’ve come, maybe some of the momentum has scaled back a little bit,” Tulk said.

The Canadian dollar briefly fell through the psychologically important C$1.12 area on Friday before bouncing higher. That the currency was not able to sustain the move past C$1.12 helped the loonie gain some strength on Monday, said Scott Smith, seniormarket analyst at Cambridge Mercantile Group in Calgary.

“The trade has been a little crowded for a while, we needed a little washout and reset,” Smith said. “So it’s along the lines that we expect a little bit of a consolidation here until we see the catalyst for the next move higher” for the U.S. dollar-Canadian dollar pairing.

Canadian government bond prices were higher across the maturity curve, with the two-year up 3.7 Canadian cents to yield 0.931 percent and the benchmark 10-year up 35 Canadian cents to yield 2.297 percent.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

24 Sussex Drive Worth $7.2 Million, U.S. Real Estate Firm Says

OTTAWA - Call it fake estate.

An American real estate company has done a fictional listing for 24 Sussex Dr.

California-based national brokerage Movoto says the home of Canada’s prime minister is worth $7.2 million.

Movoto does legitimate work for publications such as Forbes, but its fake listings are gaining in popularity. Previous faux listings have included Wayne Manor in Gotham City, Superman’s fortress, Sesame Street and The White House.

The firm is clearly familiar with Canadian stereotypes. The 24 Sussex “listing agent” is identified as “The Mountie” with an accompanying photo. It also includes a testimonial quote from Stephen Harper.

"The Mountie was always there when I needed him, hot poutine at the ready!"

Funny, eh?

Local elite real estate agent Marilyn Wilson of Dream Properties claims 24 Sussex is worth far more — as long as the home is torn down first.

Looking over the municipal property assessment, Wilson figures the property itself — minus the buildings — would go for $12 million even though it’s assessed for $7.9 million.

"It would be worth more as vacant land," she said. "A buyer would want their own style. It’s not formidable, it’s lacking great bones. It wasn’t built to be a prime minister’s residence."

She says the cost to renovate would be prohibitive.

"It would be cheaper to demolish it and perhaps reuse the stone," she said. "Do it over in a new style, to 2014 standards."

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Tips To Selecting A Credit Consolidation Company

1. Success of the company

You should know the success rate of the company which you want to choose for your debt consolidation services. Knowing that will allow you to think whether you are taking any risk or not with that company. You can verify the claims of the consolidators from the present customers of the company.

2. Check the license

It is mandatory in most of the states that any debt consolidation company is licensed. So never forget to verify it and at the same time cross check the validity of the license of your consultants.

3. Fees

It is a must to be known that the FTC has put a ban on the companies from making any upfront fees. So next time if any debt consolidation company asks for it, then let them know the rule. Never go for any agreement with the consolidation company only as you may become a victim of debt consolidation scam.

4. Ask your relatives

Before you go for any consolidation company to consolidate credit card debts, try to have a talk with your friends and relatives, so that you can know the working of the company. If they have any previous relations with a company the vote should most probably go for that company.

5. Mailing details of the company

Never go for a debt consolidation company which tries to hide their mailing details. Ask them for their phone number, mailing details, fax numbers and also e-mail addresses, so that you can get in touch with them during any emergency.

6. Judge the privacy

Whenever you are dealing with a debt consolidation company know the ways they will handle your personal information. Ask the manager about the precautions they are taking to keep your details private, and also take a copy of their privacy manual.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Worrying About Debt Consolidation? Look To These Tips!

Look at your interest rates and concentrate on paying the one off that has the highest interest.

By concentrating on the highest interest loan, you can help eliminate excess interest which will save you money in the long run. After paying the highest interest loan off, go to the next highest interest loan. If you are unable to manage various debts and meet your payment obligations each month, you may want to consider debt consolidation.This is a popular way to reduce multiple bills and payments into an affordable single monthly payment. Sometimes you will even have your overall debt reduced with debt consolidation.

You need to understand the reason you have so much debt.

This is something that must be figured out before beginning the process of debt consolidation. If the cause is not addressed, the symptoms will surely reappear. Find the problem, figure out how to fix, pay your debts and find financial freedom.

Why do you want to consider debt consolidation to help you out?

If it is only to reduce your payments so that you have more money to spend on discretionary things, such as entertainment or going out to eat, you are making a huge mistake. This method is only for those who are intent on paying down debt. Most people are able to lower their payments just by contacting the creditor. Many creditors will modify payment terms to help a debtor who is in arrears. If you’ve been having trouble paying your credit card payments then you need to contact the company that gave you the card to see if there’s anything you can do to work this situation out. Consider a bill consolidation service to help with your monthly debt. When you seek to consolidate debt, paying monthly bills to individual companies can create confusion and missed payments.

Use a consolidation service that will pay these providers for you.

You supply them with one lump sum each month and they will quickly dole it out for you automatically. If you’re thinking of taking care of your debt by getting it consolidated, see if a family member can help you first. This might be a good method of repaying debt in a single monthly chunk. The interest might be lower than paying back more than one debtor.

Prior to searching for a debt consolidation company.

Make sure you look through the FTC regulations regarding this topic. Read about things like debt relief and negotiation companies. It will give you some of the background you need to go forward with the process, and it will make you feel more prepared in general. Make sure you hire a reputable debt consolidation agency to help you manage your debt restructuring. Although you will find many companies offering to help you, few are really in it to benefit the consumer.

Check first with government sponsored agencies that offer free credit counseling and will then refer you to a trusted debt consolidation service.

Whenever you prepare a list of all your creditors, learn the details of them. You should know when these debts are due, the interest they are charging, what you owe and how much you need to pay. You’ll need this information for debt consolidation purposes. If you are a homeowner and have lots of equity in it, try taking out a line of credit or home equity loan. This can help you use use that money for nearly anything you desire, including debt consolidation, and the interest paid is tax-deductible. This will help you save money in multiple ways.

Thanks to lender competition, rates can often be great when you seek out a secured debt consolidation loan. If you can lock it into a certain time frame, such as five years, the rate may be reduced further. If you sign up for automatic payments, they may give you another discount!

Make sure that any consultant that is working with you at a debt consolidation company has enough experience and is qualified to give you the help you need. Check to see if the consultant needs to be certified. Ask lots of questions. Make sure they give you informative and correct answers.

If you are stuck in a never ending cycle of debt brought about from payday loans, debt consolidation may be a good solution for you. Many payday loan companies offer advice and will help you consolidate your payday loans into a single affordable payment. Because of higher interest rates, many people get caught in this payday loan cycle and cannot get out without help.

Think about your long-term financial future.

It’s easy to think in the short-term, as debt consolidation helps you almost immediately cut bills you need to pay on a monthly basis, but think about more than that.

Ask yourself what you need to do so that your long-term financial picture looks good.

A home equity loan or a line of credit is a good option if your home is paid off. You can basically borrow money and use your home as a collateral. Borrow just enough to pay your debt off and make your loan payments on time. You can deduct the interests you pay on your loan from your taxes.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.