Collection Agencies May Be Cleared for Robo-Calling Cell Phones

The collection agency may be getting a break that they've been waiting for. President Obama is putting forth legislation, it was announced today, to allow collection agencies to robo-call cell phones in order to collect past due student and other government loans. As expected, there has been an outcry from consumer advocate groups, and some senators have refused to comment because they have always assumed consumer friendly roles.

To be clear, as of now the ruling will be only for those that owe student loans, and other "undefined' government obligations. The move is an effort for the government to collect more money but industry experts doubt that it would have any measurable effectiveness on the overall ballooning debt. The other concern of course is that it won't take much to extend this ruling to all types of consumer debt.

The collections industry has been lobbying for years for this type of prohibition to be lifted. Their principle argument being that millions of consumers have given up their landlines completely since the rates of cell carriers have become so competitive.

Most cell phone users have responded to this as an invasion of privacy and recent comments on some news sites have a common theme about the ease with which cell phone calls can be ignored and dismissed. In addition, many apps are available to block numbers entirely. It's safe to assume that many more of these types of apps will be available soon as well.

Many times people overlook the danger inherit in ignoring calls from collection agencies, regardless of the source or destination. Collection agencies can be relentless when searching for a debtor. When the money is owed to the government, that effort can be amplified many fold. Ignoring the collector will not make the debt go away and in some cases, it could make the debt amount increase.

When a collection agency is unable to contact a debtor, there are a limited number actions which are then open to them. The debt might be sold to another agency or debt buyer and the process may start all over again. The debt may be assigned to a skip tracer, or legal action may take place.

Taking a debtor to court is not a difficult procedure for collection agencies and they often win the case simply because the debtor chooses to ignore the summons.

This new ruling will not change a lot of what already goes on between collection agencies and debtors. But it will make things just a bit more difficult when it comes to avoiding robo-calls.

David Miller is a freelance writer and marketing consultant. He has written extensively about bankruptcy, debt settlement, debt consolidation, credit and credit cards, collection agency abuse, consumer law, credit card defense, FDCPA guidelines and complaints, loan modification scams, and foreclosure.

He contributes regularly to financial and real estate blogs.

He currently edits several websites and is a contributing author to many of them including http://lawfirmslongisland.com/

His articles about foreclosure, debt discharge, student loan debt and many other topics in the area of bankruptcy, credit and can be found at http://lawfirmslongisland.com/ along with links to other resources which he has been a contributing author.

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Student Loans Can Be Cleared in More Than Just One Way

Lenders tend to share the same opinion that student loans should be offered on more flexible terms that other loans. This is great news for students, who might otherwise seriously struggle to handle the financial pressures. But, the loans will have to be repaid eventually, meaning the debt hangs over them until graduation.

The idea of the scheme is that a student graduates, gets a job and then repays the loan, by which time the interest built up will be substantial. In fact, loans for students are highly flexible because even when it comes time to pay, the repayment schedule can be negotiated.

Not only that, but periodic payments when a student is flush, usually after the summer break spent working, helps to reduce these loans to cover student expenses and fees. In fact, there are a number of ways in which graduates can repay their loan debt.

Repaying Independently

The most obvious method is to simply pay the student loan off though an agreed monthly repayment plan. This can usually be done automatically, with the money required simply taken out of the salary figure deposited into an account on pay day. This works well because of the structure, but the only catch is the graduate needs to have found a job.

The advantages to lenders offering loans for students is that they tend to develop a healthy relationship with their young customers. But part of developing that relationship is to be flexible. For that reason, it is possible for students to meet with their loan officer and work out an affordable repayment scheme.

The fact is that loans to cover student expenses and college fees can add up to quite a lot over the course of university life. By the time of graduation, the student might own $150,000. So, negotiating a workable repayment solution is essential. It may take 15 years to repay the loans, but it can be more easily handled that trying to pay the sum over 5 or even 10 years.

Debt Consolidation

Of course, it is possible too that student loans came from a number of sources. For example, the loan from one lender for $25,000 was added when extra cash was required, of $5,000. Perhaps one or two other loans were picked up along the way, as particular financial difficulties cropped up.

The sheer number makes it necessary to consolidate all these loans for students into one management figure. This simplifies the situation, reduces the repayment amount, and can effectively lessen the financial burden.

Unfortunately, because the lenders have already been patient in issuing loans to cover student expenses and fees with a repayment delay of maybe 5 years, the interest rate can be high. Over 20 years or more, the total interest paid can be huge, but the important thing is that the repayments are manageable, and not a struggle.

Alternative Payment

There are other ways to pay student loans, without having to actually pay any money. For many, this is a very attractive prospect, but of course nothing is for free in this world. The scheme involves a graduate either serving their debt in the armed forces or doing community service.

This method is referred to as loan forgiveness, and allows the graduate to write off a large portion of these loans for students each year, and over a number of years pay it off completely.

Under the GI Bill, for example, military service will wipe as much as $20,000 off the debt, while a further $5,000 per year will be removed from the total owed if the graduate teaches in deprived urban areas or in isolated rural communities.

In this way, loans to cover student expenses end up helping to get these same students involved in community activities.

Hilary Bowman is the author of this article. She works successfully as a financial advisor with years of expertise on Military Loans for Bad Credit. Hilary publishes informative articles about Bad Credit Loans and other financial topics at FastGuaranteedLoans.com

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