The Credit Doc Is In…

creditdoc — Sun, 30 Mar 2008 04:57:39 +0000

Welcome to my first blog entry. My name is Dennis DAmato, and I call myself the Credit Doc. Why? Because I have spent the last 25 years of my life in the credit industry. I have been on both sides of the credit industry. As an attorney, I represented all kinds of lenders from “A” lenders to those who specialized in hard money loans. My law firm represented credit card companies, credit unions, banks and private lenders in actions that ranged from simple suits to recover money owed to foreclosures and repossessions. While I can look back at those days and recognize that there is a need for such endeavors, I can honestly say that I was not particularly happy about what I was doing. Even though I was very good at it, I always found myself asking if the “defendants” I pursued were really worthy of the title. After all, I reasoned, most people in this country are one or two paychecks away from financial doom and destruction. I knew lenders have a legitimate right to collect what is owed to them, but I began to see that many of the problems facing American consumers and their families were not the result of irresponsible borrowing. Instead, I saw that many of the people facing financial ruin in hard times were victims of avoricious collection agencies, unconsciounable late fees and penalties, and predatory lenders who care less about your ability to pay than they do your desire to obtain credit. After years of practice, I decided that consumers needed to learn about the credit system before they fall victim to its dangers and pitfalls. I decided that a basic primer in the way the credit system works should be a rudimentary element of everyone’s education. I decided that my experience and expertise in these areas could be a springboard for that education. I sought out to find a way to make that contribution. Even though the change in career direction would result in a drastic loss of income for me, and that it would put me in the same situation many of my clients would be facing. It was an education worth pursuing.

The first days of this transition were painful in many ways. Changing positions on debt and defendants…really changing philosophy and not merely clients…requires some self inspection and evaluation. It is not easy to realize that for the better part of your career you were on the wrong side of an important issue. That perhaps your ability to represent successfully represent lenders and collection agencies resulted in over burdensome penalties and consequence upon many good people who came upon hard times or who may have been misled or defrauded into ufavorable credit situations. And worse case, that you may have set aside your compassion and understanding of fundamental fairness and traded it for the somewhat blind pursuit of a creditor’s happiness. While leaving debtors penniless and sometimes homeless in the wake of your triumph. I know that I tried to be fair. But I realized that in truth, there is very little fair about a system so stacked against consumers that they have no chance of winning on their own, and can not afford the kind of representation they need to fight the good fight in their defense.

The first step was to become involved in the debt negotiation and settlement business. I became associated with a company that charged clients an upfront fee to negotiate debt settlements and an additional fee based on the amount of money saved on the account. This does not really sound like a bad idea at first. After all, the client gets to pay off substantial debt at a reduced rate, even when the fees are included. The lender gets to take a bad debt out of its portfolio and make more money available for lending to other more qualified borrowers. Oh, and let’s not forget that our company made a few ducats as well. Everyone is happy. Right? Well, not really. This system is not without pitfalls of its own.

First of all, the only way to make this system work is to allow your accounts to go further into delinquency. The theory is that the more delinquent the account, the more likely a creditor or collection agency will be to settle for a discount. While there is some validity to that idea, the benefits of such settlements are frequently outweighed by the consequence. First and foremost, a client’s credit score is destroyed. Allowing all of your accounts to go 90 or more days delinquent will devastate your chances to recover for many years. Even debts that are settled for less than full value and are technically paid will result in a negative entry on your credit profile. While the immediate goal of settling debt may be realized in short order, the client is left with the inability to finance a car or home at a competitive rate, and the long term goal of financial freedom is delayed, if not completely destroyed in the process. Our company had a solution to this problem. Or so I thought.

After a client completed our “program” of debt negotiation and settlement, they were placed into the second phase of our recovery plan. Credit repair. Credit repair is a valid way to upgrade your credit profile. It is completely legal and most everyone is capable of doing it on their own, without the help of credit repair companies or agencies. Many people are intimidated by the process, however, and rely upon these companies to do the work for them. Sometimes for outrageous fees. Many of these companies are fly by night companies that scoff at regulation and leave clients in worse shape than they found them. Our company was fully licensed and bonded according to strict state laws, and I can honestly say that our process worked rather well. In fact, we still do credit repair for some clients. The difference is that we no longer are involved in debt negoations designed to lead that client to credit repair later on. I have also developed a do it yourself credit repair system that virtually eliminates the need for third party credit repair companies. That’s right. This blog is probably going to put that company out of business. Not because it does not do a good job. But because anyone can do just as good a job for themselves with a little guidance. I will be supplying that guidance here at no cost. I will also offer personal one on one advice to those who ask for it at a reasonable price. The choice is yours, and the free information will be here for your use at any time.

This blog will deal with these issues and many more. I will address how some of the Bush Administration policies and favoritism to the banking industry has put the consumers of this country in peril of losing everything. Bankruptcy laws have become so restrictive that they fly in the face of the right to file Bankruptcy. This administration has virtually legalized usury and predatory lending, while removing any chance for a person who finds themselves in financial crisis to find a way out. Without being totally devastated in the process. Outrageous late fees and penalties for being delinquent…even by one day…can change your $100.00 per month payment on an account to $300.00 per month without any chance of recovery. People who enter into credit card or other lending agreements with all the good intention in the world find themselves unable to manage the debt they incurred at a reasonable rate because they “defaulted” by missing one due date. They find their 15% interest rate raised to 30% or higher on their card. And what is worse, credit card companies that are paid on time can also raise the rate because of a “default” on a totally unrelated account. This results in a dominoe effect that could be devastating on debtor’s finances . The credit card companies will tell you it is perfectly legal and that the terms are dislcosed to you when you get your card. Most consumers will tell you that the disclosures are illegible, not understandable and much too complicated to read. Especially when they are going to make a purchase the day they get the card. The credit card companies are counting on that. Even though they will not admit it. The Bush administration has enabled it. Even though he probably does not understand it.

I will address your particular questions and situations here, and offer comment and commentary designed to help you find solutions to your specific problems. I can not offer legal advice here, and caution you to seek legal advice if the need arises. There is no substitute for competent legal advice from an attorney in your community. I will discuss changes in laws and policies that will have an effect on your financial future, and offer some strategies to help you make decisions that are right for you and your family. Whenever possible, I will include the input of experts in various related fields, and provide links and reference materials to keep you informed. And I will always be here to help whenever I can.

So, welcome to my blog. The Doctor Is In…

Assault On Consumers

The Credit Doc Is In…