Article 43
Dealing with Layoff
Articles in this section are specific to post-layoff issues.
Tuesday, August 10, 2010
Boomers Burned By Recession Part 3
Boomers wanting to work past retirement age find limited options
By Christine Dugas,
USA Today
August 10,2010
Baby Boomers approaching retirement age are in for a rude awakening.
Many want to keep working, knowing that they likely will live well into their 80s and 90s, stay healthier than previous generations and need more cash to keep paying the bills.
However, for Boomers those 79 million Americans born from 1946 through 1964 ח “the new retirement reality may be a messy proposition,” says Alicia Munnell, director of the Center for Retirement Research at Boston College.
Jobs are scarce and many employers AREN’T WILLING to hire older workers. Boomers who do land jobs often must settle for ones that are less fulfilling than desired.
Gilbert Brooks knows the drill firsthand.
The harsh reality hit him in 2008 when his employer, a trucking company in Memphis, was sold and he was forced into early retirement.
“I worked in transportation sales and marketing for 35 years,” says Brooks, 66. “I am highly qualified.”
But two years and 12 job interviews later, he is still unemployed.
Six months after Brooks was laid off, his wife, Ann, 70, lost her job as a secretary and receptionist for real estate closing lawyers.
“We were both actively looking for jobs but finally just gave up,” he says. “You get so tired of the rejection.”
The Brookses’ story is familiar at a time when the unemployment rate for workers 55 and older has jumped from 3% in the second quarter of 2008 to 7% in the second quarter this year. That adds up to about 2.1 million unemployed older Americans. And that doesn’t include people like the Brookses who no longer are counted in unemployment figures because they’ve given up seeking work and have applied for Social Security.
Longer job searches
Many experts predict that unemployment rates will remain high for the next few years. That’s not good news for older Americans who have seen their retirement savings shrink.
“It’s very hard to look people in the eye and say, ‘Go out and work longer, or get a job,’ “ Munnell says.
Exacerbating the problem is the reality that employers are not eager to retain or hire older workers, she says. That had started to change in the mid-2000s as businesses, anticipating labor shortages as the Baby Boom generation retired, started hiring more older Americans, Munnell says.
Then the RECESSION hit in late 2007.
Now it takes much longer for older, unemployed workers to find a job. In February, jobless workers 55 and older were pounding the payment for 35 weeks 10 weeks longer than those ages 16 to 24.
Margaret Allen, 67, is one of the lucky ones. When she lost her job about three years ago, she was quickly hired again. She now works full time, handling medical billing at the Women’s Health Alliance in Dallas, and has no plans to stop working.
Half of Baby Boomers expect to work into their 70s, according to a survey of 400 Boomers by First Command Financial Services in May. The chief reason they give: a desire to stay busy and intellectually engaged.
Money also appears to be a driving force. Older Baby Boomers have been hit hard by the stock market slump and the recession. Instead of counting on a pension plan to fund their retirement as previous generations did, many Boomers must rely on 401(k) plans whose values dropped along with the stock market.
Nearly half of Baby Boomers ages 56 to 62 are at risk of not having enough savings for basic expenses and uninsured medical bills, according to Employee Benefit Research Institute’s new Retirement Readiness Rating. And 41% of the lowest-income older Boomers ח those who are expected to earn $11,711 or less at age 64 are likely to run short of money after 10 years of retirement.
“Being close to retirement has become a nightmare,” says Darryl Rodgers, 55, a quality assurance inspector at Gatorade in Atlanta. Rodgers wants to keep working but has chronic back problems. His wife, Geraldine, has been out of work for nearly four years. And they’re still paying down their home mortgage.
“After not being properly prepared prior to the recession and the stock market crash, it seems like (retirement) will not be a possibility, even by age 62,” Rodgers says.
Retirement goals have changed. Not long ago, many older Americans wanted to retire at an early age, move to a retirement community and relax.
“We have a manufactured vision of what retirement is, and that doesn’t necessarily correlate with reality,” says Margaret Allen’s husband, Paul, 64, who has his own business as a software developer in Dallas. “Unless you have a well-thought-out scenario, you’re going to be in for a shock at retirement.”
About half of retirees follow a non-traditional path, according to a 2009 study by Nicole Maestas, an economist at the Rand Corp. Before they even reached retirement age, they had planned to stay in the labor force, working part time or finding a new career.
But some others have learned only after they retired that it was a mistake.
Matt Beha, 69, retired in January 2001 from his job as a communications representative for the state of Michigan. By the end of the year, he had decided to go back to work.
“I discovered that I needed to be around people more,” says Beha, who lives in Dimondale, Mich. He now works part time at Lansing Community College.
The extra money also allowed him to help his two sons ח one a registered nurse, the other a computer programmer after they were laid off. The recession clearly affects whole families, as unemployed children move back home with older parents or need financial assistance.
“Our generation thought that we would have everything better than our parents, and it’s not turning out that way for a lot of us,” Beha says.
The new retirement reality is affecting everyone, from affluent to low-income workers.
“Somebody who was a senior executive at a company for 30 years generally is not somebody who will be happy golfing,” says Amelia Warren Tyagi, co-founder of Business Talent Group, which provides companies with temporary, top-tier professionals, including older workers.
“I hear over and over their desire to do interesting and engaging work,” she says. But they want an alternative, such as working as a temporary consultant or a board member.
Help for seniors
Across the United States, AARP has been sponsoring career fairs for older Americans. Earlier this year, about 6,000 people attended one in Cleveland.
“In some areas where industries are disappearing, it’s not just about finding another job. It’s about contemplating doing something completely different,” says Deborah Russell, AARP director of workforce issues.
And 15 community colleges have received grants to develop programs for students over 50. Among the programs are pharmacy tech, nursing assistant and computer skills.
“Some are shifting jobs because they are burned out by what they have done for 30 years,” says Mary McKee, vice president of continuing education at Century College in St. Cloud, Minn.
Even older Americas at the poverty level can get help from the federal Senior Community Service Employment Program. People who are over 50 and have been unemployed for more than six months are eligible. The AARP Foundation receives SCSEP grants to upgrade participants’ skills, provide a stipend for temporary volunteer work, and help them get a job.
George Dorsett, 69, retired in 2005, but when the stock market slumped, his savings plummeted, forcing him to go back to work. He went through the Manhattan SCSEP program in 2007 and now works full time as the operations manager at AARP Foundation WorkSearch.
“I don’t think I’d retire again,” he says. “Your mind doesn’t get fed enough information to keep you vibrant and alive.”
“Working after retirement is not the same. It’s a different mind-set,” Margaret Allen says.
“There is a girl who sits next to me and comes in at the last minute every day. Then she proceeds to put her makeup on. That’s foreign to me. I enjoy what I do, and I always get to work early.”
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Monday, December 28, 2009
Facts About Age Discrimination
Facts About Age Discrimination
The AGE DISCRIMINATION EMPLOYMENT ACT OF 1967 (ADEA) protects individuals who are 40 years of age or older from employment DISCRIMINATION BASED ON AGE. The ADEAs protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. The ADEA permits employers to favor older workers based on age even when doing so adversely affects a younger worker who is 40 or older.
It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on age or for filing an age discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under the ADEA.
The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal government. ADEA protections include:
· Apprenticeship Programs
It is generally unlawful for apprenticeship programs, including joint labor-management apprenticeship programs, to discriminate on the basis of an individuals age. Age limitations in apprenticeship programs are valid only if they fall within certain specific exceptions under the ADEA or if the EEOC grants a specific exemption.
· Job Notices and Advertisements
The ADEA generally makes it unlawful to include age preferences, limitations, or specifications in job notices or advertisements. A job notice or advertisement may specify an age limit only in the rare circumstances where age is shown to be a “bona fide occupational qualification” (BFOQ) reasonably necessary to the normal operation of the business.
· Pre-Employment Inquiries
The ADEA does not specifically prohibit an employer from ASKING FOR AN APPLICANT’S AGE or date of birth. However, because such inquiries may deter older workers from applying for employment or may otherwise indicate possible intent to discriminate based on age, requests for age information will be closely scrutinized to make sure that the inquiry was made for a lawful purpose, rather than for a purpose prohibited by the ADEA.
· Benefits
The Older Workers Benefit Protection Act of 1990 (OWBPA) amended the ADEA to specifically prohibit employers from denying benefits to older employees. Congress recognized that the cost of providing certain benefits to older workers is greater than the cost of providing those same benefits to younger workers, and that those greater costs would create a disincentive to hire older workers. Therefore, in limited circumstances, an employer may be permitted to reduce benefits based on age, as long as the cost of providing the reduced benefits to older workers is the same as the cost of providing benefits to younger workers.
Employers are permitted to coordinate retiree health benefit plans with eligibility for Medicare or a comparable state-sponsored health benefit.
· Waivers of ADEA Rights
An employer may ask an employee to waive his/her rights or claims under the ADEA either in the settlement of an ADEA administrative or court claim or in connection with an exit incentive program or other employment termination program. However, the ADEA, as amended by OWBPA, sets out specific minimum standards that must be met in order for a waiver to be considered knowing and voluntary and, therefore, valid. Among other requirements, a valid ADEA waiver must:
- be in writing and be understandable;
- specifically refer to ADEA rights or claims;
- not waive rights or claims that may arise in the future;
- be in exchange for valuable consideration;
- advise the individual in writing to consult an attorney before signing the waiver; and
- provide the individual at least 21 days to consider the agreement and at least seven days to revoke the agreement after signing it.
If an employer requests an ADEA waiver in connection with an exit incentive program or other employment termination program, the minimum requirements for a valid waiver are more extensive.
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In 1990, Congress passed the Older Workers Benefit Protection Act (OWBPA) which amended the Age Discrimination in Employment Act (ADEA) to safeguard older workers’ employee benefits from age DISCRIMINATION. Even with the OWBPA amendments, employers may observe the terms of “bona fide employee benefit plans” such as retirement, pension, or insurance plans that contain age-based distinctions, but only if the distinctions are cost-justified. Employers must pay the same amount for each benefit provided to an older worker as is paid for a younger worker. But the OWBPA does make provision for the increased costs of providing certain benefits, such as life insurance, to older workers.
Release of claims under Older Workers Benefit Protection Act
Most employers seek a general release from employees in connection with voluntary or involuntary severance payments or early retirement benefits to limit their exposure to lawsuits by employees challenging the company’s selection decisions.Whenever employers seek a release of federal age discrimination claims, they must comply with the OWBPA. It is important to note that the OWBPA’s requirements apply only to the release of age discrimination claims under the ADEA.The release of all other claims, such as state law claims, are not affected by compliance with the OWBPA.
The Older Workers Benefit Protection Act addresses four different release scenarios: 1) a release by an involuntarily terminated employee who has not filed an Equal Employment Opportunity Commission (EEOC) charge or lawsuit; 2) releases by employees who are involuntarily terminated under group reductions in force and who have not filed age discrimination claims or lawsuits; 3) releases in settlement of disputed claims, either pending EEOC charges or civil lawsuits; and 4) releases by employees who have voluntarily opted to sever employment under an incentive program.
In some circumstances, an employee’s rights under the OWBPA and the ADEA can be waived if specific criteria are met. Of utmost importance is the requirement that the waivers of potential age discrimination claims be “knowing and voluntary.”
Layoffs and the OWBPA
Regarding restructuring and layofff programs and early retirement plans, the OWBPA requires employers to provide information about the ages of both terminated and retained employees to those who are considering releasing their age claims.
Deciding which employees comprise the group or organizational unit for the OWBPA’s disclosure requirements can be a logistical nightmare for an employer. Unfortunately, the OWBPA itself offers little guidance on what an appropriate definition might be.
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Filing An Age Discrimination Claim
By Roger Braddock
Senior Magazine
Age discrimination is against the law and employers have often tried to get around age discrimination claims by holding severance pay as a hostage to signing an age discrimination waiver. The Equal Employment Opportunity Commission ("EEOC") has issued regulations regarding severance agreements that are signed by people who could file an age discrimination claim. The employee now has an easier time collecting offered severance pay from the employer while at the same time challenging age discrimination releases and waivers in the severance agreement.
The Age Discrimination in Employment Act of 1967 ("ADEA") applies to employers with 20 or more employees and prohibits age discrimination against employees 40 years of age or older.
ADEA waivers
In some cases, an employer might offer a severance agreement that includes a waiver of a right to file an age discrimination claim. Such a waiver under ADEA is a legal agreement in which the employee gives up the right to file an age discrimination claim against the employer in exchange for something of value like early retirement benefits or a severance package.
Congress was concerned that an exiting employee might be duped or coerced into signing this agreement, and passed the Older Workers Benefit Protection Act ("OWBPA") as an amendment to the ADEA.
Provisions of OWBPA
The OWBPA established certain minimum requirements that must be met in order for an ADEA waiver to be valid. Those minimum requirements, among other things, require waivers be written in plain English and give employees a twenty-one day consideration period. It must also encourage employees to consult legal counsel and provide a seven-day period which they can back out of the agreement.
During the 1990’’s, legal disputes arose concerning whether an employee could challenge an ADEA waiver in court without first having to return the severance money the employee received from the employer for the waiver.
In Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998), the United States Supreme Court resolved this matter, holding that older workers are not required to give back severance money to their employers before filing ADEA lawsuits.
The reason for the Court’s decision was the an older worker often needs the severance money to make bills and that forcing the worker to give back the money in order to make a claim would be tantamount to financial blackmail to avoid a legitimate claim being filed.
In December 2000, the EEOC issued new regulations reaffirming and expanding the U.S. Supreme Court’’s decision. The regulations, entitled “Waivers of Rights and Claims: Tender Back of Consideration”, became effective January 10, 2001 and in summary, provide:
· An older worker does not have to “tender back” (give back) severance pay or other benefits before filing a lawsuit to challenge an ADEA waiver;
· An employer cannot avoid the “no tender back” rule by contractually requiring an employee to pay damages, costs or attorneys’’ fees for having filed suit
· An employer may only recover severance monies paid if the employee successfully challenges the validity of his waiver and wins on his age discrimination claim. But.the employer is, at the court’s discretion, limited to recovering the lesser of: (a) the amount the company paid for the ADEA waiver; or (b) the amount of the employee’s ADEA award; In other words, the employee would probably not be able to keep both the settlement amount or award AND the severance pay, but would be allowed to keep the larger of the two.
· An employee’s lawsuit does not stop the employer’s commitments under the severance agreement (i.e. the employer must continue making severance payments it agreed to provide to the employee); and Waiver is an affirmative defense to an ADEA lawsuit so a case will only be dismissed if the employer can prove the employee’s waiver was valid under the OWBPA.
What does all this mean to seniors who are being terminated or laid off?
Essentially, you must give due consideration to any documents that you sign when you leave. And of course, you are entitled to have an attorney review these documents before you sign them and even after you sign them.
You also have rights regarding the waivers including that you must understand what it is that you are signing. Nobody can say that you must sign them now or forget it, and even if you do sign them, you have a solid week to reconsider and undo your agreement.
It also means that if you have signed such a waiver, it does not necessarily mean that you cannot pursue an age discrimination claim against the employer and that if you make that claim, you cannot be compelled to give back the severance payments or the employer cannot suddenly stop making them to you.
What it does not mean: If the employer has fulfilled all of their duties under ADEA and OWBPA, you cannot just sign the agreement and sometime later hope that you are going to get both your severance pay and successfully file an age discrimination claim.
You are given a windowof opportunity here, but at some time, that windowdoes close and you don’t have unlimited recourse against your old employer. At some time (and you don’t have for ever), you must make a decision as to whether you will accept the terms of the severance agreement and the associated terms, or if you will pursue legal recourse.
Seek legal counsel early
It is recommended that you seek professional legal counsel in making this determination. There is the opportunity to have someone who has experience in these matters take a look at your situation and help you determine first, whether age discrimination has likely occurred, and if so, if it is reasonable that it can be proven.
If you think that you have been discriminated against because of your age, you should make an appointment with an attorney early. This kind of decision potentially can involve a great deal of money and there are often very few hard facts. It can take time to pull together all of the circumstantial evidence to determine if there is a reasonable case for age discrimination.
You owe it to yourself to have the most time possible to determine as many facts as you can and have the most time to consider all of your options.
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Tuesday, November 17, 2009
Seven Deadly Sins for Older Job Seekers
Seven Deadly Sins for Older Job Seekers
And how to avoid them
OLDER JOB SEEKERS face long odds in todays grim marketplace. Nearly 7 percent of age 55-PLUS ADULTS are unemployed, and they’re competing against five other jobless people for every opening. Is there any hope for them?
"Sure there is,” says Robert Skladany, research director of RETIREMENT JOBS. “What the statistics don’t say is that people are landing jobs if they are resourceful and diligent about looking for them.”
But some older adults are sabotaging their prospects by making common mistakes, a new study by the MET LIFE MATURE MARKET INSTITUTE suggests. Instead of analyzing their skills, abilities and preferences and realistically assessing the job market, they’re relying on their long resums to make their case to employers.
“The harsh truth is, nobody cares about your experience,” says workplace expert David DeLong, author of the report Buddy, Can You Spare a Job? “In a performance-driven marketplace, you have to frame your experience and show how you can solve a company’s problems. You cant expect the potential employer to figure that out.”
The study, released Oct. 13, also found that older job seekers routinely overestimate their computer skills, fail to seek extra training, and may feel ambivalent about returning to work in spite of financial need. If potential employers sense that ambivalence in an interview, it can kill any chances of a hire.
In a recession, people of all ages discover that their elementary job-hunting skills, adequate in times of prosperity, are woefully lacking in a highly competitive marketplace, says Richard N. Bolles, author of the annual guide What Color Is Your Parachute?
400 resums dont help
“Older job hunters tend to rely on what worked before, like sending out 400 resums,” says Bolles, “In this brutal economy, that just doesnt work.” Job seekers need multiple strategies such as making an inventory of transferable skills, targeting fields of interest and key employers, making cold calls and joining job-support groups.
Last February, designer Michael Locascio started calling recruiters after he was abruptly laid off from a Chicago-area company. Usually within a couple of weeks, “I would find something, even just project-based work, but this time there was nothing or the pay was ridiculously low,” he says.
Locascio, 50, always disdained networking. “I felt like you’re always asking someone for a favor,” he says. But last summer, out of desperation, he joined St. Hubert Job and Networking Ministry, one of Chicago’s largest free job-support groups. “There was a no-whining policy,” he says. “You’re there to stay focused on the task.”
The ministry breaks participants into small groups of eight to 12 job seekers from different occupations who problem-solved, shared job leads and held each other accountable for progress. “That helped to keep me going seeing others land jobs,” says Locascio.
He also used social media tools such as Facebook and LinkedIn, where he joined a niche group for those skilled in computer-assisted design. “I started posting and got some recommendations. That’s how I turned up a job I hadnt seen listed anywhere else,” he says. After a webcam interview in September, Locascio, who is single, relocated to central New Jersey to work for a commercial lighting company.
Energy counts
Older adults frequently feel they have encountered age bias and are INFURIATED BY IT, the MetLife study reported, but workplace experts caution that age discrimination in hiring is difficult to document, and anger does not help land a job. They advise impressing a younger hiring manager with a sharp personal appearance and by displaying both their skills and their passion for the work.
”Age shouldn’t be an issue, but what is an issue is an older individuals energy, enthusiasm for their work and commitment to avoid obsolescence,” says Bob Podgorski, a human resources executive and cofounder of the St. Hubert group.
A consistent finding of the study was that older adults overestimate their computer knowledge and fail to upgrade their technical skills. Only 36 percent of those surveyed sought any job training, even though employment experts say that is often a key to a successful job search.
In July, Nubia Hernandez, 57, of Orlando, Fla., resigned as supervisor of the employee cafeteria at Marriott World Center after the hotel reduced her hours. She flooded the local hotel industry with resums, but got only one interview. Then, even that lead dried up.
“I was very upset,” says Hernandez. Her partner, Mark Hoewing, asked what she wanted to do that would make her happy, regardless of a paycheck. “I told him, I love children and would like to work with them.”
Hernandez, an elementary schoolteacher in her native Colombia, passed Florid’s online certification course for day care workers and has just landed a job at a day care facility. “I’m so happy to be working with 3- and 4-year-olds,” she says. “I’ll also be teaching them a little Spanish, so now I can use my language skills and my teaching background.”
Social skills are a plus
Another strategy that job counselors suggest is approaching small and medium-sized companies in healthy sectors such as education, health care and government. Older adults social skills are valued in customer-contact jobs in temporary staffing agencies, mutual fund and health insurance companies - even high-end grocery chains.
Other businesses actively seeking older workers can be found at AARPs National Employer team, Retirementjobs.com, YourEncore.com, RetiredBrains.com, Workforce50.com and other websites for 50-plus workers. Snagajob.com is a source for part-time positions.
“Above all, nurture your network - that’s how older adults get hired,” says Retirementjobs.com’s Skladany. Many businesses, swamped with online applications, do not list jobs but prefer to HIRE FROM WITHIN OR THROUGH WORD OF MOUTH.
“That’s why its critical to talk to friends and family, or join a community or faith-based job-support group to seek resources and encouragement,” says Skladany. “If you try to do a job search in isolation, you’ll fail.”
The seven deadly sins of job hunting
Here’s what many older job seekers doand you should not.
1. “I’ll just do what I was doing before.” Many jobs and industries have changed radically in recent years. Identify your transferable skills and explore new ways to use them. Find self-assessment tests and tools at jobhuntersbible.com, rileyguide.com and job-hunt.org.
2. “My experience speaks for itself.” Dont start the interview with, “Ive had 35 years in sales.” Instead, ask questions and use examples that highlight your experience, such as “I know the pitfalls of this sort of situation, and I have the contacts to work it out.”
3. “I’ve always been successful, so why should things be different now?” In today’s job market, ability trumps seniority. Its a plus to say, “I work well with Gen X and Gen Y.” Seek volunteer jobs working with younger people to get needed experience.
4. “I just need a job. I don’t have time for touchy-feely stuff.” Be prepared for questions such as What’s your vision? Many older job seekers fail to reflect on how their skills fit into a larger arena. Devote time to a serious inventory of your strengths, values and assets.
5. “Of course Im good with computers.” If youre an expert at Windows 98, worked in just one organization or have been out of the workplace for a few years, rethink this. Find out what your target markets need and get the necessary training.
6. “Ill just use a recruiter or some coaching to get another job.” Its smart to seek help, but successful networking requires a plan and plenty of legwork. Tap into online networking tools like Facebook, Twitter and LinkedIn. And talk to friends and family, or join a community or faith-based job-support group to seek resources and encouragement.
7. “Ill become a consultant or a security guard!” Older job seekers often chase unrealistic jobs. Ask yourself if you have the necessary skills, temperament and physical endurance for a position. Then ask friends and advisers for feedback. The more realistic you are about yourself, the better chance you have of success.
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Monday, November 16, 2009
Five Years Later
When the power of Love overcomes the love of power, the world will know peace.
- Jimi Hendrix
Five years ago - the CWA AND AT&T DISCARDED US.
Some folks have new jobs and NEW CAREERS.
Some are HOLDING ON to what they have, and STILL LOOKING for MEANINGFUL WORK.
Some cling to the belief that RETRAINING is the answer.
Some lost A LOT.
Some lost HOPE.
Some SEE NO LIGHT and may be ready to GIVE UP.
Some remain DISGUSTED by OUTSOURCING, the RECESSION, and things like the SELF SERVING INTERESTS of unions DISGUISED as ORGANIZED LABOR MOVEMENTS - especially when creeps like CWA big-shot RALPH MALY are mentioned.
Four years ago the Supreme Court ruled AGE BIAS NEED NOT BE DELIBERATE.
Now this…
IF THE CWA DESERVES ANY RESPECT - they’d be supporting the EEOC, instead of the SAME OLD CRAP.
The EEOC filed a Complaint in August of this year concerning AT&T’s practice of NOT REHIRING PEOPLE who went out on VRIP and other force reduction programs. The Complaint says that this is part of a PATTERN of AGE DISCRIMINATION. Over the years, a lot of people have commented about being blacklisted from being rehired.
The EEOC attorney who is handling the case is Louis Graziano. His email address and telephone number are 212-336-3721.
This case is not associated with the CASH BALANCE CASE, Engers vs. AT&T.
The complaint will be on the AT&T RETIREES WEBSITE.
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Friday, November 06, 2009
Settling Credit Card Debt
Friends and I have been debating how to stick it to the CREDIT CARD COMPANIES that are STICKING IT TO US - raising our rates to 20% AND OVER, even though we’re paying our bills on time, and trying very hard to keep our heads above water in today’s terrible FINANCIAL CLIMATE that favors bankers and big business over society.
Bankruptcy is off my list list until at the very end my financial rope, regardless of WHAT THE EXPERTS SAY. Why? Because job applications ask the question “Have you ever gone bankrupt?”. Answer yes, and forget any possibility getting a job. Plus, I got enough problems with the ”HOW OLD ARE YOU” question, being an AMERICAN JOB HUNTER IN AMERICA, and a WHITE MALE.
I called two credit companies asking to reduce the rate of this 20+ year customer they just INCREASED over 50%. They told me to jack off. Although a customer - and constant revenue stream of theirs - for most of my life, after talking with their customer service reps on the phone (some English challenged), I FELT MORE LIKE AN ADVERSARY, than valued customer whose business they want to keep.
REBEL - by missing a few payments, and forcing the greedy credit card companies to either negotiate or watch it’s monthly check from you stop. That seems to be the only language they understand.
For people without a job, living off savings, and struggling not to be deadbeats - I don’t think it’s a bad move. You’ll never get new credit anyway, and these BASTARD BANKS don’t seem to care one bit about doing the right thing. Why should we?
Folks are WALKING AWAY FROM THEIR MORTAGES because of interest rates - maybe it’’s time to do the same with greedy credit card companies and their gouging.
A friend recenty negotiated a settlement of $3,000, as payoff to his $10,000 credit card bill, whose rate the credit card company raised to 19% last month. He couldn’t afford to pay anymore, thanks to the shylark tactics - and they agreed to settle.
Why you’re at it - FREEZE YOUR CREDIT REPORTS - to stick it to them some more, while HELPING PROTECT YOURSELF FROM IDENTITY THEFT, and READ THIS about collection agencies.
Honest Answers To A Difficult Question
When you decide to settle your debt, there are certain factors you need to take into consideration. Is your credit score more important than your monthly cash flow. i.e. by not settling your debt, and making large minimum payments, do you have enough money leftover every month? If you are skipping payments, you are already negatively impacting your credit, and should seriously consider debt settlement.
There is a SETTLEMENT STRATEGY that can positively affect your credit score.
Paid in Exchange for Deletion - 30% success rate.
A payment in exchange for deletion will immediately have a positive effect on your credit score. A debt settlement negotiation takes place with the creditor, where the client agrees to pay in exchange for a deletion letter. This deletion letter will remove the collection from your credit report, creating an almost instant boost to your credit score. Most if not all will require a full payment in order to agree to exchange for a deletion letter. This option has around a 30% success rate.
Important! A deletion letter must be received by the client before any payment is made. Most creditors will require full payment in order to agree to a PAYMENT IN EXCHANGE FOR DELETION.
Once the payment has been made to the creditors, the deletion letter is sent to all three credit bureaus. The collection is then deleted from your credit report. Payment in exchange for a deletion letter is a decision made by the collection agency or creditor. Not all companies will agree to a payment in exchange for deletion, even if it is an offer to pay in full. However, you should always go for the payment in exchange for deletion letter first. Always. It will not only eliminate the debt settlement effect on credit score, but more than likely increase your score immediately. Plus, you are now out of debt, and avoided the statute of limitations.
Where would you rather be in 3 years?
It goes without saying that most people believe paying off an account is always better than settling. That may be true, but what if your debt is escalating at a rate that you cannot keep up with due to interest? If you are barely making the minimum payments which is mostly interest anyway, or not paying at all then a settlement may benefit you in the long run. Debts higher than $20,000 can take over 20 years to pay off with interest when making minimum payments.
Think about it. You may have continued late payments on a large sum of debt for years to come as you are trying to pay off the debt. Depending on the amount of debt, you could be just paying interest.
Settle and Rebuild your credit...
Or you could settle the debt for possibly .50 on the dollar, and begin to rebuild your credit starting right now. Yes, a settlement will have a negative impact on your credit report in the beginning, but a settlement will have less weight on your score after two years (aged item), and the debt has been paid. So, where would you rather be in 3 years? Paying for the next 15 years, or paid and rebuilding your credit in the next 3 years. You may even be able to delete the item from your credit report when settling the debt, giving you an instant boost to your score!
What are statute of limitations?
If you are no longer making payments at all on a large collection you need to be concerned with the statute of limitations in your state. The statute of limitations is the amount of time a creditor has to legally file suit against you for collection of money. If you are within the time a creditor can file suit, you may end up with a judgment on you credit report, negatively effecting your score, and if they win the case you will still have to pay back the money. Settlement may have an initial negative impact on your credit score, but it will age and become less of an impact. In this instance, the debt settlement effect on credit report would fair better than a judgment on your credit report. Plus you would be free and clear of the statute of limitations or the possibility of being sued if you settled. The statute of limitations start on the date of last activity in your credit report. See my credit report.
How long do items get reported on my credit report?
Delinquencies (30 - 180 days): Can remain seven years from the date of the initial missed payment.
Collection accounts: Remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date). When a collection account is paid in full, it will be marked “paid collection” on the credit report.
Charged-off accounts: Remain seven years from the date of the initial missed payment that led to the charge-off (the original delinquency date), even if payments are later made on the charged-off account.
Closed accounts: Closed accounts are accounts that are no longer available for further use. Closed accounts may or may not have a zero balance. Closed accounts with delinquencies remain seven years from the date they are reported closed, whether closed by the creditor or by the consumer, but the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments. Positive closed accounts remain ten years from the closing date.
Lost credit card: If there are no delinquencies, credit cards that are reported lost will continue to be listed for two years from the date the card is reported lost. Delinquent payments that occurred before the card was lost are reported for seven years.
Bankruptcy: Chapters 7, 11, and 12 remain for ten years from the filing date. Chapter 13 remains seven years from the filing date. Accounts included in bankruptcy will remain seven years from the date they were reported as included in the bankruptcy.
Judgments: Remain seven years from the date the judgment is filed.
City, county, state, and federal tax liens : Unpaid tax liens remain fifteen years from the filing date. Paid tax liens remain seven years from the paid date of the lien.
Inquiries: Most inquiries listed on your credit report will remain for two years. All inquiries must remain for a minimum of one year from the date the inquiry was made. Some inquiries, such as employment or pre-approved offers of credit, will show only on a personal credit report pulled by you.
Is there anything that cannot be in my credit report?
Certain information cannot be in a credit report, including:
Medical information (unless you give your consent)
Notice of bankruptcy (Chapter 11) that is more than ten years old
Debts (including delinquent child support payments) that are more than seven years old
For California residents: records of arrest, information, or misdemeanor complaints must be removed after seven years. But under federal law, records of criminal convictions may remain on a credit report indefinitely.
Age, marital status, or race (if the request is from a current or prospective employer
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Banks Doing More Credit Card Modifications
Clark Howard
October 1, 2009
The Washington Post reports that credit card lenders are now agreeing to lower outstanding balances, interest rates or even both in some cases.
Chase has admitted to modifications for 600,000 customers. Bank of America, meanwhile, is doing modifications for 1.2 million card holder accounts, according to the article.
If you are in a pickle, call your credit card company and try to obtain a modification. It is happening for people out there. Be organized and be realistic about what you can afford to pay when you talk to them. And don’t be afraid to play hardball by ignoring their first offer and holding out for a better deal.
Know that not all credit card lenders are not doing modifications in the same manner. Some require you to be delinquent. Others will only work with you if you’re current on your account.
Why are the banks that control credit cards even doing these modifications in the first place? Well, they’re scared of people going bankrupt, in which case they would get nothing. The charge-off rate in July was 10.5 percent for credit cards. Those are big money losses for the banks.
Keep in mind the tax implications of a modification. You won’t incur any tax penalty if you just get your interest rate reduced. But if the bank reduces the outstanding balance, you will get a tax bill for the money that’s written off.
Clark knows there are people listening to him who are incensed by what he’s saying. But these kinds of modifications have always been done in commercial lending under the name of “workouts.” They’re not unprecedented, they’re not evil and they’re not immoral. This is how business operates.
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Negotiating Reduced Payments Can Hurt Credit Scores
Dear Experian,
I have several credit cards and am struggling to make house payments and credit card payments. If I make arrangements with a credit card company to pay the card off with a reduced amount, will that still affect my credit?
- SPS
Dear SPS,
Negotiating a reduced payment with your credit card provider probably will have a negative affect on your credit scores.
When you negotiate a reduced pay off amount, you are actually settling the debt for less than you owe. As a result, the lender will likely report the account as “settled” rather than “paid.”
Anytime an account is reported as not paid in full or not paid as agreed, it will have a negative impact on credit scores.
Sometimes it is better to take the negative hit of a settled account to get the debt behind you. It shouldnt matter if your credit scores are impacted in the short term because you really don’t need to take on new debt until you have gotten control of your budget and your spending. Then you can concentrate on rebuilding a strong credit history, which will help you get the best rates when you are ready for new credit.
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How To Protect Yourself Against Aggressive Debt Collectors
By Jay Slatkin
Consumerist
July 9, 2008
Millions of Americans are in debt, so it stands to reason that there are over 6,500 collection agencies in the U.S.. Most of these agencies operate under the law but a growing number of them do not. According to statistics from the Better Business Bureau, complaints filed against debt collectors rose 27% in 2007. Even if you legitimately owe the debt, you should know there are laws that protect you against harassment and the unfair practices often employed by these rogue debt collectors. CNN MONEY DISCUSSES the Fair Debt Collection Practices Act and laws which protect the consumer. Details, inside…
Third-party debt collectors are regulated by the FAIR DEBT COLLECTION PRACTICES ACT (FDCPA) which is overseen by the FTC. Here are few practices which are prohibited under the law:
Harassment
Debt collectors cannot make threats of violence against consumers or publish lists of those who don’t pay their debt. They may contact you in person, by mail, or by fax but can only call you between 8 a.m. and 9 p.m. unless you have agreed to alternate hours. They are also not allowed to use obscene language or call repeatedly (i.e. several times a day).
False statements
Debt collectors cannot misrepresent themselves. They cannot not falsely imply that they are attorneys, government agencies or that they work for a credit bureau. They cannot say that papers being sent you are legal forms if they are not, or say that they are not legal forms if they are.
Unfair practices
Debt collectors may not collect an amount greater than your debt, unless your state law permits it. They cannot use deception to make you accept collect calls or pay for telegrams. They also cannot threaten to take your property or contact you by postcard.
Linda Sherry of Consumer Action recommends that if a debt collector contacts you, the first thing you should do is ask for PROOF OF THE DEBT which should consist of a paper documentwith your signature stating that you applied for the debt. Also, be aware that some debts have a statute of limitations which could be from 3 to 15 years. Check your state’s laws to see if your debt is still collectible because once you pay a portion of the debt the clock resets again.
You can stop a debt collector from contacting you if you SUBMIT A WRITTEN REQUEST to them. Once they receive the letter, they cannot contact you again except to tell you there will be no more contact. Additionally, if you have an attorney presiding over your debt, they must contact the attorney instead of you.
Just because you are in debt, doesn’t mean that debt collectors have the right to harass you or operate outside of the law. If you feel that a debt collector has violated the law, you can file a complaint with your state’s ATTORNET GENERAL OFFICE and the Federal Trade Commission.
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