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Advice from a credit-repair expert: What to do if you can’t pay bills

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Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

  • According to credit-repair expert Matt Listro, if you’re having trouble paying your bills, the biggest mistake you can make is not reaching out to your creditor and explaining your situation.
  • In light of the coronavirus pandemic, banks and other lenders have expanded their financial relief programs to accommodate customers who have lost income — but these programs don’t work automatically; you need to reach out.
  • Another mistake is waiting too long to ask for help. Listro recommends contacting your bank as soon as you realize you may have trouble with your bills so you can get relief before the issue gets worse.
  • Get your free credit score with CreditKarma »

As millions of Americans have filed for unemployment and countless others have lost income for other reasons related to the coronavirus crisis, building and maintaining a good credit score is harder than ever. But it remains as important as ever, especially if you’re looking to apply for any type of loan in the near future.

To better understand how to manage credit problems during this crisis, I spoke to Matt Listro, one of the nation’s top credit repair experts.

Listro is the founder and owner of National Credit Fixers, which has been helping people with their credit since 1996. He’s also the producer of Credit Con, an annual conference for the credit-repair industry, and he sits on the advisory board of NACSO, The National Association of Credit Services Organizations.

You could get help from your lender — if you ask for it

According to FICO, the largest portion of your credit score, 35%, is attributable to your payment history.

Simply put, if you don’t pay your bills on time, it will be impossible to have good credit. So what should you do if you’re unable to make your payments due to the economic crisis?

According to Listro, there are a lot of misconceptions about your options in this situation, and most companies are actually willing to work with consumers during this crisis.

Listro says the biggest misconception is that people assume that various financial relief programs will work automatically, while the reality is that you need to reach out to your lender to explain your situation and discuss your options. 

Listro’s advice for people who have lost their jobs or have seen their hours reduced can be summed up simply as: “Be proactive.” He advises people to call their billers and see if they can be of assistance to you.

Talk to your creditors, including your mortgage company, your credit card company, and your bank. “You don’t know if your landlord will have the ability to be compassionate with you, but they might,” says Listro.

He points to many lenders that have programs to help people who are having trouble. Banks are offering customers assistance for mortgages, car payments, credit cards, and more. These programs could give you some extra time to make payments, waive late fees, and more, but it’s up to borrowers to contact them and ask to be part of the program.

Don’t wait until you’re in dire straits

Another issue is people waiting too long to ask for help from their lenders. “Don’t wait until you absolutely need it,” he says. “If you’re on the verge or you’re not sure how things are going to go, call your car loan company and get a little bit of a break now. It might give you the insurance that you need to make sure that you’re better next month or two months from now if this goes on longer than you think.”

Prioritize paying whatever bills you can

Listro says that “business is booming in credit repair,” but not for the reasons that you might expect. Spring is normally the busiest time for the credit-repair business, because that’s the time that people are looking for new homes. The coronavirus lockdown created a pent-up demand for new home buyers looking to quickly improve their credit.

Furthermore, Listro says that the stimulus checks and unemployment benefits have actually helped many people making minimum wage or who have a very low income, since the stimulus and unemployment benefits represent the highest percentage of their income. In this situation, the influx of cash may motivate them to get to work on improving their credit score. 

However, the way Listro sees it, credit repair is a luxury item. The first thing you should do is make sure you have enough money to pay your bills. If you have extra money after paying your bills and you’d like help building up your credit score, then you might seek assistance to help repair your credit.

Furthermore, some credit problems simply aren’t repairable. Listro doesn’t think that credit repair is right for everyone, and he doesn’t accept all of the potential clients who seek his services. “We’re not a solution to get out of debt,” he says. Listro also says that some cases are better suited to bankruptcy than credit repair.

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California’s vague new financial regulation law

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California Capitol. Photo by Anne Wernikoff for CalMatters

In summary

California has a new financial regulation law but its reach is vague and awaits more definition.

Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.

Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.

However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.

The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.

The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.

It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.

Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.

Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.

The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”

Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.

Although the new state law is said to mirror the Dodd-Frank law, it contains at least one significant difference. When federal regulators levy fines for what they consider to be bad conduct, the money goes into the federal treasury. When state regulators impose their fines of up to $1 million a day, the money will be retained by the new agency to finance more activity.

Will that give the new agency a financial incentive to skip over minor consumer issues and go after big companies? It’s a question that only time will answer.

Significantly too, the new investigative and regulatory mechanism contained in AB 1864 specifically does not usurp the authority of the attorney general to also target companies under the state’s equally vague “unfair competition” law.

From its inception a decade ago, Dodd-Frank has attracted criticism from business executives for regulatory overkill. Will California’s new version be less controversial? We won’t know until the new agency puts some definitional meat on its bones.



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California’s vague new financial regulation law – Whittier Daily News

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Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.

Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.

However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.

The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.

The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.

It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.

Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.

Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.

The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”

Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.

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397 people register to vote on deadline day at Duval Supervisor of Elections – 104.5 WOKV

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JACKSONVILLE, Fla. — Monday, Oct. 5 at midnight, is the deadline to register to vote in Duval County.

But the Supervisor of Elections helped hundreds of people get registered today.

Robert Phillips, the chief elections officer of the Duval Supervisor of Elections, told Action News Jax’s Courtney Cole that 397 people came down to the Supervisor of Elections in downtown Jacksonville to get registered.

Supervisor of Elections staff assembled tents outside to allow people to register to vote without having to go through the COVID-19 prescreening necessary to enter the building.

“Again, 2020 has thrown us some challenges,” Phillips said.

There was even a little rain thrown into the mix today, but it didn’t stop folks from coming out.

“Out here, we have a lot of activity. We’ve been going since first thing this morning,” Phillips told Action News Jax.

There were people of all ages from all walks of life — some even registered for the very first time like Lemark Jamison.

Monday, Oct. 5, is a day he will always remember.

“It feels awesome, you know? It feels awesome,” Jamison told Cole.

Today, Jamison had the opportunity to register to vote for the first time in Florida.

“I’ve worked for voter registration companies. I’ve done advocating for Amendment 4, but I was never able to vote because of my prior background. But now I can,” Jamison said.

Jamison, the owner of a tax and credit repair business, told Cole his prior felony conviction held him back in the past.

In November 2018, more than 60% of Floridians voted to restore voting rights to more than 1 million people who completed their sentences.

But several months later, legislation was passed that required them to pay all financial penalties, which means thousands lost the right as quickly as they gained it.

“I’ve been contributing to society. I’ve been able to have several businesses. And I pay taxes. But I haven’t been able to, when it comes to voting, whether in a local level or any type of legislature — I haven’t been able to vote,” Jamison said.

The 35-year-old told Cole even though his wife helped him fill out his voter registration form — to which he exclaimed, “Thank God for wives, right?” — he told Cole it was pretty easy.

Now, he has this advice to share with other people who may be in his shoes:

“Get out and vote. Take advantage of this opportunity, regardless of who you plan on voting for.”

Here’s a breakdown from the Supervisor of Elections of how the 397 people registered today:

-56% registered as Democrats.

-21% registered as Republicans.

-22% registered as nonparty affiliates.



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