1. This presentation gives basic legal information, not legal advice. The information in this presentation is not intended to be legal advice. You should not rely solely on this presentation for help with this topic. If you have a legal problem, consult an attorney before taking any legal action.

2. Credit Cards, Debt Repayment and Debt Collection - Presented by Montana Legal Services -

3. Montana Legal Services gives civil legal assistance in a variety of areas: Legal advice and representation for clients Referrals to pro bono attorneys and other providers Self-help clinics Self-help Materials Educational brochures, classes, and workshops

4. Clients can reach us a number of different ways: MLSA HelpLine at 1-866-666-6899 Outreach to Crow, Northern Cheyenne, Blackfeet, Rocky Boy, and Fort Belknap www.MontanaLawHelp.org www.MTLSA.org

5. MLSA offers a variety of services: Advice phone calls Brief services Self-help clinics Extended Representation

6. What are Credit Cards? “Revolving” credit lets you make a minimum payment instead of paying off the entire balance. Companies make money by charging interest on the balance. The interest is called APR or Annual Percentage Rate. Companies charge other fees, too.

7. Why Credit Cards Can Cause Problems Interest rates can change. “Fixed rates” for credit cards only means that the card issuer has to give you 15 days notice before raising the rate. Fees. There are fees for every transaction or mistake a consumer could make. Late fees, balance transfer fees, over-limit fees, cash advance fees. The charges are endless.

8. Credit Card Problems Credit cards make it easy to buy things you can’t afford. Cards often have high limits. Also, the interest rates are sometimes not what they seem. Consumers can easily get in over their heads in debt. The key to using a credit card wisely is to use it only when you need it. You should aim to pay off your balance at the end of every month. If you can’t pay it off, always pay more than the minimum payment.

9. How much money does paying more than the minimum save? Let’s say you have a credit card balance of $500--low, by most standards, and an APR of 18%. The minimum payment, as calculated at 2.5% of your balance, would be $12.50.

10. If you paid $12.50, it would take you 7 years and over $365 in interest to pay off your debt! If you paid $50 dollars instead, you would pay off your debt in only 11 months, with about $46 in interest charges. Minimum Payments

11. $ 365 OR $46? ALWAYS PAY MORE THAN THE MINIMUM! That seems like a no-brainer. But it’s easy to overlook when companies don’t tell you how long it takes to pay off.

12. Credit Card Alternatives Debit Cards: takes money directly out of your checking account. Pre-paid Credit Cards: Only allows you to spend a set amount. Once it’s gone you have to reload the account. Credit Union: If it’s a loan you need, try your local credit union, they are usually more flexible and willing to work with you.

13. What debts to pay first: 1. Family Necessities Food Health Insurance Premiums 2. Housing Related Expenses Mortgage/Rental Payments Utilities Debt Repayment and Collection

14. 3.Transportation Car Payments Vehicle Insurance Payments 4. Child Support Payments 5. Income Taxes Debt Repayment and Collection

15. Lower Priority Debts Unsecured debts, or debts that do not have collateral are lower priority. These include: Payday Loans Credit Card debt Doctor and hospital bills Debts with other professionals

16. Who is a debt collector? Anyone who regularly collects debts for other people. Examples include:  CBB Collections, Inc.  NCO Financial Systems, Inc.  Nationwide Credit, Inc.

17. Who is a debt collector? A company who holds an original debt does not have to follow the same rules as collection agencies. Examples of original creditors include:  Verizon Wireless  St. Vincent’s  Montana-Dakota Utilities

18. What Debt Collectors Cannot Do: Call before 8am or after 9pm Keep calling to harass you Threaten or swear at you Tell you that you have committed a crime by not paying the debt

19. Call you at work after you have told them not to Call or speak to you without telling you who they are Threaten to have you arrested if you don’t pay the debt Pretend they are attorneys or government officials What Debt Collectors Cannot Do:

20. What Debt Collectors Can Do: Contact you until they receive a cease-contact letter Take you to court If they win, they can garnish your wages or sweep your bank accounts of available funds

21. 1. Ask for Proof Ask for the debt collector to send you proof, in writing, that you actually owe the debt. 2. Make a Deal If you want to keep paying on your bills, try to work out lower monthly payments. Make sure to get this in writing. How to Deal with Debt Collectors:

22. 3.Record Everything Keep copies of all letters from the collectors and payment receipts. Keep a journal of each time the collector calls you. Write down the date, time of day, what is said. Always ask for the caller’s name or ID# and address. It is illegal to record phone calls in the State of Montana. Records must be written, and it is extremely important to keep them if you are being harassed by a company collecting its own debts or a debt collector.

23. 4. Get them to Stop Calling Tell them that your work does not accept personal phone calls and that they should stop calling Hang up. You do not have to talk to them. Write a cease-contact letter. How to Deal with Debt Collectors:

24. Please note, these rules do not apply if the people you owe money to are the Federal, State, or Tribal Government, for instance: The Internal Revenue Service (IRS) Child Support Enforcement Division (CSED) Student Loans How to Deal with Debt Collectors:

25. This is an example of a Cease Contact Letter written to a collection agency.

26. This presentation gives basic legal information, not legal advice. The information in this presentation is not intended to be legal advice. You should not rely solely on this presentation for help with this topic. If you have a legal problem, consult an attorney before taking any legal action.