If a notary is acting on behalf of a debt settlement company that may not be playing by the rules then it is very possible that the notary could be snatched up in actions by the FTC for assisting and facilitating an enterprise in a deceptive telemarketing act or practice. These fines are $16,000 per occurrence so notary beware.
Full Answer
What happens when you settle a debt?
Warning: Debt settlement may well leave you deeper in debt than you were when you started. Most debt settlement companies will ask you to stop paying your debts in order to get creditors to negotiate and to collect the funds required for a settlement.
Is it difficult to resolve a lawsuit as a notary public?
However, the lawsuit proved extremely difficult — and costly — to resolve because of the multiple complaints and cross-complaints involving the numerous defendants. Your financial risk as a Notary often has nothing to do with being right. You can be right and still end up with legal bills.
Do debt settlement companies negotiate with creditors?
Debt settlement companies, also sometimes called "debt relief" or "debt adjusting" companies, often claim they can negotiate with your creditors to reduce the amount you owe. Consider all of your options, including working with a nonprofit credit counselor, and negotiating directly with the creditor or debt collector yourself.
What are the financial risks of being a notary public?
Your financial risk as a Notary often has nothing to do with being right. You can be right and still end up with legal bills. Fortunately, the Notary’s E&O policy in this case paid the legal expenses. In this case, an oversight when recording a journal entry got a Notary into serious legal trouble.
What is the most challenging part of being a notary?
Challenge — Scanning or reading the document. Your task is to look over the document only enough to obtain the information you need to complete the notarization. Once you've confirmed what you need, you shouldn't spend time reading over the document in detail because this may be considered a breach of signers' privacy.
What is a debt settlement signing?
Debt settlement means a creditor has agreed to accept less than the amount you owe as full payment. Once it accepts that deal, the creditor can't continue to hound you for the money and you don't have to worry that you could get sued over that particular debt.
What percentage should I offer to settle debt?
When you're negotiating with a creditor, try to settle your debt for 50% or less, which is a realistic goal based on creditors' history with debt settlement. If you owe $3,000, shoot for a settlement of up to $1,500.
Do settlements hurt your credit?
While settling an account won't damage your credit as much as not paying at all, a status of "settled" on your credit report is still considered negative. Settling a debt means you have negotiated with the lender and they have agreed to accept less than the full amount owed as final payment on the account.
What is debt settlement and how does it work?
Debt settlement is when your debt is settled for less than what you currently owe, with the promise that you'll pay the amount settled for in full. Sometimes known as debt relief or debt adjustment, debt settlement is usually handled by a third-party company, although you could do it by yourself.
What happens when I settle a debt?
When you settle an account, its balance is brought to zero, but your credit report will show the account was settled for less than the full amount. Settling an account instead of paying it in full is considered negative because the creditor agreed to take a loss in accepting less than what it was owed.
How long does debt settlement affect credit?
Debt settlement affects your credit for up to 7 years, lowering your credit score by as much as 100 points initially and then having less of an effect as time goes on. The events that typically lead up to debt settlement will affect your credit score, too.
How long does it take to improve credit score after debt settlement?
between 6 and 24 monthsHowever, a debt settlement does not mean that your life needs to stop. You can begin rebuilding your credit score little by little. Your credit score will usually take between 6 and 24 months to improve. It depends on how poor your credit score is after debt settlement.
What was the purpose of the notary in the case of the deed of trust?
In this case, the Notary was asked to notarize the signatures of two individuals who signed a deed of trust in buying a property. Since the signers had no ID, the Notary identified them using a single credible identifying witness — the agent representing the signers. State law required the Notary to personally know the witness, but the Notary hardly knew the agent. In addition, the Notary failed to obtain the thumbprints of the signers in her journal. The settlement and legal fees were substantial.
What is the lesson of the case of the notary?
This case teaches an important lesson. Litigation can get messy, and sometimes litigants don’t give up. As a result, you can incur significant costs in defending yourself — even against frivolous claims. In this instance, the Notary had an errors and omissions insurance policy, and it took a substantial amount of the policy to defend the Notary in both actions. Without a policy with sufficient coverage to absorb all the costs, he would have had to pay the expenses out of his own pocket.
What is a subpoena for notary?
Subpoenas included requests for Notary journal entries or affidavits or a demand to appear at a deposition to provide information about a past notarization.
Why was the plaintiff declared a vexatious litigant?
During the case, the plaintiff was declared a “vexatious litigant” by the court after it was learned he had a history of filing frivolous lawsuits. The Notary’s attorney claimed the grounds for the suit were legally insufficient and the court upheld this claim.
What to do if you have questions about a fraudulent document?
If you have legal questions about a fraudulent document, you will need to contact a qualified attorney.
Did the notary know the witness?
State law required the Notary to personally know the witness, but the Notary hardly knew the agent. In addition, the Notary failed to obtain the thumbprints of the signers in her journal. The settlement and legal fees were substantial.
Do notaries carry E&O policies?
The case of the Notary caught in the crossfire. Some Notaries assume that they don’t have to carry an E&O policy as long as they don’t make mistakes. As this next case shows, even a blameless Notary can be dragged into a lawsuit.
What happens when you settle a debt?
In debt settlement, the company will instruct you to stop making payments to the creditors. Your accounts become delinquent, and the debt settlement company tries to negotiate a settlement on your behalf. In the meantime, you give your money to the debt settlement company, who also is not paying the creditor with it.
Why Work with a Debt Settlement Company?
Often there’s a good reason – a layoff or reduction in pay, big medical bills, an unexpected emergency expense. No matter what the reason, it can be difficult to get out from under overwhelming debt on your own. This is particularly true for credit card debt or other revolving debt, that never seems to decrease, even if you’re paying monthly.
What is debt settlement?
Debt settlement is an agreement made between a creditor and a consumer in which the total debt balance owed is reduced and/or fees are waived, and the reduced debt amount is paid in a lump sum instead of revolving monthly. Get Debt Help.
How long does it take for a debt settlement to pay?
Meanwhile, the company will negotiate with your creditors to settle for a lower amount. Once you’ve paid the amount the agreement is for into the escrow account, the debt settlement company will pay your creditor. This process can take 2-3 years.
What do debt settlement companies have to explain?
Debt settlement companies must explain price and terms, including fees and any conditions on services.
How much does a debt settlement company charge?
Debt settlement companies charge a fee, generally 15-25% of the debt the company is settling. The American Fair Credit Council found that consumers enrolled in debt settlement ended up paying about 50% of what they initially owed on their debt, but they also paid fees that cut into their savings. The report gives an example of a debt settlement client whose $4,262 account balance was reduced to $2,115 with the settlement. So, at first it would seem she saved $2,147, the different between what she owed and what the settlement amount was. But she also paid $829 in fees to the debt settlement company, so she ended up saving $1,318.
How much money did a debt settlement save?
The report found that debt settlement clients settled an average of about 50% of what was originally owed, but realized savings of about 30%.
What happens if you stop paying debt settlement?
This can have a negative effect on your credit score and may result in the creditor or debt collector filing a lawsuit while you are collecting settlement funds. And if you stop making payments on a credit card, late fees and interest will be added to the debt each month. If you exceed your credit limit, additional fees and charges may apply. This can cause your original debt to increase.
What is debt settlement?
Debt settlement companies are companies that say they can renegotiate, settle, or in some way change the terms of a person's debt to a creditor or debt collector. Dealing with debt settlement companies can be risky. Debt settlement companies, also sometimes called "debt relief" or "debt adjusting" companies, often claim they can negotiate ...
How to avoid paying credit card debt?
Avoid doing business with any company that promises to settle your debt if the company: 1 Charges any fees before it settles your debts 2 Represents that it can settle all of you debt for a promised percentage reduction 3 Touts a "new government program" to bail out personal credit card debt 4 Guarantees it can make your debt go away 5 Tells you to stop communicating with your creditors 6 Tells you it can stop all debt collection calls and lawsuits 7 Guarantees that your unsecured debts can be paid off for pennies on the dollar
What is an alternative to a debt settlement company?
An alternative to a debt settlement company is a non-profit consumer credit counseling service. These non-profits can attempt to work with you and your creditors to develop a debt management plan that you can afford, and that can help get you out of debt.
What happens if you stop paying your credit card bills?
If you stop paying your bills, you will usually incur late fees, penalty interest and other charges, and creditors will likely step up their collection efforts against you.
Is forgiven debt taxable income?
If a portion of your debt is forgiven by the creditor, it could be counted as taxable income on your federal income taxes. You may want to consult a tax advisor or tax attorney to learn how forgiven debt affects your federal income tax. Read full answer.
Can a debt settlement company settle all your debts?
In many cases, the debt settlement company will be unable to settle all of your debts. If you do business with a debt settlement company, the company may tell you to put money in a dedicated bank account, which will be managed by a third party. You may be charged fees for using this account.
