Life is getting more and more difficult each day because of the recent recession. Millions of consumers across the country are victimized by the economy breakdown and their most common problem is tremendous credit card debt. Unemployment and inflation has caused individuals to rely on credit cards, making huge bills which are then unable to get ridden off. Not only their financial position is worsening, but it is also affecting their personal lives very adversely. People are unable to keep their marriages, some are getting divorces, some are getting separation and others are suffering from health issues.

When someone faces huge debts which are not easy to resolve, then the first solution they come up with is proclaim bankruptcy. Even though knowing how much damage bankruptcy causes to your financial position you still want to attempt it as you think that this is the only solution. But now there are other debt relief solutions available, they are the legitimate debt relief options introduced by the government to get out of credit card debt. The reason as to why they came into being is that, bankruptcies were increasing at an alarming rate and it was destroying the overall country economy. So in order to stop the economy crashing down, our new government came out with different debt relief options to resolve credit card debt.

These options include debt settlement program and debt consolidation loan. They are much better than filing for bankruptcy because firstly, they do not involve any court procedures and secondly they cause less damage to the credit reports as compare to bankruptcy. Here is a brief introduction about these options:

DEBT SETTLEMENT PROGRAM:

There are a lot of individuals who think debt settlement as the best possible solution to wipe out credit card debts existing in the market today. In debt settlement you have to convince your lenders to accept a reduced amount of debt as you can not pay the full debt. If you hire a debt settlement firm to negotiate with the creditors from your behalf then chances increases for you to get a good waiver like from 50% to 70%. Debt settlement firms are skilled in negotiating with the creditors and they can easily make them accept a lowered amount of debt as compare to a single individual for whom it would be very difficult to settle a favorable deal with lenders himself.

DEBT CONSOLIDATION LOAN:

Debt consolidation loan is for those individuals, who hold multiple credit card debts. Most of the consumers are the ones that hold multiple credit card debts, so they can utilize the option of debt consolidation loan. In this loan, you combine all your multiple credit card debts and create a single debt which although is a huge debt but the interest charged on debt consolidation loan is low. In this way, you would not have to go to different credit card companies to pay for each debt. You can just make a single payment each month.

Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the best performing programs in order to get the best deals. To compare debt settlement companies it would be wise to visit a free debt relief network which will locate the best performing companies in your area for free.

Contact us for free debt advice = 8883613619

[Transcript] My name is Frank Huchrowski, I’m from North Versailles Pennsylvania. Some people are saying that today’s economic crisis is being caused flaws in Capitalism. This is not true. The root cause of the currency crisis is central banking. In 1848, Karl Marx published his Communist Manifesto. In the 5Th plank of that manifesto he calls for the – “Centralization of credit in the hands of the State, by means of a national bank with state capital and an exclusive monopoly.” In 1913, the United States Congress implemented something pretty close to plank number 5. They called it the Federal Reserve – It’s a privately owned central bank with a monopoly on money and credit. A government granted monopoly – That’s not capitalism. The Federal Reserve has caused today’s economic problems, but capitalism is wrongly taking the blame! Our history books ignore this, but – this Federal Reserve it our 3rd national bank. President Thomas Jefferson killed our first national bank. President Andrew Jackson killed the second national bank. Today, we need to rise up and kill the third national bank – We must END the FEDERAL RESERVE! You don’t need to have a PhD in economics to argue economic policy, Here is a some simple thing you can do – Ask people to define inflation. My College Economics textbook defined Inflation as – “a rise in the general price level of all goods.” Most of you think that’s probably right; Its wrong. Go to an old copy of Webster’s dictionary, where it defines …
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Credit cards are unavoidable these days when carrying cash or paper money is very risky. There is no harm or fear in using them for your daily needs as long as you are able to repay the credit card debts every month. When the payment cannot be made the debt amount is credited with heavy interest and that’s what an extra burden becomes. Spending within limits is safe but when it is unlimited you have to bear the cross for your actions. Credit card consolidation services might be the only savior in times of such trouble.

The credit card debt consolidation services offer credit card debt consolidation loans with low interest rates. Availing these loans you can easily payback the outstanding loan amounts and consolidate your any loans making it a single low interest loan. Your extra financial burden is thus erased out making way for smarter use of the money you save in the way of the reduced interest rates. Your confidence and self esteem increases as you are able to meet the monthly loan repayments in style.

The credit card debt consolidation services offer various credit card debt consolidation programs to help the people to solve the credit card related problems. These services might also be offered for free or might even be a non profit credit card debt consolidation service. Whatever be the policy it is always wise to avail these services as they operate with the sole purpose of setting you free from credit card loans. They offer timely advice and proper guidance to safeguard your finances and to manage the payments every month.

Credit card debt consolidation companies are many and offer various services to the customers. Choosing the right credit card debt consolidation service however depends upon the correct choice made after various considerations. Online help is also available so that complete details and comparative services of other companies can also be reviewed. Some companies even offer free services and guidance to help people to assimilate their loans and plan for a better future. These services are easy to get and much easier to operate because of their feasibility and flexibility of operation. The consolidation companies can be a real savior in time to recover you from all the bad debts weighing you down. Don’t hesitate to avail these services and relieve yourself from the harassments and threat calls from credit card companies.

One of the frequent questions, that you would find on any debt solutions forum or social media platform these days. is about IVA and how to help get out of debt problems, especially the ones that are too complicated. This just proves that you are not the only one! This also proves that there are solutions available for the kind of debt problems you find yourself in. This should reduce some of your worries.

There are solutions to almost any kind of problems regarding debt and lending. And now that you know this fact, let us get on further to resolve some of the common problems that people are facing in UK today. Yes, there is a huge number of Britishers who are facing debt problems because they fail to take the right plans as suitable for them and even if they do take up a loan, suitable or unsuitable, they are not able to manage the debts properly.

And as a result, they are left in deep troubles. But there are solutions to such situations as well. For instance IVA, where you are given a voluntary arrangement. In this voluntary arrangement, you are supposed to clear your credit in a guaranteed period of time, like 5 years, and during that you pay a monthly instalment which is comfortable to you.

During the time period of IVA, you are supposed to pay the monthly instalments on time. After this term, any balance left over is automatically written off. The interest and the charges on your borrowed money is frozen during IVA. Your creditors and lenders are not allowed to contact you and you enter a legally binding repayment agreement with them. This agreement is supervised by a licensed insolvency practitioner who takes care of the negotiation with your creditors and regularly reviews your circumstances.

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UK FINANCIALS LTD introduce Bad Debt Consolidation Loan UK: Debt Consolidation for People with Bankruptcy, Get Rid of Your Multiple Debts Instantly Debt Consolidation Loans: Great way to come out of Multiple Debts and Resolve All Your pending loans. There are times in our lives when we are not mature enough. The ease with which one can avail the loans in today’s market lures many people into getting their objects of desire financed. Not only that, there may be emergencies what may force you to take loans. Apart from all these, the practice of credit cards is the most dangerous. They carry an interest rate more than that of an unsecured bad credit loan. When you feel that you cannot handle these debts anymore, you can go for debt consolidation.

Debt consolidation refers to the process of combining all your loans into a single big loan which you can pay off in easy installments over years. You can opt for either secured debt consolidation where you place some collateral with the consolidation company against the money they spend to takeover your loans. Debt consolidation loan can be a secured loan or an unsecured one. If you are a homeowner willing to give your home as a security to the lender then go for secured debt consolidation loan, as this loan can be easily availed. Otherwise, you can take unsecured debt consolidation loan. Debt consolidation for people with bankruptcy can be searched on the World Wide Web for beneficial deals and offers.

Debt consolidation loans provide you with enough money so that you can repay your current lenders. If you have earlier defaulted in repayments due to lack of money and now the lenders are knocking your door for their outstanding dues, then opt for this loan and make a new beginning by repaying them. But, it should be remembered that the loan should be taken as a temporary relief so that you can get rid of your existing lenders. The overall debt remains the same as earlier, with the only difference being that you have one lender instead of several, and all your debts are transferred to that single lender. Debt consolidation From UK FINANCIALS LTD not only refers to the taking over of all your existing debts and converting them into one, the service also offers you advice on avoiding such circumstances in future. There are many companies on the internet that are offering these services. Some are even offering advice for free. But since you need to get rid your debts, you must go for the experts in the field debts at less amounts.

Talk to a UK Financials Ltd. adviser to discuss your situation and they will help you decide the best option for your situation. Debt consolidation loans will be processed quickly and once your loan has been approved your money will be made available as soon as possible so you can get your finances back on track.

Why only debt consolidation loans? First of all, debt consolidation means that you will take a new, single line of credit that is big enough to pay off all the others you have.

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Borrow £1,000 to £100,000 Borrow over 3 to 25 years Simple, fast and straight forward Free yourself from unwanted debts

UK FINANCIALS LTD can be the best solution for your need. Applying Debt Consolidation Loan online from UK FINANCIALS LTD is the instant and most convenient way. Ravi Mishra is associated with loans, he is a senior author in loans where visitors can get useful information and apply for any type of loans online. For further information about Debt Consolidation Loan visit www.ukfinancials.com

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We all carry a lot of debt around with us if we live in the western world, and sometimes the load becomes almost unbearable, but there are ways in which you can limit your debt burden without paying through the nose to do so. In fact, anyone who doesn’t, is a fool. This article is a short read on the subject of debt consolidation. Read the entire article and if you require more information then just visit the link at the bottom. Happy Reading!

Debt Consolidation is just plain good sense. What it means is, rather than holding debt in a variety of places – let’s say two credit cards, an auto loan, a retail store charge account and a student loan – you take out one nice big loan that pays off everything, and pay one monthly interest rate.

Now, most people don’t do this, and the reason why is simple – they’re either lazy, or they don’t know that such a thing exists. The reality is, any bank will gladly help you put together a debt consolidation loan, because:

a) You’re transferring your debt to them (and they like that a lot)
b) You’re showing real initiative in turning your finances around
c) You’re not borrowing MORE money, you’re just borrowing it from one place

The way it works is easy. Many kinds of credit incur a monthly minimum charge. For example, the interest on your credit card might be per month, but the credit card company will insist on you paying a percentage of what you owe in total, not just the interest. So your credit card payment for the month will be 0 or more.

Now, if you have two credit cards, that amount just doubled. Now add the late fee for any time you’re short that month can make a late payment (), another if you go over your spending limit, and then all those other accounts on top (student loan, retail store, car loan), and you’re paying hundreds of dollars to several entities.

But if you consolidate all those loans into one single debt to one single company, you pay just one simple fee. And instead of the 19%-39% that credit card and loan companies charge, you’re dealing with a manageable rate, and a timeframe that will eventually see you completely debt-free.

Isn’t it time you took that first step with your financial future?

We all, over the course of our lives, sometimes rely on credit to get by. Whether it is for a mortgage on our home, a loan for a car, or a payday loan to get by until next Friday, there’s little we can do to escape the effect of a debtors society. But the way you handle your debt is something you can have a say in, and indeed the way you do so could mean you save – or spend – thousands of dollars a year.

Let’s imagine you have a few credit cards on the go. One of them, the card you had since you were in college, has a few grand racked up on it, and because you missed a few payments way back when, the interest rate is at 19%. Ouch. Well this happens to the best of us and according to the statistics most of us.

But most of us never look at the interest rate we’re paying, because, quite frankly, we don’t give it a second thought. MasterCard says we owe them 4 this month, so we pay 4. This is simply the worst thing you can do for you financial future.

But it doesn’t have to be that way. Many credit card companies will give you a card, albeit with high interest after a period of time, that for the first 6 months to a year comes with 0% interest on all credit card transfers. What this means is, if you use your new card to pay a big chunk of your old card, you pay no interest on the new card for a set period of time.

Now, of course once that time is up, they’ll put you right back on the expensive interest rate, but for a short time, the money you pay on your credit card is ALL-principal.

Credit card companies don’t like you doing this too much – in fact, they’ll put it on your credit card report if you do it more than a couple of times – but if you’re looking to get out of a short term financial logjam, look for those introductory offers and use a new card to pay off your old card.

Oh, and when you do – shut the old card down!

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There are all kinds of reasons why you might fall behind in your mortgage payment – sickness, job loss, divorce, or a host of unforeseen circumstances that can have you facing foreclosure. You can stop home foreclosure by getting cash for your house.

There are two types of cash you can seek out to stop the foreclosure on your home. The first is in another form of financing that will bring you out of rears and back into good standing so that you are no longer facing foreclosure. The second is to sell your house quickly. A cash sale will pay out your mortgage and bring you out of foreclosure before it can actually happen.

If you aren’t able to make your mortgage payment call your lender immediately, explain the problem. I hope that your lender is wiling to work with you, but that’s not always the case. If you need to stop home foreclosure, you’d better get busy.

Today those facing foreclosure have a lot more options than just a few years ago. Today we have non-traditional loans, longer terms, adjustable rates, and even loans that allow you to finance 100% of the cost. The idea that you are about to lose your home to foreclosure is heart breaking. All that hard work to make it your own home, all that time to fix it up, and now you are faced with foreclosure, but you can stop home foreclosure. So what can you do?

You can get cash for your house if you have built up some equity. There are many lenders that will be happy to lend you the equity that you have built in your home. You can contact local lending institutions or have a look on line. What you are really looking for is mortgage lenders that think outside the box in their methodology for financing.

There are plenty of investors out there who are willing to do high-risk foreclosure financing so make sure you check out all your options. You may be able to pull a secondary mortgage, or you may be able to refinance your entire home and quite possibly come out with lower payments.

With that said you need to be aware of scam artists that are called predatory lenders offering loans that are at an interest rate that is far too high, have exorbitant brokerage fees, or repayment terms which are simply unaffordable. Which means you will land up in foreclosure again in no time at all.

Your second option is to sell for cash and then paying out your mortgage. Selling your house as a pre-foreclosure sends the message that you are serious and that your house is priced right. In fact, there are sites that list nothing but pre-foreclosures and investors that make a habit of stopping by to see what’s for sale on the pre-foreclosure front.

What’s important to remember when you are forced with a foreclosure is that you have options. You can stop home foreclosure by getting cash for your house. Whether you want to find cash and remain in the house or find cash and sell the house is also up to you. If you are facing foreclosure it’s important to take care of your family.

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Introduction:

Loans for unemployed tenants are specially structured for the people who are facing the worst situation of unemployment. One find it really tough if he is going through from unemployment and don’t even have enough cash to pay off their debts. These loans help providing enough cash to the borrower when they got stuck in some kind of financial crisis. Tenants who don’t own their own house and unemployed people can grant easy help to avail the loan amount to meet with the various needs without facing too many troubles and obstacles. You can use the loans for varied number of purposes such as renovation of home, meeting wedding expenses, paying off old debts, pursuing higher education, purchasing a new car and other miscellaneous activities.

Features:

Borrower can source unsecured loans for unemployed tenant in the form of secured as well as unsecured form. The classification of these loans enables you to grant any one of the form as per your need and requirements. Secured loans are long term loans which avail you the large sum of money by staking a valuable asset as a security against the loan amount. On the other hand unsecured loans are short term loans which provide a great help for your short term temporary requirements to fulfill without placing any collateral to the lender. These loans don’t demand credit checks, so all the borrower whether they are possessing bad credit history, good credit history or no credit history can avail the loan amount without any obligations. These loans offers substantial amount of funds to tackle any kind of financial problem effortlessly. You can avail this loan though online facility with ease and swiftness. You just need to fill an online form with requisite details and the lender will assist you for further terms and submit the cash amount in your bank account within 24 hours without nay delay and inconvenience.

Requirements:

Certain requirements are needed to the borrower to fulfill before applying for loans for unemployed tenants:
1. Borrowers should be permanent citizen of UK.
2. He should possess a bank account.
3. He should be having repayment ability.
4. He should be an adult.

www.timesofearth.com WASHINGTON – Barack Obama, the US president, has vowed to tackle the aftermath of the financial crisis in his new budget, which projects a record deficit of .56tn this year. Obama said on Monday that his .8tn budget “reflects the serious challenges facing the country”, including debt and unemployment. “We will continue, for example, to do what it takes to create jobs. That is reflected in my budget. It is essential,” he said. Judd Gregg, the Senate Budget Committee’s top Republican, said the budget, which “claims to be fiscally responsible”, would in reality see “more spending, more borrowing and more taxes”. “After a year in office that has put us on a pace to double the debt by 2013, the president should have a tougher plan to address our fiscal crisis, because this budget will solve nothing,” he said. Obama has blamed his predecessor, George Bush, for the country’s financial mess, and said the rise in national debt was partly due to the 7bn stimulus package pushed through Congress last year to fight the recession. His budget, which remains subject to change by the US Congress, attempts to save money by curbing 120 projects, including a space mission to the moon. The plans see more money invested in education, research and job creation, with 0bn earmarked for measures to help tackle unemployment, which is expected to edge towards 8.2 per cent in 2012 from 10 per cent in 2010. The Obama administration also backed limited steps to lower …
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When you are down under a rock of debts, an ad promising free credit card debt consolidation looks like a silver lining in the dark clouds. However, be aware while jumping into the boat. Most of the time, they turn out to be fraudulent companies, out to rob your last penny.

There is nothing called free lunch, so see how much ‘free’ is your free personal credit card debt consolidation. Most of time, the free part will be a free quote for your credit card debt consolidation. They are also very important, as they will show you the condition of the market. You can compare the offers of the different companies before settling into one.

How You May Be Ripped Off By the Promises of Free Credit Card Debt Consolidation

The way the fraudulent companies operate is very simple. They will give glittering ads, promising you free services credit card debt, and reasons for why you should take them. They will paint doomsday picture of bankruptcy, if you do not take their loan. Then they will ask you not to bother with your bills any more, for they claim that if you pay regularly in their account, they will do all your worrying and paying. The result is that, neither your bills are paid, nor your debt is reduced. On the other hand, they will get even bigger.

So Is There No Real Free Credit Card Debt Consolidation Company?

There are some non profit debt relief, which will help you to get out of your debt. However, they are few and their services are restricted. They will provide counselor, who will show you how to effectively mange your bills and expenditure. They may also negotiate on your behalf to bring down the loan amount or the interest rate.

Then there are Christian credit card debt consolidations, in which, Christian groups help fellow Christians to get out of debts. When a Christian is in debt, he is not only in financial problem, but also in spiritual problem. A free personal credit card debt consolidation from them will not only remove your debt problem to some degree, but will also guide on how to avoid getting into the trap of credit card debt.

When you get free credit card debt consolidation, there are some things that you should keep in mind. Check the interest rate of your new loan and see that it is lower than your previous credit loans. They are generally lower, but in the end cost a bit more because you pay for a longer period. Most of the time, you have to surrender your credit cards when you go for credit card debt consolidation; so learn to live without your credit cards.

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Struggling to cope with debts can be one of the most difficult and personal matters you may ever have to deal with.

It is very easy for people to say you should not over spend and to live to your means but what is easy for some is not always easy for others. Slipping into an ever spiralling debt is not always noticeable or avoided. Basically it can happen to anyone regardless of their income or assets.

In fact it is just as common for a rich person to fall into debt as it is for somebody living from day to day on the breadline. Managing your finances regardless of the budget takes skill, an understanding of basic accounting, prudence and planning to ensure that everything is taken care of and there is a contingency plan for any sudden expenditure.

Together with the above abilities luck plays an important part in finances. Whether it is good luck or bad luck it could and will have a significant impact on managing your finances. You may be in the right place at the right time and get a promotion at work, win the lottery or get left money in someones will. Alternatively you could get made redundant from work, have a fire or flood in your house or have to pay funeral cost for a relative that did not leave you any money!

Some people say you make your own luck and to a certain extent that is right and planning for the unexpected is something we should all do but there will always be an element of risk attached to unforeseen circumstances which will ultimately affect your finances.

Whether it is a question of luck, bad planning or judgement being in debt can lead a person to the brink of despair and in many cases sadly take their own lives.

There are many organisations that will help with your debt problems and not only dealing with the financial aspect of trying to reduce your debt but also help can be sought for counselling any depression that has arisen from the situation.

Unfortunately many people suffering from a debt problem do find it very difficult to accept in the first instance that there even is a problem and have an even harder time discussing it with others.

The citizens advice bureau would be able to give guidance on where to seek help but probably the first person to see if you are suffering the effects of being in debt is your local doctor.

It would probably be a good idea to discuss your finances with a financial advisor to get guidance and advice on how to manage your debts going forward as there is little point in clearing any outstanding debts only to find a few months later they have built up again.

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Until the emergence of debt collection business, debt collection in India, was never treated as a specialized job and was always treated as one of the jobs that legal departments of the banks and financial institutions were required to undertake. A typical legal department of an organization would approach the collection job strictly as a legal issue rather than as a revenue collection measure. Litigation would be the only tool used for recoveries and no other tool was either known or used by the industry. Litigation as a recovery measure always had its own limitations due to long and winding court procedures the Indian legal system is always criticized for. On the other hand, foreign banking firms introduced the concept of specialized debt collection services. Debt collection services became one of the many services that began to be outsourced to specialized agencies. The collection business had a very humble beginning and it barely qualified as a specialized service.

However over a period of time with the emergence of India as a global outsourcing destination the domestic businesses also adopted the outsourcing as an efficient business tool. With the result today, the third-party debt collection industry plays an important role in the Indian economy. The industry employs hundreds of thousands of Indians as collection professionals, who are servicing several industries ranging from banks, to telecom service providers to insurance companies. Typically, only small recoveries arising from periodic billing defaults by the customers are outsourced to the collection agencies. Not only the collection business has become a direct source of employment to thousands but its contribution to the economy is more pronounced because it helps infuse money back in the economy that otherwise would have remained uncollected. The economic benefits of third-party debt collection are significant. Citibank is the pioneer in introducing third party collection techniques in India.

The debt collection industry in India also has grown sharply this year as higher borrowing costs; rising inflation and the general slowdown in the economy force more companies and individuals into difficulties. Underlying debt has gone through the roof and lenders and organizations increasingly want to move any bad debt off their books. Whether it is a high street bank, a credit card lender or a mobile phone company, growing numbers are turning to professional debt collectors in a more difficult environment.

The debt collection industry in India is growing at a faster pace and is surely poised for growth. The credit card outstanding have shot up by a whopping 87% at USD 6114 Million during this year, from USD 2844 Million in the period year ago. The Reserve Bank of India (RBI) which regulates the banking industry in the country encourages banks to shift bad loans off their books more quickly because they will be required to hold more capital against risky assets that may default.

COLLECTION INDUSTRY – UNREGULATED SCENARIO

The collection business has its own inherent shortcomings due to unregulated and primitive nature of this business in this country. The persons employed in the industry are untrained both in soft skills and legal skills. Being unregulated, the procedures are not standardized and there are no industry specific checks and balances. Still litigation is used as the last resort tool for recoveries. However the industry has been accused of manipulating the legal system to their advantage by using courts as their agents of recovery. It is seen that big corporations with large volumes of recoveries have unwritten understanding with the local courts at the lowest level. With the patronage of minuscule minority of pliable judges simple civil defaults are registered as criminal cases thus pressurizing the debtors into paying the dues. Slow and long civil recovery court process has no takers in this age of instant results where revenue targets are the most sacrosanct. Under such strict and cut throat environment, there is pressure on the banks to keep their account books healthy therefore such aggressive and extra-legal methods are employed for quick recoveries.

GOVERNMENT / RBI INTERVENTION

Debt collectors in the past had a lot of leeway and it wasn’t uncommon for collectors to embarrass, harass or humiliate debtors by adopting extra-legal measures. In the absence of any regulatory regime the courts had to step in by laying down guidelines for the industry to follow. After the intervention of judiciary, the RBI woke up to the need of regulating the unruly collection agencies and laid down its own guidelines for the banking industry to follow.

The guidelines prescribed by RBI are enforced against the banks that have contractually employed collection agencies. The banks in turn via their contracts with the collection agencies ensure that the RBI guidelines are followed. Now, under the RBI guidelines it is illegal to threaten violence or cause harm to debtor, use obscene language, or repeatedly use the phone to harass debtors. In addition, collection agents cannot seize or garnish a consumer’s property or wages without recourse to court procedure.

The following are few of the core underpinnings of the collection process. These are the norms formalized by the top bank in India – RBI.

1. DSAs/DMAs/Recovery agents to get minimum 100 hours of training.

2. Recovery agents should call borrowers only from telephone numbers notified to the borrower.

3. Each bank should have a mechanism whereby borrowers’ grievances with regard to the recovery process can be addressed.

4. Banks are advised to ensure that contracts with recovery agents do not 
induce adoption of uncivilized, unlawful and questionable behavior or recovery process.

5. Banks are required to strictly abide by the codes pertaining to collection of dues.

RBI in the draft guidelines issued for banks engaging recovery agents, has asked banks to inform borrowers the details of recovery agents engaged for the purpose while forwarding default cases to the recovery agents.

The Reserve Bank of India has also considered imposing a temporary ban (or even a permanent ban in case of persistent abusive practices) for engaging recovery agents on those banks where penalties have been imposed by a High Court/Supreme Court or against its directors/officers with regard to the abusive practices followed by their recovery agents. An operational circular in this regard has been issued in November 15, 2007.

Other Laws

Still the non banking debts collection business is outside the purview of any regulator. There are no licenses or registrations to be obtained from any regulator to pursue collection business in India. The extant guidelines applicable to banking industry are found inadequate as they address only the problem of debtors’ harassment and the guidelines do not regulate the industry as such. The Government is well aware of the need of having a specialized legal mechanism for recovery of institutional debts which has become a huge problem for the entire banking industry.

Every bank is grappling with the non-paying accounts, known as Non Performing Accounts (NPA) in the Indian banking parlance. The problem has taken enormous proportion and threatened the economy. Creation of Debt Recovery Tribunals in the year 1993 was a step in the direction of facilitating fast recoveries by the banks . The intention behind creation of such Tribunal was to ensure that banking industry was provided with its own recovery mechanism that was part of the legal system but at the same time exclusive to the banking industry. Bank debts above USD 22,727 could be recovered through the Tribunals.

However, over a period of time it was realized that this new mechanism did not yield the desired result since the recoveries were still slow and due to shear volume of work, the Tribunal became like any other court. The whole objective of having a fast track and efficient recovery mechanism was therefore defeated. Bank debts still remained a major problem to be solved since it affected the entire economy of the country. The Government felt the need of having a mechanism that was minimally dependent on the courts for effecting recoveries since the legal system could not be reformed overnight. Therefore instead of reforming the court procedure the government did some clever thinking and came up with a legislation that minimized the intervention of court and empowered the banks with special powers using which the recoveries could be affected.

The government thus came up with a new law Scrutinization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) where under the banks are allowed to liquidate security given by the borrower for recovery of their dues. This law also paved the way for creation of asset reconstruction companies that take over the security interest of the debtors. These agencies are thus another form of debt collection agencies that have been institutionalized.

The need to share credit information among the banking industry was also felt in order for the industry to benefit from each other. Thus Credit Information Companies (Regulation) Act was enacted in the year 2005.

INDIAN LEGAL SYSTEM AND COLLECTION PROCESSES

The Indian legal system is absolutely fair and assures justice to the party involved. There are remedies available under the law to collect the debt, if the debtor does not agree to pay under normal circumstances. The creditor may file a suit for his recovery. Debts based on written contracts could be recovered by following fast track procedure. If the debtor is a company, creditor / his lawyers may apply in the ‘Company Court’ for winding up of the company due to non-payment of substantial