Tuesday, June 17, 2008

Responding to Debt Collection

With the economy in a downturn, cash flow is tight for many businesses. In turn, a company may be slow in paying its bills. Before you get involved in litigation for failing to meet a payment deadline, consider the following tips to avoid a creditor's escalating collection efforts:

• Respond in a timely manner to any demand letters you receive;
• Dispute in writing any debt that you believe is erroneous;
• If you can't pay a bill in full, pay as much as you can;
• Contact the creditor and try to arrange a payment plan that you can afford; and
• Contact counsel as soon as possible if you receive any "final demands", threats of litigation or are sued.

Extended Unemployment Benefits Rejected

Last Wednesday, the US House of Representatives rejected a Democratic attempt to extend unemployment benefits for an additional three months after the White House threatened to veto the bill. The bill would have extended the average $300-a-week unemployment benefit check by 13 weeks for all Americans. Job seekers in high unemployment states like Alaska, California, Michigan and Rhode Island would have been able to get an extra 13 weeks on top of that.

Jobless Claims Rise Again

The US Department of Labor reported last week that new applications for jobless benefits rose to 384,000, an increase of 25,000 from the previous week.
That was a much bigger gain than analysts had been expecting and indicated that the labor market still remains under pressure. Last week, the government reported that the unemployment rate jumped to 5.5 percent, up from 5 percent in April. That was the biggest one-month gain in 22 years.

The latest figures come after the government reported the nation's unemployment rate jumped to 5.5 percent in May - the biggest monthly rise since 1986 - as nervous employers cut 49,000 jobs last month.