Money Tips, what are they good for? People can benefit a lot from the ways to manage their finances. So it is therefore important to keep track of tips that will help one look after his financial health. More often people know of these tips already but reminders will help. Pick ones that pertain to you. We will therefore showcase some at least once a week and more often if possible. If you want more of these, just sign up at the top of the home page and you will receive more every week.
Bank of America Tackles Principal Forgiveness
Can you believe Bank of America is going to forgive or cut the principal by as much as 30% on about 45,000 home loans? Not too long ago, banks attempted to reverse the number of foreclosures but not one of them mentioned cutting the principal. Now since the largest mortgage lender announced its program, other banks may follow.
The government and regulators have been in favor of the reduction of the principal but the banks have been hesitant to do this as they will have to take immediate loss. But now that home values have fallen so much, the banks may be willing to cut the principal especially so, if you do the math, the foreclosure cost is much more than the principal reduction.
10. They Say They Can Negotiate to Make Your Debt Lower (Number 10 Money Tip for 2010)
Be careful with this one as this is entirely different from the consolidation service. When these companies negotiate a lower total amount loan for you, there are some ramifications that you may not be aware of. If you want to get a good credit rating, this will not do it for you. Why? Read on.
These companies may be able to negotiate a lower debt amount for you but the reduction amount will be a taxable income. For example, if you owe $30,000.00 and the company was successful at arranging to lower your debt to $10,000.00, the $20,000.00 they save you will become an income for which you will have to pay a tax on.
In addition, the report will say that it is a paid charge off. What does this mean? It will carry with it an R-9 on the credit report and that, my friends, will lower your credit rating. So you see, this form of settling your debt is not a wise alternative if you want to maintain your credit rating.
9. They Give a Quote of Unusually Low Monthly Payment (Number 9 Money Tip Sign to Avoid for 2010)
Two things to remember here to see why giving you an unusually low monthly payment that will make you suspect this is a dead giveaway are here. Be wary of companies who do these:
Other companies have given you a much higher monthly payment.
Your balance is substantial in the vicinity of $30,000.00.
Be wary also of companies that use serving associates. These advertise on TV, in the internet and on the phone. What they do when they are successful at reeling you in is to sell your data to other companies. This is why we have to be very careful in the choice of companies we deal with.
8. Don't Sign Up With a Company When They Quote Payoff Times of a Certain Number of Years or Months (Number 8 Money Tip Sign to Avoid for 2010)
If the payoff time of a certain number of years or months does not come with the payoff time for each creditor, then something may be amiss. Make sure that you will get the individual quotes of payoff times for each of your creditors.
When you have six creditors with six different interest rates and six different balances, then obviously, the quote that states a certain number of names and months comes from a sales script that a telemarketer is reading to you.
No professional debt management person can give you such a forecast unless backed up by a detailed calculation shown on a spreadsheet or a sheet of paper. This way you can do some checking up to see if their calculation makes sense.
Here's another tip, this time on how to beat foreclosure. Do you know what some people do? They stay in their homes for years by repeatedly filing for bankruptcy. Some say this is an abuse of the system but what can parents do if there are children involved?
Foreclosure Defense Secrets
This Program Is A Necessity For Any Homeowner Facing Foreclosure Or Even Just Behind On Their Mortgage.
7. They Quote Interest Rates Lumped Between 0% and 10% Instead of individually for each Creditor (Number 7 Money Tip Sign to Avoid for 2010 with a Company Who Does This)
They give you an interest quotation of from 0% to 10% instead of individual interest rate for each creditor. When they start negotiation with the different creditors, not all of them will offer the same rate, Just the same, though you will want to know what each creditor will charge you for the interest rate.
They will even offer you an award in the form of some cash. This may only divert you from what you really need to pay attention to. Sometimes the supposed cash back award may cover up the higher interest rate you may have to pay.
6. They Advise You to Include Your IRS Debts (Number 6 Money Tip Sign to Avoid for 2010)
Your debt to the IRS should be handled separately in the consolidation process from all your other accounts. So don't believe any promises that this problem of yours will evaporate into thin air. There is a proper source that can handle this and it is the Internal Revenue Services. So if you hear someone promising you that it can be solved just like that, ask IRS to make sure if it is true.
5. They Advise You To Include Accounts That Are Already Low (Number 5 Money Tip Sign to Avoid for 2010)
Some will have the nerve to advise you to include your student loans in your consolidation. Student loans have already low rates. Why would you have to do this when the student loans already have low interest rates? Duh, that's a no brainer. For student loans that you may need help on, check this out at http://www.debtchallenges.com/collegeloandebt.html
They may also advise to include other accounts that have already low rates so watch out for these. An example of this is your credit union account. This account usually enjoys lower rates so you may just be jumping from lukewarm to hot water.
4. They Require You Call Back to See If You Are Approved (Number 4 Money Tip Sign to Avoid for 2010)
There are no such things as requirements for approval for your debt to be consolidated. The only thing to determine is whether the creditors will offer terms that are better for you and also whether you can pay the amount that is required.
Also, if they do not try to find out if you need to have an account out of the program before you begin with them, then fire them and try another company. Who knows, you may need something to fall back on if things do not go as well as you anticipated.
3. They Require Your Account Numbers (Number 3 Money Tip Sign to Avoid for 2010)
They want you to give them your account numbers before giving you a quote. You should not give them your account numbers as these are not necessary for them to give you a quote. All they need are the creditors’ names, the interest rates and the balances.
They may also offer you a lot of services like credit repair and help with the IRS. Do not fall for these jack of all trades for debt consolidation needs a lot of work and branching out to others could spell trouble. It means the company may have some internal problems.
2. They Require You to Close All Your Accounts (Number 2 Money Tip Sign to Avoid for 2010)
They insist that they keep the first payment as a set-up fee. Thank goodness, there are now changes in policies that make this no longer reasonable. They also may want you to close all your accounts. So please study the contract carefully.
Help! There are Sharks in the Ocean! (Number 1 Money Tip Sign to Avoid for 2010)
Due to so much demand for help on debt management, unscrupulous companies have sprouted all over the world. Those who have asked for debt help are exploited by some companies to the point their credit is damaged more than it really is. To be careful is the order of the day. Here are some signs of companies you should avoid:
1. They do not offer a guarantee. There are trustworthy companies that offer a guarantee. Some unscrupulous ones require you to pay them by cashier checks or money order or they may get you to let them debit your account right away. Be very careful with these companies as you should not be required to pay until you are already in the program. How to Reduce Fees You Pay to the Bank Tip#2
Here's another way to reduce the bank fees:
Account Maintenance Fees - For just keeping your checking and savings account open, the bank could charge you for as much as $12.00 a month. What to do? Call the bank if you see some strange charges that you did not make and were not there last month. Know the terms of your account and try to find the bank that is right for you.
Today is the last day to sign up at the top of the page for alerts and tips on how to reduce the bank fees to receive them all at once. Otherwise you will get them one week or so at a time.
There are small banking fees that could cost you quite a bit if you are not careful. In the following weeks, we will let you know how to avoid some of them. You probably were not even aware of them.
Transfer Fees - Do you have linked accounts? When you move money around between linked accounts, some banks now charge $3 or $5 for each transfer that you make online. Try to make only one transfer a month or redirect a direct deposit.
Debt Collection Rules
Here are the rules for debt collectors according to the Fair Collection Practices Act:
Collectors can only call 8am to 9 p.m., in your time zone.
They cannot harass by calling repeatedly.
Collectors cannot use obscene, profane or abusive language.
They cannot threaten violence for failure to pay.
Collectors cannot call you at work if they know your employer does not allow it.
You have a right to dispute the debt within 30 days of written notification.
Should You Walk Away From Your Home?
Let us take an example of the couple who bought their house in the middle of 2006 for $240,000.00. They put a 5% down payment and obtained a 30-year fixed mortgage at 6 3/4%. They pay annual taxes of $3500 and $2500 for insuring the property.
The market went south and their home is now worth $137,500. Altogether they have made 41 monthly payments of $1976.00 and still owe $219,000 in principal. If they walk away, they could rent a similar home for $1100, thus saving $80,000 if they stayed in their home for eight years. They will make more money if they put the savings in an investment account.
Here's the problem. In Florida, there is a law that allows the lenders five years to pursue a deficiency judgment and they could be forced to pay the difference between the loan and the foreclosure price. This has not been common these days though because of the rampant foreclosures. But their credit rating could get hit as well.
If the couple decides to stay, it will take them 15 years to get back their equity at 4% appreciation. In addition they will lose $630 a month or $113,400 over 15 years which is the difference between the monthly mortgage and rental payments. Rents could rise but then they won't have to spend thousands for maintenance of the home.
So should they walk out of their home? Is saving $100,000 worth the risk on their credit score and the chance they would have to face the deficiency judgment? You be the judge of this and let us know via the contact form what you think of this.
Find Help With College Cost
Parents should make use of every chance to help with the college cost. Cost for college including books, tuition and fees go up every year. It makes sense to try to secure every help so that whatever money saved can be used to start up a business to go from debt into wealth.
I am writing an ebook with links like this example: Those who qualify may be able to get grants for as much as $4000 every year to pay the bills. Find out if you qualify at http://www.ed.gov/about/offices/list/ocfo/grants/grants.html So sign up at the top of the page so you can get these tips in full rather than by bits and pieces.
Don't Close Debt and Credit Cards with Good History
Since when have debt and credit cards been with good history? They are with good standing history if payments have been made on time, the credit history has been long and the ratio between the credit limit and the balance is low. Now why are you not supposed to close these good guys?
Because closing them will impact your credit history. Your credit score could go down and you know what that means. Your interest rate will go up and when time comes you will need to borrow some money, it will cost you more. Remember before we can invest to be wealthy, we have to pay off the debt.
Parents Can Find Some Debt Relief With $2,500 Tuition Credit
Parents who pay for their children's college tuition fee can find a maximum of $2500 through a tuition tax credit. This is part of President Obama's stimulus bill which is called higher-education tax credit. There is no additional paper work required. The only thing is that the students have to file their income tax return on time. See this resource for more information: http://www.irs.gov/newsroom/article/0,,id=205674,00.html
Perhaps when we get help we will get debt-free sooner and be ready to start a home based business.
Deferment, Forbearance or Default?
When you find yourself with a $120,000 college degree, with no job and the six-month grace period is over, what do you do? There are options like deferment and forbearance. Check it out here http://studentaid.ed.gov/PORTALSWebApp/students/english/difficulty.jsp
on what to do. How about default on the loan? Don't even think of this for although the deferment and forbearance have some repercussions, nothing as damaging as paying late and defaulting on the loan.
Congressional Proposals That Could Lighten the Financial Burden
It is a great thing that finally there are congressional proposals that will help those who have a pre-existing condition. These proposals will take away the ability of the insurance company to deny coverage to those who have a pre-existing condition or drop them for a medical history that has not been disclosed. There may also be a cap on the maximum cost that a patient or a family will incur. This will lighten the financial burden.
Here are the lessons someone emailed me about what he learned:
Don't sign up for credit cards just because of the gimmicks, like a free t-shirt or trip.
Charge only what I can pay off in full when the statement arrives.
Purchasing things just to impress someone is a big no-no.
Debt will keep growing unless you do something about it.
The only way to be free is to be out of debt.
Having Problems Getting on to the Next Stage of Your Life?
Find out what is it you want in your life, visualize it and say "yes" to whatever it takes to get there. Find what action steps you need to do to take you there. If it is getting out of debt that you want to happen, then do it. There are a lot of resources available. Find out the steps to getting out of debt and do them. If you find they are difficult to follow, get help. Your body knows when life gets too difficult to handle. Listen to it and keep looking for help until you find the one that suits you.
Even Those Insured Can Go in Debt With Serious Illness
It's unbelievable but true that having a health insurance will not make one not go into debt. Why? Because there is a difference between the actual cost of treatment and what insurance covers. That is why those with medical problems that are life threatening and chronic go into hole so deep it is impossible to escape.
Thank goodness there are now measures in the legislature dealing with this problem like:
Insurers will be required to offer benefits that meet quality standards with less coverage gaps.
There will be caps on out-of-pocket costs for patients.
Insurers will be stopped from refusing coverage of pre-existing condition.
I will be so glad when a legislation like that passes for then there will be less chance of us going into medical debt. Then we can concentrate on getting wealthy through investments or a home based business.
So try to sign up for more alert and tips so you can get them every week as those which I send to my subscribers may not land in this web page. Sign up below:
Debt Consolidation or Debt Settlement?
We have to continue to face the music no matter how unpleasant it is because to get into wealth, we will have to get out of debt first if we want to do some investment or go into business. So when you feel a headache coming and you feel lethargic and agitated thinking of how to get out of debt, don't forget to do the good stuff.
Don't forget to eat healthy, exercise and have some social activities with friends. When you are exhausted though and feeling tired, get rested before going on the next flurry of activities. You will then be better prepared to deal with the debt.
When asked if it is good to use a debt settlement company to settle the debt for a lower amount, an expert said it is better to do the debt consolidation route as it will make things more manageable with one monthly payment. As soon as this is paid, one can work on building one's credit.
The debt settlement damages the credit history of the debtor. Not only that, you will have to pay federal taxes on the amount that has been reduced. Just remember that this will not take a day or two to solve the problem. It will take sometime until you finish paying it off. With discipline and determination, you will get there.
Say "Yes" to the Action Steps
Having trouble getting on to the next stage of your life? Visualize what is it you want in your life and say "yes" to the action steps that will take you there. Is it getting out of debt that you want to happen? Then find out how to do it and take the steps. If you find it too hard, get help. Our body knows when life gets too hard to handle but there is always help around. Keep looking for help until you find the right fit
What is holding you back?
Could it be your beliefs, past actions and debts that are accumulating faster than I can say debt collector? Are you stuck and can't go forward to have a home-based business because of overspending?
Find out what is triggering the over spending. Is it your job that pays high but makes you overspend? Or is there a deep-seated psychological reason behind it all? Whatever it is, face it and determine what you have to do and then do it.
Can Debt Make You Sick?
According to a poll, eight out of ten Americans have been hit by the economic crisis. In this case, the credit score can go down and with it the health as well. It's no wonder for financial health offers security and with that threatened, so is the ability to face other issues. This can make anyone feel physically sick. Fortunately, there are possible solutions.
So how can you keep your health during this tough economic scenario? Well, just thinking about it will just make it worse. Let’s follow the “mind over matter” thinking so we will not let the debt take over our life. There are some strategies we can follow and I will give you the first one today and the others hopefully next week. Ready?
Look back to see what happened. How did we end up in this situation? Could we have done something to avoid this? What is the cause of this? Do we have some behaviors that we need to change so we can avoid similar things from happening again? Stepping back this way will empower us to face the challenges. Next week, I will let you know the other two strategies. Knowing the cause will lead us to get help from reliable people.
Here Are Two Questions about Debt Collectors
How can I stop a debt collector from contacting me?
You can tell the debt collector to stop contacting you by writing him a letter.
Can a debt collector contact you any place or time?
A debt collector cannot contact you any time or place that is inconvenient to you. He cannot call you before 8:00 am in the morning or in the evening after 9:00 pm.
Do you want to know what happened to the debt collector company that filed collection suits against debtors for debts that were beyond the statute of limitation and so have expired? Well, the consumers filed a class action suit against this company and now the plaintiffs' lawyers have announced that the company has made a settlement for $150,000. Yay, one point for the good guys! Now do you want to know if your debts have expired? Just sign up down below and you will receive more tips every week and two or three of those weeks will be on statute of limitation.
Sometimes I can't wait to tell you something important. For example I have been sending tips on the statute of limitation of debts. Did you know that once your debt has expired, you are not obligated to pay for it? Sure enough, a firm was fined for trying to collect a debt that has expired and even sued people for not paying up. So these people got themselves a class action suit and won!