You are here: Home / Archives for Debt

What Bills Should Be Paid During Tough Times

December 17, 2010 By
PB Visa Gold Credit Card
Image by liewcf via Flickr

During tough times, many folks have to make hard decisions regarding payments that are to be made. Some people find it difficult to stop paying on any bills, and are therefore highly stressed to do the lack of funds to pay everything on time. Here are the things that you should consider when looking at what you should, or should not pay, when times are tight.
For one, ask yourself, “If I stop paying this bill, will my home, car, children, job be affected?” If the answer is “yes” to any of those, then you should consider paying that bill. For instance, if you do not pay your mortgage, you could find yourself in foreclosure. This would affect your children, and your home. However, if you do not pay a credit card bill, will that affect your home, children, or job? If the answer is “no,” then you should take a hard look at calling your credit company or companies and negotiate a payment plan. Discontinue using the cards in question, and begin eliminating that debt either through negotiation, or through default. This is by no means a way of escaping the debt, but rather a hard look of what to stop paying if it is a matter of feeding your family, or paying your bills.
The next item to take a look at is if there are any kind of legal fees, medical bills, or old unpaid utility bills. First, try to call the creditors and work out a reasonable plan to try and pay off of the debt. If that does not work, you may be forced to let the debt fall into default. If it is becoming overwhelming, bankruptcy is always an option. Depending on the type of bankruptcy you declare, you will still be able to keep your home, and cars. You should look at this as your last resort.

Filed Under: Management Tagged With: , , ,

Collection Agent Tactics

December 14, 2010 By

Collection companies have used tried and true tactics in order to get their money. Many of them try to bully, and instill fear, while others try to be understanding. Whatever the strategy, just know that it is all a means to obtain what you owe. There are ways to work around the tactics that collection company’s use, and it could save you hundreds, if not thousands of dollars. First, let us understand the operation behind collections companies, and how they really work.
When you owe a company money, and it goes unpaid for a significant amount of time, usually 90 to 120 days, they sell the account to a collection agency for pennies on the dollar. The company looks at the payment as a chance to have regained some of the costs, on an account that has proven that payment is not guaranteed. The collection agency then attempts to collect the full amount of the debt in order to make profit. For example, if you owe $120, the collection agency will buy the account for $80. They will go after you for the full $120, and then negotiate down. When you settle for $100, you feel satisfied, and they still made a profit. Keep that in mind when you are being called upon by debtors for payment.
When you contact a bill collector for payment arrangements, always ask about a settlement amount, or a low payment plan. Sometimes, creditors will allow you to make hardship payments, that are very little, and the interest will discontinue accruing because on the books, you are paying your debt. This is one way to get the phone calls to stop. The other strategy that works is sympathy. If you contact the creditor and let them know that you really want to pay the debt, but you have very little, they will understand and take as little as $15-$20 a month.

Filed Under: Tips & Tricks Tagged With: , ,

Dealing With Debt Collectors

December 7, 2010 By

In dealing with debt collectors, there is always something you should remember; in tough times these companies are saturated with past due accounts. Many of the account holders will file for bankruptcy, while others may simply never pay on the account, and hope that the debt ages out to the point that it simply goes away. Knowing that piece of insider information should help you when you are dealing with collection companies and debt collectors. Gone are the days of the belligerent collection calls, because these companies know that by harassing you, they stand a risk at never seeing a dime of the bill. So they have shifted to a new strategy, niceness. They seem all too understanding and eager to help. This is a great benefit to individual that has the account, as this opens a door for negotiating.
The first step when speaking with a debt collector is to tell them that you want to pay, but that you have limited funds. This is where they begin to throw out offers of settlement, and very affordable payment plans. The trick is to find a way to cut down on the amount that you owe, pay over time, and ask for a removal off of your credit report, if it is appearing. Many times, companies will remove the debt completely if you pay the whole bill, but this does not have to be done in one payment.
For the most part, when dealing with debt collectors, remember the state of the national economy. These companies have been just as affected by the poor income as any other organization, and that is your key to capitalize on. You will find that you are able to pay off your debt for much less than originally owed, because debt collectors are realizing that collecting a percentage of the balance, is more than collecting nothing on the balance.

Filed Under: Company Culture Tagged With: , , ,

Budgeting That Makes Sense

December 4, 2010 By

Putting together a budget does not need to be a scary endeavor. In fact, it can be one that is liberating, eye opening, and potentially encouraging. The best advice for setting a budget is to take a hard look at your bills. Get everything out. Bills that that you will need available for this exercise include utility bills, credit card bills, car payments, etc. If you are paying on something monthly, make sure you bring it with you, and you can have an accurate accounting. The basic formula for creating a new budget is that a certain percentage of money is designated for particular payments.
For instance, the mortgage should never be more than 40% of your total gross income. However, if your mortgage is in the range of 35% of your net income, you will find that the purse strings loosen a significant amount. This could be a higher percentage, though, if you have a consolidation, and you other overall debt is lower. If you have a higher percentage going towards your mortgage, but you have no credit card debt, it is a wash, and you should be fine based on the income you are earning.
Utilities and food are usually items that are grouped together and do not play a big role in your finances because they are assumed to always be present. Things that can be eliminated through your budget focus are credit card debt, car payments, student loans, etc. You will need to have a purpose, or a goal for your budget. Whether it is for a higher savings account, pay down debt, or a college fund, having a goal will make it easier to plan a budget. Many people find that once they plan a budget, it is very rewarding to actually stick to it, and make it work. Just be patient with yourself, and know that in the beginning it is a tough transition, but very rewarding.

Filed Under: Tips & Tricks Tagged With: , , ,
Newer Posts »