Wise Bread (Jessica Harp)

How to Deal with Collection Agencies

Jessica Harp — Thu, 30 Aug 2007 00:47:35 +0000

As anyone who has been through collections will tell you, the collection agencies tend to lie and to cheat in order to manipulate the collections process to their advantage. So how do you regain your power as a consumer from the collection agencies? By following these 9 suggestions, you can stop screening your phone calls and turn the collections process to your advantage.

1.) Know Your Rights

A common complaint is that collection agencies do not play by the rules. They make harassing telephone calls and threaten to kill your dog. Why are they allowed to do this? Because we let them! Most consumers do not know their rights, so we leave it to the collection industry to police itself.

So what is the best way to make that collections agent behave and stop threatening to kill your dog? Know your rights! Read, learn, and memorize the Fair Debt Collection Practices Act. (If you don’t want to read through the legalese, our very own Linsey Knerl wrote a spot-on article highlighting the finer points of the FDCPA.)

Nothing strikes more fear into the heart of a collection agent than a consumer saying, “According to the Fair Debt Collection Practices Act, you are not allowed to call me more than 1 time per day and no more than 3 times per week. If you call again, I will report you to the FTC and the Attorney General’s Office.” The very fact that you are demonstrating knowledge of your rights will make them behave quicker than a stern look from their mother.

2.) Know Your Debt
Every consumer is entitled to a free annual credit report from each of the 3 credit reporting agencies. By requesting your credit report, you will have a fairly good idea of how much you owe and to whom.

One lesser-known fact about your credit report is that items generally disappear from your report after 7 years from the date of last activity. If you have an item that is getting ready to fall off your credit report, do not take any action on that account! You will restart the entire 7-year time limit. If a collection agent calls you about a bill from 6.5 years ago, do not confirm this debt. Confirming a debt will restart the 7-year limit. Ask them to send you any paperwork that they have on this bill. Procrastinate taking action on this bill for another 6 months, and the debt will fall off your credit report. In most states, you are not under any legal obligation to pay a debt that has not had any action for more than 7 years.

This advice does not apply if you are planning to purchase a home. Mortgage lenders will see all of your debt – no matter how old it is. If you want to buy a house, you will need to pay down most of your debt.

3.) Keep a Written Record of Every Call.
When a creditor or collection agent calls you, ask the caller for their full name, the name of their company, and their employee identification number. Every employee will have some type of identification number, so do not let them tell you otherwise. Gathering this information, along with the date, time, and reason for the call, will assist you in filing any necessary complaints with the FTC and AG’s office.

If you are being hounded or harassed by creditors and/or collection agents, consider buying a recorder for your phone. A recorder will further assist you in filing any complaints against a specific person or company. Just remember to tell the caller that the call is being recorded.

In my experience, collectors will behave if you start the phone call by politely asking for their employee identification information and telling them that the call is being recorded. Once again, these actions tell the agent that they are dealing with an informed consumer who will not hesitate to report them to the FTC or AG’s office.

4.) Attitude is key.
When a collection agency calls you, they are expecting to reach a very rude and aggressive consumer. Imagine what a loop you will throw them for if you are calm, polite, and cooperative!

As difficult as it may sound, maintaining your composure allows you to have the upper hand when dealing with collection agents. As I stated earlier, the collections process is a game. The more composure you have, the more power you earn. This will translate into being able to set your own terms with the collection agent.

5.) Keep Your Creditors Informed.
The moment you know you will not be able to make a scheduled payment, call your creditor or collection agency. Usually, they will workout another payment option for you, or they might waive your scheduled payment. Creditors and collection agencies are less likely to work with you if they have to hunt you down. So, take the initiative to call them. Explain your situation and ask how they can help you.

Additionally, if you move, it is your responsibility to inform your creditors or collectors of your new address. If a creditor or collector cannot find you but can show they made a good faith effort to contact you, they can pursue legal proceedings without your direct knowledge. The next time you go to apply for a job or for credit, you might be surprised to learn that your wages are being garnished or that you have legal action listed on your credit report.

6.) Get Everything in WRITING!
Let’s say your great attitude and cooperation has gotten the collection agency to agree to accept your suggested monthly payments. Do not send any money until you have this agreement in writing! Collection agencies are infamous for reneging on verbal “agreements”.

If you pay a debt in full or workout a settlement offer with the creditor or collection agency, make sure to get these actions documented in writing.

7.) Stick to Your Guns.
Never agree to a payment plan you know you cannot afford. If you know that you can afford to send the creditor $10 per month, tell them that. They will try to pressure you into paying more than you can afford. They will tell you to borrow from grandma, your church, or your kid’s piggy bank. Do not allow them to tell you how much you can afford!

8.) Never Refuse to Pay.
In the course of politely explaining to your creditors that you cannot afford their suggested payment of $250 per month, they will ask, “So, are you refusing to pay your bill?” No matter how angry you are, do not fall for this trap. They are trying to provoke you and have you on record as saying that you will not pay your bills. This will be used against you in court. Instead, calmly say, “I did not say that. I said I can only pay $X per month.” If you continue to restate that you can only pay a certain amount per month, the collector will usually get so angry that they will hang-up on you, or they will accept your offer.

9.) Never give a collection agency access to your bank account.
Creditors and collection agencies have been known to take more than the authorized amount out of people’s bank accounts. By providing them with your bank account information or by paying with a personal check, you are enabling this practice. Send payments by money order or Western Union. Not only will you protect your bank account information, but you will have another record of payment for your files.

Permalink | 38 comments | Jessica Harp's blog | Channel: Consumer Affairs

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How to Erase Your Medical Debt

Jessica Harp — Wed, 15 Aug 2007 19:55:55 +0000

By Jessica Harp

As most of you know, the cost of healthcare in the United States is outrageous! (Sicko, anyone?) For those lucky enough to have good medical insurance, an illness or an injury does not become a financial burden. However, for those without insurance or with sub par insurance plans, a seemingly small injury can quickly turn in to an emotional and financial ordeal. Interestingly enough, one of the best-kept secrets in the healthcare industry is that there are financial and charitable aid programs available to alleviate the financial burden caused by medical expenses.

Almost every hospital has a charitable or financial aid department associated with the billing and collections office. With out getting into the particulars, the financial aid department has a “magic wand” that can erase some, if not all, of your medical bills.

Who qualifies for medical financial aid?
To qualify for 100% elimination of your medical bills, most hospitals require that your annual income does not exceed 200% of the federal poverty level. If your income exceeds set limits, you can usually qualify for reduced financial aid.

Additionally, if you earn an income well over the federal poverty level, but a medical disaster creates bills that exceed a certain percentage of your income, then the financial aid department will usually offer aid to cover some of your bills. Most hospitals set a limit of medical debt-to-income ratio of 30%. If your medical bills exceed your income by 30%, most financial aid departments will pay for the portion of your bills over 30%.

The catch with receiving aid from a hospital’s financial aid department is that you have to exhaust all other available resources. First, you must utilize your insurance, if you have any. Second, you must apply for and use any other public medical benefits. If you still have medical bills after exhausting other resources, then the hospital’s financial aid department will consider your application.

How to you apply for medical financial aid?
The easiest way to find out if your hospital has a financial aid department is to ask. Call or stop by the billing office to inquire about financial aid for your medical bill.

You will usually be required to submit proofs of income for the 12 months preceding your medical care. This is how they will calculate your “annual” income.

You will also be required to list you assets. The financial aid department will want to know whether you have money in savings, checking, a certificate of deposit (CD), Individual Retirement Accounts (IRAs), trust funds, or equity in real estate that is not your primary residence. Most hospitals will require a statement from your financial institution detailing your assets.

If you do not have a job or assets, you will need to sign an affidavit indicating this.

When should I apply for aid?
As soon as possible! Most hospitals have a relatively short time limit (6 – 12 months) for applying for aid.

This sounds difficult and like a lot of paperwork.
It may take some time to fill out the paperwork and gather all of your supporting documentation, but a few hours of work could erase thousands of dollars of medical debt. Plus, you never know until you try.

I recently had a client who had $75,000+ of medical debt. (Yes, she gave me her permission to write about her.) This client went to the hospital’s financial aid department on Monday, gathered her supporting paperwork and documentation on Tuesday, submitted her forms on Wednesday, and had her medical debt erased by the following Tuesday. With 5 total hours of work, she was able to have $75,000+ in medical debt erased. Not only was a financial burden lifted off her shoulders, but an emotional burden was lifted too.

Permalink | 33 comments | Jessica Harp's blog | Channel: Consumer Affairs

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Are You Ready for Home Ownership?

Jessica Harp — Fri, 20 Jul 2007 06:11:21 +0000

By Jessica Harp

My husband and I just moved to the Great Northwest, and we batted around the idea of purchasing our first home. We are both college graduates, have great jobs, and we’re ready to live the American Dream! Not only are we ready to live “The Dream”, but the financial aspects of home ownership are certainly appealing. I mean, who likes throwing their money down the toilet every month in rent checks? I sure don’t! So, why would we choose to rent rather than to purchase a home?

Everyone will tell you that the first step to purchasing a house is to analyze your budget. Can you afford the monthly mortgage payment? What about taxes, insurance, and maintenance? Would you be able to handle a financial emergency, such as your heater dying (and needing to be replaced immediately!) in the dead of winter? Most professionals will tell you that if you answered yes to all of those questions then you’re on your way to becoming a homeowner.

My husband and I answered a resounding “YES!” to all of those questions, but we have decided to rent an apartment rather than to purchase a house. Why? Because we are not ready to be homeowners. Although we want to live the American Dream with a house and white-picket fence, we are not ready for the responsibility of owning a home. Sure, we can afford the mortgage payments, but neither one of us wants to make those payments. We have other financial goals that we want to meet before we take on the burden of a house payment and house maintenance. Additionally, neither one of us likes house or yard work! So, after much deliberation, we decided that we prefer the relatively worry free life-style that renting affords us.

Although homeownership is a hallmark of the American Dream, the first step to purchasing a house should be to ask yourself if you’re ready for the responsibility of that Dream. Are you ready for the financial commitment? Are you ready for the preventive and emergency maintenance? Are you ready for the taxes? If you answered “YES!” then you are able to move to the second step of figuring out if you can afford the Dream.

Permalink | 9 comments | Jessica Harp's blog | Channel: Real Estate and Housing

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How to Survive a Road Trip

Jessica Harp — Tue, 03 Jul 2007 23:33:51 +0000

By Jessica Harp

It’s that time of year again. The time of year when you pack-up the car and depart on a summer road trip. Unfortunately, it is also the time of year when relationships are tested. As we all know, road trips always begin on a high note, but by the end even Mother Teresa would be willing to shove her grandmother out of the car. So, how do you not end-up single or friendless at the end of a road trip? Here are a few tips:

1.) Do maintenance on your car before you leave. Get your oil changed, fluids topped off, and tires inflated. Half way through the road trip is not the time to remember that you need an oil change or to realize that you have no windshield wiper fluid to clean the bug guts off the windshield.

2.) Do not be radio nazi. I can guarantee you that not everybody in the car shares your love of polka music. Decide ahead of time who will control the radio. Will the driver have control of the radio? Will you split radio time 50/50?

3.) Negotiate pit stops. If you decide ahead of time that unplanned pit stops are authorized, remember that your stop at the “World’s Largest Prairie Dog” might mean your carmate gets equal time at the “World’s Largest Golf Ball”.

4.) Discuss driving time. Some people are content to drive the entire trip. Other people can only drive for a few hours at a time. Decide ahead of time if and when you will change drivers. Keep in mind whose car you are driving and each person’s level of comfort regarding different driving conditions. If you are hesitant about your carmate driving you car, then you should expect to do most of the driving. Likewise, if your carmate hates driving at night, then you should expect to do most of the driving if you are traveling after dark.

5.) Splurge on a GPS. No matter how great you think your navigation skills are, there is nothing that can bring a road trip to a screeching halt quicker than being lost. Even worse, the biggest arguments during a road trip tend to relate to directions and someone’s inability to read a map. Splurge on the GPS and you will not have to worry about being lost. If for some odd reason the GPS gets you lost, you and your carmate can bond while mutually hating the GPS – instead of each other.

6.) Add an extra 20-30% to your budget. Nobody ever stays on budget during a road trip. Fluctuating gas prices, last minute side trips, and outrageously priced t-shirts to commemorate your journey always put you over budget. Emergencies can also put you further beyond your initial budget.

7.) Don’t plan on eating fast-food the entire time. First, it is nice to get out of that 4’ x 4’ box every now and then. Second, just because you are on vacation does not mean that the basic rules of metabolism and caloric intake do not apply. You cannot eat 4,000 calories per day and not gain weight. Well, unless you have the metabolism of a teenage boy…

8.) Do not have overly high expectations. If you have been planning a trip to the Great Salt Lake for the past year, you might be crushed to realize that it is well below its normal water level, it smells like dead fish, and it is infested with red gnat-like creatures that love to swarm you. At the risk of sounding pessimistic, the higher your expectations the more likely you are to be disappointed.

9.) Remember, road trips never go as planned. Do not be idealistic while planning your road trip. There will be traffic, road work, and unplanned pit stops. Your hotel reservations might be canceled, and Yosemite might be closed. There might even be a flat tire or two. Stay flexible and your road trip will be a much better experience.

Finally, remember that everyone will be irritable after a few days in a 4’ x 4’ box on wheels. But yelling will not get you there any sooner or get you “un-lost”. Also, do not say whatever comes to mind in the heat of the moment. Your carmate’s plan might be the “stupidest idea” you’ve ever heard, but don’t say it in the heat of the moment. If you must say it, say it later. At the end of the trip. Over drinks.

Permalink | 8 comments | Jessica Harp's blog | Channel: Life Hacks

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Cow Appreciation Day!

Jessica Harp — Mon, 25 Jun 2007 16:40:46 +0000

By Jessica Harp

Are you just itching to pull out that cow costume? Or have you ever wanted to dress like a cow and get rewarded for it? Then, Friday, July 13th might just be your day!

Chick-Fil-A’s second annual Cow Appreciation Day will take place next month. This could mean a free meal for you!

From Chick-Fil-A’s website:

Q: What is Cow Appreciation Day?
A: For one day only, black and white spots, cow bells and furry ears will be appropriate attire in the nation’s second largest chicken chain. In celebration of July 13, Cow Appreciation Day, an unofficial – yet nationally recognized holiday, Chick-fil- A will award a free combo meal (breakfast, lunch or dinner) to any customer who comes to one of the chain’s 1,200-plus restaurants fully dressed as a cow.

Q: What does “fully dressed as a cow” really mean?
A: “Fully dressed like a cow” means effort to be dressed like a cow from head to toe. “Partial cow attire” means just a cow accessory, such as a cow-printed hat, vest or purse.

Mark your calendars! On Friday, July 13th, Chick-Fil-A is the place to be!

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AT&T Offers $10 DSL Plans

Jessica Harp — Tue, 19 Jun 2007 06:30:44 +0000

By Jessica Harp

Thanks to AT&T’s acquisition of Bell South Corp, customers in 22 states are being offered DSL packages for $10 per month.

The catch is that AT&T has yet to advertise this package, and information regarding the package is buried in AT&T’s website. But, never fear! Your fearless Wisebread blogger has dug up all the pertinent information on this offer!

In order to qualify for the promotion, you must live within one of the 22 states AT&T has designated for this promotion. The promotion requires a 12 month commitment. You also have to be a new AT&T internet customer with or willing to switch to AT&T phone service.

To find out if you qualify for the promotion, click here. If you do qualify, the service should show up on the list of internet packages like in this screenshot.

Permalink | 12 comments | Jessica Harp's blog | Channel: Deals and Coupons

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The Bank of Gasoline

Jessica Harp — Mon, 18 Jun 2007 18:33:52 +0000

By Jessica Harp

Fuel prices may be going down, but for some motorists fuel prices never went up. Over 8,000 motorists in the St. Cloud, MN area are paying an average of $.50 to $1.50 less per gallon than the current market price for their gas. How did they lock-in these low rates? They went to the Bank of Gasoline.

Since the mid-1980s, First Fuel Bank customers in the St. Cloud, MN area have been able prepay for their gasoline and lock in the price of their gas – no matter what gasoline prices do in the future. Customers can purchase as much gas as they like, whenever the price seems right. When gasoline prices rise above the price of their prepaid gas, First Fuel Banks customers can tap their gasoline accounts to fill-up their tanks. Conversely, when prices dip under the price of their prepaid gas, customers are free to purchase gas at another fueling station.

Although First Fuel Banks is only located in the St. Cloud, MN area, there are rumors of expansion to 11 other northeastern states.

Another company joining the prepaid gas bandwagon is the Fuel Bank. The Fuel Bank, based in Ft. Meyers, FL, is still laying the groundwork for a nation-wide prepaid gasoline network, but once established it promises customers the ability to pick-up their prepaid gas at any station in the nationwide network.

Although being able to lock in low gasoline prices sounds great, there are a few drawbacks.

The primary drawback to prepaying for your gasoline is that payment for these fixed prices is by credit card. If you don’t have the money to pay off the purchase in full when the bill comes, then the interest on the credit card will make the gas much more expensive due to interest charges. Depending on the price of your prepaid gas, you may not realize any actual savings.

Secondary drawbacks include the unavailability of stations at which to redeem your gasoline and the opportunity cost of prepaying for your gas. Depending on the price you lock-in versus the market price of gas, you might be better off letting your money sit in a high-yield savings account.

Nevertheless, if you live in an area near one of the Banks of Gasoline and have the savings to prepay for your gasoline, you’ll be laughing all the way to the bank...

Permalink | 1 comment | Jessica Harp's blog | Channel: Cars and Transportation

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The Big Kahuna of Coupon Books

Jessica Harp — Mon, 11 Jun 2007 21:41:07 +0000

By Jessica Harp

Have you ever said no to saving money? Probably not since you’re a Wisebread reader! Being able to find the best deals seems to be a hallmark of the American population. Whether it’s saving money on clothing, travel, food, or electronics, Americans are always looking for ways to maximize their consumption. And that’s where Entertainment Books come in...

What is an Entertainment Book?
It's a book chockfull of coupons to local restaurants, stores, and attractions. According to their website, each book has over $15,000 worth of coupons specific to the area of your choice.

What Kind of Coupons are in the Entertainment Book?
Most of the coupons for restaurants and stores are for national brands located in your area, but there is always a delicious assortment of truly local restaurants and stores.

In the restaurant section, you can find coupons for fine dining, casual dining, and fast-food restaurants. Coupons for oil changes, dry cleaning, movies, groceries, and retail are just a few of the discounts that can be found in shopping section of the Entertainment Book.

Entertainment Books also offer a section of coupons for use at national hotel chains, car rental companies, and airlines.

Do the Coupons Expire?
Yes, the book is produced annually, so the coupons in each annual edition are good for the stated calendar year.

How much are Entertainment books?
Entertainment Books retail for $25 - $45 depending on which local book you buy.

However, they are having a huge sale right now! All 2007 books have been discounted to $9.99! One nice dinner or visit to a museum and you’ve paid for the book! If you plan on purchasing the 2008 edition, you can receive a free copy of the 2007 Entertainment Book.

What if I don’t Want or Use All of the Coupons?
Chances are that you will not be interested in every coupon in the Entertainment Book. But, if you have friends who also have Entertainment Book, this is when you engage in a little schoolyard haggling. “I’ll trade you a ‘Buy one, get one admission free at the Children’s Museum’ for a ‘Buy one, get one entrée free at Olive Garden’.”

Can I Purchase an Entertainment Book for More than One Location?
Yes! Whenever I travel, I always purchase an Entertainment Book before I leave. On my last trip to New Mexico, I saved $100 on airfare, $75 on the hotel, and $40 on the rental car. I also saved a total of $83 on local restaurants, attractions, and souvenirs. I paid $42 for the book, but I saved almost $300!

Permalink | 3 comments | Jessica Harp's blog | Channel: Deals and Coupons

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Fine Dining on a Take-Out Budget

Jessica Harp — Fri, 08 Jun 2007 16:13:12 +0000

By Jessica Harp

Are you looking for a first-rate meal on a take-out budget? Head over to your local culinary school for a great meal at a low price.

Nearly all culinary schools have student-run restaurants, which are opened to the public practically every day school is in session. Since the chefs are at the cutting edge of culinary science, the restaurants offer an innovative assortment of gourmet food at student friendly prices. In layman’s terms, these restaurants offer terrific food at dirt cheap prices. Lunch at your local culinary school will set you back $6 or $7, and a three-course lunch at a nationally recognized school will cost $15-$20.

Culinary schools, however, aren’t the only places to score a great meal with out breaking the bank. Most universities, colleges, and vocational schools with culinary or hospitality management programs also have student-run restaurants. Thanks to larger campus populations, these restaurants are typically open for a combination of breakfast, lunch, and dinner. For example, at one large, Southern university, the student-run campus restaurant offers a full breakfast buffet for $5 and a three-course lunch (including drink) for $6.95. Every month, they also host a themed five-course dinner for $15.

If you’re adventurous enough, culinary school meals are also a great way to enjoy fine dining while traveling abroad. When I lived in London, there was a world famous culinary school two blocks down the road from us. Every few weeks, we enjoyed a five course meal, with selected wines, for £10 (about $15 at the time).

More than likely, there are culinary schools or hospitality management programs with student-run restaurants in your area. Fire up your search engine or flip through your phone book to find them! Call them for hours and prices. Also, if you’re looking for catering for a special event, some of the larger culinary and hospitality management programs offer catering services at drastically reduced prices.

Permalink | 13 comments | Jessica Harp's blog | Channel: Food and Drink

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Lower Credit Card Rates? Just Ask!

Jessica Harp — Thu, 07 Jun 2007 17:59:11 +0000

By Jessica Harp

When’s the last time you saw the interest rate and fees on your credit card go down? Yes, you read that right. Down.

If you’re like most Americans, the likely answer to this question is never. Now, what if I told you that eliminating your fees and slashing your interest rate by five, ten or fifteen percent is as easy as picking up the phone and dialing the number on the back of the card? Yes, seriously! Just follow these two easy steps, and you’ll be on your way to lower credit card rates and more money in your pocket!

The first step to reducing your credit card rates is to know your history. What rate are you paying now? How many years have you been with the company? Do you always make, at least, the minimum payment? Have you ever been late? This information will come in handy when asking the credit card company for a lower rate.

The second step is to call the company, and tell them you want a lower rate. More than likely, they will tell you no the first time you ask. Why? Because the higher your rate, the more money they make! But don’t take no for an answer! If they tell you no, inform them of your positive history with the company. Remind them how you’ve been a loyal customer for 10 years, or have never paid late. If the answer is still no, ask to speak with a supervisor. If the supervisor says no, wait 15 minutes and call again. You’ll be speaking with an entirely different person.

What if they keep telling you no? Or what if you’ve been a less than stellar client? What if you haven’t paid on time or didn’t make the minimum payment? Then it’s time for the Credit Card Rate Hail Mary. Tell them that you’ve received other offers in the mail, and if they do not meet those offers you will cancel your card. (Make sure you have a few real or pretend offers to give to them as examples.)

The key to lowering your rate is to be persistent and to remember that the credit card business is fiercely competitive. They would rather keep you as a customer than spend money on attracting a new customer. Even if you aren’t a great customer, you should still ask for a lower rate. If you carry a balance, two or three percentage points lower on your credit card rate can make a sizeable difference! Remember: If you don’t ask, you’ll never know.

Below is a sample script to read to the credit card company:

“Hi, my name is __________________ . I have been a good customer for _________ years, but I’ve received numerous offers in the mail from other companies offering much lower rates. Visa/Mastercard/Discovery is offering me a _________ APR. I want to stay with your company, but I also want a lower rate on my card. What can you do for me?”

These tips will also work for increasing your limit. Just replace “lower rates” with “higher limits” and “APR” with “limit”.

Permalink | 19 comments | Jessica Harp's blog | Channel: Credit Cards

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