Creditors http://www.wisebread.com/taxonomy/term/7715/all en-US How to Manage Debt While Unemployed http://www.wisebread.com/how-to-manage-debt-while-unemployed <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-manage-debt-while-unemployed" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000050909676_Large.jpg" alt="trying to manage debt while unemployed" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you're unemployed, it can be harder than ever to manage your debt. But with the right strategy, you can stop worrying about debt and start focusing on finding a new job. Here's how to get a handle on your debt during unemployment:</p> <h2>Assess Your Assets</h2> <p>First consider all assets and possible sources of income available to you. Can you accept part-time work, sell belongings on eBay, or take a local babysitting gig to make a little extra cash for the necessities? This can make it easier to stay afloat and make your minimum monthly payments on-time. And if you haven't already done so, visit the <a href="http://www.dol.gov/">U.S. Department of Labor</a> to apply for unemployment benefits.</p> <h2>Create a Survival Budget</h2> <p>Determine what your basic living expenses are, such as food, mortgage, utilities, transportation, insurance, and medical costs. Create a budget that details every single dime you spend each month so that you can determine what can be cut during this time. Once you find new employment, try to stick to this survival budget so that you have extra funds available to pay down debt or invest in an emergency savings fund.</p> <p>Assess your remaining costs to determine if there is anything that can be cut. For instance, try reducing your credit card and cable bills, forego the land line, cancel any magazine subscriptions, cut back on entertainment expenses and streaming services, and reduce or eliminate costly habits (such as drinking, smoking, and eating out). Look for other creative ways to save money, such as relying on public transportation and finding easy ways to cut back on utilities. (See also: <a href="http://www.wisebread.com/10-ways-to-save-money-when-you-are-unemployed?ref=seealso">10 Ways to Save Money When You Are Unemployed</a>)</p> <h2>Set Priorities</h2> <p>Prioritize your debts. Determine which bills need to be paid first, once your basic living expenses are taken care of. Secured credit accounts, like credit cards, loans, and car payments should be paid next.</p> <p>The goal is to preserve your savings, so don't try paying off any debts early at this point. Make only the minimum payments on your credit cards and avoid using any sort of credit for as long as possible. Once you find new employment, you can start working on paying down your debts as quickly and efficiently as possible.</p> <p>If you have a federally-backed student loan, there are a number of payment options available during tough times. Often, the loans can be deferred until you find work again. Check with the <a href="http://www.ed.gov/">U.S. Department of Education</a> for more information.</p> <h2>Negotiate With Creditors</h2> <p>Speak with your mortgage lender and credit card issuers at the first sign of trouble. If you wait to contact them until after you've already missed a payment, it's less likely creditors will work with you to find a reasonable solution.</p> <p>Your creditors may be able to help you ease loan terms, reduce your monthly payments, or even put your payments on hold for a short period of time. While there are no guarantees that they will work out an arrangement with you, it's worth a shot.</p> <h2>Pursue Alternatives</h2> <p>There are alternative options, such as debt management, debt settlement, debt consolidation loans, and bankruptcy. Speaking with a <a href="https://www.nfcc.org/">credit counselor</a> can provide you with precise information on the options available to you. (See also: <a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option?ref=seealso">11 Steps to Take When Bankruptcy Is Your Only Option</a>)</p> <p><em>Do you have other tips for dealing with debt when you're unemployed? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/how-to-manage-debt-while-unemployed">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">How to Deal With Collection Agencies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy">How to Do a One-Day, Do-It-Yourself Bankruptcy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-down-debt-first-or-invest">Should You Pay Down Debt First or Invest?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-back-on-track-when-youre-behind-on-your-bills">How to Get Back on Track When You&#039;re Behind on Your Bills</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-allocate-your-cash-when-you-are-broke">How to Allocate Your Cash When You Are Broke</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Creditors negotiating out of work Paying Off Debt survival budget unemployed Mon, 02 May 2016 10:00:11 +0000 Andrea Cannon 1700680 at http://www.wisebread.com How to Get Back on Track When You're Behind on Your Bills http://www.wisebread.com/how-to-get-back-on-track-when-youre-behind-on-your-bills <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-get-back-on-track-when-youre-behind-on-your-bills" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/finances-5272046-small.jpg" alt="paying bills" title="paying bills" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>There may be many reasons why your bills have gone late. Whether you miss a bill deadline once in a blue moon or if you are consistently late and behind in paying your bills, it is time to get your financial life back on track and realize what the consequences are of paying bills late. (See also: <a href="http://www.wisebread.com/how-to-get-rid-of-and-avoid-late-fees">Get Rid of and Avoid Late Fees</a>)</p> <h2>First, the Consequences</h2> <p>No matter the reason for getting behind in your bills, know that you are doing damage to credit and your overall financial life. Late or missed bill payments drop your credit score significantly, and if you are paying all of your bills late or carrying a large balance from one month to the next, you are doing yourself no favors. Late payments will stay on your credit report for several years so you will feel the effects for many years to come.</p> <p>In order to reorder your financial life, it is a must-do to start perfecting a strategy for paying your bills on time without fail. Here is a guideline for what to do to get current again.</p> <h2>Begin Eliminating Outstanding Debts</h2> <p>When people are behind in their bill payments, they generally are fully aware there is a problem but may not necessarily realize just how much of a problem they have. It is time to start reorganizing your system to ensure bills are taken care of and balances are eliminated in a reasonable amount of time. (See also: <a href="http://www.wisebread.com/why-cant-you-ever-make-on-time-payments">Why Can't You Make Your Payments On Time?</a>)</p> <p><strong>Write It All Out</strong></p> <p>Gather in one place all of your monthly bills and anything with a balance showing. Review each statement or bill and write down on a separate sheet of paper who you owe, how much you owe monthly, how much you owe in total, and due dates for the amount to be paid.</p> <p><strong>Highlight the Worst</strong></p> <p>If there are some bills you are keeping up with monthly, it's a good start but you'll need to formulate a plan for keeping up while paying past due balances at the same time. Highlight the past due balances that need to be tended to each month.</p> <p><strong>Do the Math</strong></p> <p>Once all bills and balances are accounted for, add up the columns to find out how much is due each month. Any bills that you haven't been paying should have an amount of money allocated to them on a monthly basis. Say you owe $1,200 to your doctor on an overdue bill. Review your budget to find an amount you can afford to pay towards the debt each month and add that into your monthly totals.</p> <p><strong>Find a Solution</strong></p> <p>If you find your monthly must-pay amounts total more than you earn, resist the urge to stop paying back the balance. Your goal at this time is to find a way to make payoff possible. You may need to reduce other expenses from your budget or find a secondary source of income to allow your plan to work effectively for eliminating debts.</p> <p><strong>Consult With Your Creditors</strong></p> <p>You may already be getting contacted by creditors to whom you owe money. With a new strategy in place, you should have more confidence to contact your creditors directly and let them know of your intent to make a set payment amount each month. This can keep the lines of communication open between your and your creditors, who may choose not to take more drastic measures once they know you are trying to make good on your debts.</p> <h2>During the Debt Elimination Process</h2> <p>Commitment to eliminating debt will be essential, so stay very involved through the process. It may be difficult to allocate so much of your cash towards old, overdue debts but the end result will be well worth it.</p> <p><strong>Be Willing to Sacrifice</strong></p> <p>During the time you are working towards debt elimination to get back on track, you have to be willing to make sacrifices, including saying no to even the best deals and discounts.</p> <p><strong>Keep Your Own Records</strong></p> <p>Your creditors have probably kept very good records about the debts you didn't pay, but you owe it to yourself to keep good records of the debts you are paying. Keep track of how much you are sending each month to your creditors, and check statements to be sure everything is correct. Creditors can make mistakes, and you'll want to ensure they are not getting more money from you than they are owed.</p> <p><strong>Regularly Reallocate</strong></p> <p>If you have managed to pay off your old cell phone bill, you'll need to go back to your plan and reallocate the cell phone payment money towards another bill. Do this every time you eliminate one of your overdue bills to make your debts go away faster.</p> <p><strong>Avoid New Debts</strong></p> <p>You already know how hard debt elimination can be so why get yourself into the same mess twice? During your balance elimination plan, avoid new expenses like the plague. (See also: <a href="http://www.wisebread.com/how-to-botch-up-then-peddle-back-to-good-credit">How to Paddle Back to Good Credit</a>)</p> <h2>Living Life After Balances Are Zeroed Out</h2> <p>Once you have caught up on your overdue bills and have things back on track, your goal should always be to prevent history from repeating itself.</p> <p><strong>Set Up a Foolproof System</strong></p> <p>Today's technology can help you avoid the trap of forgotten or missed bill payments. Use one of the many available phone apps or online banking resources to automatically pay your bills on time each month. For bills that can't be paid automatically, post a calendar where you can always see due dates or set a reminder on your mobile device when a bill payment needs to be made.</p> <p><strong>Stockpile Your Cash</strong></p> <p>After eliminating your debt, you now know you have the willpower and commitment to having a better financial life. Eliminating old debts should not be the end of your strategic plan. Keep sacrificing for a few months longer as you stockpile the collective bill payment amounts into a savings account. If the reason why your bills were always late was due to a lack of money, a healthy savings account can certainly prevent history from coming back to haunt you. (See also: <a href="http://www.wisebread.com/37-savings-changes-you-can-make-today">Savings Changes You Can Make Today</a>)</p> <p><strong>Check Your Credit</strong></p> <p>As you are getting your bills back on track, make sure your creditors are on the same page. Order a copy of your consumer credit report and follow the progress you are making. Check in with your financial records every few months to make sure appropriate changes have been made and that your credit score is on the rise.</p> <p>Don't let another month go by knowing you have unpaid or habitually late bills. A reasonable system to keep up with your bills is not very difficult to set up or maintain. It will be far easier to be proactive about your money matters than have to run scared from creditors for the next few years.</p> <p><em>How do you keep pace with your bills? Do you have a system or do you just wing it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tisha-tolar">Tisha Tolar</a> of <a href="http://www.wisebread.com/how-to-get-back-on-track-when-youre-behind-on-your-bills">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-financial-mistakes-that-limit-your-freedom">4 Financial Mistakes That Limit Your Freedom</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt">The Fastest Method to Eliminate Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-tricks-to-save-money-with-credit-cards">10 Tricks to Save Money with Credit Cards</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">How to Deal With Collection Agencies</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bills budgeting credit Creditors debt eliminating debt Thu, 12 Sep 2013 09:48:04 +0000 Tisha Tolar 981987 at http://www.wisebread.com How to Do a One-Day, Do-It-Yourself Bankruptcy http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-do-a-one-day-do-it-yourself-bankruptcy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/8169560070_290a4e1fc4_z.jpg" alt="paperwork" title="paperwork" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>If your debts have become overwhelming and you&rsquo;re facing a significant financial blow, such as wage garnishment, vehicle repossession, foreclosure, eviction, or utility service disconnection, and you don&rsquo;t have the money for a lawyer, don't panic. While bankruptcy should be a last resort, you do have options. It&rsquo;s possible to file a Chapter 7 or Chapter 13 bankruptcy by yourself to avoid or stop these collection attempts. As soon as you file, the court invokes the immediate protection of the automatic stay, which stops creditors from pursuing all collection activities, including phone calls and letters, and mandates utility companies to restore any disconnected services. Filers may also be able to get back repossessed vehicles. By following this timeline, you can file bankruptcy in a matter of hours. (See also: <a href="http://www.wisebread.com/debt/bankruptcy">How to File for Bankruptcy</a>)</p> <h3>The Night Before: Gather Your Documentation</h3> <p>To file either Chapter 7 or Chapter 13 bankruptcy, you must provide documentation of your debts, expenses, and income.</p> <p><b>Debts</b></p> <p>Gather bills, account statements, and other correspondence for all of your creditors. This not only serves as a record of what you owe, it also ensures that you have accurate creditor information. Improperly identifying creditors can cause those debts to be excluded from the bankruptcy case, leaving you responsible for them. Pull copies of your credit report from Equifax, Experian, and TransUnion to ensure you list all creditors.</p> <p><b>Income</b></p> <p>The court also needs to see proof of your income for the past six months. This includes pay stubs, investment account statements, business profit and loss statements, and documentation of unemployment, Social Security, or other social service benefits. You must also include documentation of any child support or alimony payments you receive.</p> <p><b>Expenses</b></p> <p>The bankruptcy petition requires you to list your monthly household expenses as well, so gather the <a href="http://www.wisebread.com/10-monthly-bills-you-can-slash">bills you receive for utilities</a>, rent or mortgage, and other recurring expenses, such as medical care, and court-ordered support payments. You must also provide estimates of how much you spend each month on things like food, clothing, and education expenses for minor children.</p> <h3>The Night Before: Look for Help</h3> <p>If your financial situation is simple, you may not need any assistance with the filing process. However, if you run into any snags, it&rsquo;s imperative to know where to go for help. Visit <a target="_blank" href="http://www.lawhelp.org/">LawHelp.org</a> or search the Internet for legal aid organizations in your area, most of which offer legal advice both by phone and in person. Although seeking assistance may put a dent in your one-day plan, filing an accurate petition is much more important than speed.</p> <h3>7 a.m. &mdash; Credit Counseling</h3> <p>U.S. bankruptcy laws require all filers to undergo 90 minutes of credit counseling and receive a certificate of completion. Luckily, many courses are available online and over the phone. You can complete the entire process within two hours. The price varies depending on the provider, but in general, the class should cost no more than $50. You can receive a waiver of the course fee if your income is below the poverty line in your state. You can find <a target="_blank" href="http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm">approved credit counseling providers</a> on the U.S. Courts website.</p> <h3>9 a.m.&nbsp;&mdash; Completing the Petition</h3> <p>The bankruptcy petition consists of a multitude of forms, called &ldquo;schedules,&rdquo; to record your debts, income, expenses, and assets. You can <a target="_blank" href="http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx">download the bankruptcy petition paperwork</a> from the U.S. Courts website, under the &ldquo;Official Forms, Instructions, and Committee Notes&rdquo; heading. The list may seem daunting, but the Courts website provides an <a target="_blank" href="http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Current/B_200.pdf">index of the forms</a> you need to file each type of bankruptcy. Give yourself at least five hours to compete the petition; more if you need to take breaks to stretch, eat, fish toys out of the toilet, etc.</p> <p><strong>Means Test</strong></p> <p>Officially known as the &ldquo;Statement of Current Monthly Income and Means Test Calculation,&rdquo; this is the first form you should download and complete. This form walks you through calculations to determine if your income requires you to file Chapter 7 or Chapter 13. If your income is above the median in your state and you have at least $150 in disposable income each month, you have to file Chapter 13 bankruptcy and create a repayment plan for your debts. If it falls below the median income, you must file Chapter 7 bankruptcy and surrender any non-exempt assets.</p> <p><strong>Income</strong></p> <p>Use the documentation you gathered earlier to give a complete account of your average monthly income on Forms B 22A, B 6I and B 7. Do not leave anything off, even if it is a small amount or it was given as a gift. The courts will examine your finances carefully, and any dishonesty here can be cause for the judge to dismiss your case for fraud.</p> <p><strong>Debts</strong></p> <p>List creditor names, addresses, account numbers, and the amount you owe on form B 1. Describe whether the debts are secured, such as <a href="http://www.wisebread.com/the-different-types-of-loans-a-primer">mortgages and car loans</a>, or unsecured, such as credit cards, on Forms B 6E and B 6F. If you file Chapter 7 bankruptcy and have secured debts, you must fill out Form B 8 and declare your intention to either keep the property serving as collateral for the debt and continue paying, or surrender the property and be free of the debt.</p> <p><strong>Expenses</strong></p> <p>Your average monthly expenses go on Forms B 22A and B 6J. As with the other forms, be thorough. Leaving off a valid expense could place you over the Chapter 7 threshold or cause you to make higher payments in a Chapter 13 payment plan.</p> <p><strong>Assets</strong></p> <p>If you file Chapter 7 bankruptcy, you must list your assets on Forms B 6B and B6C. This includes real estate, vehicles, jewelry, electronics, collectibles, fire arms, cash, and funds in bank accounts. The document requires a description of the property, as well as the current value. If you don&rsquo;t know the exact value of an item, look in the newspaper, in online classified ads, and on web auction websites for the cost of items similar to yours and estimate from there. The court will perform its own valuation if it seizes the property for creditors or thinks your figure is incorrect. Most of the time, the value of your property will not exceed the exemption threshold in your state, so it&rsquo;s unlikely that you will have to give anything up. You can check the exact exemption amounts by visiting your state&rsquo;s bankruptcy court website.</p> <p><strong>Chapter 13 Payment Plan</strong></p> <p>If you file Chapter 13 bankruptcy, you must come up with a three- to five-year plan to use your disposable monthly income to repay your debt. There is no official form, so if your state&rsquo;s bankruptcy court website doesn&rsquo;t provide one, you must create the plan in a word processing program. Bankruptcy laws require you to pay off priority debts first, or at least bring them current. These include non-dischargeable debts such as taxes and child support, as well as secured debts. Once you pay those, the plan requires you to pay as much of your unsecured debt as possible each month until the end of the plan term. The court discharges any unsecured debt remaining at the end of this time, and you will no longer be responsible for paying it.</p> <h3>2 p.m. &mdash; Filing the Petition</h3> <p>Filers without legal representation must submit the completed petition and the credit counseling certification in person to the court clerk and pay the appropriate fees by cash or money order. To file Chapter 7, you must pay a filing fee of $299. The Chapter 13 filing fee is $279. If you cannot pay the entire fee up front, the court will accept installment payments. People with income that is less than 150% of the federal poverty guidelines can receive a complete waiver of the Chapter 7 filing fee. There is no waiver available for Chapter 13 filers. The clerk will give you a document to prove that you filed.</p> <h3>3 p.m. &mdash; Mission Complete</h3> <p>Once the paperwork is in, the filing process is complete. You are under the full protection of the automatic stay, so you can fax or mail copies of the document to your creditors, who are then legally required to cease all <a href="http://www.wisebread.com/always-answer-the-call-expert-advice-on-debt-collection">collection activities</a> immediately.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lauren-treadwell">Lauren Treadwell</a> of <a href="http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">How to Deal With Collection Agencies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-you-know-when-it-s-time-for-bankruptcy">How You Know When It&#039;s Time For Bankruptcy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask">5 Debt Management Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-erase-your-medical-debt">How to Erase Your Medical Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/surprising-things-that-can-kill-your-credit">Surprising Things That Can Kill Your Credit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Debt Management DIY bankruptcy Creditors emergency plan Fri, 18 Jan 2013 10:48:41 +0000 Lauren Treadwell 961916 at http://www.wisebread.com How to Allocate Your Cash When You Are Broke http://www.wisebread.com/how-to-allocate-your-cash-when-you-are-broke <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-allocate-your-cash-when-you-are-broke" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/broke pig.jpg" alt="Broken piggy bank" title="Broken piggy bank" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>There are many reasons why you might have a serious lack of cash, and it can seem impossible to budget the little bit of money you have on hand. Of course, the obvious question is &quot;How did I get in this mess in the first place?&quot; and the answer is usually due to a lack of smart budgeting. But since we can&rsquo;t go back and change the past, all we can do is look towards the future and try to do better with our money management.</p> <p>Here are some tips for surviving life when you are cash-strapped or flat broke. (See also: <a href="http://www.wisebread.com/emergency-belt-tightening">Emergency&nbsp;Belt-Tightening</a>)</p> <h2>Don&rsquo;t Stay Silent</h2> <p>It won&rsquo;t take long until your <a href="http://www.wisebread.com/look-out-consumers-debt-collections-get-scarier">creditors come calling</a>. The worst thing you can do is ignore those calls, and the best thing you can do is take control of the situation, no matter how out of control you feel. Ask your creditors upfront for a payment extension or an alternative payment plan on a temporarily basis until you can recover from your financial hardship.</p> <h2>Prioritize the Money You Do Have</h2> <p>If you find you are falling a few hundred dollars short of your monthly financial obligations, sit down and prioritize the bills you need to pay such as your mortgage, electricity, and insurance payments. The other bills can wait until you free up more cash. You want to make sure you keep your home and have the basic utilities you need to survive. Again, speaking to your individual creditors can also help you extend payments without serious consequences and assure your creditors you are doing your best to get back on track.</p> <h2>Interrupt Your Savings Plan...for Now</h2> <p>If you have been contributing to a <a href="http://www.wisebread.com/pay-yourself-first-what-it-means-and-how-to-do-it">savings account</a>, it would be wise to put that money to better use. Otherwise you will find that in order to save your typical $50 a week, you will need to pay a few hundred dollars in overdraft bank fees, credit card interest rates, and other fees for making late payments or missing them entirely.</p> <h2>Don&rsquo;t Live on Credit</h2> <p>A big mistake people make when they are short on cash is to use their credit cards like they would their paycheck. They are quick to spend on credit because it is available, but they fail to see the long term impact these purchases will have on their financial life. The golden rule of credit card use is that you should only spend on credit what you have in cash reserves. Since you have no cash, you're likely to end up racking up even more <a href="http://www.wisebread.com/how-much-does-your-credit-card-debt-cost-you">debts you can&rsquo;t afford</a>.</p> <h2>Add to Your Income</h2> <p>If you do not foresee an end to your budget crisis in the immediate future, you should start to take action now to find ways to boost your income. Depending on the reason for your financial hardship, you may need to <a href="http://www.wisebread.com/how-to-find-freelance-clients-part-one">find a second job</a> and bring in another paycheck. You may also want to consider working overtime when you can or offloading some of the stuff around your home through a yard sale or online auction. The faster you can regain your financial ground, the less expensive this period will be for you in the long run.</p> <h2>Get Cracking on a New Budget</h2> <p>While the last thing you may want to do is deal with your money issues, now is the time to construct a better, more viable budget to prevent this from happening again. Even if this current financial hardship was due to unforeseen circumstances (such as a <a href="http://www.wisebread.com/tips-to-prepare-for-a-health-emergency">medical emergency</a> or job loss) you should make a plan to be better prepared for such instances in the future. Boost your income and your savings goals, and learn new tricks to start living below your means.</p> <p>It will take some sacrifices to survive a period of being broke, but the only way to assure you will get ahead of the game is if you commit to better money management and work as hard as you can to get back into the black. If you fall into despair and just avoid the situation altogether, you must know that things will only get worse. The longer you take to act, the longer it will take you to recover financially.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tisha-tolar">Tisha Tolar</a> of <a href="http://www.wisebread.com/how-to-allocate-your-cash-when-you-are-broke">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-psychological-traps-preventing-you-from-saving-and-how-to-fix-them">4 Psychological Traps Preventing You From Saving — And How to Fix Them</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/try-these-6-money-saving-challenges-now">Try These 6 Money-Saving Challenges Now</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-live-on-12-000-a-year">How to live on $12,000 a year</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management cash flow problems Creditors saving money Mon, 09 Apr 2012 09:48:12 +0000 Tisha Tolar 916317 at http://www.wisebread.com How to Deal With Collection Agencies http://www.wisebread.com/how-to-deal-with-collection-agencies <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-deal-with-collection-agencies" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4277455147_1c5ce339b6_z.jpg" alt="kid boxer" title="kid boxer" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>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 nine suggestions, you can stop screening your phone calls and turn the collections process to your advantage. (See also: <a href="http://www.wisebread.com/always-answer-the-call-expert-advice-on-debt-collection">Always Answer the Call: Expert Advice on Debt Collection</a>)</p> <h3>1. Know your rights.</h3> <p>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.</p> <p>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 <a href="http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm">Fair Debt Collection Practices Act</a>. (If you don't want to read through the legalese, our very own <a href="http://www.wisebread.com/laws-the-leg-breakers-don-t-want-you-to-know-about">Linsey Knerl wrote a spot-on article highlighting the finer points of the FDCPA</a>.)</p> <p>Nothing strikes more fear into the heart of a collection agent than a consumer saying, &quot;According to the <a href="http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm">Fair Debt Collection Practices Act</a>, you are not allowed to call me more than one time per day and no more than three times per week. If you call again, I will report you to the FTC and the Attorney General's Office.&quot; The very fact that you are demonstrating knowledge of your rights will make them behave quicker than a stern look from their mother.</p> <h3>2. Know your debt.</h3> <p>Every consumer is entitled to a <a href="https://www.annualcreditreport.com/cra/index.jsp">free annual credit report</a> 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.</p> <p>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.</p> <p>This advice does not apply if you are planning to purchase a home. Mortgage lenders will see all of your debt &mdash; no matter how old it is. If you want to buy a house, you will need to pay down most of your debt.</p> <h3>3. Keep a written record of every call.</h3> <p>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.</p> <p>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.</p> <p>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.</p> <h3>4. Attitude is key.</h3> <p>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!</p> <p>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.</p> <h3>5. Keep your creditors informed.</h3> <p>The moment you know you will not be able to make a scheduled payment, call your creditor or collection agency. Usually, they will work out 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.</p> <p>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.</p> <h3>6. Get everything in WRITING!</h3> <p>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 &quot;agreements&quot;.</p> <p>If you pay a debt in full or work out a settlement offer with the creditor or collection agency, make sure to get these actions documented in writing.</p> <h3>7. Stick to your guns.</h3> <p>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 <em>them</em> to tell <em>you</em> how much <em>you</em> can afford!</p> <h3>8. Never refuse to pay.</h3> <p>In the course of politely explaining to your creditors that you cannot afford their suggested payment of $250 per month, they will ask, &quot;So, are you <em>refusing</em> to pay your bill?&quot; 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, &quot;I did not say that. I said I can only pay $X per month.&quot; 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.</p> <h3>9. Never give a collection agency access to your bank account.</h3> <p>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.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jessica-harp">Jessica Harp</a> of <a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-erase-your-medical-debt">How to Erase Your Medical Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/laws-the-leg-breakers-don-t-want-you-to-know-about">Laws the Leg-Breakers Don’t Want You to Know About</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy">How to Do a One-Day, Do-It-Yourself Bankruptcy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-champion-of-savings-over-spending">A champion of savings over spending</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-back-on-track-when-youre-behind-on-your-bills">How to Get Back on Track When You&#039;re Behind on Your Bills</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Debt Management Collection Collection Agencies Creditors debt FDCPA FTC Thu, 30 Aug 2007 00:47:35 +0000 Jessica Harp 1063 at http://www.wisebread.com