The Top 3 Post-College Financial Pitfalls

With winter semesters across the country coming to a close, soon-to-be college grads will be anxiously awaiting the end of the spring. Proud students will walk away from their educational institutions with the degrees they have expended blood, sweat, tears—and hundreds of thousands of dollars—to earn, and with a wealth of knowledge and experience that will send them off into their adult lives. In a nation still recovering from several financial crises, and where the cost of higher education leaves the majority of graduates  in debt, the thought of navigating the post-grad financial waters may be a bit daunting for some–  and understandably so. Moving away from home and managing many new responsibilities—financial and otherwise—will be difficult in the beginning, and of course, some will make much worse decisions than others. The following describes the top3 most common financial pitfalls newly graduated young adults tend to make:

Moving Out Without the Means

We are all told early on that living outside of ones means can lead to trouble, but at no other time is this more true than right after completing college. Most grads will want to avoid moving back home after school, but without the help of student loans to pay their housing (quite the contrary—many loans will have fallen into repayment by then) this becomes an especially complicated issue. Rent and student loan payments are only a small portion of the equation—food, utilities, transportation, etc. have a way of piling up on unsuspecting post-grads. If living at home is an option, you will find you have much more financial flexibility when it comes time to take what you’ve saved and move into a place of your own.

Acquiring Loans

On top of the student loan debt many face after college, millions of young adults are also roped into using pricey credit cards to pay their expenses, or large sums of money in the form of personal loans. Incurring this often unmanageable debt sets post-grads up for failure from the get-go. Not understanding interest rates or built in features of a particular plan cost them much more money in the long run. Lawsuit settlements loans are a smarter investment when it comes situations in which the recent grad is unable to work or is involved in debt incurred by legal issues. This type of loan can actually help graduates pay their bills and manage their finances while complex or lengthy settlements are being reached. Avoiding late payments will also improve credit and the standing of personal financial records.

 Avoiding Effective Budgeting

For those who are lucky enough to receive relatively well paying jobs after graduation, it can be difficult to be responsible with your earnings and resist the urge to spend more than what is saved. Keeping a detailed record of your monthly earnings versus your monthly expenses goes a long way in identifying where too much is being spent, and where that much more can be saved. Emergency funds or long term savings will ensure that there won’t be any need to take out expensive or unnecessary loans, which ultimately can help recent college graduates avoid huge pitfalls and start off toward a future of financial security.


Author Bio: Hailey Andersen is an avid blogger who enjoys sharing her insights on financial planning and education. 

5 Reasons Why You Need A Good Credit Score Even When You’re Retired

Retirement is your reward for committing to years of hard work. But while you may be planning to see the world, finally write that book, or just spend lots of time with your grandkids, you may not be giving much thought to your post-retirement credit score. You may believe that, upon exiting the workforce, you can stop worrying about those pesky credit reports, but this couldn’t be any further from the truth.

Still not convinced? Here’s a look at five reasons why keeping an eye on your credit score should still be a priority throughout your retirement.

1. Credit card rewards programs

Many savvy retirees choose to utilize credit cards for everyday expenses, as a good card can enable you to accumulate rewards. As long as card payments are made in full each month, you can avoid interest while still reaping the benefits of buying with credit. If you keep your FICO score high, you’ll enjoy access to the best credit card rewards programs – including platinum-level travel cards. This can make it a lot easier for you to manage airfare, hotel costs, and other travel expenses throughout your retirement.

2. Great insurance rates

Auto and homeowners insurance agencies look to credit scores when quoting monthly premiums. When your credit score is higher, you will appear to be more responsible, resulting in lower overall insurance payments. Even if you have been insured with the same company for years, you should never stop shopping around for a better policy. Keeping your credit score high can help you to find all of the best deals, and will provide you with negotiating power with insurance agents. This is especially important in retirement, as any monthly savings can provide you with more capital for both regular expenses and making the most of each day.

3. Refinancing your mortgage

Although entering into retirement without any debt is a noble goal, the reality of the matter is that nearly 40 percent of senior homeowners, ages 60 to 64, carry a mortgage. This statistic, provided by the research of Strategic Business Insights, makes it clear that retirees should make plans for managing mortgage payments after work. Those with a high credit score will enjoy the luxury of being able to refinance their mortgages, enabling them to save significantly on monthly payments… Ultimately, this could mean the difference between being locked down by your home, or living the dream.

4. Keeping an eye out for identity theft

Retirees who believe their credit scores to be irrelevant may not take the time to review your credit reports each year. This is bad news, as senior adults are often targeted for identity theft, and unless you regularly monitor your reports, you may not realize that you have been victimized. To minimize your risk, be sure to always keep an eye out for suspicious activities or mistakes.

5. Second acts

For many individuals, the meaning of retirement has changed dramatically. Instead of viewing retirement as the closing chapter of life, a growing number of retirees are viewing this as a “second act” – a time wherein they have the ability to pursue their dream careers, and finally do the work that they love. This may mean becoming the author of a children’s book, building custom furniture, or selling crafts and artwork at trade shows. While many second act goals may not require a lot of capital investment, some do. Having a good credit score could make it easier for you to obtain any necessary loans.

Your credit will always matter. By keeping tabs on your score, you’ll enjoy a happier, more peaceful retirement.

Author Bio: This article was written by author and blogger Chase Sagum. Chase covers Economic topics for

7 Tips To Cut Costs For Your Budget

Life would be so much easier if money grew on trees. Unfortunately, it doesn’t, and that means that most of us have to budget our finances in order to make ends meet. But budgeting doesn’t have to be a grueling task that sends you into financial despair. There are plenty of simple tricks you can learn that will help you cut down your budget, leaving you with more money to spend or save.

Know Your Limits

The first thing you need to do is know your income per month. That’s your limit. Even if you own credit cards and use them regularly, don’t calculate the credit cards into your limit, because you have to pay those cards off eventually, and that money will come out of your income. So start your budget with your income.

Calculate the Necessary Expenses

Now you need to calculate your expenses. Only worry about the necessary expenses for now—the expenses that are fixed, because you pay roughly the same amount every month. These expenses will include things like rent, utilities, credit cards, loans, cell phone bills, insurance plans, and internet use. They will also be the biggest drain on your budget, so this is where you will need to focus the most on trying to reduce.

Bundle Your Plans

Look at your necessary expenses, and see if there’s a way you can combine any of them. If you have multiple types of insurance, like auto, home, and health, see if there’s a way to bundle them all into one plan at one company, rather than three separate plans at three different companies. Another easy one to bundle is your phone, TV, and internet. The biggest wireless phone providers also carry plans for internet and TV, and it’s cheaper to bundle everything under one plan than to carry multiple plans.

List Your Needs and Wants

Once you have your necessary expenses sorted out, you can take a look at everything else you spend money on per month. Prioritize these items by making two lists: your needs and your wants.

Your needs list will include everything that you cannot live without, like food and toilet paper. Your wants list will be everything else, from ice cream to video games. You can even break your wants list down even further, separating what you really want from what you would like to have. Use these lists when budgeting the rest of your finances. Plan first for the needs list, and then whatever is left can be used for a few items on the want list.

Use the Credit Card Perks

Make sure the credit cards you use benefit you. Find credit cards with rewards and perks that interest you, and then use those cards in the ways that reward you the most. This might be store bucks, a gift card, or a discount on gas. Whatever the perks, they are rewards you should take advantage of.

Make Shopping Lists

Before you go to any store, make a list of what you need, whether it’s for grocery items or clothing. Know exactly what you need before you enter the store. That way, you won’t get distracted by other items, or purchase products you don’t need. You can also cut costs even further by bargain shopping. You don’t need a particular kind of Dijon mustard when a generic store brand will do. Compare prices, and buy the cheapest you can find.

Save a Little Each Month

If you don’t have a savings account, open one. Then, set aside a certain percent each month to put in the savings account. It doesn’t have to be much—5% will suffice. If you want to put in a little extra on certain months, go ahead, but make sure you put at least the percentage you’ve stated. It may take a while for the savings account to grow, but after a while you’ll have a hefty amount in there you can use for an emergency, or possibly even a vacation.

With these simple tips and tricks, you can become a budgeting pro, always having the money you need when you need it—you won’t even have to plant a money tree.

Author byline:

Edson Senna is a business student. He enjoys applying what he has learned by writing about investing, finance, entrepreneurship, and other business-related topics. He also loves to learn about new software that helps businesses, like a business rules engine.

3 Ways To Reduce Impulsive Spending

It’s a problem that most people have. By the time we are fully grown adults with real careers, we’ve tried it all: savings accounts, setting aside money ahead of time for priorities, tracking our expenses via checkbooks or online banking, piggy banks, you name it. Sometimes it works, but too many times, it doesn’t. When the money is technically available to you, and there’s something you really want, you make up another excuse for why you deserve it. Or else you just have a hard time looking at the big picture, and a few nights at the bar turns into a major dent in your finances. It happens to the best of us. Nevertheless, there are a few tricks of the trade floating around out there that have helped many people start saving money. Here are a few good ones that might help you:

Limit Your Accounts

When you have multiple accounts, you’ll typically spend more money on a regular basis because you’re not fully aware of the total amount of money you have, and that provides a little subconscious comfort to you because you’re not seeing that total number drop down as you spend more and more, but only a number that represents a fraction of your money. The same concept goes with keeping cash on you all the time.

Think Twice Before Making Big Purchases

Studies show that for most people, the feeling of wanting something brings more happiness to them than actually having it. So before you spend half your paycheck on something you don’t actually need, wait a day or two and then decide if it’s really worth it. Consider the alternate things you could do with that money. Think about the years to come; will you still love it just as much next year? If you still think you should get it after all that, then go for it.

Budget Your Money!

Most people know about this one, but don’t actually do it. Start by thinking about the top five things you spend your money on. Do some math and try to figure out the approximate monthly amount you spend on each of those things. Or better yet, get a detailed bank statement. You’ll probably find that one or two of those things are a bit out of control. What do you want that number to be? Try setting a budget for each of those categories, and then one for miscellaneous purchases.

For the budget that you think will be most difficult for you to stick to, try this: take that money out of your account and put it in a labeled envelope. Keep the envelope in your room and take cash from it very sparingly. Using only cash will make you much more conscious of just how much you are spending, and keeping it at home will give you less of a chance to be impulsive with it. For more tips on staying on budget speak with an accountant or financial adviser

LBS Tax is a local tax accountant service that has begun a series of helpful articles to help the public better handle their financials.

Tax Deductions You May Not Know About

When tax returns come due every April 15th, everybody is looking to maximize their tax benefits. Getting the largest return when you file taxes is truly not about your skills, but rather how much you know about the tax system. It is all too common that many taxpayers either overlook or miss out on various credits and deductions they are unaware of. The most frequently missed deductions relate to health care expenses, insurance premiums, and interest rates on loans. This article will discuss a few types of deductions that could save you some serious cash on your next tax returns.

Disability Insurance Premiums

This insurance is quite possibly the most overlooked premium which qualifies as a tax deduction. It is important to remember that these premiums will always be tax deductible as a business expense for self-employed, taxpaying citizens. Just remember that if you deduct the premium on your tax return, any benefits which are paid on the policy will count as taxable income. Conversely, if you do not deduct your premium, then the policy benefits will not be taxable; this allows taxpayers to receive tax-free benefits should they become disabled.

Life Insurance Premiums

Your premiums for life insurance are another frequently missed deduction. Your premium is deductible since it qualifies as a business-related expense. Death benefits paid to business-related beneficiaries are usually tax-free, but there are situations in which this benefit is taxable if it is corporate-owned. For individual policy holders, the death benefit is usually tax-free as well. Most premiums are also eligible as a deduction for most non-qualified plans which include executive bonuses and deferred compensation.

Medical Expenses

If your medical expenses exceed 7.5% of your adjusted gross income, they are considered a deductible expense. The vast majority of taxpayers never accrue enough unreimbursed medical bills within a single year to qualify for the deduction. However, there are ways to boost your deduction if you have a substantial amount of pending bills. It is possible to schedule other medical expenses or procedures within the same fiscal year to breach the limit for the deduction. The total amount of expenditures which qualify for this deduction include operations not covered by your insurance and any other types of unreimbursed expenses you accumulated within the same year. These expenses may include routine checkups, chiropractic treatments, dental procedures, vision correction, and prescription drugs.

This can be a crucial deduction, but you should not declare this specific deduction if there is the possibility that your insurance company may reimburse you. If you receive an insurance check in the following year for reimbursement, you will need to claim the total amount of the reimbursement as income on your next tax return.

Student Loans

Many graduates struggle to pay off their massive loans once they enter the professional world, but this may actually qualify as a tax write-off. You can deduct up to $2,500 per year for the interest on your student loans, even if your deductions are not itemized. It is important to note that this deduction does have income limitations. Another added bonus for those who paid extra money on their student loans to reduce their principle amount can deduct the interest of voluntary payments.

Taxes for a New Vehicle

At the end of 2012, there was a revival of the deductions for state sales tax. This write-off allows taxpayers to choose between a deduction for either the state sales taxes or income taxes. If you live in a state with no income tax, this is an easy decision; however, if you live in one of the high-tax states it could save you a significant chunk of change if you made a large purchase, such as a new vehicle.

Check with a tax attorney if you have any questions about tax deductions.

Author: Written by Randy Otis of Levy Tax Help.

4 Unexpected Factors That Can Raise Insurance Premiums

If you are looking to buy insurance, it’s important to know going in whether you can expect higher rates than other people. Here are some of the factors that may increase your insurance rate.

Untreated Sleep Apnea

If you have untreated sleep apnea, your insurance rates are going to be higher. That’s because sleep apnea puts you at risk for numerous other serious health conditions, including psychological problems and cardiovascular illness. Once treated, though, sleep apnea risks decline significantly, and so may your insurance rates.

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“Sleep apnea treatment can be very effective,” according to Dr. Mark Dunayer of B&D Dental Excellence near Rockland, New York. “And now it’s even more convenient than ever, with oral appliance therapy available for many people, instead of the cumbersome CPAP machine we used to use.”

Your Job

You may think your work is none of their business, but the insurance company sees it differently. They will charge you higher rates if you work in an industry where you are exposed to toxic chemicals or have a high risk of injury or death.

The occupations with the highest risk of nonfatal injury, according to the Bureau of Labor Statistics:

  • Police officers
  • Truck drivers
  • Janitors and cleaners
  • Nursing aides and orderlies
  • Laborers

These professions alone accounted for 20% of illnesses requiring days off work. Most injuries occur when people have 1-5 years experience, so if you’ve been working at your job for a longer period, you may see a discount (unless you work in a job where chemical exposure effects increase with time).

Your Marital Status

Married people tend to live longer and be healthier. Married people are at lower risk of heart disease, stroke, and other major illnesses. This means they tend to get lower insurance rates. If you get married, you may see a drop in insurance rates, although men tend to see a larger drop, because they get a bigger health boost for being married. Research shows these benefits mostly accrue to couples that are “happily” married, though your insurance company isn’t likely to put that fine a point on it.

For some of these conditions, pets have also been shown to lower your risk, but they’re unlikely to lower your insurance rates.

Your Zip Code

Where you live also affects your life insurance rates. People who live in certain places tend to be at higher risk for serious injury or death. There may be many different factors for this, including the climate, the presence of infectious diseases where you live, environmental pollution such as air pollution or contaminated groundwater, crime rates, and car accident risks. Sometimes, insurance rates will be higher based on the general area of the country, but they may also be higher for certain neighborhoods or towns.

The Good News for You

On the plus side, all of these conditions are rated differently by different insurance companies, which means that you may be able to get a better rate by competitive shopping. Talk to several insurance companies and see how the rate varies. You may be able to find a great bargain.


Author Bio: Thanks to Dr. Mark Dunayer of B&D Excellence Dentistry in West Nyack, New York, for his contribution to this article.

The Best Ways to Screw Up Your Taxes

The United States tax code is not exactly known for simplicity, and many people struggle with knowing how to file their returns successfully.  The problem is that a mistake on your taxes could end up costing you money.  For example, if you underpay your tax bill and the IRS discovers your error (and there’s a good chance they will), then you could find yourself facing late fees, penalties and interest on the money you didn’t pay.  Not only that, but if you fail to take the deductions that you are owed and you overpay your taxes, the IRS isn’t exactly going to send you a nice check with a note that you forgot to claim a credit you were entitled to.

Think they aren’t out to make as much money off of you as possible? Think again.

Image: cc licensed ( BY ) flickr photo shared by Tax Credits

Because there are such high stakes when it comes to income taxes, paying your taxes is something you definitely don’t want to screw up.  Of course, there are always those people who like a challenge and who just don’t mind a little bit of excitement in their lives. Just in case you like tangling with government agencies, paying late fees and fines and ending up in a maze of audit requests, here are a few top mistakes that you can make that are sure to earn ire from the IRS.

Mistakes to Avoid on Your Taxes

Okay, in all seriousness, no one wants to feel the wrath of the IRS. That being said, make sure you avoid making these mistakes in order to fly in under the radar.

  1. Skip the tax preparation software: Tax prep software like TurboTax is easy-to-use and makes paying taxes simple so you get all of your deductions and pay the appropriate amount.  TurboTax even has experts available to answer your tax questions and to help you ensure that you can get the information you need to complete your tax return successfully. Since TurboTax makes it so hard for you to fail, you should definitely skip using this program or other tax software to do your taxes.  Instead, try to figure everything out using forms, pencil and paper and your memory of what deductions you might be eligible for. That is sure to go well for you. Just kidding—e-file to make your life easier!
  2. Wait until the very last possible second to start your taxes: This way, if something is wrong or if you are missing documents and paperwork, you can have the joy of scrambling at the last minute in order to meet your deadline.  US News identifies waiting to file as one of the Top 10 Common Tax Mistakes that people make, but who doesn’t love trying to get to the post office and get the taxes mailed at the very last second? Not only that, but if you are due a refund on your taxes, then you can delay getting your money from the government. Giving Uncle Sam an interest free loan is a really great way to keep your own money out of your pocket for just a little bit longer.   Not like you need that money to pay debts down, pay bills or bulk up your savings anyway…
  3. Leave off a few sources of income.  Failing to include all of your sources of income is number two on the Investopedia list of common tax mistakes.   When you leave off sources of income, the IRS is sure to find out about them anyway since the person or company who paid you will probably send a tax form to the IRS indicating that the payment has been made (you’ll get the form too). The IRS matches up the 1099s and other reports of income that come in and if you are missing some income, you get the added fun of getting noticed by the IRS for the discrepancy and potentially getting to pay late fees on top of paying your taxes.
  4. Be careless when completing the forms.  Surely, it doesn’t really matter if you write the wrong social security number on your income tax documents, if you don’t include the social security numbers of your spouse or kids or if you check single when you really are married—right?  The forms are only used to calculate your tax burden and make sure that the money and return goes to the right person… that’s probably not important as long as you send the forms in anyway!

These are definitely the best ways to make big mistakes with your income taxes. Now, it is up to you if you want to make these errors or if you want to do the smart thing and get your taxes filed on time and correctly so you don’t get the IRS after you.

Don’t be a dummy. Make a few wise choices, stay out of tax trouble, and enjoy a nice return. You deserve it.

About the author: Margaret Jackson is a full-time business/tax writer for a variety of publications. Prior to taking up the pen as her primary means of income, she worked as an internal auditor for a major corporation, which could explain her dry sense of humor. Now, she takes what she learned along the way to try and help people just like you.

Essential Apps To Help Your Finances

Smartphone apps
cc licensed ( BY ND ) flickr photo by Mr. T in DC

Considering how expensive things are these days, we need a way to keep track of our finances: this helps us to budget, plan, and prepare for the future. When we have a hold on our finances, we also have a hold on our lives. Similarly, what has made our lives more manageable has been the progress and evolution of mobile devices.

With our devices, we’re able to keep track of our emails, our loved ones, our calendars and, indeed, our finances. With this pocket-sized accountant and personal-assistant, many lives have been made easier and more manageable. But not all apps are equal for our phones.

These are the essential financial and personal assistant apps to get for your mobile device.


This handy app centralises all your expenses and income, by tracking all your savings, credit, and other accounts. All your credit card and bank spending can be monitored via Mint. After an initial setup, obviously, the App will take a reading of your incoming and outgoing expenses. From this, it can generate a sensible budget.

Available on iOS and Android.

A necessary reminder to pay the bills on time, avoiding extra costs that incur as penalties.  Though not a fully-fleshed out app, like Mint, it may be necessary for its timely reminders, and ease-of-use if you don’t need a full app.

Available on iOS and Android.


Known throughout the planet – and soon out of space – PayPal is the leading platform for monetary exchange, that makes for ease of handling due to its being universally acceptable.

The App allows for managing your PayPal account – which you can get for free – and monitor your invoices, your expenses, and so on.  You can even take a photo of a cheque to add money to your PayPal account for free. The App also allows you to locate local vendors who use PayPal so that you can pay securely.

Available on iOS and Android.


The major feature for this App is the multiple syncing feature. That is, new data and info and expenses can be uploaded through different formats – such as using an iPad, an Android phone, PC – and sync accordingly. Outcomes are readjusted according to this new data.

Pie charts, graphs and so forth can also better visualise the data. The full list of incredible features even includes adjusting to the local region.

Available on iOS and Android.


By using these apps, we have better grasp of large numbers, incomes, invoices and so forth that spiral around us like a tornado of incomprehensible data. Even just be noting numbers, we can do better. Allowing us to make better investments when making inquiries into new cars, home loan applications, and so on.

Data matters. Or, rather, manageable data matters, since pure data can be just noise that bogs us down. Considering the fast pace of modern living, we need a fast-pace form of financial assistance.

Author Bio: Terrence Stoker is a long-time finance writer and researcher of human behaviour, with a love for science and technology.

Finance Apps for Chrome: 5 Awesome Chrome Extensions

toshl  finance apps for chromeGoogle Chrome has become a top web browser due to its simplicity of personalizing your browser to fit your needs with web apps, themes, and extensions. Chrome comes with a plethora of extensions available to download for everything from news to photo editors to education. Another useful set of extensions are Finance Apps for Chrome especially personal finance- budgeting, keeping track of accounts, making payments, and more. For those of us who bank online and need a little help making sure we’re not overspending, these extensions can be lifesavers. Check out the best five Chrome extensions to help you manage your personal finances.

5 Finance Apps for Chrome

1) Mint

Mint gives you an extension that allows you to see all your personal finances in one place. You can add all your checking and savings accounts, credit cards, loans, and any other finances you have out there, all in one place and safely online. Mint gets access to your accounts so that it can show you every payment and transaction that’s recorded on your account. On Mint, you’re able to: create a personalized budget, set payment reminders, set balance notifications, explore goal setting options, and personalized reminders that are sent directly to your phone.

2) Toshl Finance

This extension creates a fun atmosphere for you to see your accounts and budget accordingly. Beautiful graphs and visual aids accompany your income and spending habits to help you better visualize where your money is going. One of the cooler things about this app is that you can see pattern emerge visually- for example, you can see how your spending habits change in different seasons throughout the year, and at different times of the month. If you’re more of a visual person and numbers don’t work for you, this extension is a great way to really see your spending habits and work to budget your money.

3) Cashbase

Cashbase is an easy-to-use, simple extension that allows you to add your income and expenses and any number of related accounts to keep track of, as well as providing chart and graphs to see where your money is going. One feature is the budget tracker encourages users to stay on budget by spending under budget. Cashbase also notifies you of recurrent transactions, provides a weekly email, allows you to import your bank statements, and has reliable customer support.

4) PocketSmith

The object of this extension is to design a financial calendar that let’s you forecast your future spending and bank balances. Centering around your financial future, PocketSmith allows you to personalize your extension with interactive visuals of your finances, planning for the future, track purchases, and make sure you’re financially prepared for any future expenses. Bank transactions can be customized into categories and you can assign alerts on spending limits to keep you on track.

5) Finance41

Finance41 was built for people who don’t like complicated software and just want to see their money flow. Easier than Excel spreadsheets, Finance 41 allows you to track your spending and budget your money without any hassle. Features include transactions being added quickly, categorizing spending with tags, analyzing spending and maintaining control of finances. The extension can also be synced with your phone to allow personal financing on the go.

So, if you’re looking for a savvy way to organize your spending and plan your finances for the future, consider looking into Finance Apps for Chrome Extensions- the easiest one-stop way to manage your spending.

Author Bio: Ricardo Casas owns Fahrenheit Marketing, an Austin, Texas based online marketing agency, dedicated to improving their clients’ online presence and digital strategy.

More about Finance Apps for Chrome

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Financial Apps in Google Chrome Web Store
If your favorite web browser is Google Chrome, you will want to check out the Chrome Web Store. The Chrome Web Store has free and cheap …

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What are Chrome apps, you ask? They are Chrome-optimized versions of websites with interactive features, and they are also complex editing …

3 Secrets Debt Collectors Don’t Want You To Know

debt (Photo credit: Alan Cleaver)

Debt – possibly the worst four letter word anyone knows. It creates stress, anxiety, and in extreme cases it can you put you in trouble with the law, or ruin your credit. Most people don’t seek out this kind of trouble. In most cases, when you get into a past-due situation, there are a multitude of legitimate reasons that could land you there. For the vast majority of people, debt collection is not a common thing. If you’ve ever found yourself out of work, or have a bad month where lots of emergency situations popped up, you know how easy it is to fall behind on payments and start incurring the debt collector’s wrath. But, it doesn’t have to be all stress and fear. Following are the three secrets you need to know to beat back the debt collector’s harassment.

Let’s get this out here though – avoiding the calls and letters will only make matters worse. The more you avoid dealing with the situation, the more the debt starts to cause problems for your credit and other issues. Realize this though, you are not alone – there are roughly 30 million consumers being contacted by debt agencies. If you don’t start talking you’ll never get the debt resolved though.

They cannot threaten to withhold wages

Here’s a biggie and one that has been a great tool in the debt collectors bag. Oftentimes a debt collector will get a consumer on the phone and threaten them with legal procedures that will cause withholdings (automatic reductions in your pay) to get rid of the debt. This is illegal. Most consumers aren’t aware of this, and this is why the tactic is still used. If you are ever threatened with this, tell them immediately that you have rights and you will be contacting a consumer protection lawyer. Do everything in your power to get as much information: the debt collection company you’re dealing with, the agent you’re talking to, and the time and date of the phone call. It is possible to use this information to get your payments (legally) reduced, or in some extreme cases completely forgiven.

They cannot require large lump sum payments

Realize this: debt collection agents often work on commission. If they can talk you into paying off the debt with a big lump sum payment, they make a better commission. There is no requirement on your part to do this though. If a debt collector tells you that you need to give a large down payment to avoid incurring other fees realize that this is false. The agent is simply trying to get a larger chunk of money for his or her commission.

You can dispute the debt

You have the right to notify the debt collection agency that you want to dispute whether you really owe a specific debt or whether there has been a mistake. A common issue is when a consumer pays a debt to, say a medical office, but it’s between the time that the office issued the debt to their collector and when you have been contacted. If you are certain that payment was made, notify verbally and in writing the agency contacting you. At this point they, by law, must stop any debt harassment that is occurring. Also, agencies are required to notify of your right to dispute the debt.

Any sort of debt is frustrating and obviously should be paid off in a timely manner. But, as consumers, you need to know your rights so that you can avoid any and all debt harassment that can often occur when zealous agents work to close their debts. Make sure you notify any agent calling that you want a copy of your rights, and that (if you can) you will be taping the call. Ultimately, it’s in yours and the agency’s best interest to setup a plan to make payment easy, affordable and fair.


Author Bio: Sean Carter is an experienced writer who has written for many sites all across the blogosphere. His interests include finance, technology and home renovation.

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