4 Warning Signs of a Debt Relief Scam

It sounds almost too good to be true: Just as you’re fretting about your debt more than ever, a solution seems to drop out of the sky. You’ve received a call, email or letter that promises to change everything — someone wants to help you get rid of your debts!

Consumers, beware. Anytime an offer seems too good to be true, it usually is. Anyone vowing to quickly and effortlessly erase your debt is likely to try to prey on your financial vulnerability and good faith. There have been many instances of phony debt relief operations, like a 2017 case in Florida that “bilked tens of millions of dollars from financially strapped consumers, including elderly and disabled people.”

There’s a huge difference between reputable debt relief firms with a proven track record of settling millions in debt and scams. And, for your own wellbeing, it’s your responsibility to differentiate between them when you’re trying to tackle your debt.

Here are four major warning signs of a debt relief scam.

Scam Sign #1: Requesting Payments Up Front

Protecting yourself against a scam first and foremost means knowing your rights as a consumer.

The Federal Trade Commission’s 2010 Telemarketing Sales Rule prohibits debt relief firms from charging up-front fees. They are only allowed to solicit payment after they’ve successfully settled or otherwise resolved a participant’s debts. A legit debt relief company will adhere to this rule; a scam operation will typically not.

Scam Sign #2: Guaranteeing Certain Results

Another provision in the FTC’s regulation forbids debt relief organizations from misrepresenting their services. There are simply no guarantees in the world of debt settlement. Final outcomes depend on many factors, including the creditor in question, the negotiation process and more. Reputable companies will try their best to get enrollees’ debts settled for a percentage of the original balances, but they will not guarantee any certain outcomes ahead of time.

Be very wary of anyone who tries to assure you they can resolve all your debt, or get rid of your debts within a set timeframe.

Scam Sign #3: Requesting Personal Info Right Away

As the AARP reminds consumers, consider it a red flag if a company withholds information about itself “unless you provide financial information such as credit card account numbers and balances.”

The first step in a legitimate debt relief partnership will always be a consultation during which you’ll explain your overall financial situation without getting pressured to hand over highly personal and financial information. Scammers, on the other hand, will generally try to gain access to that data as quickly as possible.

Scam Sign #4: Failing to Provide Adequate Information

Any firm that acts dodgy when you ask them for more details is not your friend. Reputable debt settlement organizations will have no problem pointing you to a website — and you should be able to find plenty of reviews of their services online from prior customers. Scammers, on the other hand, may hem and haw when you ask them for specifics about their services.

Legitimate debt relief companies will disclose the potential benefits of enrolling in a settlement program as well as the potential risks you’ll face. They will also disclose information like how long it may take to see results, how much it may cost you in fees, how to access and control any associated accounts and potential negative consequences you could experience.

Debt relief scams talk a good game but will not deliver results — instead they’ll take whatever hard-earned money they can get out of victims. Be on the lookout for the major warning signs: guaranteeing results, asking for payment up-front, asking for personal information right away and providing insufficient information about their services.

How to Get Out of Credit Card Debt Without Ruining Your Credit

Did you know that the average American has around $38,000 in personal debt? Do you feel like you have been drowning in debt lately? If you are part of this statistic and are looking for how to get out of credit card debt without ruining your credit, you are in the right place.
Keep reading to learn more about how to tackle your debt ASAP!

Debt Consolidation

Finding a debt consolidation company is a great way to pay off your debt without worrying about ruining your credit. There are different companies out there that will consolidate your debt into one making it easier to handle everything you owe with one payment vs a few different payments. This is a great method if you are able to get a debt consolidation loan that has a lower interest rate than your current credit cards. If you are looking for options check out all the debthunch reviews to see if debt consolidation is a good option for you too.
Another way to consolidate debt is to take out a personal loan. A personal loan typically has a lower interest rate than a credit card does. Make sure that before you commit to a personal loan the interest rate is lower than all of your credit cards before signing anything.

Ask for Lower Interest Rates

Sometimes credit card companies might lower your interest percentage one or two points. This can add to up to hundreds when you do the math. Call each credit card issuer and ask about lowering your rate. If you have been a long term customer that has been making payments on time and have a good credit score, they will more than likely say yes.
If you have recently been offered a lower interest rate by a competitor you can ask if they will match it. Depending on the credit card company they might match that offer.

More Minimum Payments

Usually, with a credit card company, you are charged interest daily which means that the sooner you make a payment the less interest you will pay because your average daily balance goes down. Instead of paying one minimum monthly payment pay two payments in the same month. You would be surprised at how many years this will knock off your pay off date. For those on super tight budgets making a payment of the minimum due every two weeks is the way to go.

Now You Know How to Get Out of Credit Card Debt Without Ruining Your Credit

Learning how to get out of credit card debt without ruining your credit is the first step, the next step is to take action. Start applying everything we shared above and soon you will feel the weight lifted off your shoulders.
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Coping With Debt: Help Is Available

Owing money for a mortgage may seem like a normal part of life for many people. but being buried under a mountain of debt or falling behind on credit card payments can quickly become overwhelming. If you are struggling with debt you cannot manage, know that there are ways to get help and pay your balances. Consider these options that may help you cope with your situation.

Contact Creditors

Reach out to lenders to see if they can work with you to lower payment or interest rates, reverse fees, or even structure a repayment plan. If your balances are primarily secured, you may have better luck taking this route, since banks are not generally looking to enter the tangible property market.

Debt Resolution

If you honestly believe that your balances are too high for you to repay them, then debt resolution can be an option. It involves negotiating with creditors to accept a lower total payment on certain types of balances in exchange for a set payment schedule or single, lump-sum amount.

This can be done on your own, but it often involves using a third-party company, like Rescue One Financial, that specializes in this type of situation.

Financial Counselors

There are plenty of financial and credit counselors who can help you understand your finances and help get them back under control. No matter how you choose to tackle your current debt burden, talking to a counselor can help you stay out of the same situation in the future. Choose a reputable agency that you feel comfortable working with.

Even if you have a solid income and work hard to make ends meet, one wrong move or sudden illness can cast doubt on your financial security and make paying bills difficult. Use the resources available to you to find the best way to get out from under your growing debt before it becomes any bigger.

5 Things Everybody in Debt Needs to Know

As of 2019, the average household debt in the United States was almost $10,000, totaling over one trillion dollars of debt in the entire country.

If you are one of the millions of people that feel like you are drowning in debt every month, here are 5 things you need to know.

5 Do’s and Don’ts When You’re in Debt

1. Don’t borrow from Peter to pay Paul. Many people get so far in debt that the only way to pay one bill is to take out another credit card or loan. They get the mentality that if they are already this far in debt, why not go a little further? The truth is that without a detailed plan to get out of debt, adding more to it is not going to help.

2. Don’t add unnecessary items to your debt. Using your credit cards to buy food or pay your electricity bill might be an urgent, understandable emergency. But using them to buy the shoes that you just had to have or pay the Netflix bill for the month are not good uses for a bill that is going to accrue interest.

3. Do be careful when accepting a zero-interest credit card. Zero interest credit cards sound like a dream come true at the time. If you use them right, you can transfer high-interest balances to the new card. But you’ll need to pay those balances off before the interest term ends and your rates skyrocket. In some cases, your new rates may be even higher than the one you were trying to get out of before.

If you do accept a zero-interest card and transfer that big ugly balance over to the new card, be sure you use those monthly payment-free bonuses wisely. You won’t have the old payment and you won’t have a big payment on your new card for a while, so that’s the time to invest that extra money into buckling down to pay off your debt.

4. Do work with a professional to reduce your debt. Going it alone is not the strategy that works for most people. You can become easily frustrated when it looks like your debt is not going anywhere. Professionals have tried and true strategies and debt consolidation tips that work.

5. Don’t fall for “checks in the mail” scams. Once you start actively researching ways to get out of debt, you’ll probably find multiple lending companies sending you “checks” in your mailbox. Some of them are real checks and it can be tempting to cash them and end your worries. Check the fine print, though. The strings attached to “free” money are usually not worth the cost.

You Can Get Out of Debt

You don’t have to reinvent the wheel to find your way out debt. Millions of others before you have done it through strategies that work. Find the one that works for you and you will be enjoying your hard-earned money yourself before you know it.

Debt Dodgers – 5 Strategies to Avoid the Debt Trap Forever

Dealing with debt is a total drag. If you’ve experienced the vicious cycle in the past, reap some positivity from it today by letting it serve as a reminder. Forgive yourself for any mistakes you may have made back then, or, for the stress and toll it had on your lifestyle and family. It’s much healthier to focus on making sure you never end up in the situation again. Start by following these five foolproof strategies for living your best life and steering clear of debt.

1. Run Away From Credit Card Offers and Payday Lenders

The bigger the financier, the less likely they are to have your best interests at heart. If you find yourself in an emergency financial situation you can’t cover with your savings, take out a low interest loan from a community-focused lender. Their smaller, more affordable loans and financial counseling services are designed to help the community, unlike the big banks who will always try to upsell and sneakily offer more credit than you can afford to pay back.

2. Say No To Pay Later Schemes

If it’s not a matter of life or death and you’re offered to pay in increments rather than upfront, do not accept. If you cannot afford something at the moment, do not buy it. While this point may seem obvious, many people carry debt because of this common mistake. Whether it’s for a new television, car or just a bicycle, a pay-later scheme leaves you indebted to someone and can be risky if your expenses or financial situation changes. It is much safer to buy upfront or not at all.

3. Prioritize Your Emergency Savings Account

While you can’t predict the future, you certainly can do your best to safeguard it. Create one designated bank account strictly for emergency use and make sure it’s not easily accessible – maybe use a different bank. Calculate the cost of six months worth of living expenses and put that amount in your emergency fund. It may mean depleting your checking account or a bit of aggressive saving for a while but if one day, you fall into financial trouble or lose a job this will be your safety net.

4. Generate Multiple Streams of Income

Job security can be a bit of a misnomer if you only have one job. By generating your income from a few different sources, you’ll gain the capacity to earn more money and have a plan B should anything affect your main income source. Setting up an online store or website is easy if you’re an artist, craftsperson, or have a supply of anything valuable. You can generate ad revenue if you write a blog or create content online or even make money by outsourcing your services on gig sites or selling second-hand items.

5. Renegotiate Your Ongoing Expenses

It may surprise you to know that most service fees we pay for on a daily basis are negotiable. This is especially true for all privatized billing services like your energy and gas, insurance, bank, phone and internet providers to name a few. Visit a rate comparison site and explore the competition to find the lowest rates. Unless you’re already on the most cost-effective plan, present these numbers to your provider and a lot of the time, you’ll find they actually can afford to charge you a lot less!

Keep these tips in mind and pay close attention to your spending habits. You’ll be able to save more money, enjoy more freedom as well as financial security.

The Top 3 Pros and Cons to Using a Credit Card to Pay Off Debt

Some people use their credit card balance to pay off debts. This has many pros and cons. Through Loanable financial solutions, you may avoid using credit card balance to pay off debts. But we are going to review some of the pros and cons of using the credit card. We will also review alternative methods to pay off debts. Debt management is good as it helps you clear existing loans and helps you to avoid taking more debts in future. Knowing the various options you have towards clearing loans and any other debts may help you to achieve financial freedom

Here are the top 3 pros to using a credit card to pay off debt:

  1. Improve credit rating

To qualify for loans and financial help from most lenders, your credit rating is considered. Using a credit card to shop regularly and ensuring that the credit card bill is paid on time will help you to increase your credit score.  Most organizations use the credit score to determine interest rate when you apply for a loan, rent deposit and generally your creditworthiness. Paying off debts with your credit card helps you get rid of bad debts, therefore, enhancing your creditworthiness.

  1. Avoid accrual of debt charges

If you use your credit card to pay off debts, you may avoid charges due to non-payment of the debt or late payment. With a credit card, you have up to forty-five days in some cases to repay the amount already spent. This makes it a good debt management tool.

  1. Savings

Every time you use your credit card you get rewards. Different companies have a form of reward to their loyal customers. If you pay debts using the credit card, you still get the rewards. These are forms of savings and if you use your credit card more, you also access more points and hence more rewards.

Cons of using a credit card to pay debts

  1. Destroy credit rating

Because of ease of spending, it may eventually destroy your credit rating when you fail to pay. You should use other methods to pay debts so as to avoid reducing your credit rating score. It is advisable to use alternative methods to pay debts to avoid compounding the debt problem.

  1. Interest

If not paid on time, you will be charged interest. If you are struggling to pay off debts, you may still find it hard to pay the credit card dues on time. This may end up increasing your debt in the long run.

  1. Increased debt

Since you already know you have a credit card that can help you clear monthly debt installments, you may not feel the need to look for additional sources of income. Due to ease of spending, a credit card may also get you into even more bigger debts. You should, therefore, avoid using it as much as possible. It’s best reserved for emergencies.

Before you decide to use a credit card to pay off debts, ensure that you have also reviewed other sources of finances. You may easily identify affordable loans with better repayment terms and conditions and avoid the risk of getting into more high-interest debts.

4 Tips to Working With a Collection Agency

Debt recovery is a potentially taxing, unnerving, and time-consuming undertaking hence the rising popularity of collection agency merchant accounts. Collection agencies hold clients financially responsible for outstanding bills. For better services, we recommend you secure engage a collection agency that acts as more of a partner than a contractor.

The importance of cultivating an excellent working relationship with your agency can’t be stressed enough. Work ethics dictate you hold regular meetings for status report updates to assess your account status.

This piece will explore on the various way to work with a collection agency.

1. Determine an agency’s legitimacy

Statistics reveal the existence of over 4,200 collection agencies in America alone! You’d expect a few unscrupulous agencies to account for a fair percentage of that figure.

Some collection agencies handle B2B collections, while others deal with consumer accounts. The more established collection firms often deal with both B2B and consumer accounts.

Ask for referrals from trusted business associates, your attorney, or accountant in your industry.

Another aspect to consider is licensed and bond status. In most states, regulations stipulate that collection agencies require to obtain either of bonded status or licensing and others both. Assuming you do business locally, hire a collection agency located in your State.

For cross-border business persons, find an agency that’s licensed in all states you conduct business.

2. Disclose information

The collection agency requires you to provide them with as much information as possible about a debtor. Full disclosure helps in raising the odds of obtaining the highest possible compensation.

The more debtor information you disclose, the more cash you stand to collect. Besides revealing your debtor’s name, you must furnish the debt collector with their telephone numbers and addresses.

Also share cell phone numbers and email addresses, physical address, spouse, neighbors, relatives, and friends.

Other information includes;

  • If the debtor has, in any way, responded to your collection inquiries
  • Nicknames, aliases, and maiden names of the debtor
  • Extensive details about the transaction or purchase, including the date and time- if need deemed necessary
  • Contracts signed and credit applications

3. Understand applicable regulations

The FDCPA (Fair Debt Collection Practices Act) guides the practices of collection agencies. As much as the debtor owes you, they remain protected from possible harassment. Agencies are known for employing aggressive tactics, pushing and bending laws to coerce people to meet their debt obligations. Understanding relevant laws will guide you during your collection exercises.

Refrain from hiring an agency renowned for using underhanded tactics.

4. Understand the cost of engaging a collection agency

Collection agencies recover your money at a price, meaning you must pay them a pre-agreed percentage of what’s recovered. In most cases, if your business receivables go past the 120-day mark, your chances of recovering your monies drop significantly.

Key takeaway

It’s vital that a collection agency doesn’t ruin the relationship with your customers by fulfilling their mandate as per the law. Hire a reputable agency to safeguard future business.  

Financial Steps To Take after Paying off Debt

You’ve dreamed of being debt-free and after persistence, sacrifice and delayed gratification; you’ve paid off that last credit card bill. Congratulations, but your financial journey is nowhere near over.

Becoming debt-free doesn’t mean you suddenly have all the financial answers. You have to guard against backsliding, and plot your new course among the many new options that come with more disposable cash. Here are a few steps from Cash 1 Loans to take after you pay off your debt.

  1. Be the Tortoise, Not the Hare.

While, the hare in one of Aesop’s Fables was one of the fastest animals around, he quickly lost steam and was defeated in a race with a slow-moving tortoise. When it comes to your money, it’s better to be slow and methodical than fast and impulsive. Rushed decisions are very often emotional decisions. Take a couple of months to get used to your financial situation and determine what you want to accomplish next. Then create a spending plan that will get you there.

  1. Commit to a New Major Goal.

One of the benefits of paying off debt is proving to yourself that you have the heart to achieve a big goal. Keep those motivational juices going by finding another mountain to conquer. When you finish, don’t stop there. Take another two to three years to aggressively save. You’ll be so pleased with the results.

  1. Reassess Your Budget.

You’ve had all your extra money going toward your debt payoff and it’s now time to redirect the money somewhere else. But that doesn’t mean you aren’t allowed to use any of the money for fun either.

If you’ve been working yourself to the bone and pinching pennies over the last several months or years take the time to figure out how you want to reallocate your income.

If you plan on putting a portion of that money towards things you consider fun like home improvement, clothing or a trip and decide how much that will be. While it’s absolutely okay to cut yourself some slack, if you don’t carefully plan you’ll end up spending all of your extra money on fun stuff rather than just the small portion you were planning.

  1. Fight the Urge to Chuck the Budget.

When every penny no longer needs to be accounted for, you may think you no longer need a spending plan. But if you don’t have guidelines, you can go back into the same cycle.

After paying off significant debt, one might easily have an extra $500 to $1,000 per month in disposable income. Without a plan, the extra money can simply “get lost” amid your normal spending money.

  1. Consider Priorities You Put Off.

If you’ve been paying off debt, chances are there are things you’ve been putting off. Whether it’s buying a long-term care policy, starting your child’s education fund or even taking that dream vacation, now you can put money aside for those things you neglected. Two areas to pay particular attention to are emergency savings and retirement.

That’s what Zina Kumok of Indianapolis did after taking three years to pay off $28,000 in student loans. “Since paying off my loans, we’ve been able to increase our retirement contributions to 10 percent, save $15,000 or six months’ worth of expenses and also save for a European vacation next year,” she says. Look how this student loan payoff calculator can help you maximize your payments.

  1. Look into Alternative Investments.

Now that you have more money freed up each month you have the option of looking for ways to earn even more. One of these methods could be through alternative investments.

All of these ideas are not for everyone but if you’re interested here’s a list of things to consider:

  • Investing in Real Estate
  • Investing in Peer to Peer Lending
  • Learning How to Trade Stocks

Be sure to thoroughly research any new investment idea. Learn as much as you can before investing large amounts!

  1. Put More Towards Retirement.

When I was working on building up my finances to a level I considered stable, one thing I definitely slacked on was retirement savings. If you’re like me, now is a good time to increase your contributions.

Even increasing your retirement savings by 5 or 10% can go a long way. This is also one of our favorite strategies for reducing the taxes you have to pay before the end of the year.

  1. Start a Side Business.

When you’re saddled with debt, taking any type of risk with income can seem scary. Perhaps that debt has held you back from trying out a new side business idea you’ve been interested in? If so, now is a good time to get your feet wet and give your idea a fair try.

  1. Incorporate the Lessons Learned.

Don’t forget the difficult lessons your debt taught you. I have seen people pay off debt and then plow themselves back in because they have not addressed the root of the issue. If overspending got you in credit card debt before, you might want to stick with cash.

  1. Prepare for the Toll on Relationships.

You’ll realize such a significant accomplishment as paying off your debt is likely to affect those around you. For example, you and your friends may have grumbled together about your money woes or your inability to do certain things because of financial restraints.

Now that you’re debt free, you may have to find other topics of conversation and ways of connecting. On the flip side, some friends or family members may be more apt to ask for a handout. If you don’t want to fulfill such requests, plan in advance how to turn them down.

  1. Stay Goal Oriented.

It was easy to stay focused on paying off your debt (most of the time) because you had a strong goal. You knew exactly how much debt you had to pay off and could calculate how much time it would take based on your extra monthly cash flow.

That goal kept you motivated.

If you want to keep improving your personal finances, you need to stay goal oriented. While it’s perfectly fine to loosen the reigns a bit you’re going to need to set yourself strong goals to stay focused on the end game.

  1. Spend and Have A Blast.

Now, it’s not all about saving. I don’t use the word often, but after all your hard work paying off debt and saving so much; you deserve to spend a little!

This is one of the most difficult steps for anyone who has paid off large amounts of debt because it doesn’t come naturally. However, if you are actively saving 15% or more of your income and investing in your retirement accounts, you have an emergency fund, and you have money left over every month, you should be free to go on vacation or buy whatever you want as long as it’s not more than what you have.

Ultimately, paying off debt is just the first step to your journey of financial independence, but it’s the most important one because it sets the path for the rest of your journey to financial success. Just remember that life isn’t all about saving, saving and saving some more. Leave yourself a little room to enjoy life’s little extras too, especially because you spent so much time setting yourself up for success.

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