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Debt

Stop Debt Collectors Cold

Some collectors would call you every day. It is distressing because the conversation is repetitive. He tells you that your account is delinquent and you tell him that you cannot pay (probably because you lost your job or you spent a lot on medical bills). Whatever it is, the debt collector continues to tell you that he will continue the collection efforts. You can request him to stop calling you and tell him that you will write a certified letter. The calls may continue until they have received the letter.

You can ask the debt collector to stop calling you on your next conversation but writing a letter to the debt collection agency is the surefire way to make the calls stop. In your letter, ask the collection agency to verify the debt and stop calling you unless they have already verified it. It will usually take long for them to verify the debt. Sometimes, it is impossible for them to do it.

Many debts are passed on to third party collection agencies by assignment or purchase. With assignment, the original creditor hires them only to collect but the debt is still in the original creditor. With purchase, you now own the collection agency. Whatever the case is, you don’t know the collector simply because you borrowed money from a different agency or company. No one in his right mind will give a huge amount of money to someone he just met, right? A verification of debt is indeed needed.

The Fair Debt Collection Practices Act gives you the right to ask the debt collection agencies to verify the debt and prove that they are collecting for the original creditor. The proofs may include a hard copy of the debt transfer or purchase where your account is included in the batch. Watch out for the collection agencies that send only a cover letter where you see a page signed by the original creditor and the collection agency stating the purchase of debt. Look for the list of sold debt account number and name.

The FDCPA also gives the third party collection agencies a deadline in verifying the debts. They need to send the verification letter within five days. It must include important details such as the name of the original creditor and the amount of your debt. You can dispute their verification letter within 30 days and make the collection agency a proof that it is your debt. They don’t have a deadline for this and their collectors can still contact you unless you formally ask them to stop phone communications through a certified mail return receipt requested. The proofs must include a proof that the collection agency holds your debt, a history of your payment and a copy of your original contract (the one with the original creditor).

Fight Back Against Debt Claims

Read and Understand the Notice

The Fair Debt Collection Practices Act give debtors the upper hand in any consumer debt claims so don’t be too quick to hand over your hard earned money once you see a collection letter in your mail. First, read and understand the notice and then check if they got the right person. Some collection agencies are known for sending collection letters to the wrong address. Note if the debt amount is clearly defined and their contact details, so you can respond accordingly.

Respond to the Notice

Once you read and understood the notice, it’s time to respond to it. The worst thing you can do at this point is to ignore the notice as this could result in a credit card lawsuit. Your silence over the issue could be translated as consent on the debt’s ownership! You will be given 30 days to dispute the debt so make sure you send an appropriate response within the given time frame.

Check the Rules

If the debt is sent to you by mistake, it’s important to let the debt collection agency know in writing. Send the letter via certified mail with return receipt requested. On the other hand, if you own the debt, it’s best to check if the debt is within statutes. If the debt is out of statutes, the creditor can no longer file a credit card lawsuit nor threaten you with filing a credit card lawsuit to get you to pay.

Take Action

Accepting or rejecting the debt claim is entirely up to you. If the debt is indeed yours, you can either offer a lump sum to repay the debt or propose a payment plan. If the debt is valid and legal, it is best to do the right thing and repay the debt to avoid a credit card lawsuit. However, do not respond to threats, abusive behavior or bullying. If such things occur during the course of the debt validation, you can sue the debt collection companies for violating consumer rights under the FDCPA.

Handling Your Debt

Every single person who earns a stable income, and doesn’t fall prey to any terrible misfortunes, should be able to build a sizeable nest egg for himself or herself with a little self discipline. It doesn’t matter how much you earn, if you plan properly, you will be able to save.

The trick is to delay gratification when it comes to spending. Ask yourself what the real cost of an impulse purchase will be. Think of what it will cost you today and also tomorrow. One of the worst reasons for over spending is because you want to compete with somebody. Always trying to have better things than the next person can turn into a disease and severely hamper your financial stability. People guilty of doing this will normally over spend and then borrow more and more money, putting themselves into serious debt.

Avoid the debt-trap at all costs, because once you are servicing your debts by borrowing money from elsewhere, it is extremely difficult to get out of. These debt relief tips may be for you.

It is never too early to start saving. Even as little as 5% of your income will add up to a lot of money over time. This is the magic of compound interest. Saving is far better than borrowing and incurring debt and you can make sure that you are comfortable later on. A good way to save is to sign a debit order. In this way, you can write off your debit orders each month and budget around what is left afterwards. Saving is far better than borrowing and incurring debt and you can make sure that you are comfortable later on.

Here are some things you need to watch out for.

Make sure that your debt repayments don’t exceed 40% of your take home pay. If they get as high as 50%, then you know that you are in serious trouble.

If your vehicle is not insured, then you are at risk. If you don’t have a will, make one fast.

Resist all offers for finance, as this is the fastest way to get in the red.

If purchasing a vehicle, make sure the repayments are not higher than 17% of your salary.

Make sure that any saving that you are contributing to are working on a compound and not a simple interest system.

With just a little will power and some savvy saving, you will be living the retirement of your dreams.

Corporate Banking and Its Products

Products under Corporate Banking

Project Loan: Commercial banks offer project loan to export-oriented customers for setting up new projects as well as for expansion of an existing projects. To finance costs of building, machinery, equipments, vehicles and other fixed expenses may be the objective of project Loan. Project Loan is provided to the customers in the form of hire purchase, lease finance, loan general etc.

Working Capital Finance: Business enterprises engaged in manufacturing, trading service business are eligible to avail working capital loan to meet day-to-day expenses for processing of manufacturing and selling product and services. Working capital products include both fund and non-fund based products. Fund-based working capital products include secured over draft, cash credit, packing credit, short-term loans payable on demand bank guarantees. Non-fund based products include bank guarantee; performance guarantees and bid bonds are also supporting the business of our customers.

Lease Financing: Lease financing became a thrust sector for individual and small enterprise besides medium and large enterprises. Commercial bank has been providing lease finance facility to its customer for acquisition of manufacturing and service equipments for all major industrial sectors.

Syndication Finance: commercial banks have been financing large-scale projects under syndication arrangement to raise and meet huge credit need of a company. This arrangement allows the banks to share expertise among them and diversify its credit risks. Syndicated loan as loans extended by multiple banks where the overall credit involved exceeds an individual lender’s legal lending or other limits. It is made available by a group of financial institutions in pre-defined proportions under the same credit facility following common loan documentation formalities.

Trade Finance

  • Letter of Credit: Business Enterprises can avail Non-funded facility for import and procurement of raw materials, machinery, equipment, merchandise item.
  • Loan against Imported Merchandize: Business Enterprises engaged in import merchandise can avail working capital for retirement of import documents.
  • Loan against Trust Receipt: Business Enterprises engaged in import of merchandise can avail working capital for retirement of import documents.

Other Cost of Debt

Perhaps enticed by these products, you spurge left and right, swiping your credit cards as though there is no tomorrow. Remember the movie Confessions of a Shopaholic? Sometime, people tend to be guilty about it. However, the reality is that our life is not a movie that someone must direct us what to do to make it a happy ending.

More than the financial costs of debt, there is one factor that is detrimental if left unheeded and unsolved. This may cost more than your wealth simply because nobody can buy it. When you lost a thing, you say, “it’s just a thing, I still can buy it.” But when the emotion is involved, it’s something that is serious and it needs careful attention.

When you are unable to pay your debts on time due to financial scarcity and whatnot, it leaves you feel desperate and not in control of your life. It’s like someone is controlling you. The worst thing to happen is to deprive yourself of the things that could make you stay healthy and happy. This can eventually lead to loss of confidence and, to some extent, this has an abysmal effect to one’s sense of self.

The emotional consequences of debts can also affect the people around you. It can harm your relationships with your family, friends and loved ones just like a lot of failed marriages are rooted in money problems. While somehow it has an advantage to your work performance as it would push you to do more, to perform more, which apparently beneficial to your employer, there should be a long term solution to your debt problems.

In the midst of all these negativities, debt should not only be construed as bad, useless, detrimental and whatnot. Debt is good as long as you know how to use it and how you handle it. Debt exists to fill in the scarcity for the mean time. However, a careful planning must be in place before anything else.

Zombie Debts

The principle behind this business deal is simple. All debts at some point of time become uncollectable as they have passed the time period laid down in the statute of limitations. This time period could range from 3 to 7 years. This period varies from state to state. At this point collection companies who wish to make some money from this deal will buy the debt at a fraction of its value. It can be understood that older the debt the less its market value. Thus a debt over 8 years will cost a fraction of the money that would be paid for a debt that is 3 years old.

In earlier times the collection agents had a free field and could use any method to recover the outstanding debt. This could include threats and intimidation. However The Fair Debt Collection Practices Act passed in 1996 has put a premium on all forms of coercion. This act lays down the limits under which a collection agency can run and any infringement of this can be reported to the authorities. However there have been cases where the collection agents subvert this act to collect something out of the outstanding debt. Yet, despite this act, the debt that is very old does not debar collection agents from buying the debt and trying to recover it. The aim of the collection agent who has purchased the debt at a very, very low price is to recover a portion of the debt and thus make some money in the bargain.

These zombie debts can appear at any time and this is often referred to as re-aging of debts. This is illegal but it happens all the time. There have been cases recorded where an original debt that has been discharged in a bankruptcy re-appears as a Zombie debt. This re-aging of debts needs to be guarded against. But if it does happen some prudent action is required to contain the damage. Thus an individual need to be aware of the following.

  • He must as a rule check his credit report at regular intervals and see if any such entry is there. In case such an entry appears it is incumbent on the person to check with the credit bureau and get the entry rectified.
  • Be informed. The fact that you are not aware of the statute of limitations will not hold water. Thus in case contacted by a debt collector be aware of your rights and act so. You can follow-up by contacting your state’s Attorney General’s Office and the Better Business Bureau. This is not the end and it should be followed up by contacting the agency that issues the license to a collector in the state you live and complain about this ‘zombie’ debt that has been re-aged. Remember all collectors have to be licensed.

The debt – buying industry is lucrative business and information available shows that some of these collection companies have earned enormous sums of money running into thousands of dollars by purchasing Zombie debts. They will even purchase debts that have passed the statute of limitations and try and recover some part of the debt. There have been cases where a debtor with a 9-year-old debt has been approached by these agents. They thrive on the ignorance of the debtor and hold the fear of a prison term as well.

However it must be mentioned that after a 7 year period a debt cannot appear in your credit report. It does not matter whether the debt is still outstanding against your name or has lapsed. If such a thing happens then it is best to report this anomaly to the credit bureau. Remember that there is a good chance that the debt has already been written off, but collection agents will still buy it, as it is their business. They thus buy the debt at a few pennies to a dollar. The debt collectors know that the entire debt cannot be recovered and hence they will go in for a settlement, an adjustment where the debt owner pays only a part of the debt. But the basic ingredient on which these collector’s thrive is ignorance and lack of information.

Though Zombie debts are illegal, yet they are very much a part of the American scenario. Thus in case you are approached by a debt collector for recovery of an old debt than the following steps may be taken.

  • Contact the credit bureau and report the wrong entry in the Credit report. Make it a point to demand documentary proof from the debt collector about the debt. The debt collector is under obligation to give this information within 30 days; in case he is unable to do so then you are home and dry.
  • In case a collector persists in his attempt to collect a bill that has been paid long back, or passed the statute of limitations then report him under the federal Fair Debt Collections Practices Act. The bill collector could end up paying a massive civil penalty as well as subject to fraud and harassment charges

Avoid Getting Bad Credit

Most lending institutions are reluctant to lend cash to individuals with an unfavorable repayment history. Therefore, it is better for people in this position to deal with an accredited agency that is used to obtaining loans for bad credit on behalf of its clients. It is particularly advantageous if the agency has an established network of lending institutions as this enables them to shop around for the best interest rates.

Surprisingly, bad credit unsecured loans can also help to repair a poor credit history. This is because it will work in your favor if you can successfully obtain borrowing. Additionally, if you ensure that any repayments on unsecured bad credit loans are made on time, you will begin to demonstrate your capacity to meet your financial obligations. You may find yourself with a poor credit history for a number of reasons including bankruptcy, Individual Voluntary Arrangements, County Court Judgments and defaults on previous loans. Additionally, people who have never borrowed money may find it difficult to obtain finance as they haven’t been able to build up a positive history.

All of the above factors can affect your credit report; these reports are maintained by agencies that specialize in recording financial information about individuals. Therefore, when you apply for any type of borrowing the lending institution may refer to your report before deciding whether to grant finance. If you make repeated applications and are turned down then this is also recorded on your report, and could reflect badly on you. Many lenders use a credit score system for people that apply for loans. Your score will depend on many factors and will vary from company to company. However, a major factor will be your credit report. Therefore, if you have a poor report then this could pose a predicament for you in obtaining finance.By visiting a specialist agency you may be able to secure borrowing that suits your needs. Additionally, once you can prove that you are able to meet the repayments on time, your credibility as a borrower will be enhanced. This should eventually boost your chances of obtaining finance in the future. The amount that you can borrow will vary as it depends on factors such as your income and how many financial commitments you already have.Your loan adviser will inform you about the options available once the staff have obtained relevant information regarding your financial status. The repayment period can also depend on how much is borrowed and the amount that you can afford to repay each month.

Debts Incurred Overseas

If you do not pay the debts that you have incurred overseas, you should not expect to have a clean slate in the particular country that you have gotten these. Apparently, the creditors would surely make the necessary steps to recover the amount that they have loaned to you through legal means. If it seems difficult for them to make sure pursue this in your current country, they would at least make sure that you would not be able to return to theirs without having to repay the debts that you have incurred.

Another step that they may take is to hire debt collection agencies in your current country. Such firms may also employ legal maneuvers in order to compel you to pay up for the loans that you have acquired abroad. The presence of debt collection agencies in the country that you are currently in are actually the most potent mechanism that would serve the interests of the creditors abroad. Once these are hired by your creditor, they would certainly do everything legally allowed to make sure that you pay up. This is especially true if they actually paid the debt themselves because they believe that they could recover it from you.

You can never live an absolutely trouble-free life if you have debts that are unpaid and overdue, wherever in the world this may be. One way or another, these would certainly hassle you. If not in the immediate future, it could annoy you maybe in years after. This is the reason why you should avoid having unpaid debts. If there are circumstances when you have to leave a country for another without having to deal with your debt repayments first, you could always do this even when you are abroad. Technology has made this possible.

Obviously, debts incurred overseas are not exactly done deals. Of course, the pressure may no longer be too strong as you are far away from the reach of the mailed bills. But then, this does not really absolve you from your debts. Wherever you would be, you would still be obligated to repay it. The best that you could do is to repay the debt but according to your terms of payment. If the creditor sees that you are repaying despite your distance, they would not mind the delays.

Direct Deposit

To verify an account, an employee must send a statement or a blank cheque from his bank. By doing this, he will provide vital information that will enable the employer’s bank to get the individual’s bank account number and the routing number. The routing number is a coded string of numbers which identify the employee’s banking institution. Another prerequisite of certain pay roll processors is a pre-note. This is an electronic transaction from the payroll processor’s bank to the employee’s bank, and it authenticates the account’s information. After such an authentication, an employee can expect regular pay checks which come on time.

This method has various advantages. It saves time because cash is easily and conveniently deposited in an employee’s account thus saving the employee time which he would otherwise use standing in long queues at ATM’s. The employees also do not need to wait for cheque clearance since, funds clear promptly. This is a safe and secure process of transferring money, because an individual does not need to worry that his cheque might be stolen, and he avoids the risk which comes with carrying large amounts of money.

The process is also confidential. Since money is transferred electronically, fewer people come into contact with the money, thus reducing the risk of identity theft. This service also allows an employee to have complete control of his funds as he can divide his cash into different accounts easily. Most employees also give a paper stub in advance so that an employee may know the amount of money which will be deposited, and the deductions made from the salary.

How to Be Debt-Free

Do not think of access to debt as a status symbol. Change your frame of mind about debt. Credit cards are a sure way to financial worries. Throw them into the bin.

Spend within your means. Do not think of spending more than what you have. Credit cards are very tempting as they are convenient to use. However, its end result is headache and financial exhaustion. Oftentimes, people who patronize credit cards are tempted to have more credit cards than what they already have. Common sense tells us why these people are now working just to pay-off their debts.

Be guided by a financial record. Take note of your regular income and the monthly expenditures for basic needs. List the items that needed to be purchased regularly with an aim of making savings. Keeping a record allows you to track your expenditures and it is really nice reading these records once in a while. With financial records as your guide, it will make you feel you are a better person than the person sitting next to you.

Discard credit cards one by one. This is one of the best tips among the 7 clear tips on how to be debt-free. Start from the credit with the biggest balance. Make a schedule within which you will mark the dates each card is expected to be thrown away. The moment you have gotten rid of the first card, you will have the impetus to throw away some more.

Enlist the contribution of every family member. This is a nice opportunity to get everybody working toward a meaningful goal. Teach your children the value of money, wise spending and solving problems squarely. Working as a family can really be very exciting when everybody feels needed in family affairs.

Cut down on unnecessary spending. Perhaps, you may need to cancel a vacation or suspend your plan to buy another car. If you can do this, you will not have to have a long list in your financial records and finances will be easier to handle. Also, remember that these activities do not really mean a lot because they quickly disappear from memory into oblivion. Spend for things that will last forever.

Focus on saving for worthwhile causes. This is the last in the list of 7 clear tips on how to be debt-free. Purchasing your own house (or a dream house) in the future or preparing for your children’s university education is top priority that will help you to focus and eliminate unnecessary expenditures. Financial goals are a way of getting rid of temptations to buy and own less important goods and services. Make these goals realistic to help make you feel a sense of accomplishment.