50 Plus Finance

Wednesday, February 9, 2011

Debt Collectors Are Calling me Everyday - What are my Rights?

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The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.

If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.

Here are some questions and answers about your rights under the Act.

What types of debts are covered?

The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.

Can a debt collector contact me any time or any place?

No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.

How can I stop a debt collector from contacting me?

If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:

Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.

Can a debt collector contact anyone else about my debt?

If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

What does the debt collector have to tell me about the debt?

Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.

Can a debt collector keep contacting me if I don’t think I owe any money?

If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.

Debt collectors are relentless in hounding you for their money. They will call day and night, ignoring the law in pursuit of a settlement. They will harass you and belittle you into paying them. They will use psychological pressure to make you pay them before you pay your electric bill. They are good at their job. You have legal rights under the law, it's your duty to know these rights because they afford a protection that you are due.

Federal Trade Commission Website - http://www.ftc.gov

Tuesday, February 8, 2011

The Early Warning Signs of Debt

Image via Wikipedia

Debt seems to catch people by surprise, there are a few warning signs of future credit problems that you should be aware of. If you know what to look for, you can still turn things around before it's to late.

Who's the most likely to fall into debt? Even though we are all susceptible to credit problems there are several groups that are more likely to have credit problems, according to Credit Counseling Groups. They are:

Young people
Households with children
Low-income households
Retired people

What are the warning signs of debt? The earliest warning signs of a credit problem include not having much money in your bank account but seeing high figures on your credit statements. As you shuffle money and credit around to try and make ends meet, you may see these additional warning signs as indicators of debt. They are:

Regularly paying bills after their due dates
Using cash advances on credit cards to pay off other credit cards (you may also be using cash advances for basic purchases, like rent or groceries)
Asking family and friends for money
Looking for a second job to make ends meet

If you see these signs get ahead of the problem. Most likely you don't have a budget. This will allow you to see how much money is coming in, and where your money is going. Also, once you create a plan to get out of debt, your budget will be a trusted map to show you the way.

If neither a pencil and paper nor an Excel spreadsheet appeals to you, check out Mint.com online home budget calculator. Simply put in your income and expenses and the calculator will give you a report of what’s costing you the most, how much you’re short each month, and what your debt ratio is.

Next try to get ahead of your debt. If you are having trouble paying back lenders, it’s wise to contact them. Let them know you’re having trouble and see what arrangements can be made to pay them back. Most creditors would rather get less of your money than not get any at all.

Keep in mind that free credit counseling services are available for everyone. If your only sign of debt so far is a super-high credit card bill and a mediocre bank account, it may be a good idea to get help with a new financial strategy before things really get out of hand.

Once you have your new financial strategy and budget in place, be extremely disciplined when it comes to spending. Your biggest purchases in the months that follow will be paying back debt, so now is not the time to increase your debt load any further. If you’ve racked up a lot of retail debt on things like entertainment, clothes and restaurants, you’ll need to look for more frugal options.

If your only have a small debt to repay count yourself lucky you doing something about it now. Most people wait way to long when the damage is extreme.

Related articles

Monday, February 7, 2011

The True Value Of Improvements To Your Home

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Since you can't get a dollar-for-dollar return on your home improvement, it's important to weigh the other advantages. In addition to creating a more enjoyable space, these may include:

Future goals

First impressions are everything. According to the National Association of Realtors, more than 77% of new home buyers start their search for a new house online, but they won't go near the property if the exterior doesn't look nice. So if you want or need to sell your current house, investing in "curb appeal" improvements that enhance the exterior condition of your home can be especially worthwhile. These types of updates may also help you move the property faster and secure a better resale price.

I often tell homeowners that although they may not see investing in a property 'facelift' as a high priority in terms of their own needs, when it comes time to sell, this type of improvement can bring in big dividends simply by increasing traffic to the homes. More eyes mean a faster sale and a better price — especially if the interior matches or exceeds the curb appeal of the exterior.

"Green" benefits

Some improvements create a return on investment that isn't seen in the property value but rather energy efficiency. Such improvements may also benefit the environment — especially if you have a home that's nearly three decades old.

According to the Joint Center for Housing Studies at Harvard, existing housing stock built prior to 1983 constitutes over 20% of annual CO2 emissions from fossil fuel combustion. Certain upgrades can help improve the efficiencies of these and other homes. For example, qualified dual- or triple-paned windows can help save as much as 15% to 20% on energy bills. Foam-backed siding can provide an insulation boost and also reduce sound transmission, which may enhance quality of life. And upgraded Energy Star appliances, HVAC systems and electronics can serve as "mini remodels" that pay for themselves by reducing utility costs, thus improving cash flow.

Now is an especially appealing time to complete these types of upgrades because of the tax credits available through the American Recovery and Reinvestment Act (ARRA) of 2009. The Act offers $4.3 billion in tax credits to homeowners who purchase Energy Star qualified appliances, including central air conditioners, furnaces (oil and gas), heat pumps (air source and geothermal), water heaters and more.

Other considerations

You need to weigh all of the pros and cons of a remodeling project — and have a game plan for financing — before you start. Here are some of the main things to consider:
Longer-term costs .... and benefits

Some projects may have additional future costs, while others can actually save you money. For example, if you're building an addition, you will have to pay the structural costs of the initial outlay and you will also need to furnish the new space, and heat and cool it year-round. Make sure to add these costs into your budget.

One thing I encourage people to do is to spend part of their remodeling budget on making the existing structure more energy efficient. First, I recommend an energy audit (usually around $500-600 for an average home), which shows the homeowner which energy-efficiency upgrades they could benefit from. Then they can choose the most beneficial upgrades for their home and implement them over time as budget allows.

Often the upgrades pay for themselves in only two or three years because the home is less expensive to maintain. Plus, the efficiencies gained from the upgrades will continue for the lifetime of the house, benefiting future homeowners, too.

Property taxes

If the project requires a permit, you can expect the tax adjuster to take an interest in your project. This could lead to a value reassessment and, potentially, increased property taxes.

Time frame

Quality of life is important, but you will also want to balance the reality of life events and consider whether you'll have time to enjoy the improvements. You may also have other higher-priority expenses that will need to take precedence. Your financial advisor can help you evaluate your situation so you can determine what's best for you.
Home equity line of credit

One option to consider to help pay for your remodeling costs is a home equity line of credit. This type of loan may be especially attractive right now considering today's lower interest rates. Your financial advisor can help you explore this option.

Do it yourself (DIY)

Are you handy? Or do you have time to learn some new skills? A major trend in home remodeling is for the homeowner to take on a large portion of the labor on a project. With labor costs typically running around 30% per project, doing the work yourself could significantly lower your overall costs. Or if you're not comfortable completing all of the work (e.g., electrical, plumbing), consider hiring out only those parts of the job. Also, you may want to be your own contractor to further reduce your costs and increase your return on investment.

Property conversion

Here's an interesting option to consider today: Instead of making improvements to your house, rent it out to someone else and purchase a new property that already includes everything you want at a dramatic discount. Many builders and homeowners are trapped with properties that are brand new, but aren't selling in today's buyer's market. You can take advantage of this property abundance, as well as lower interest rates, if you have good credit and are able to manage the expense. Once your tenants start paying rent, you can pay the mortgage and may even be able to take in some extra income.
What to ponder before you pound that nail

Ask yourself these questions to help you determine whether a remodeling project makes sense for you:
What makes my house feel like home to me?
What improvements would I need to make to enhance my quality of my life in this home?
Am I willing to invest the time and energy to do the work myself or do I need to hire an expert?
Am I prepared to be inconvenienced while the improvements are made?
How will I cover the costs?

If you have a clear vision, then it may be time to take on that remodeling project. That means it's time to meet with a minimum of three remodeling contractors to obtain cost and time estimates. And it also means it's time to talk with your advisor about your financing options and how a remodeling project fits into your long-term goals.

In the end, a home improvement may increase your home value for when it's time to sell. But one of the most valuable benefits of this type of investment today may simply be to make your home more enjoyable for you and your family.
"There's a direct relationship between how your house makes you feel and your perceived quality of life. When a home is beautiful as well as functional, you are far more likely to feel at home in your life. In our world today, that's a value that can't be quantified.

Follow the IRS on YouTube and Twitter

Image via CrunchBase

I will never accuse the I.R.S. of being behind the times every again. They have been constantly updating their computers and data processing for years. There are new ways to file your taxes like never before. You can do them on computer, online and now on your phone.

Image representing YouTube as depicted in Crun...

Image via CrunchBaseThe I.R.S. has kept up with social media too. You can follow there videos and tweets here.

YouTube

The IRS has short and informative YouTube videos on tax related topics in English, American Sign Language (ASL) and a variety of foreign languages:

IRS Videos – http://www.youtube.com/irsvideos

ASL Videos – http://www.youtube.com/IRSvideosASL

Multilingual Videos – http://www.youtube.com/IRSvideosMultilingua

Twitter

IRS tweets include various tax-related announcements, news for tax professionals and hiring initiatives:

@IRSnews – http://twitter.com/irsnews

IRS news and helpful information for the public, the press and practitioners

@IRStaxpros – http://twitter.com/irstaxpros

IRS news and guidance for tax professionals

@IRSenEspanol – http://twitter.com/irsenespanol

Información, Comunicados de Prensa y Noticias en Español del IRS

News and information in Spanish from IRS

@RecruitmentIRS – http://twitter.com/recruitmentirs

IRS Human Capital Office

@YourVoiceatIRS – http://twitter.com/yourvoiceatirs

Taxpayer Advocate Service

Audio Files for Podcasts

The IRS creates audio files for use as podcasts. Each short audio recording provides information on one tax related topic. The audio files and their transcripts can be found in the Multimedia Center on IRS.gov. These files are also available as podcasts on iTunes.

Widgets

Widgets are tools that can be placed on websites, blogs or social media networks to direct others to IRS.gov for information. The IRS has developed a variety of widgets that feature the latest tax initiatives and programs. These widgets can be found on Marketing Express, the marketing site that allows IRS partners and tax preparers to customize their IRS communications products.

Sunday, February 6, 2011

Super Bowl Weekend Roundup

If you are lucky enough to go to the Super Bowl you must be pretty well off. A nice info graphic at Mint.com pretty well sums it up. The median price of 4 tickets to attend is $26,294 according to Stubhub.com. Add to that your airfare, room and food. The ticket price range goes from $2,827 for a seat to $307,500 for Hall of Fame Suites.

So what kind of person can attend this shindig? The average income is $222,318. The median age is 37 . It splits up to 26% Female and 74% male. Most attendees are executives or professionals. Pretty nice.

In between plays here are a few of the best post on some of my favorite blogs that you can read:

When Can You Lie About Money to Your Spouse? @ Consumerism Commentary

What Should You do if You Get an IRS Audit Letter in the Mail? @ Free Money Finance

Your Take: Divorce Insurance? @ bargaineering

Lifecycle Funds are a Terrible Investment Idea @ Five Cent Nickel

Surviving on Minimum Wage? : An Example Budget @ Free By 50

Can you afford NOT to be in a couple? @ DINKS Finance

Check your mortgage company rules before trying to pay off your loan @ Clever Dude

20SomethingFinance 2010 Tax Guide @ 20 Something Finance

Converting a Principal Residence into a Rental Property – The Solution! @ Million Dollar Journey

How to Cope With Buyers Remorse @ barbarafriedbergpersonalfinance

How Moe Broke Out of His Rut @ personalfinancebythebook

Here are some carnivals I participated in:
FESTIVAL OF FRUGALITY-265-Get Stuff on the Cheap & Help the Earth
Totally Money Blog Carnival #3!
Baby Boomer's Blog Carnival Seventy-sixth Edition

Have a good time watching the game. I know I will.

Saturday, February 5, 2011

Online Budgeting Tool That Keeps Your Data Private Try Doughhound.com

Some people are a little worried when using sites like Mint.com because they have to share their personal account numbers and passwords.

Now there is a new site called Doughhound.com that wants to serve these people. The idea behind Doughhound.com is to help consumers monitor their spending without having them enter there account numbers or passwords.

Doughhound.com was created by Daniel and Jillian Tobias. They used to track their budget on a spreadsheet since they could not find an online budgeting site that didn't require them to provide private information.

The way Doughhound.com works is you manually enter your expenses and tag each one with the corresponding category or categories. Which you create yourself. This means users can decide to look only at one area of their spending, and they don’t have to deal with correcting categorizing errors that can crop up on sites that do it automatically

Users can also set up budgets on the site to keep track of how much they are spending in a certain category over a certain time period and create customized charts and views. Each time they visit the site and enter their data, users can see how well they are meeting their budgeting goals.

If you don't want to manually enter the data yourself then Doughhound.com is not for you. A site like Mint.com will suit you better.

So why not just use a spreadsheet? The advantage of Doughhound.com over a spreadsheet or similar software is that you don’t have to deal with complicated spreadsheet formulas, you can more easily share the information online with others and you can provide information via e-mail. Doughhound, which went live recently, will accept advertising and so far has about 100 users.

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