Archive for October, 2010
AARP is open to anyone 50 years or older and to spouses of people 50 years or older. So you could be an AARP member at a fairly young age if your spouse has reached eligibility. AARP is not an insurance company. They contract with insurance companies to provide insurance programs to their members.
The AARP auto insurance is offered by Hartford. Just because it is offered to AARP members does not mean it is the best insurance for your situation or the cheapest. It does have some rather nice features.
Highlights of AARP auto insurance:
- Waiver of deductible
If an accident is not your fault, the Hartford insurance company will waive your deductible in most cases. My deductible currently is in the $500 range, so this is a nice perk.
- First accident forgiveness
Your insurance premium will not be raised just because you had an accident, if all drivers on the insurance plan have been accident free for the 5 years prior to this accident. That is a lot better than dealing with the insurance companies that simply the drop anyone that dares to become involved in an accident.
- Approved shop $100 deductible waiver
If you have an accident, the AARP auto insurance program includes a $100 deductible waiver whenever you take your car to an approved shop for repairs. This is an easy one. As a bonus, the repair is then covered for as long as you own it.
- Lifetime renewability
After 60 days of being insured, your insurance is guaranteed to be renewable as long as you keep paying your premiums on time, are over 50 years old, have not had a DUI conviction and are legally, mentally and physically allowed to drive a vehicle.
- New car replacement
If you should be so unlucky as to total your car within 15 months, AARP auto insurance is going to replace your vehicle with one of the same make, model and equipment without calculating in depreciation.
There are more features you may find attractive. The highlighted features all sound attractive if they are true. In the reports by people insured by AARP auto insurance, there were a disturbing number of customer complaints about the very features that make AARP auto insurance so attractive. Most of them come down to rude customer service and business practices that do not benefit the consumer.
For example, with the waiver of collision deductible feature, one customer complained they had to pay the deductible when picking up their car. The insurance company, when called, informed them that they may have their deductible refunded if eligible. So this would be a case, where you still get your deductible waiver, as promised, but it is rather inconvenient to have to wait until it is convenient for the company to send you a check.
Many seniors do not have large sums of cash in their emergency funds to be tied up like that. So it depends on your situation whether you can live with that implementation of a great benefit. Another complaint was about the valuation of a vehicle. It is not uncommon for an insurance company to go with the lowest valuation they can find. It helps their bottom line.
Looking up the Hartford insurance company that administers the AARP auto insurance with the Better Business Bureau, the company has received a B+ rating. That is certainly not the A or A+ rating I would like to see with a company, I do business with, but it isn’t bad either. The company did seem to make an effort to attempt to resolve customer issues. As always, people with complaints tend to speak up more than satisfied customers.
Credit counseling includes everything from budgeting to teaching money management skills to working out payment plans. Many credit counseling agencies will offer you a debt management plan if it is appropriate for your situation.
This differs greatly from debt negotiation. In debt negotiation, you attempt to arrange a lower payoff amount than the debt you actually owe. No creditor is required to negotiate with you. Many will, if they believe, it is the only way to get at least some of the money you owe them.
So what do they have in common?
- Both are methods to help you pay off your debt.
Debt negotiation attempts to lower your debt, so you can make the payments with your current lifestyle. Credit counseling works on your financial discipline to help you pay off your debt and works out a debt management plan which may include the consolidation of loans to lower the payment on them.
- Both are offered by independent agencies which you will need to check out for professional ethics. Remember that even non profit organizations can charge fees for their services. Some of the agencies charge enormous fees which can easily be as high as your original debt. Check with the Better Business Bureau before you agree to work with any agency.
- Neither one can guarantee to have related entries removed from your credit report such as late payments or non payments. Creditors by law have to provide accurate information to credit reporting agencies, they do not have to remove accurate information. Some of the information can stay on your credit report for a long time. For example, a bankruptcy will remain on your record for 10 years.
- They can both keep you out of bankruptcy.
How do they differ?
- With credit counseling you end up with some new financial skills to use in the future. Debt negotiation will at the most teach you how to write a debt settlement letter.
- With credit counseling you work out a budget to follow. You are still on your own with that one if you choose debt negotiation.
- Credit counseling attempts to lower your payments by consolidating loans at a lower interest rate while debt negotiation tries to have creditors write off some of your debt as a loss.
- There is no tax impact with credit counseling. Debt forgiven as part of debt negotiation can be considered as income by the IRS and will be taxable.
- Ethically, credit counseling is preferable because you will most likely be paying off your entire debt versus a small portion of it. Thus you are taking care of your responsibility and not walking away from it.
If you end up consolidating a loan, pay attention to what you are doing. If you are getting a secured loan, understand what your collateral is. If it is your home, then if you fail to make payments this time, you will lose your home. It may be your only option for consolidating your debt, but at least know what the consequences could be.
The Federal Trade Commission has published a great article called ‘Knee Deep In Debt’ where you can find more information on both credit counseling and debt negotiating. Pay particular attention to their cautionary notes. Do not let any organization convince you that they can deliver miracles. Be realistic in your expectations. If it were that easy to live beyond your means and get away with it, it would be much more common.
Getting yourself out of debt is never an easy experience. The best way is to never get there in the first place, but once you are in debt, there are a few things you should know.
This statute was enacted by congress to protect the consumer from harassment by debt collection companies. Threatening to smash your car is just not cool. It is illegal too. Constantly barraging you with phone calls, that is illegal too. Banging on you door at midnight, yes, that too is illegal. So if you are dealing with a debt collection agency that seems to live in the world of movies instead of the real world, get yourself some legal help and stop them. You have rights and they are violating them.
- Debt collection statute of limitations
This is an interesting one. Many people assume there are federal statutes for this, but there aren’t. The statute of limitations are set by individual states. So, for example, in Texas debt collectors have 4 years from the last date of activity in an account to collect the debt. Yet in Ohio debt collectors have a full 15 years to come after you for debts on written agreements and 6 years for debt on oral agreements.
- Which state is a debt assigned to?
Generally, the laws of the state the debtor lives in apply. There may be exceptions though.
- Debt collection letter
A debt collection letter is a letter written by the creditor to collect a debt owed to them. Sample debt collection letters can give you an idea of what to expect. They start out as simple reminders and progress into more serious demands as you fail to pay off your debt. The Fair Debt Collection Practices Act regulates what kinds of letters you can receive from collection agencies. For example, it would be illegal for a debt collection company to send you a post card demanding payment of a debt, because it would violate your right to privacy. Third parties can read postcards.
- Debt settlement letter
This letter can be written by either the creditor or the debtor. A fill in the blank sample letter can make it very easy for you to prepare one of your own. Remember that a debt settlement letter is considered a written contract, so take your time getting it right. Once you agree to an arrangement, you are obligated. As mentioned above different states have different statues of limitations on debt.
Personally, I believe you should always honor your commitments, so you should pay off any debt, but if that is simply not possible, you should evaluate your options based on the statute of limitations as well. Lets say you have credit card debt. Credit cards are generally considered open accounts. So in NC the statute of limitations is reached after just three years, in California and Florida it would take four years and in Rhode Island debt collectors have a whole ten years to come after you.
- Debt management
As a responsible citizen you should pay off your debt. There are many non profit organizations that will help you figure out a budget and a payment plan. There are also companies that will help you negotiate reduced settlements and debt consolidation loans to get your debt to an amount, you could reasonably pay back. The National Foundation for Credit Counseling can help you find a knowledgeable counselor in your area.
Confirmation Code: GHVHFVB9484180
This one is not free. They charge $7.99 for this sample letter.
Do it yourself debt settlement can be done. With all the free samples above, it should be easy to find a letter sample matching your needs. I recommend reading the related material, so you know what to expect next and what legal consequences your letter could have.
You don’t want to accidentally cause your situation to get worse. You want that debt to be settled and your credit to be restored. You may want to draft your debt settlement letters and then visit one of the free legal advice sessions held in many communities around the country at regular intervals to have a lawyer take a look at them.
After all, a slight delay is unlikely to make a difference at this point since you have probably been in default for a long time already. The important thing is to prepare carefully and to get it done.
Debt settlement letters are legal agreements. Make sure you request all the things you want to get out of it as conditions of the settlement. Once you make the payment, it is too late to make further requests. If you expect your credit history to be repaired, you need to have that in your debt settlement letter from the beginning. And you do want your credit history to reflect that your debt was paid and there are no further outstanding balances.
Creditors are willing to settle debts at much reduced amounts after long time periods of non payment. They would rather see some money than none at all. So when you draft your first debt settlement offer, set the payoff amount fairly low. They may make you a counter offer.
A few of the websites above have sample letters to deal with counter offers. You don’t have to be good at drafting letters anymore, you just have to be able to modify sample letters to fit your situation. The internet has shed light on many legal transactions and this is one of them. Make use of the help.
If you have decided to take control of your financial life and finally live within your budget, there are a few ways resources you can use to find out how to pay off debt quickly. First of all you should use a pay off debt calculator. Be prepared for a shock. If you have accumulated a lot of debt, this step could be terrifying.
Once you have run your current possible numbers with a debt payoff calculator, try running it with higher payments to get to the number of months you were hoping it would take, to pay off your debt. Now calculate the difference between the payment for your preferred pay off time and the one you can currently afford. That is the monthly amount of money you have to find from other sources. So here are you choices:
- Get a second job
This may not sound enticing, but you got yourself into this mess, so you have to work yourself back out of it. Is it realistic for you to get a second job that pays enough for you to make the extra income you need to cover the increased payment?
- Cut your expenses
Look at the way you spend your money. Are there expenses that are really not necessities? If you think about it, there are few things, people actually need. Food and shelter are the basics. If you cannot walk to work, you will need to pay for your transportation. Think about using public transportation or car pooling. Everything else is optional. Do you buy a drink at Starbucks every day you go to work? That could be $100 per month right there. Do you smoke? Cut down and save that money. You get the idea. Nothing is off limits. Cut the frills first, though.
- Get loans to pay off debt
If you have a lot of credit card debt, it may be beneficial to consolidate your outstanding balances into a single loan. This is particularly true if you have only been paying the minimum amount due. You likely have a high interest rate on your credit card balances, which could be reduced with a consolidation loan.
Remember, the idea is to pay off debt fast. In order for this to work, you will need to make changes to your lifestyle. No one is going to hand you a ‘Get out of Debt Fast’ pass. If you seriously want to pay off credit card debt, consider using all three of the above methods at once.
Getting a consolidation loan, should be the last option you consider, bec.ause loans are always affiliated with fees and you will still owe the same amount of money after you consolidate. It only makes sense if your interest rate drops significantly. If you use a consolidation loan, make sure you do not reduce the amount of money you pay towards the loan from what you are paying now to pay on the different debts you have. Remember, the idea is to get out of debt. So if your payments would be less with the consolidation loan, make sure you can pay the loan off faster without penalties, and then pay the money you saved in interest towards the principal balance of your loan.
Now you know how much extra money it will take every month in order to pay off your debt in the amount of time, you were hoping to. Get out your worksheet and start figuring out how you will get that amount.
Everywhere you look, you see advertisements about credit scores. “Get your credit score today,” they say or, “Improve your credit score now.” Why should you? What is this mysterious credit score and what does it mean for you when you are applying for credit?
Here is your guide to credit scores. First lets look at how they are computed. They are based on five factors which are weighed differently in the calculation of your credit score. They are:
- Your payment history, which accounts for 35% of your credit score
- The debt you owe, which weighs in at 30% of your credit score
- The length of your credit history, which is computed in at 15%
- The types of credit used which impacts 10% of your score
- Recently opened credit accounts and inquiries which affect 10% of your score
The weighting above is the distribution used for the FICO score. There are other scores proposed and used by different lenders. As far as the score goes, it is interesting to note that only what is in your credit report, is considered. This may seem obvious, but it is worth pointing out to inspire you to get your free annual credit reports from the credit reporting agencies.
After all, you could be the wisest credit card user around, but if someone else is opening accounts in your name, your credit score could still be terrible. You want to make sure what is in your credit report is accurate. You also want to make sure your positive credit history is being reported. After all, your payment history accounts for a third of your score.
So what does a good credit score do for you? It decreases the interest rate you have to pay on loans. If you are a better credit risk, banks are more likely to want your business and will offer you a lower interest rate loan. The difference could be as much as 5%.
Now, what about paying off your debt? As you can see, the amount you owe affects your credit score heavily. Ideally, if you have credit cards, you want to keep the amount of credit you charge considerably below your limit. So if you have maxed out your credit cards right now, yes, you should pay down your debt. It will help your credit score.
A great tool is the FICO® Score Estimator. It will ask you a series of questions and present you with a range your credit score is estimated to be in based on your answers. At least you will know where you are starting from.
If you have determined that you need to pay down your debt, it is good to get some support. Changing your lifestyle is not easy. Sit down and write down what you currently spend your money on. Write down everything. Coffee, cigarettes, snacks, lunches, bills, loans, everything. Now look at the list and decide which of those expenses you could reduce or eliminate all together. Implement your reduction plan.
To keep you going, enlist a friend to keep you in line when you get the urge to spend money. Right now you need to cut your expenses. Stick to it. You can find more information on methods to reduce debt. Find a plan that will work for you and implement it. Whether it is picking up a second job or drastically reducing your expenses, or a combination of both, what you really need to do is act responsibly and get rid of that debt.
The Fair Debt Collection Practices Act is a United States statute and can also be referred to as 15 USC 1692. Since the Federal Trade Commission is in charge of overseeing this act, they have prepared a version of the Fair Debt Collection Practices Act, that is easier for consumers to read.
When it comes debt, people have developed some strange notions. Misconceptions about the Fair Debt Collection Practices Act can get you in trouble if you don’t inform yourself properly. I highly recommend reading the act itself by following the link above to find out what it really covers. Here are some of the misconceptions about it:
NOT TRUE: The Fair Debt Collection Act statute of limitations allows me to not pay off my debt.
If you search the Fair Debt Collection Practices Act, you will discover that the words “statute of limitations” do not actually appear in the statute. Now, that does not mean that such limitations do not exist. In fact, they do, but they are determined by the states. You can look up what the statute of limitations for your state are.
NOT TRUE: The Fair Debt Collection Act eliminates the universal default clause.
While the act does put many restrictions on creditors, it does not specifically eliminate the universal default clause. And this is one to really pay attention to. The universal default clause means that the lender can change your interest rates on the credit you have with them, if you default on a debt you have with another lender.
This can be disastrous to your paycheck. Some of the credit cards available have stated interest rates in the 30 percent range, if you fail to make a payment on time or are otherwise considered in default. Just because you were late paying off one bill, you could find your minimum payment on your other debts going up to the point where you can no longer afford to pay them.
NOT TRUE: The Fair Debt Collection Act keeps creditors away from me.
The act restricts abusive practices by debt collection agencies, but it does not keep them from collecting a debt you owe. For example, it limits the hours during which a debt collector can contact you.
NOT TRUE: The Fair Debt Collection Act gives me the right to renegotiate my debt.
If you cannot make your payments, negotiating a new arrangement is a good idea, and most creditors are willing to work with you, but they are not obligated to do this. If you find yourself in this position, you can find some scripts as to how to approach a creditor on the telephone and in writing to negotiate different terms.
Overall, you are better off because of the consumer protections built into the Fair Debt Collection Act. It restricts many of the harassing practices debt collectors had gotten into the habit of using to collect their debts. No more excessive telephone calls, no more embarrassing information leaked to your neighbors, no more threats of violence, no more banging on your door in the middle of the night.
Your best defense, however, is to not put yourself into this position in the first place. Instead of trying to wait out the statute of limitations on debt, deal with it the moment you get in trouble. If you have a car loan and you suddenly lose your job, look for a new job immediately. If you find that your new sources of income can’t handle your debt, contact your creditor, and try to negotiate a lower payment immediately.
Are you over your eyes in debt? Have you been wondering where to turn? Or have you been told to go to a credit counseling agency and don’t know how to find a good one? The National Foundation for Credit Counseling can help you. They are a member organization for credit counseling agencies and offer a lot of resources to consumers. Some of the highlights are listed below:
- Search for a credit counselor in your area
- Download a free budget worksheet
- Use miscellaneous calculators
- Read financial news on their site
The National Foundation for Credit Counseling’s vision is to create a national culture of financial responsibility. The foundation exists to provide their members with the resources they need to provide their clients with better financial education and services. It does not provide credit counseling itself.
The foundation has over 100 member agencies and has been around for 59 years. Their seal shows you that the counselors you are talking to have a reasonably high standard and have been trained well. After all, it would reflect badly on the foundation if they recommended counselors who did not do their job well. Many of their counselors provide free or low cost services. Once you find a credit counselor, you should still do your due diligence and find out what they charge for any services you may need right at the beginning.
The National Foundation for Credit Counseling will help you with housing counseling as well. This includes pre-purchase counseling as well as foreclosure counseling. Their members also provide reverse mortgage counseling for seniors. By law, only seniors are eligible for reverse mortgages.
A good place to start is their budget worksheet though. They list a lot of categories and your numbers are automatically added up so you can see, what your budget really looks like. It can be quite an eye opener to see it all listed separately. It may seem like only a $10 expense at the time, but those $10 expenses can add up quickly.
The National Foundation for Credit Counseling offers financial education classes through their members and basic information on their website. You can find tips and information on money management and savings, credit, insurance, housing, retirement and bankruptcy.
There are some really useful calculators in the Consumer Tools section. Need to find out what interest rate you have to earn on your savings in order to get the amount of monthly funds you will need in retirement? You can find out here. You will also be able to check what kind of mortgage you can afford and a number of other financial questions you may have.
In their Financial Literacy section you can find reports on identity theft, homeownership, and financial literacy. Who hasn’t heard of identity theft these days? It is important to know how to protect yourself. Personally, I have had an account broken into and it took months to get the mess straightened out. It is practically impossible to totally protect yourself unless you only deal in cash and do not provide anyone with any personal information, but that is not realistic. Far better to learn how to reduce your risks than to be sorry later.
The National Foundation for Credit Counseling is trying to help in the nation’s effort to increase financial literacy among its citizens. Their information provides a good starting point and definitely some useful tools to apply to your own situation.
Tired of living paycheck to paycheck? Can’t afford to pay your bills anymore? Well, it’s time to sit down and figure out a budget. You don’t know where to start? There are a number of credit counseling agencies that can help you.
However, before you choose to work with a credit counseling agency, check out the Federal Trade Commission’s publication for consumers called For People on Debt Management Plans: A Must-Do List. Take a look at the following steps:
Make a budget
A budget is not that difficult to figure out. You can use this budget worksheet available free online from the Indiana Department of Child Services. This is a very basic budget worksheet, however, it does list some typical percentages for your expense categories that you can use as guidelines.
Cut your expenses
If your expenses in any of the categories falls into a percentage higher than the suggested one, except for the savings category, you should definitely cut your expenses in that category. You do want to make sure your life style does not cost more than you can afford. If it does, you need to make changes right now. Even the best debt management plan will not be able to eliminate your debt, if you keep adding to it.
Create a debt management plan
You can find worksheets to help you establish your own free debt management plan. One such worksheet will help you determine what payments to make. Concordia Plan Services also has a section on debt management that will explain how to use their worksheets. Using a debt management plan worksheet will help you figure out how to allocate your money and how long it will take to eliminate your debt.
Seek credit counseling
Check into the credit counseling agencies in your area. A legitimate credit counseling agency should have counselors that are trained somewhere other than on the job. They also should be teaching you about budgeting and debt management techniques. Do not fall pray to the companies that just want to take your money, a rather high percentage of which goes towards their services.
Check out the credit counseling agency with the Better Business Bureau
If the company has been around a fair amount of time and still has an A rating with the Better Business Bureau, you can be fairly certain that the company deals with any customer complaint smoothly. A perfect A+ rating does not mean that the company has no complaints, merely that the company dealt with complaints to the customer’s satisfaction.
Implement the plan
It doesn’t matter how ingenious your plan is, if you do not act on it. Currently, the financial community is divided into two camps when it comes to paying off debt. One group believes they should start with the debt that carries the highest interest rate on it. And that makes sense for those of you that are motivated by money. However, the other camp thinks you should start by paying off the smallest loan first, so the act of paying it off can entice you to keep going to increasingly larger loans.
If you do not have the discipline to carry out your plan, you should consider enlisting the help of a credit counselor. There are honest ones out there. You could also enlist the help of a good friend. Take them shopping with you and tell them to keep you from buying anything other than the item you came for. A true friend will be happy to help you.
Overstock.com is a Utah based company that was started in 1999. With over $800 million in revenue, they have grown into one of the largest online retailers. They specialize in helping manufacturers and retailers liquidate their inventory and thereby offering their customers great bargains.
One of the very attractive features at Overstock.com is their flat shipping rate of $2.95. How many other retailers do you know that will ship furniture at that price? Their inventory changes continuously as they bring in new merchandise to liquidate.
So what does an Overstock coupon code do for you? It makes a great deal even better. Here are some extra ways to save:
Overstock online coupon
You can find online coupons to use at overstock.com at the following site:
http://www.offers.com/overstock/?path=b9q-b9x-gls-100b1a. I saw coupons with up to 40% off values on there.
By joining Club O, you get an overstock discount in the form of a 5% reward on any purchase except book and media purchases totalling under $25. Club membership costs 19.95 per year. So if you plan to purchase merchandise totalling over $400, it is worth joining Club O.
Overstock free shipping
As if a $2.95 flat shipping fee isn’t good enough, you get free shipping if you are a Club O member. Overstock.com also has a coupon page. Currently, it features a coupon for free shipping on orders over $50.
Overstock.com does have a section where they have slashed their prices even more. Check it out. I have some seen some amazing clothing deals in there. They have over 800,000 products on their site, you just might find what you are looking for.
Overstock.com does sell refurbished products such as laptops and waffle makers. You can usually save money this way, but be aware that you are purchasing a refurbished product. I have had some good experiences with refurbished products, but you never know how old the parts in there are that didn’t need to be refurbished at the time. Buy with caution.
This section features products that Overstock.com has put on sale for a limited time. So for this section to benefit you, you need to visit the site regularly, so you actually see the bargain that appeals to you when it is offered.
Overstock.com offers some great deals. If you are a bargain basement Walmart shopper, you may not find the deal you are looking for, but if you like higher end merchandise, then definitely check out Overstock.com. They have products ranging from furniture, to clothes, to jewelry and electronics all the way to sports and books.
They even have a section for businesses where you can find commercial equipment, like sandwich making stations or office equipment. http://www.o.biz/ is the commercial site. They have sections such as restaurant, catering, janitorial, medical and builder supply among others.
Club O offers coupons up to 20% off on occasion. They have received awards for their customer service and their revenue has grown a hundredfold over the last decade. Their customers appear to be happy and continue to shop there. That is always a good sign.
Signing up for their e-mails with online specials isn’t instant as at most online merchants. Expect a one or two day delay before you receive anything. Club O may be faster since you pay for that one. If you need your discounts instantly, click on the links in the article above and make use of the overstock coupon codes listed there.
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