Archive for September, 2010

5 Important Things You Need to Know Before Settling Debt

Debt SettlementAre you thinking about settling your debt on your own? While there may be debt settlement companies offering to do it for you, you can do it yourself and save money on fees. Plus, many creditors prefer working directly with you over the debt settlement companies anyway.

Here are 5 Important Things You Need to Know Before Settling Debt:

  1. Negotiate a repayment plan with your creditor before it goes into collections. Creditors are usually easier to work with than debt collection agencies, so contact your creditor to discuss a repayment plan that works best for you. Be upfront about any circumstances that are preventing you (e.g. unemployment) from paying as agreed.
  2. Settling your account may negatively impact your credit report. If your creditor agrees to accept less than the amount owed, it could be reported as settled and affect your credit score.
  3. The IRS may treat any reduced debt as taxable income. This means you could owe taxes on the amount of debt you were forgiven ($600 or more).
  4. Beware of creditors who ask for electronic access to your financial institution’s account in order to settle. Typically, creditors settle for an upfront lump sum cash amount only. For example, you may pay $400 (50 -60% off) in cash on an outstanding balance of $900.
  5. In the event they agree to a payment plan and request electronic access to your account for withdrawals don’t give it to them. If you allow them to automatically withdraw money from your account, you no longer have control of when or how much you pay them unless you close the account.

  6. Always get the settlement agreement (full terms) in writing before you settle your debt. Any agreement that you make should be received in writing to ensure your creditor’s commitment to the terms of your settlement.

The items above are some considerations to make before settling your debt. Ideally, it’s best to follow through on your commitment to pay your creditor in full. However, if you have extenuating circumstances preventing you from paying your account as agreed – I hope that you find this post helpful and wish you the best in settling your account.

CreditCards.com – 8 myths about settling credit card debt is a great read for those considering debt settlement.

Do you have any experience or tips to share on settling debt?

Photo: alancleaver_2000

Categories: Debt

New FTC Rules for Debt Settlement Companies in Effect

Are you tired of hearing those debt relief commercials that sound ‘too good to be true’? They tout irresistible offers to wipe away your debt fast and easy. In some cases, they even proclaim the government will pay your debt with bailout money. Sadly, many of these debt settlement companies leave customers with empty promises (no debt relief!) and in some cases worse off than before. As a result, the Federal Trade Commission (FTC) receives thousands of complaints and is now doing something to help protect consumers.

Starting today (September 27th) there’s good news for debt settlement consumers because new FTC rules go in effect. According to the FTC, the new rules:

  • require debt relief companies to make specific disclosures to consumers;
  • prohibit them from making misrepresentations; an
  • extend the Telemarketing Sales Rule to cover calls consumers make to these firms in response to debt relief advertising.

Click here to read more details about the new FTC rules for debt relief companies on FTC.gov.

What this means?

Debt settlement companies are required to give customers more disclosure about the process and results when communicating over the phone. For example, they must disclose to you:

  • how long it will take to get out of debt
  • how much you will need to settle the debt
  • the negative consequences of going through their debt settlement process (e.g. impact to credit rating, lawsuits)

Still to come…On October 27, 2010, for-profit debt relief companies that sell their services over the telephone may not collect their fees upfront (No more advance fees!). They must settle, reduce or renegotiate at least one debt before collecting any fee.  In other words, they need to do some work before you pay them anything.

My Take on Debt Settlement:

Personally, I have no experience working with any debt settlement company, but I find the common debt settlement industry practices of preying on people who need help the most — deplorable. Especially when they make outlandish claims, collect hundreds and thousands of dollars in fees upfront, propose you don’t pay your bills and ruin your credit score.

The new rules are a good thing, because they provide consumers with more insight into the costs and process. (more…)

Categories: Debt

Illinois Appliance Rebate Program Ends Soon

This morning my husband suggested that we buy our new freezer tomorrow. I replied, “What’s the rush?” He thought it would be a great time to buy, since he just watched a Sears commercial about the Illinois appliance rebate program — where Illinois residents save 15% on energy-efficient appliances tomorrow (9/24/10).

The Illinois Appliance Rebate is only one day  – September 24, 2010.  The appliance instant rebate is 15% off qualifying purchases. The program starts at 8 a.m. CST at participating retailers and ends at 9 p.m. CST or when the funds have been depleted. You’d better get there early (some stores are opening at 7a.m.) to take advantage of the savings before the funds run out!

Do you need to replace an appliance? The eligible products include ENERGY STAR®:

  • Freezers
  • Clothes washers
  • Dishwashers
  • Refrigerators

Click here to read the program details and to find participating retailers for the Illinois ENERGY STAR® Appliance Rebate program.

Click here to learn about energy efficient appliance rebate programs offered in other states.

Save green and go green with your next major appliance purchase!

Categories: Save Money

NBER Says – The Great Recession is Over

Yesterday the National Bureau of Economic Research (NBER) announced that the “Great Recession” ended in June 2009. It’s the longest recession on record since the Great Depression, lasting a total of 18 months (December ’07 – June ‘09). Given this significance, the recession is commonly referred to as the “The Great Recession.”

What’s a recession anyway? The NBER defines a recession as “a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales.”

Although the recession is officially over, the economic recovery has been slow. With one of the biggest concerns being the unemployment rate, which remains a high 9.6%. The home industry is another area of concern given the low home values and high levels of foreclosures and bank repos.

Below is President Obama’s response to NBER’s announcement (recession ended in June 2009), during CNBC sponsored Town Hall meeting on jobs (September 20, 2010):

“Well, first of all, even though economists may say that the recession officially ended last year, obviously for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, it’s still very real for them.”

“The challenge is, is that the hole was so deep that a lot of people out there are still hurting”

President Obama added, “something that took 10 years to create is going to take a little more time to solve.”

What’s your take on the recession being officially over?

  • Do you feel like the recession is over?
  • What does this news mean to YOU?
  • Will this news have a positive impact on the economy?
Categories: Economy

Chase Issues Formal Apology for Website Outage

ChaseChase bank issued a formal apology to bank customers for their website outage last week. During the website outage (from the evening on September 13th through September 15th when website was restored), customers were unable to access their accounts on Chase.com or via mobile services — more than 24 hours.

If Chase’s website outage cost you in fees, the bank is offering to pay them. Be sure to check your account for any charges you may have incurred due to the website outage. Contact Chase if necessary to receive a refund of any website outage related fees.

Chase’s Formal Apology:

We are sorry for the difficulties that recently affected Chase.com, and we apologize for not communicating better with you during this issue. Giving you 24-hour access to your banking is of the utmost importance to us. This was not the level of service we know you expect, and we will work hard to serve you better in the future and to communicate with you better if a situation like this should arise again.

Online Bill Payments scheduled for September 13, 14 or 15 were processed by Wednesday night, September 15. It is not necessary to reschedule these payments. If you scheduled a payment during those dates, but do not see it reflected in your payment activity by September 16, please contact us. “

We will refund any late fees that you may have incurred as a result of our delay in processing your payment.

Thank you for your patience and for the opportunity to work harder to serve you in the future.

Chase apologized to online banking customers via email: (more…)

Categories: News

Remember to Ask for Your Discount

Ask For Your DiscountDuring my mom’s last visit to Chicago she shared one of her secret money saving tips. As an avid saver myself, I’m use to scouring the internet for promotion and discount codes before buying anything online. Before shopping, I normally look for coupons online, through sales flyers and newspapers. However, my mom’s method of saving had nothing to do with any of that stuff – she simply asks for a discount.

Sure, when I’m at the store I may be asked: “Would you like to save 10% today?”

Believe it or not – my immediate response is always, “No, thank you.”

To think if I ever responded with a Yes, then I would be faced with one of the biggest sales pitches to apply for a new credit card. For me it’s just not worth it, especially when my total is $3.21 and you’re only going to save me a whopping 32 cents!

On the other hand, a discount without a new credit inquiry on my credit report and another credit card in my wallet sounds a lot more appealing. (more…)

Categories: Save Money

Speeders Beware: Illinois Traffic Tickets Go Up Today

Starting today speeding tickets and other traffic violations will go up as much as 60% in Illinois.

If you drive in Illinois, it’s going to cost you more money for speeding and many other traffic violations. After all, its been reported that there has not been an increase in traffic fines since 1993.

Some examples of how the new traffic fines impact your wallet:

  • Speeding, 20 mph or less over the speed limit, fines will go from $75 to $120
  • Speeding, 21 – 30 mph over the speed limit, fines go from $95 to $140
  • Violation for not wearing a seatbelt fine up from $55 to $60
  • Driving on a suspended license or allowing someone to drive under the influence from $1,000 to $1,500

The increase in traffic violation fines is expected to help the budget shortfall in Illinois. Click here for ABC7 Chicago’s Fines Going Up video for more details.

Will these traffic fine increases change the way you drive in Illinois?

Categories: News

New Obama Short Refinance Mortgage Assistance Program

President ObamaEarlier this week on September 7th, 2010 the Obama administration launched a new “short refinance” mortgage assistance program. This program targets homeowners that are current on their mortgage and underwater. Essentially, these homeowners owe more than their property’s worth.

According to HUD.gov:

“Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.”

“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” said FHA Commissioner David H. Stevens. “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”

The “short refinance” program reduces mortgage balances for homeowners. Yes, that’s right. Through the program lenders can reduce the amount you owe on your home. The new mortgage is written down to less than the current value of the property and backed by the government in a Federal Housing Administration (FHA) loan.

A few key highlights of the new “short refinance” program’s eligibility requirements*:

  • Homeowner must be current on mortgage
  • Homeowner must owe more than their property is worth
  • Homeowner must meet FHA underwriting requirements and have a credit score of 500 or above
  • Homeowners must live in the property as their primary residence
  • The current mortgage must not be an FHA loan

Click here for detailed program information from HUD.gov.

If you’re interested in applying for the program, contact your lender.

Read the Wall Street Journal’s article Government to Deploy Broader Mortgage Aid for more details about the program.

What are your thoughts on the new Obama administration “short refinance” program? Do you think it will help or hurt the real estate market?

Categories: Mortgage

Does Money Buy You Happiness?

In the movie The Pursuit of Happyness, there was a direct correlation between money and happiness. The triumphant true story is based on Chris Gardner’s life. Will Smith stars in this heartfelt movie about one man’s determination to rise above poverty and homelessness to achieve success. In the end, Chris Gardner builds wealth and finds what he deems to be “happyness”.

Does Money Buy Happiness? According to a new study conducted by Princeton University’s Woodrow Wilson School money can buy you happiness. The study found people’s level of happiness improved based on their income rising up to $75,000.

For folks making less than that, said Angus Deaton, an economist at the Center for Health and Wellbeing at Princeton University, “Stuff is so in your face it’s hard to be happy. It interferes with your enjoyment.”

“Giving people more income beyond 75K is not going to do much for their daily mood … but it is going to make them feel they have a better life,” Deaton said in an interview.

I agree that money buys you happiness up to a certain point; because of the things (e.g. food, shelter) money provides you. However, I don’t think Money = Happiness. In other words, having money does not necessarily mean you’re happy.

It’s interesting to see the $75,000 level for money and happiness. If we looked a little closer at the group making more than $75,000, I wonder if we’d find any truth to the saying “more money, more problems.”

What do you think? Does money buy happiness?

Need some inspiration? Check out The Pursuit of Happyness movie trailer:

Categories: News

Labor Day Sales and Deals

Labor Day sales have already begun. Are you ready to take advantage of Labor Day deals? The Labor Day holiday is a great time to save on groceries (stock up on bargain prices), back to school items, cars and a whole lot more.

Here is a roundup of some of the best Labor Day sales articles I’ve seen:

Be sure to check your local newspaper (Sunday paper), email or visit the store’s website to find out about any special Labor Day sales. If you’re going shopping at an outlet mall, visit their website for special Labor Day coupons.

Enjoy your Labor Day Weekend!

Categories: Save Money
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