Protect Yourself from Unscrupulous Collection Agencies

Collection agencies are infamous for fudging the law when collecting money that is owed to them. If you are an individual with a low income, you could be an easy target for these deceptive practices. The uninformed can fall prey easily. Common practices of collection agencies can include profanity and intimidation to seek payment. If you are a victim of these practices you can seek refuge under federal law, which prohibits collection agencies from engaging in unfair practices. If they fail to comply with the rules, there can be penalties and heavy court fees. 

If you are an individual facing collection, you have protection and recourse under the Fair Debt Collections Practices Act (FDCPA). There are specific provisions under which you are federally protected.

Harassment and Abuse

Collection agents cannot use profane language or make repeated calls in order to collect payment. Threatening or intimidating a debtor is harassment and is strictly restricted. This also includes calling members of your family.

Mode of Communication

Collection agents can call you only between the hours of 8:00 a.m. and 9:00 p.m. unless you have specified another time than this. Similarly, they cannot attempt to contact you at work or contact your employer. You can also make a request not to be contacted at all. Collection agents are required to comply with such requests without fail.

Third Party Communication

Agencies dealing with collection are not allowed to talk to third parties about your case. They can only ask your whereabouts and give their name. If you have an attorney, all information or contact must be directed through the attorney. Collection agents have the right to contact your spouse. If you are a minor, they can contact your parents.

False Representation

Collection agents have been known to use tactics like impersonation or falsification of documents to seek payment. Impersonation of law enforcement officials and falsified documents can intimidate the debtor into paying. Such tactics are not allowed under the law.

Unfair Tactics

In the case of non-payment, you cannot be threatened with criminal prosecution. Collection agencies are obliged to notify you well in advance when there has been a non-payment or a change in interest rate. They also cannot deposit post dated checks prior to the date without your permission.


Recourse and Refuge
As a debtor, you have certain rights and are federally protected under the FDCPA Act. If your rights have been violated, you can sue the collection agency for being overzealous about seeking payments. If they resort to unfair practices, you will be legally protected under the law.  Debt counseling services can teach you how to tackle such issues. In some cases, you can have a partial or entire debt forgiven for fighting against illegal practices.

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A Complete Guide to Debt Management Solutions

In today’s economic crisis, debt management is a savior for all debtors. However, the concept of debt management is vast and includes various types of services. Knowing the types of debt services will help you chose the right service for managing your debt.

Types of Debt Management Solutions 
Per a recent analysis, in 1980 consumer expenditures were 65% on average in the US, but today it’s a whopping 110%! With the economy showing no leniency and expenditures growing leaps and bounds, many consumers are falling prey to debt and bankruptcy. However, debt management helps consumers manage their expenditures effectively and become debt-free. Debt management solutions cover many services. Some of the more prominent ones are discussed below.

Non-profit Debt Management Solution
Many consultants offering debt reduction services are non-profit, which means they charge very reasonable fees. If you are looking for a quality service at very nominal fees, this one is for you.

Holiday Debt Management 
Paying off holiday debts is a headache for many, but there is a debt management service exclusively meant for holiday shoppers. While planning your holiday pay-off, it is suggested that you pay off higher interest credit cards first and transfer balances to lower interest rate credit cards. If your company offers a Christmas or year-end bonus, it would be wise to save a significant amount to put towards holiday debt payments.

Consolidated Debt Management Loans
Consolidated loans have lower monthly interest rates and longer time periods. It makes sense to choose these to pay off higher debts. However, you have to be disciplined about your expenditures so as not to fall prey to some other bigger debt again.

Credit Card Debt Management 
An important thing about credit card bills is to pay them on time. A delay in one payment might increase the interest on other cards as well.

Educational Programs on Debt Management
Most often we fall prey to debt because we do not know how to follow a budget effectively. That’s why many service providers offer educational programs where they make you aware of debt and show you how to control your budget so as to avoid debt situations. These programs are inexpensive and in many cases even free. This type of debt help service is very useful because they also help you stay out of debt in the future.

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Credit Counseling the Right Way

You can improve your quality of life by learning to manage your finances better. All of us have debts and loans that need to be paid over time. If our money is not managed properly though, we can easily become caught in a web of debt. Increasing debt is a serious concern in the day to day lives of many, and effective debt management is necessary to stay afloat. 

Credit counseling is a good option for people who need help sorting out their financial situation. It helps people understand how to avoid incurring more debt. It can be helpful in planning an effective debt management strategy to assure debt relief. Some of the benefits of credit counseling are: 

Knowing your finances – The best part of is that you learn more about how money works -- bank accounts, credit, debit, bills, loans, interest and more. This equips you to handle your current financial situation better and will be of great help in the future too. 

Mediators – Credit counseling services offer to talk to your creditors on your behalf and work on a plan that satisfies your interests as well as your creditors’. Your monthly payment plan will be negotiated and settled with your creditors. 

No initial fees – Some counseling companies do not charge for initial consultations. Opt for such companies with good reputations. Monthly fees are usually used to pay your debt and the counseling service's fee for managing the debt. Do not choose companies that charge a large amount up front or high commissions. 

Credit counseling is a good way to find help to manage your debt, but tread with care. Do your own homework on the various services out there, and choose the one you feel the most comfortable with.To Know more about - Debt management programme

A Debt Management Solution Can Bring Peace of Mind

In these times of economic recession, experiencing financial trouble is nothing new. But on the positive side, this recession has also led many people to find new ways to save money and pay down their debt.  For some though, regardless of the budget put into place, life has ways of making the economic struggle even worse. They might have to deal with job loss, pay cuts, shorter working hours or even sickness. For people in debt, the thought of dealing with reduced finances can be particularly worrying. Rents or mortgages, utility bills, gas, food and all the other essential everyday expenses that seemed so easy a few months ago might suddenly be a real challenge.

When you find paying back debt difficult or even impossible, a debt management program may be just what you need to finally overcome your financial troubles.  There are many debt management solutions available on the internet for comparison and consideration.

Remember, getting out of debt does not have to be difficult if approached in an organized manner with proper counseling assistance from a debt management solutions company. Their counselors are trained and experienced on such financial issues, so you can disclose all the details of your existing debts to them. The counselor will work closely with you to understand your situation and come up with a personalized plan that fits your needs and helps you get out of debt more quickly. 

Benefits of a debt management solution include the lowering of your interest rates and monthly payments, the slashing of your over-the-limit fees or penalties, stopping collection calls, and the consolidation of multiple bills that you are juggling into one singular monthly payment. They enable clients to take charge and take control of their financial situations by supplying them with helpful and easy to use financial tips. Get easy to follow tools and resources that can help you evaluate and track your situation and make some important decisions. 

All this sounds very simple, and it is if you find the right debt management plan. There are non-profit debt management companies dedicated to helping people like you get out of debt. However, make sure you deal with a reputable company by checking their background and reading reviews to find out what people are saying about their debt management program before you finalize.   

Don’t accept any solution unless it fits your needs. Make sure that the plan designed for you is acceptable to your creditors. Finally, once everything falls into place, remember to never be late with your payments.
Again, getting out of debt is easy if you have the right debt solution. It is better to work with a customized plan and regain your financial health than to struggle and fail.

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Basics of Personal Loans

Banks offer different kinds of loans, one of which is Personal Loan. Available at your discretion, a personal loan is a typical general purpose loan. Expenses like paying bills, car repairs, paying school fees etc. often need unsecured loans to be covered. Personal loans are unsecured loans which are granted to people with good credit records. A good credit record implies an ability to repay.

Often touted as a resourceful tool for debt consolidation loans, multiple accounts can be merged into one single payment through personal loans. However, personal loans are difficult to obtain because the requirements to qualify for personal loans are considerably strict.

What You Should Know About Personal Loans

Here are certain facts that you should be aware of, before applying for a personal loan:

• Personal loans are unsecured loans. The lender will not require an asset as collateral. This is a good reason why personal loans are difficult to obtain. Although the lender cannot seize an asset, non-payment of the loan can attract lawsuits.

• Personal loans are based on a fixed amount.  Based on your credit rating, a personal loan usually ranges between $1000 - $50000. Higher amounts can only be obtained from banks that you already share a good credit history with.

• Personal loans have fixed interest rates. The interest rate of a personal loan remains fixed and does not change during its life span. Like the loan amount, interest rates for a personal loan, vary according to the credit rating of the applicant. Hence lower interest rates are preferable because this makes it easier for you to repay the amount. Few personal loans come with a variable interest rate.

• Personal Loans have a fixed repayment period. If you borrow a personal loan, your repayment period is fixed, mostly in months. Longer repayment periods may lower the monthly repayment amount. However, this tends to increase your interest rate. Shorter repayment periods attract a lower rate of interest.

Since a personal loan is unsecured, they usually tend to come with a higher rate of interest. Also, they are considered as one of the best debt consolidation program. If you do not have an impressive credit history, you could obtain a personal loan by acquiring a credit card. However, this works only for small amounts. An extra option lies in the form of money sourced from friends and family, from whom loans can be obtained with a clear contract on repayment.

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Fixed Rates vs. Variable Rates

A credit card can either pave the way for a good spending plan or make you a spendthrift drowned in debt. Hence, before accepting a credit card, a major factor for consideration is the type of interest rate you will pay on the credit card. There are two types of interest rates – fixed interest rates and variable interest rates. If you are confused about what kind of interest rate is right for you, it is important to know your options well.


Fixed Interest Rate


If you are a card holder with this option, you always know your interest rate. The credit card company can increase this interest rate after one year, but is liable to notify you 45 days in advance. You have the privilege of canceling the card and paying the balance at a much lower rate. 


Credit card issuers can increase your rate under the following circumstances:

• You have delayed a credit card payment for more than 60 days
• You had a promotional rate that has ended
• You have completed a debt management program your underlying interest rate has changed and you now have a variable interest rate

Unless it is for one of the reasons stated above, credit card companies cannot increase your interest rate within the first year. This type of interest rate can provide stability in making monthly payments because the APR (Annual Percentage Rate) remains consistent.


Variable Interest Rate 


A variable interest rate tends to fluctuate with the prime interest rate. Since it is linked to the underlying rate, it tends to go up and down. In this case, credit card issuers are not liable to send you any notifications of the changing rate. Unless you pay attention to your billing statements, you will not be able to know the change in interest rate on your credit card. However, if the credit card company increases the margin portion of the interest rate, they are liable to send you a notification in advance. The margin portion is the difference between the variable interest rate and the index rate. In this case, the rules of fixed interest rates apply. You also have an option to opt out of the interest rate.


The primary advantage of a variable interest rate is that if the interest rate goes down, your payment can become easy. If the margin portion is increased, you will always be notified. However, it is important that you pay close attention to the fluctuating interest rates. 


Choose Wisely


Choosing the appropriate type of interest rate is part of a good debt management plan. Determine your financial resources. If you can afford to pay a fixed interest rate, go ahead with that option. On the other hand, if you want to play with the odds and take full advantage of fluctuating rates, choose the variable interest rate.

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Pros & Cons of Credit Card Balance Transfer

Credit card companies are making big business these days. With the extensive use of credit cards by their customers, finance charges mount up very quickly. When such conditions arise, a possible solution is credit card balance transfer. This involves shifting one credit card balance to another credit card.

Credit card balance transfer is encouraged by almost all credit card providers because it attracts new customers. And for customers this is an attractive option because the new bank may offer lower interest rates and temporary interest-free periods.

So, what is the real deal with credit card balance transfers? Is this process part of a good debt management plan or just an offer to lure customers? When should you opt for a credit card balance transfer? To have these questions answered, it is necessary to understand the pros and cons of credit card balance transfer.

Benefits of Credit Card Balance Transfers

• Interest-free Period – You can save money from an interest-free credit card balance transfer. With a low APR (Annual Percentage Rate) and a sizable balance, a customer can save a considerable amount annually.

• Reduction of Debt – If the rate of interest is low, it implies that monthly payments can clear the outstanding balances sooner.

• Budgeted Borrowing – If the transfers are managed successfully, the interest rates can be minimized. Furthermore, this method of inexpensive borrowing can prove to be cheaper than a personal loan.

• Unsecured Debt – Credit card debt is unsecured. Since the lender does not have collateral, an alternative debt solution can be initiated if the credit card balance transfer fails to reduce debt.

Disadvantages of Credit Card Balance Transfers

• New Lines of Credit – The purpose of a credit card balance transfer can also have a contradictory effect. Sometimes consumers are given higher spending  limits with their new line of credit, which may result in additional spending that can destroy the very purpose of the credit card balance transfer.

• Availability – Interest-free credit periods are available only to those with a good credit history. Those with late and missed payments do not qualify for full benefits.

• Transfer Fees – Card providers usually charge a flat fee or a percentage of the balance to be transferred. This fee is added to the owed amount, implying that a customer may only be able to start saving on interest payments after a few months.

• Expiration of Introductory Rate – Once the introductory rate expires, the APR can become higher again, resulting in the debt situation returning to its earlier scenario.

A debt management plan is usually only effective when it is well thought out. If the credit card balance transfer is not promising enough to improve your financial condition, then it is better not to do it. On the other hand, a good credit history and an effective management of credit card balance transfers can improve your financial status. So, use the pros and cons above to assess and determine your current debt scenario, and opt for a credit card balance transfer only if it is capable of improving your current financial status.

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Debt Consolidation Loans for You

Expenses that exceed your income become debt. Repayment of these loans can become a challenge. Sometimes, you may have to resort to taking additional loans to cover the existing ones. In such cases, an individual needs professional advice from debt settlement companies or debt consolidation companies. Financial advisors often offer an option of debt consolidation loans.


A debt consolidation loan covers all the debt you have acquired. The idea behind a debt consolidation loan is to merge all your loans and credit card debt into a single loan. What is the benefit? Instead of paying separate debts to individual creditors, you can make a single payment to the debt consolidation company every month. The debt consolidation company then makes the payments to your creditors.


There are various forms of debt consolidation loans. It is important to determine which one suits you the best. A debtor should consider his needs and requirements before applying for a debt consolidation loan or plan.

To make a wise choice, it is wise to seek debt management credit counseling. When applying for a debt consolidation loan, it is important to consider the following –

• Life span of a loan
• Payback amount in gross plus interest
• Fixed monthly payment
• Effect on credit rating

After a thorough analysis of these factors, you can consider the types of debt consolidation loans available –

Home Equity Loans

If you have enough credit and a fair amount of equity in your home, a home equity loan is an option. Though the interest rates are lower, your home will become a part of your credit card debt. Hence, this option is not usually preferred unless fixed payments can be assured.

Credit Card Balance Transfers

This option involves transferring all of your credit card balances to a single credit card. Although the interest rates are lower, they tend to expire after a certain period of time. If you are interested in this option, consider the life span of the low interest rate. Credit card balance transfers can also affect your credit score.

Personal Loans

Personal loans are unsecured loans with fixed payments over a period of time. Approval of personal loans depend on your credit rating. If your credit rating is good, your application will be approved. A bad credit rating could result in a personal loan with a high interest rate or sometimes no approval at all.


Remember that a debt consolidation loan is not a solution for getting rid of your debt. It is just a way of merging and organizing your payments so that it becomes easier to make a single payment instead of many. Choosing the wrong type of debt consolidation can become troublesome. Debt management counseling is a must. Consider your requirements and choose wisely.

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