Losing your job can feel like your whole world is falling apart.  A job can be so much more than just a J-O-B, it can define you as a person.  When it is pulled out from underneath you with no warning, then your mind set can really be affected. Depression can rear its ugly head during times of high stress and pressure when your personal finances are falling apart.

If you are the main bread winner and you have the responsibility to support your family, loosing a job can soon turn to depression out of feelings of despair and disappointment. Credit card debt, mortgages, and personal loans are all commitments that need to be paid.  What happens when you simply don’t have the cash flow?  

Keeping a positive mindset is paramount in times of unemployment.  You need to look at this as a temporary situation and your new job is to look for a new one.  Don’t sit on the couch and dwell on the situation, this doesn’t help anyone.  If you just lost your job, and you worked 40 hours per week, then you need to be actively looking for your new opportunity with this time. This is not an opportunity to catch up on reading or cleaning.  If you have a family to support or bills that need to be paid, then you must do all you can to get back into work asap!

Ensure your resume is up to date

Rewrite your resume and cover letter and make sure that it contains all your current achievements.

Ensure you have an interview outfit which is clean, ironed and ready to wear.  Be ready for an interview at short notice.

Have printed copies of your resume and cover letter with you at all times.  Carry a resume folder in your car and bag so that you can drop it off as you find opportune places.

Keeping positive in times of stress and little income

Dealing with debt and stress is not fun for anyone.  However, money does not make you the person you are, so don’t let it define you.  We all need money to pay bills but don’t focus on the lack. Keep your mind on taking action and applying for jobs.

Be Proactive in looking for new work

Get creative when looking for a new job.  Look online and in local newspapers for companies that you would want to work with and make contact with them about future work.  Temporary or part time jobs can help you get a foot in the door.  Be open to the possibilities of accepting jobs that are outside of your normal industry.  You can look for more permanent work in your chosen field  while you are working in a less familiar area.  By keeping employment gaps on your resume to a minimum,  you demonstrate your tenacity and work ethic.  By accepting a position that is less than ideal, you may be setting-up your next, better job offer.  Remember that employers prefer to hire someone already employed.

Dealing with debt

When the debt collectors are calling you for money,  and you have little, stress levels can skyrocket.  Do not put your head in the sand and ignore this situation.  Either answer the phone and discuss your situation with them, or look into your debt relief options.  Your debt will not go away on its own.  You have options to explore including credit counseling, and bankruptcy as a last resort.

Times of change always present opportunities that may have not have been available before.  Be proactive, positive, and keep the lines of communication open. You will get back to work.  You will get debt under control.  You will regain your life again.

So you’re ready to get out of debt once and for all.  The question is, how do you do it and what options do you have.  I’m going to share the options available to you as well as the pros and cons of each. 

Debt Consolidation

PROS:

• Lower interest rates on your credit cards. 
• One REDUCED monthly payment
• Stop harrassing creditor phone calls
• Eliminate your debt in just 3-5 years!

CONS:

• Pay back the full amount owed
• No room for error - If you are late or miss a payment, the creditors will remove you from the program
• Accounts will be closed by the creditor

Debt Settlement

When you enroll in a Debt Settlement program, you are hiring a team of Debt Negotiaion Specialist to work with your creditors and settle your debt for less than what you owe.  Debt Settlement is an excellent option for someone who has fallen behind on their monthly payments an is trying to avoid bankruptcy.  You can include unsecured debt such as Credit Cards, accounts in Collections, Repos, and Medical Bills in a Debt Settlement Program.

PROS:

• You will eliminate your debt for much less than what you owe
• You only have to make one small monthly payment
• It will improve your credit over time much faster than going through bankruptcy

CONS:

• May hurt your credit score
• Creditors may continue to call you
• Debt Settlement cannot help with secured debt such as a home or car loan

Bankruptcy

Bankruptcy is the process of declaring yourself unable to pay off your debts.  This does not mean it will get rid of all of your debt but most of it.  The typical bankruptcy for consumers is Chapter 13.  This is where lawyers will negotiate with your creditors and collection agencies to pay back less than what are owed.

PROS:

• You pay less than what you owe.  The typical amount you will pay back on any certain debt will be anywhere from 30 to 80 cents on the dollar.
• They work a payment plan out for you.  This will allow you to creditors back over period of time.

CONS:

• Hurts your credit for the next 7 years from the point of discharge.  You will not be able to get a loan of any kind.
• Costly.  Bankruptcy can cost a lot of money.  If you’re already in a lot of debt it may be tough for you to come up with the money to even go through this process.
• Bankruptcy is also very time consuming.  Don’t expect the process to go very fast.  In most cases it will take several years to pay back all of your debts.

Would you like to learn more about what option is right for you?  Our Solutions Specialist can work with you to determine which option best fits your financial situation. 

For a FREE no obligation consultation,

give us a call TODAY!

1-877-492-4109

photo by: Helga Weber

Money is one of the topics couples fight about most often. Debt brought into marriage is an especially troublesome part of many couples’ money problems. Research shows that debt brought into marriage is the number one problem for newlyweds. Unfortunately, debt never rests, sleeps, or goes on vacation and as long as you have debt you will be in financial bondage.

Before you say, "I do," you should get to know each other's financial health.

10 questions to ask your fiancee that can help make your future life together a successful one:

1. How many credit cards do you have?
2. What are your balances and interest rates on those cards?
3. Do you pay your bills ahead of time, on the due date or late?
4. Are there dings on your credit history that might affect our ability to reach our financial goals?
5. What is your credit score?
6. Can I see your credit report?
7. What are our financial goals (salary and saving expectations, retirement plans, future education, etc.)
8. Do you have any assets (real estate, investments, retirement funds, savings accounts)?
9. Do you want children? If so, what are your (our) financial plans for supporting them?
10. Do you owe any debt from a previous marriage? Are there any financial obligations that still need to be fulfilled to your ex-spouse?

There are no correct answers to any of those questions. However, if your spouse doesn't want to chat with you about finances, consider this a BIG red flag.

If you learn that there is a large amount of credit card debt, extremely high interest rates on those cards or too many credit cards, then the time to take action is BEFORE you say "I Do". you should consult with a Debt Solutions Specialist to discuss your options such as Debt Consolidation or Debt Settlement.

If you or your fiancee would like to learn more about how to get out of debt before your big day, click the linke below for your FREE DEBT ANALYSIS or simply give us a call. 

1-877-492-4109

I received a summons for a credit card I cannot afford to pay.  Can my Social Security check be garnished?

If you are retired or disabled and your only income is from Social Security, that income cannot be garnished!

Debt collectors prey on elderly or retired people by using scare tactics.  It is not unusual to hear one of our clients report:

I got a call today and the collector told me that if I didn't send them money today they would garnish my monthly check or take all of my money out of my bank account!

According to the Federal Trade Commission and the Fair Debt Collection Practices Act, many federal benefits are EXEMPT from garnishment including:

• SOCIAL SECURITY BENEFITS
• SUPPLEMENTAL SECURITY INCOME (SSI)
• VETERANS BENEFITS
• CIVIL SERVICE and FEDERAL RETIREMENT and DISABLILTY BENEFITS
• MILITARY ANNUITIES and SURVIVOR'S BENEFITS
• RAILROAD RETIREMENT, MERCHANT SEAMAN WAGES
• LONGSHOREMAN'S and HARBOR WORKER'S DEATH and DISABLITLY BENEFITS
• FOREIGN SERVICE RETIREMENT and DISABILITY BENEFITS
• FEDERAL EMERGENCY MANAGEMENT AGENCY FEDERAL DISASTER ASSISTANCE

But, in certain cases, such as delinquent taxes, alimony, child support or student loans, federal benefits may be garnished.

Be very careful about your bank account!

As long as the funds in your checking or savings account only came from retirement accounts (such as above) and ARE NOT CO-MINGLED with income you may earn in addition, then your account cannot be levied.

If you have another job, make sure to either just cash that check or open another bank account, preferably in another bank for those funds.

Since most debt collectors are professionals, trained to say anything in order to get you to send them money, you should consider the services of a DEBT MANAGMENT COMPANY.

They may be able to:

• Limit or stop the harassing calls
• Negotiate a reduced settlement help lower your payments and fees
• Help improve your credit score as debts are paid off
• GIVE YOU PEACE OF MIND!

Did you recieve a Summons?  If so, we can help you.  Request more information or give us a call for a FREE consultation!

1-877-492-4109

 photo by: alfcio

The Fair Debt Collection Practices Act (FDCPA) provides the consumer with specific rights to protect from debt collectors.

If you have an account that has been charged off and sent to a collection agency, you most likely have experienced the efforts of an unscrupulous debt collector!

Basically, a debt collector cannot:

• Threaten or berate you
• Harass or intimidate you
• Call numerous times or during odd hours
• Make false statements or their intentions ("...we will sue you if you don't pay now!")
• contact neighbors, family or friends about the debt.  They can only state that they are trying to locate you.
• Contact your employer about your debt

How to stop the collection calls:

If you receive a letter from a collector, it will have the name of the company and address.

Write a brief letter stating that you demand that the collector stoop calling you at home (and work if employed) or you intend to report them to your state attorney general.

Date and sign the letter.

Mail by registered mail (you need a receipt proving that the collector received the letter).

Start a phone log and keep a clear record of all calls that come after the receipt of the letter. A collector may call one time after receipt to state they have received the letter and will not call you anymore.

Usually, the make one last threatening remark like, "now you have forced us to start legal action against you...".

Take good notes, because if they do not start legal action, you may have grounds to sue them!

Dealing with debt collectors is a very trying experience and you may need help.

We have been helping our customers for 8 years to:

• Stop the collection calls
• Lower the monthly amount they need to pay
• Negotiate the debt for a 50% or more reduction
• Improve their credit rating as debts are settled

If you need help dealing with your creditors, give us a call TODAY!

1-877-492-4109

What is a 1099-C?

If you or a Debt Settlement Company has helped you settle a debt for less than the balance, the difference is reported to the IRS by the original creditor as a loss.

The IRS looks at this settled or "forgiven" amount as if the money was returned to you, even though it wasn't. The IRS is thinking that you will have to include this amount as additional income and therefore pay additional tax on it!

Sadly, most tax preparers and/or accountants are not aware of how to EXCLUDE a settled debt from being included as additional income.

HERE'S WHAT YOU NEE TO DO IF YOU RECEIVE A 1099-C:

According to the IRS, the amount of forgiveness (for the sake of this article, we are talking about unsecured debt) IS EXCLUDED if at the TIME OF FORGIVENESS, you were INSOLVENT.

INSOLVENT means that your liabilities are more than your assets or in other words, you have a negative net worth.

Sounds terrible, but in reality, in this case, it is good for you.

Let's say that when you list all of your assets:

• Home equity
• Net value or current value of your car
• Home items (furniture, tools, stuff)
• Savings accounts (stocks, bonds, yeah...right!)

Now offset that by all of your debt:

• Mortgage
• Car payment
• Student Loan(s)
• Medical Bills
• Credit Cards
• Personal Loans
• Equity Line of Credit

Most likely, your net worth (Assets - liabilities) will be negative.

Using IRS Form 982, you will check the box in Part 1, on line 1-b that states Discharge of indebtedness to the extent of insolvency.

It is also helpful to write a brief (I said brief...don't say too much) explaining why you were insolvent.

Attach this with the Asset-liabilities Worksheet together with the Form 982 and send in with your tax return.

That should do it!  If you would like a more complete explanation of how the IRS treats forgiven debt and insolvency, click here.

Do you still have debts that need to be settled? We can help! Click the link -->> FREE DEBT ELIMINATION SUMMARY or give us a call!

1-877-492-4109

photo by: alancleaver_2000

Some great New Credit Card Rules were passed last year. Here's what you need to know:

In the old days (prior to 2-22-10) a credit card company could just increase your interest rate or other fees without letting you know.

Most consumers would just keep paying their minimum payments and not realize that of the $100 they paid, only $35-$40 was actually being applied towards the principal and the rest was interest and fees!

At this rate, it might take you the rest of your life (if you lived long enough!) to repay the original amount borrowed or charged.

With the New Credit Card Rules, the credit card company must send you a notice at least 45 days before they can:

• increase your interest rate
• change annual, cash advance or late fees
• make other significant changes to the terms of your card

You then have the option to cancel the card before the changes take effect. However, if you cancel your card, the credit card company may close the account and increase the monthly payment.

For example, they may require you to pay the balance off in five years.

They may also double the percentage of your balance used to calculate your minimum payment which will increase your monthly payment!

The credit card companies are now using a few "legal loop holes" to get around this new law and they do not have to send you a 45 day advance notice if:

• if your card has a variable interest rate tied to an index and the index goes up your rate will increase
• your "introductory rate" expires and jumps to the "real" rate
• your rate increases because you have made arrangements because of late payments 

Your monthly credit card bill will now include information on how long it will take you to pay off your balance if you only make the minimum payments.

It will state the current balance and the minumum payment due.

It will give you a LATE PAYMENT WARNING that says that if they do not receive the minimum payment by the date listed, you will have an additional $35 late fee charged and your APRs may be increase up to the PENALTY APR OF 28.99%!

Even though the new rules may inform you of how you are about to be taken advantage of, they really don't help that much.

If your credit card balances is so hight that you can only make the minimum payments, YOU NEED HELP!

For FREE ADVICE with NO OBLIGATION, CLICK HERE or call

1-877-492-4109

photo by: Andres Rueda

Here are 5 tips that you can use to improve your credit score:

1. Check the accuracy of your credit report

Did you know that by law, you have the right to obtain a FREE credit report from each of the three national credit reporting companies every 12 months?

To have the best credit score possible, you must make sure that your credit report does not contain errors.  This is your responsibility!

To get your Free Credit Report:

• Go to Annual Credit Report and follow the instructions.

• Or, you can call 1-877-322-8228 to request that your report be mailed to you.

• Or, you can also complete the Annual Credit Report Request form and mail in your request.

2. Pay your bills on time

Although there are several factors in determining a credit score, one of the most important is making regular, on-time montly payments.  Most banks have automatic online payment, so take advantage of the service!

3. Understand how your credit score is determined

Basically, your credit score is base on how you answer these five questions:

• Do you pay your bills on time? If you are consistently late paying your bills, your credit score will suffer.

• How much outstanding debt do you have? If you have too much outstanding debt compared to your ability to repay (based on income, debt limits, etc.) then your score will suffer.

• Have you applied for several new accounts recently? Filling out several store card applications or trying to establish new credit with several charge cards in looked on as a negative for your credit report.

• How long is your credit history? Even thought you may never have had bad credit because you have never really had a loan or credit card, this is considered a negative on your credit report.  Try to establish one or at the most, two accounts and pay them on time and possibly pay them off in a few months.

•  What types of credit accounts do you have? Too many finance companies or high interest credit cards may hurt your score. On the other hand, a mix of installment loans (auto, home, etc.) and a credit card or two is much better for your score.

For more information, check out the Federal Trade Commission's website at Facts for Consumers.

4. Take the time and effort to legally improve your credit score

It is well worth the effort to improve your credit report and score!

Click on this link for step-by-step instructions on how to repair your credit report.

5. BEWARE OF CREDIT REPAIR SCAMS!

There might be a few legitimate credit repair companies, but I haven't ever found one!

You can find all you need to know about how to legally correct or repair your credit report at the FTC's site "Credit Repair: How to Help Yourself"

If you have some questions or need some more information, our Solutions Specialists are here to help.  Give us a call!

1-877-492-4109

OR, Click on the link below for a FREE PERONALIZED DEBT ANALYSIS!

photo by: kanonn

When you’ve got negative credit accounts all over your credit report, you’re going to want to do all you can to Repair Your Credit – especially if you believe the information reported is inaccurate.

Luckily, the credit bureaus understand that not all of the information they report is always correct, so they give you the option to dispute any credit account you think looks wrong via regular mail.

All 3 have since expanded their dispute departments to cover requests being made online, so you don’t even have to worry about your queries getting lost in the mail, or having to wait longer than a month for a response.  Simply sign onto the appropriate credit bureau’s website, check off which accounts you want disputed, leave an explanation for why you’re disputing the account and you’re done.

When something seems too good to be true, it usually is.  This is no excption.

The problem with keeping your disputes online only is that the process is so overly simplified that it almost completely cuts out the follow-up options you normally have available to you had you sent your dispute letters via regular mail.  Problems with the online-only approach don’t stop there; we also recommend you keep your disputes to regular, certified mail because:

You don’t get a copy of the dispute

Again, the credit bureaus’ online dispute page simply consists of you disputing an account, leaving a note on why you’re disputing it, and pushing Submit.  Once that’s done, you’re given no physical copy of the disputes for your records – something that can be easily avoided by sending the disputes via certified mail, and keeping copies for yourself.

You give up some of your rights by disputing online

If you take the time to read the Terms & Conditions of using the credit bureau’s online dispute service, you’ll see that by doing so, you’re entering into a binding arbitrary agreement with the credit bureaus that prevents you from taking them to court over your disputes.

If it comes down to it, you don’t want to give up your right to take the credit bureaus to court should they persist in reporting information that you know is inaccurate.

Once you have reviewed your credit report for innacuracies, chances are pretty good that there will be some debts left that you actually do need to re-pay.  There are great programs available to you such as Debt Consolidation and Debt Settlement that can help you eliminate your debt quickly and save you money.

Our Solutions Specialists can help you decide which program fits your situation best.  Give us a call!

1-877-492-4109

photo by: stephanie in love

What is a 1099-C?

A 1099-C is a statement from the IRS that you may need to include the amount of a forgiven or settled debt as income.

Let's say you are going through a very tough time financially and cannot keep up with the payments on your credit cards or personal loans.

At some point, you (or a Debt Settlement Company), may be able to negotiate a settlement on the debt you owe for less than the balance.

If the amount forgiven is over $600, the creditor may claim that as a loss to the IRS and you would then receive a form 1099-C.

At first glance, it looks as though you have no choice but to include the amount forgiven as additional income and therefore, you may have to pay additional income tax!

According to IRS Form 4681, you DO NOT HAVE TO INCLUDE the amount forgiven or settled if at the time of the forgiveness you were INSOLVENT.

Sadly, most accountants or tax preparers are unaware of how to avoid this additional tax.

How to prove you were INSOLVENT:

List all of your assets.  Your assets include:

Equity in your home. (What your home would sell for today less what you owe.)

Cash, stocks, bonds, mutual funds. (Come on...most people who are in a financial crunch don't have extra money laying around!)

The net or current values of your "things":

• Car (it's probably not worth as much as you think!)
• Boat, Four-Wheeler, Motorcycle, etc.
• Furniture, tools, (get the idea?)


Now, you are going to offset this by the debt you owe:

• Mortgage (don't forget the 2nd or equity line of credit
• Student loans
• Auto loan
• Personal loans
• Credit cards
• Store cards
• Back taxes!
• Medical bills

This should show that at the time of forgiveness, you were insolvent (you owe more than your worth).

You will submit this financial worksheet along with IRS Form 982 with your tax forms.

If your tax preparer is not aware or does not seem competent dealing with this procedure, let us help!

In over 8 years of helping people reduce their debt, we have not had a client pay any additional income tax as a result of a settlement!

Need More Info? Give us a call today!

1-877-492-41096

 photo by: Stefan Baudy