At some point in your life, you may find yourself facing a debt collection action. The action may be due to a job loss that left you unable to pay your bills or a fraudulent use of your credit that resulted in bills being accumulated in your name without your knowledge. Regardless of the action that initiated the debt collection efforts, the process can be a scary one for people that are unsure of how the debt collection process works. Understanding how the debt collection process works can erase some of the fear that can accompany the action and help you make it through the process with as little financial damage as possible.
First Thirty Days
In the first thirty days after an account has become delinquent, many creditors do not take any action at all other than sending late payment notices to the account holder. In some cases, a late fee or non-payment fee may be charged to the account, but this amount is generally inconsequential. Many people miss payment deadlines and make up the missed payment within the first thirty days of delinquency so it is not worth it to make businesses to invest a lot of resources in taking action against debtors that are less than 30 days late with their payments.
Thirty To Sixty Days
After an account has been delinquent for more than thirty days, businesses start calling and sending notices to the account holder requesting the immediate payment of the past due amount. Depending on the company and their policies, these contacts may be by mail, by email, or by telephone. The delinquent payment is often reported to the credit monitoring bureaus during this time, causing a decrease in the account holder’s credit score. If you need more time to pay, you will want to contact representatives of the company and try to work out some sort of payment arrangement based on your current financial situation.
Sixty To Ninety Days
If the company still has not received a payment after sixty days, they will take further action to encourage the account holder to bring the account current. These actions include placing a negative mark on the person’s credit history that will last for the next seven years and becoming more aggressive in their collection efforts. The company may refer the account to their collection department or send the information to an outside debt collection company that will get to keep a portion of the funds they recover. The debt collection company will continue to call your home or office and send notices by mail to try to get you to pay off your debt until the statute of limitations for collecting the debt has passes, typically a period of seven years.
When times get tough, the best course of action is usually to cut your expenses as much as you can to save more of your income for necessities. While it can be difficult to decide which expenses are necessities and which can be eliminated until your financial situation changes, there are some expenses that can be easily cut to save more money. Most of these expenses seem like necessities until we are under a financial crunch, but once you have made the sacrifice to do without them, you will quickly find that they are easy to live without. Here are some of the expenses that you should focus on when your income is limited.
Many people believe that they need cable television as an entertainment option to keep themselves and/or their children entertained while at home. They may even believe that they need it to remain informed about what is going on in the world. Fortunately, there are some channels that you can get on the television without having to pay for cable. While you may not have as many options available for shows, you will be able to see some pretty good programs and receive newscasts every day. There are many other ways that you can entertain yourself without television and cutting the cable is a good reason to explore some of these other options.
Coffee Shop Drinks
Many people have gotten into the habit of stopping for a coffee shop drink on their way to work or at some point during the day for a pick-me-up if there is a convenient location nearby. While these drinks may not seem like a big expense when times are good, cutting these nearly $3 drinks out of your budget when times are bad can save you more than $60 per month. Instead of purchasing these specialty coffee drinks, spend a few bucks for a travel mug and brew your own coffee at home to drink on the way to work. You will save money and be able to make your coffee taste exactly the way you want with sweeteners and flavored creamers.
Many people believe that bottled water is cleaner and better for you than regular tap water and view it as a necessary expense for their health. However, this is often not the case. Many types of bottled water are just municipal tap water run through an additional filter and poured into a bottle to be sold at an astronomical mark-up. You would be better off carrying tap water in a refillable bottle to quench your thirst. If you are concerned about the quality of the tap water in your home, you can purchase a small filter to go onto the end of the tap to filter out anything in the water that should not be in there.
(The following is a guest post)
If you are looking for a good way to save money, you may want to consider an individual savings account (ISA). These accounts have specific details that can make them a more attractive choice than other saving vehicles. If you would like to learn more about ISAs, you have come to the right place. Here is what you should know about the benefits that an ISA can bring to you.
ISAs were created by the UK government to provide a tax friendly way for individuals to save money. There are two main types of saving account choices for savers to choose from: cash ISAs and stocks/shares ISAs. With both types of accounts, you will not have to pay tax on the money earned on the accounts. With cash ISAs, the interest earned on the amount saved is tax-free. With stocks/shares ISAs, you do not have to pay taxes on the returns earned by the account. Either way, you can save quite a bit of money in tax payments to the government.
Stocks/shares ISAs provide a way for savers to invest their savings in the stock market without having to pay the high taxes associated with capital gains. Any money that is made by increasing the value of the stocks and shares in the account is exempt from the capital gains tax, personal income tax, and the additional tax rates levied on dividends. If your account experiences a significant increase in value, you can save a considerable amount in tax deferrals.
Any resident of the UK above the age of 16 is eligible to open a cash ISA, while residents above the age of 18 can apply for a stocks/shares ISA. You can only deposit funds into one ISA each year and there is a limit to the amount that can be deposited each year. Once you have paid in the entire allowance for the year, if some of the money is withdrawn to use for other purposes, the withdrawn amount cannot be replaced within the same tax year.
The main issue with stocks/shares ISAs is that the value of the underlying stocks and shares may decrease in value. If the underlying units lose enough of their value, you may get back less than you originally contributed to the account. While there is a chance that the value of the holdings will grow, you have to be aware that they may decrease in value as well and be prepared to accept that risk. Much of the risk can be mitigated by researching the stocks and shares you are considering before you commit to placing them in your account.
Smartphones have become very popular as more and more people see the allure of keeping what is essentially a tiny computer in their pocket or purse. Smartphones can do a lot of things, but they can cost a lot of money too. Some of the costs associated with using a smartphone are not obvious and can cause sticker shock when they pop up on the bill. Here is what you are really paying when you buy a smartphone.
The cost of the handset can be very expensive when purchasing a smartphone. Because they provide you with Internet access, email, a music player, an advanced operating system, apps and a camera, the manufacturer can charge premium prices for these products. A basic smartphone will run you about $200, while a popular model like the latest iPhone or Samsung Galaxy will cost you $600 or more. In some cases, the price of the phone can be subsidized by the cell phone company as long as you agree to a contract term of two years or more, allowing you to pay a lower upfront cost for the handset.
To use your smartphone effectively, you must also sign up for a data plan when you activate your phone. These data plans allow you to use all of the additional features available for your smartphone, other than voice calls and texting. Depending on your carrier and the amount data you plan to use, these plans will cost you between $15 to $80 a month. In 2011, the average amount of data use per smartphone was 150 megabytes a month, up from 55 MB per month a year earlier. The most popular data plans typically provides two or three gigabytes of data for about $30 a month.
If you buy a pricey smartphone, it often make sense to insure it against damage, loss and theft. These insurance policies typically cost around $4 to $8 per month to insure the device and the owner must pay a deductible of between $25 to $100 when they make a claim against the insurance policy. This is pretty expensive for insurance, but beats having to pay an additional $600 to purchase another smartphone outright. Check the details of the insurance policy carefully before you decide to sign up for it because many of them specify that you will not receive a new phone for your claim, but must be satisfied with one that has been repaired or refurbished by the company.