Aldo Gonzalez | Debt Management Credit Counseling Corp.

National Do Not Call Registry

February 2, 2023 by Aldo Gonzalez

Are you tired of getting telemarketing calls at all hours of the day on your cell phone, or at night when you are trying to relax? There is a way to eliminate most of these calls completely by registering your numbers with the National Do Not Call Registry.

The National Do Not Call Registry gives you a choice about whether to receive telemarketing calls. Most telemarketers should not call your number once it has been on the registry for 31 days. If they do, you can file a complaint at the donotcall.gov Website. You can register your home or mobile phone for free. On this site you will also have the ability to verify any numbers you may have added to the registry and you may file a complaint for unwanted calls.

You may file a complaint if you received an unwanted call after your number was on the National Registry for 31 days.

You can register your numbers at www.donotcall.gov. or register by phone, call 1-888-382-1222 (voice) or 1-866-290-4236 (TTY).

Some states have statewide do-not-call lists for residents as well. Check with a state’s public service commission or consumer protection office to see if a list is available. Contact information can be found through National Association of Regulatory Utility Commissioners.

Also please note, you still may receive political calls, charitable calls, debt collection calls, informational calls, and telephone survey calls. In addition, companies may still call if you’ve recently done business with the company, or if you’ve given the company written permission to call you. However, if you ask a company not to call you again, it must honor your request. Record the date of your request.

Finally, don’t be afraid to hang up on illegal sales calls! If your number is on the Registry, and you get a sales call, or you get an illegal robocall, don’t interact in any way. Don’t press buttons to be taken off the call list or to talk to a live person. Doing so will probably lead to more unwanted calls. Instead, hang up and file a complaint with the FTC.

To read this article on FTC, click HERE

Facing Foreclosure?

December 8, 2022July 10, 2014 by Aldo Gonzalez

Scammers are targeting people having trouble paying their mortgages. Some claim to be able to “rescue” homeowners from foreclosures, while others promise to modify your loan – for a fee. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know how to avoid scams that could make your housing situation go from bad to worse. Signs of a Foreclosure Rescue Scam If you are in danger of foreclosure, AVOID any individual or company that:

Requires a fee in advance

Don’t pay any business, organization, or person who promises to prevent foreclosure or guarantees you a new mortgage. So-called “foreclosure rescue companies” claim they can help save your home, but they can’t really do that. They’re just out to make a fast buck. Some may ask for hefty fees in advance – and then, once you pay, stop returning your calls. Others may string you along before disclosing their charges. Cut off all dealings if someone insists on a fee in advance.

Promises to find mistakes in your loan documents that will force your lender to cancel or modify your loan

Cancelling your loan won’t allow you to stay in your home, and in most cases, lenders are not required to modify your loan to make it more affordable simply because of mistakes in your loan documents.

Guarantees to stop a foreclosure

Don’t do business with anyone who offers an “easy out” of foreclosure. These kinds of claims are the tell-tale signs of a foreclosure rip-off:

“We can stop your foreclosure!” “97% success rate!” “Guaranteed to save your home!”

Advises you to stop paying your mortgage company or stop talking to your mortgage company

Some scammers offer to handle financial arrangements for you, and then pocket your payment instead of sending it to your mortgage company. Send your mortgage payments ONLY to your mortgage company. Scammers may advise you not to communicate with your mortgage company. That’s a bad idea because you may not find out until it’s too late that the scammer has done nothing for you, that your mortgage company was willing to modify your loan, or even that foreclosure is just days away!

Help is Available

Contact your mortgage company as soon as possible if you’re having trouble paying your mortgage or if you get a foreclosure notice. Keeping the lines of communication with your mortgage company open is critical. Call 1-888-995-HOPE for free personalized advice from housing counseling agencies certified by the U.S. Department of Housing and Urban Development (HUD). This national hotline – open 24/7 – is operated by the Homeownership Preservation Foundation, a nonprofit member of the HOPE NOW Alliance of mortgage industry members and HUD-certified counseling agencies. For free guidance online, visit www.hopenow.com. And for free information about the President’s plan to help financially strapped homeowners in mortgage misery, visit www.makinghomeaffordable.gov DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt. Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.

Ref: Federal Trade Commission Public information

Educational Handouts and Worksheets

January 5, 2021April 13, 2014 by Aldo Gonzalez

Click on the links below to download our handouts and worksheets as a PDF. Get the latest PDF viewer here.

Daily Expense Tracker

Budget Worksheet

Compound Interest Chart

What You Should Know About Identity Theft

How to Dispute Credit Report Errors

Steps to Obtain Your Free Credit Reports

Face Your Mortgage Issues Directly and Realistically

December 8, 2022March 3, 2014 by Aldo Gonzalez

Nobody likes to take a call from the collections department. It doesn’t matter if the call is about a credit card, a utility bill, a bounced check or anything else that may be delinquent. Avoiding the issue may seem like a good strategy to those who really hate conflict, but it is usually the worst thing you can do. This is especially true when it comes to a mortgage.

Your lender does not want your house. Yes, they may be very forward in telling you that foreclosure could happen if you do not pay, but they would much rather have a good loan than face the headache of the foreclosure process, reconditioning a property and finding a way to sell it. In the current economic climate, lenders are more desperate than ever to keep you in your house, but they cannot do it unless you talk to them.

Consider this: Freddie Mac has estimated the cost of a foreclosure to the bank to be around $60,000. Officials at HSBC have estimated that the average loss on a foreclosed home is 20 to 25% of the value of the loan. This means that on a $400,000 home, they could lose $80,000 to $100,000. Doesn’t it make sense that the bank would prefer to cut its losses?

In order to work with you, the lender needs to speak to you. The sooner they can speak to you, the better your chances of working a deal with them. In another article, titled “Mortgage Options to Avoid Losing Your Home”, the specifics of what types of deals you may be able to obtain are spelled out. This article will deal only with what you need to do and what you need to be prepared to provide if you want to avoid foreclosure.

• Find out who actually owns your mortgage and deal with them directly. In most cases, you are making your payments to a company that is merely servicing your loan. That company may not be in a position to make the best deal with you. The actual owner of the mortgage has the most to lose if you reach the point of foreclosure and thus has the most to gain by working something out with you.

• Ask to speak with the “Loss Mitigation” department. Almost every lender has such a department. Those that didn’t in the past have created one because the losses from foreclosure have become so extensive. The collections department has one job: get money from you. The loss mitigation department is there to try to help you either keep your house, or at least make the process of losing it less painful, less expensive and less stressful.

• Don’t wait until they have already begun the foreclosure process. Your best deal will come when the bank has not already spent a lot of money with attorneys. Remember, to work something out, you need to make it easier and less expensive for the lender as well as yourself.

• Be prepared to show need and ability. The loss mitigation department usually has many different options to help you keep your home, but they need to see that you can make some sort of payment and you need to show them that there is a legitimate reason for your delinquency. Too many people are simply taking advantage of bad economic times to try to get a better deal. You will need to be able prove your income and explain your circumstances if you expect to get help.

• Understand that you may need to make sacrifices. You are not going to get a lot of sympathy from your lender if you own a 40 foot boat or you drive almost new luxury cars that are paid in full. You may have to consider liquidating some assets and downsizing to items that fulfill needs and not expensive desires.

• Don’t lose your home in order to salvage credit cards and personal loans. You may have to stop paying unsecured debts altogether or at least put them on a Debt Management Plan or even a Debt Settlement Plan. It might be a good idea to consult with a certified credit counselor at a credit counseling agency to find out about your options with your other debts. A reduction in payments on your other debts could make more of your income available to help save your home.

• Don’t abandon the property or let it deteriorate. Even when there is no way you can keep your home, because of the current difficulties in selling a home, the lender may be willing to offer you some assistance. Some lenders are letting people stay in homes and maintain them for little or even no rent just to keep the value up. Others are offering thousands of dollars in relocation money to people as long as they leave the house in good condition. Be sure you discuss these options with your lender if you are in the worst-case scenario of losing your home. You may find that the lender will make your transition easier or even profitable.

• You don’t have to do it alone. There are HUD approved housing counseling agencies that may be able to help you work something out with your lenders for little or no cost. There are also companies out there that will charge you a fee for their services, but unless the services include a legal challenge to the loan documents, they are unlikely to be able to do more than a HUD approved agency.

If you live in South Florida, DMCC is a HUD Approved Housing Agency that may be able to help you. If you live outside South Florida, you can contact HUD at (800) 569-4287 for a list approved agencies in your local area. For FHA insured loans, if you feel your lender is not being responsive to your requests for help, you can call (800) CALL- FHA.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt. Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.

Facts About Consumer Credit Insurance

December 8, 2022February 24, 2014 by Aldo Gonzalez

What is Credit Insurance?

Credit insurance assures a loan will be repaid in the event of the death, disability or involuntary unemployment of the insured borrower. It can be taken to protect all types of consumer borrowing, including loans to finance or refinance a home. These products may be sold by credit card companies, auto dealers, finance companies, department stores, furniture stores or wherever loans are made and credit extended for the purchase of personal property.

There are five principal types of credit insurance:

1. Credit Life Insurance insures that a borrower’s insured debt will be repaid if the insured borrower dies during the term of the coverage.

2. Credit Accident and Health Insurance, also known as Credit Disability Insurance, pays a limited number of monthly payments on a specific loan or credit card account if the borrower becomes disabled during the term of coverage.

3. Credit Involuntary Unemployment Insurance pays a limited number of monthly payments on a specific loan or credit card account if the borrower becomes involuntarily unemployed during the term of the coverage.

4. Credit Property Insurance pays to repair or replace personal property purchased with the loan or credit proceeds and/or serves as collateral for the credit if the property is lost, damaged or stolen. Unlike the first three credit insurance products, credit property insurance is not directly related to an event affecting a consumer’s ability to pay his/her debt.

5. Credit Card (Fraudulent Use) Insurance simply stated is protection against unauthorized use of your credit card in the event that your card is lost or stolen.

Benefits of Credit Insurance

• Credit insurance is affordable because it is based on group rates. This means that generally all consumers or borrowers who voluntarily select credit insurance pay the same rate in their state.

• The cost of Credit Life Insurance for middle aged and older consumers is generally less than term life insurance.

• Credit insurance is generally offered and written with few, if any, underwriting conditions that apply to other types of insurance.

• Consumers can generally obtain credit insurance, including credit life insurance, without the need to fill out a medical history, take a medical examination, or disclose if they are smokers.

• Federal and state laws require that consumers be told credit insurance is a choice and is not required to obtain a loan. Credit insurance is always optional.

• Consumers can get a “free look” at credit insurance by getting a full refund within a set period that usually ranges from 10-30 days. Consumers can cancel the trial at any time before the set time period and receive a prorated refund of any premiums paid.

• State laws and regulations establish credit insurance rates, which have been adjusted and regulated to protect consumers in a majority of states within the past five years.

• Credit Life and Disability Insurance rates do not rise as an individual ages. There is one rate for everyone, regardless of age or medical condition.

Do You Need This Insurance? Let us look at Credit Disability Insurance and Credit Involuntary Unemployment Insurance. Remember, these insurance plans will pay your credit card bills if you become disabled or you lose your job. These plans may be a good thing if your potential sources of income would not be enough to pay your monthly debts in the event of your disability or unemployment. However, there may be a waiting period before you receive your first benefit payment and the insurance may only pay the MINIMUM card payment each month (up to the policy coverage limit). Consequently, unless you are disabled or out of work for a very long time, the cost of the premiums could easily exceed any monthly benefits.

Likewise, insurance that will pay off card balances in the event of your death make sense only if you have a lot of credit card debt and little or no other life insurance. You might be better off insuring yourself against income loss or death by purchasing regular disability or life insurance instead of credit insurance.

Credit Property Insurance guarantees the purchased item or property value of the loan amount. For example, if you used an item that is collateral for a loan and that item was damaged, then its value as collateral may now be worthless but your obligation for the full loan amount has not changed. That is why the lender may require this insurance in order to guarantee the collateral against the loan.

Some telemarketers are aggressively selling insurance that covers the fraudulent use of your credit card. Do you really need that kind of credit card insurance? Most experts say no. Remember, Federal Law already limits your liability to the first $50 of fraud losses per account, provided you make a reasonable effort to notify the card issuer of any lost or stolen cards within a reasonable period of time. In many cases, the issuer will waive the $50 requirement. If your card issuer insists on the $50 payment, then check with the company that insures your home because your existing homeowner’s policy may cover the loss. If you are considering credit card insurance, ask yourself these questions:

• Why do you want this type of protection?

• What benefits will you gain from it and how much are you willing to pay?

Finally, make sure you are dealing with a legitimate insurance company. If you have doubts about the policy or the company, contact your state government insurance commissioner or office of consumer affairs. Never give your credit card number and information to anyone selling credit card loss protection over the telephone because you may be dealing with a con artist who could make unauthorized charges to your card.

Avoid Impulse Buying

December 8, 2022October 11, 2013 by Aldo Gonzalez

Impulse buying makes you spend money on items you may not really need or want. It is buying something that isn’t within budget or a part of a monthly spending plan. It’s a purchase that isn’t necessary, and one of the largest causes of consumer debt each year. To avoid impulse buying you need to ask yourself if you really need the item or just want it. When the temptation for a big impulse buy strikes, take a step back to evaluate the situation. There are a number of ways to stop impulse buying if it’s causing problems for you.

Have a budget made up and don’t spend over this amount.

Have a list of items that you intend to buy and stick to it.

Take 24 hours, a few days, or even a week, to determine if it’s truly a need.

Compare prices between sellers. You may find that someone is selling an item a lower price.

Impulse buying can rob you of your financial security if it goes unchecked. All of those “little” purchases can add up. Be wise enough to thoroughly think over the necessity of each purchase you make. Though lower price or free shipping may seem attractive and beneficial, make sure to spend time comparing the price to that of other sellers, and thinking of whether that purchase is really what your life lacks. It is best to avoid impulsing buying as much as you can.

Budget + Investment = Reward

December 8, 2022October 3, 2013 by Aldo Gonzalez

If you find yourself using your savings account to pay bills or prevent your checks from bouncing, then its time to reevaluate your spending habits. This may seem like a difficult task at first, but after a short period of time, saving money should become a breeze. To better reap the rewards of a savings account, update your budget on a regular basis and become familiar with your banking options.

It seems tedious and time consuming to keep track of every dollar you make, but starting now is better then walking a tight financial rope. Once you have figured out how much you can safely deposit into a savings account, then your next step is to make the most out of what is being offered by financial institutions. Interest bearing savings accounts are offered with most major banks, but how would you know if there are better rates being offered elsewhere?

The easiest method is researching and comparing rates through the Internet. If you are computer savvy, jump online and check out local banks as well as www.bankrate.com. This one stop shop offers comparisons between many of the local, national, and virtual banking institutions and even includes current promotional information. Linking an existing bank account with a savings account offered by another bank can be tricky, but many of the virtual banks allow you to make deposits and withdrawals as often as you need to. You have completecontrol of your money. Virtual banking is no different then banking online with the traditional bank; both financial institutions offer all of the same benefits. When looking at banks, be sure to compare virtual banks with the standard “brick and mortar” banks. Virtual banks do not have the costs of maintaining physical locations so they can provide their customers slightly higher returns on their investments.

As with budgeting, when you put your money into a savings account, it is a good idea to review your financial goals. What do you have planned for the next 5, 10, or 15 years? When you figure out an amount you wish to save each pay period and a specific goal to achieve, you can safely make timely deposits into and watch your money as it works for you. This can be done through a regular savings account, by purchasing a certificate of deposit or committing to a retirement fund.Before you open a bank account, take the extra time you need to get all of your information. First, make sure that you know exactly what fees they charge and how they assess them. No matter what type of account you open, you want to make sure it is free of monthly service fees and, unless you have enough saved elsewhere, that they do not require a minimum balance. If an emergency comes up that requires you to withdraw an amount that would lower the balance below what they require, being penalized will do you little good. Also be certain to review the banks history, credentials and make verify that it is FDIC insured. Lastly, pay attention to the customer service you and others have received. This will give you an idea of what type of service you can expect to receive in the future. If you are not content, take your money and business to another bank.

Once your strategy for savings is put in motion, the most important thing to do is keep yourself motivated. Dipping into a savings account is tempting and, all things considered, cheaper then using a credit card. If you decide to take out money from your savings account, be sure you set a limit on how much you are going to spend and plan for how you can put additional money into the savings account to cover the withdrawal. It is all too easy to use the money you work so hard for on items you may not need. If you notice the amount in your savings account dropping and havent set up a good plan to put the money back in, then get creative. Bake cookies, paint a picture, write a poem; these are not only great gifts for the holidays are very rewarding activities too.

Things To Know About Debt Consolidation

December 8, 2022October 1, 2013 by Aldo Gonzalez

Debt consolidation is a way to collect all your individual debts and lump them into a single loan. It works well to combine overdraft, credit card, and automobile loans. By consolidating your debt you only make one payment to one creditor. Usually, you can negotiate better terms, a lower interest rate, and quicker payoff times. But is debt consolidation always the best idea for you?

When you consolidate your debt make sure you know if it is an unsecured or a secured loan. An unsecured loan is like a signature loan or a good will loan from a friend. You are not required to put anything on the line to guarantee the loan in the event you don’t pay. Money is loaned to you solely on your ability to repay. A secured loan requires that you offer a piece of collateral as insurance, in order for the bank to lend you money. That collateral could be your house, your boat, or a sum of money in an account. If for any reason you don’t pay the loan back, or default, the bank has every right to take whatever you may have secured the loan with.

It is also important to know whether the interest rate on your loan is fixed or variable. A fixed interest rate remains the same until the loan is paid off. The interest rate you start out with will be the interest rate you end with. If the lender’s rates go up and down, it doesn’t matter, because you will have a fixed interest rate. The other type of loan is the variable interest rate. These usually have an introductory offer. The offer can last anywhere from three months to five years. After the offer expires your rate will adjust to a new rate. These loans are popular because the introduction rate is so much lower than other rates. It’s tempting to get a variable rate, but it’s a risk because ultimately you can be negatively affected by rate changes. Consider these carefully.

When you consolidate your debt, look at the bottom line. Many people don’t realize that their debt can cost them 200% more after they’ve made payments over time. The car you bought for $15,000 could end up costing you $45,000 in the end. If possible, get an amortization table on your loan. This will tell you how much interest and how much principle you are paying with each payment. If you can make more than the minimum payment on your loan, you will get out of debt quicker and cheaper.

As with many life choices, the more you know about your financial options, the more likely you’ll be to make the right decision.

Bankruptcy Facts

December 8, 2022September 25, 2013 by Aldo Gonzalez

While bankruptcy may be a life vest for most people drowning in debt, choosing to file is never an easy decision. For some financially distressed debtors, bankruptcy may not always be the best option.

Several events can cause individuals to lose control of their financial situation. Divorce, job loss, lawsuits, foreclosures or credit card debt can drive a person over the financial edge. Generally, filing bankruptcy allows people who are having financial difficulties to wipe out their debts. In most cases, people filing bankruptcy can keep all of their property. Thus, bankruptcy helps people wipe out their debts, keep their property and get a fresh start.

Many people filing for bankruptcy have accumulated a huge credit card debt and in some cases are trying to prevent a foreclosure on their home.

Ten Years of Bad Credit

Although bankruptcy can wipe out all unsecured debts through an order of the court called a discharge, bankruptcy information remains on a credit report for 10 years. Any negative information that appears on a credit report may prevent an individual from buying a home or car, or from obtaining a credit card or loan.

Bankruptcy serves two main purposes:

1. It gives creditors a fair share of the money that the debtors can afford to pay back.

2. It gives debtors a fresh start.

There are two ways in which bankruptcy can provide for payments to creditors and a discharge for debtors – Chapter 7 and Chapter 13.

Chapter 7

In a Chapter 7 bankruptcy, known as the liquidation chapter, debtors give up certain property when they file for bankruptcy. A trustee appointed by the court sells the property and uses the proceeds to pay the creditors. A trustee is usually a lawyer or accountant who specializes in bankruptcy cases. The debtor receives a discharge shortly after the case is filed.Debtors are allowed to keep any money earned after filing for bankruptcy, as well as most other property obtained after the filing. Under this chapter, all unsecured debts are wiped out. These debts include credit card bills, medical and legal fees, utility bills, deficiency balances (the difference between the amount owed and the value of the property), loans from friends and some student loans.

There are some debts that cannot be discharged through the bankruptcy process. These debts, known as non-dischargeable debts, include alimony, child support, some student loans, certain federal, state and local taxes, debts from fraud, larceny, theft, and fines and penalties for items worth over $1,000.

Chapter 13

Chapter 13 is designed for individuals with regular income who want to pay their debts but are currently unable to do so. The purpose of this chapter is to help individuals, under court supervision and protection, to propose and carry out a repayment plan under which creditors are paid over an extended period of time. Under this chapter, debtors are permitted to repay creditors in full or in part, in installments over a three-year period.

Try the following measures before declaring bankruptcy:

• Control spending, either with the help of a credit counselor or a debt consolidation plan.

• Set up repayment plans with creditors.

• Get credit counseling and learn about financial management.

Most experts advise against filing for bankruptcy and recommend finding alternative ways to pay off debt. Most consumers should try paying off their debts through a repayment plan before choosing bankruptcy. These types of programs will teach the consumer ways to reduce expenses and save money.

Organize Your Finances And Do Your Research

December 8, 2022September 22, 2013 by Aldo Gonzalez

If you are considering debt consolidation or consumer credit counseling agencies for credit help, start by getting your act together. Organize your finances and do your research. You will begin to learn the skills you need to fix your money problems and avoid getting in this situation again. Your active participation is key in the success of your financial future.

Visit a credit counselor. There are credit counseling companies who help consumers by offering debt reduction plans to tackle debt. An advisor will work with you to lay out a plan to repay your loans. The counselor will negotiate with lenders on your behalf for the lower rate which, in turn, will reduce your monthly payments as well as keep your credit rating intact. Read the fine print to make sure you understand any fees involved; make sure that your credit rating is not adversely affected too.

Credit counseling is all about you and your financial situation. Make sure to ask the credit counseling organization about what type of customer service they provide. Credit counseling organizations should have someone available for you to talk to during all business hours of the day. Be sure to ask about counseling fees and the type of management and education programs they have in place.

Use cash as much as possible. Paying with cash has a more significant psychological impact than plastic. It feels like you’re spending more money so you spend less.

If you want something, save for it and then buy it. You should only finance items that are absolute necessities (home and car). Don’t finance furniture, small appliances or vacations. If you can’t afford to pay cash for it–you can’t afford it! Also, paying cash for items is a safe way to avoid any financial errors and bank fees. If you only take $50 to the store, that’s all you can spend.

When paying down debt remember: Minimum payments lead to the maximum amount of money paid over time. Paying more than the minimum applies more money to the balance, which decreases the amount of money you will end up paying overall.

If you are going to use any settlement companies be sure that they are registered members of the BBB (Better Business Bureau) and that they have little to no complaints. And if there are any complaints make sure then were resolved to the clients liking.

Chronic spending and debt can be a harmful habit, just like alcoholism or any other addiction. Consult a professional and/or Debtors Anonymous if you feel you might have a problem.

Make Getting Out Of Debt Your #1 Priority

December 8, 2022September 18, 2013 by Aldo Gonzalez

Although it is extremely easy to get into massive amounts of debt very quickly, it takes time, discipline, and commitment to get out of debt. You have to make a life-changing decision that you no longer wish to be in debt because getting out of debt is going to affect every area of your life.

The first thing you need to do is to complete a spending inventory to find out where you are right now. A spending inventory is simply a list of everything you spend for an entire month, whether by check, charge, or cash. This will help you locate the waste in your budget. Most everyone can find $100 to $200 a month in wasteful spending that can be cut. This additional money can be used in your plan to get out of debt.

When you make getting out of debt your top priority, it affects your thinking, decision making, and habits. If you usually walk around the mall at lunchtime and end up compulsively buying things, then you will no longer go to the mall. Instead, you will take a brown bag lunch to work or eat in the company’s cafeteria. You will begin to analyze every purchase to decide if it is really necessary. You will cut unnecessary expenses and learn to live frugally. It’s important, as you start your plan of action, that you do not incur any new debt. Begin to only purchase things that you can pay for in cash.

One of the biggest benefits of being debt-free is peace of mind. You will no longer have to be stressed out about money.

Ways People Waste Money

December 8, 2022September 14, 2013 by Aldo Gonzalez

Wasting money is not only detrimental to your overall financial well being, it’s irresponsible. Your house and living expenses make up the major portion of your personal budgeting plan. If you are not careful, they will leave you with little or no money to build financial security, or play with. Just like spending cash unnecessarily, paying for home expenses that are unnecessary is just wasting money. Here are some ways people waste money on household expenses.

Paying for the same service twice.

Most households subscribe to cable T.V. A good portion of cable subscribers also pay additional money for one or more movie channels. It’s not unusual for these same families to rent movies from video stores and/or subscribe to a movie service via mail. In this scenario, there are now three resources included in the household budget for movie viewing entertainment. Which, by the way, is technically a discretionary expense, not even a necessary expense.

You can save by trimming down this expense to one good service that best meets your family’s movie entertainment needs. List and analyze your movie viewing options. Determine which service gives you the most benefit for your money. Then, make an informed decision on which service to keep. Reducing this household expense could save hundreds of dollars per year.

Paying for services that you don’t use or really don’t need.

This is most common with home phone services. Features like call waiting, caller ID, return call service, long distance packages, etc, etc, etc. are extra expenses that you could possibly live without. Is the convenience of caller ID worth a fee of nearly $8 per month? Do you really need it? Eliminating little money leaks like this adds up to significant yearly budget savings. Review all of your household expense bills to see if you’re paying extra for services you don’t need. Eliminate extra services and the fees that go with them whenever possible.

Sometimes making lifestyle changes can reduce expenses significantly. You can minimize costs on essential household expenses by simply being more aware. During Summer months, don’t turn on the air conditioner until you can’t take it anymore. Not using the air conditioner will save the most on home energy expenses. Many gas and electric providers offer energy efficiency evaluations for your house, free of charge. Take advantage of this service to see where you can make home improvements that could mean substantial savings in energy costs. They may also offer suggestions for lifestyle changes that can reduce energy expenses even further. During winter months lower your thermostat a few degrees and dress warmer if necessary.

Review, remove, and reduce expenses to stop wasting money and trim your household budget. Analyze each household expense for necessity and the costs associated with it. Make an effort to reduce each expense to the minimum amount possible, while still meeting your family’s needs. Before you know it you’ll be saving hundreds, if not thousands, of dollars on your household budget expenses each year.

Use Budgeting To Reduce Debt

December 8, 2022September 13, 2013 by Aldo Gonzalez

Many Americans live their daily lives without a budget, possibly why the average American household is over $8,000 in credit card debt. People in these difficult financial situations often say that the reason they have fallen upon hard times is because they do not make enough money. More money does not always solve the problem; more money often leads to more problems. The real solution to financial problems is planning, or budgeting.

With a little knowledge and effort, anyone can begin creating a budget to reduce their overall debt.

First, stop adding debt upon debt. It’s of the upmost importance that you quit accruing debt immediately. Use cash for your purchases, not your credit cards. If you can’t pay cash, you don’t buy it. Period.

Next, figure out how much you pay per month total for all of your expenses. This includes rent/mortgage, car payments, car/home insurance, utilities, credit card debt, other personal loan debt, food, gas, Internet, cable television, clothes, eating out, and entertainment – everything.

Now, determine your total income. Subtract this total from your monthly income total. Where do you stand? Are you comfortably in the positive, or barely? Or are you in the negative?

If you’re barely in the positive, or if you’re in the negative, it’s time to reduce your overall expenses.

What can you get rid of? Eliminate extraneous expenses. Also, shop around for better telephone rates, cell phone rates, and insurance rates. Make changes where you can.

Phone your credit card companies and try to get your interest rates reduced; sometimes they’re even willing to negate past due and over the limit fees. Consider contacting a non-profit credit counseling company. Debt consolidation or debt settlement might be a consideration for your situation. Your goal here is to reduce your overall debt from your credit lenders.

If you shift your focus from short term to a long term point of view, you will find that you will eliminate many of your wasteful spending habits. Furthermore, you may find that you are saving money for a rainy day, possibly even investing. Once your financial maturity reaches this point, you will no longer fall prey to life’s unexpected expenses. This is the only way to reach financial independence.

Credit Card Debt Relief Act 2010

December 8, 2022September 9, 2013 by Aldo Gonzalez

Many Americans are struggling with out of control credit card debt. As a result, several debt relief options have been introduced to the market including debt consolidation, debt settlement, and credit counseling. The Federal Trade Commission (FTC) recently passed provisions regulating the credit card debt relief industry, mainly targeting for-profit debt settlement companies. Many of these companies promised they could help consumers “cut credit card debt in half”. The problem was, however, that there was no guarantee for consumers, many of which had to pay large upfront fees to the debt settlement companies. Too many of these companies, instead of leaving consumers better off, push them deeper into debt, even bankruptcy.

The Credit Card Debt Relief Act 2010 prevents settlement companies from charging heavy fees even before the completion of the deal. This legislation is intended to provide significant protection for consumers who enter into a debt relief program and stop deceptive and abusive practices by debt relief providers that have targeted consumers in financial distress.

The purpose of the Act is to give consumers with over $10,000 in unsecured debt, who are facing financial hardship, a real and legitimate option for achieving debt relief. Since creditors and card issuers receive nothing in a bankruptcy filing, they are eager to work with genuine debt settlement companies to collect at least some of their money back.

Other provisions of the Act require settlement companies to specify to the defaulter exactly how long the total process will take and also the cost in such a circumstance. Moreover, the borrower can, at any point in time, choose not to continue with the program and in such a case, all his or her funds have to be refunded. The FTC debt settlement provisions also make it mandatory for the companies to inform the concerned customer about the negative effects, if any, of going for such a program.

Will these new regulations put legitimate debt management companies out of business along with the abusive, deceptive, and unfair debt companies? It’s very possible that this Act will have a detrimental effect on consumers, leaving many of them to resort to bankruptcy instead of debt management. Although the intention of the FTC is to protect consumers, it’s yet to be seen if the Credit Card Debt Relief Act will achieve the Commission’s desired result.

Avoiding Bank Fees

December 8, 2022September 3, 2013 by Aldo Gonzalez

Watch Out for Those Overdraft Charges

Have you ever looked at your bank statement and felt like screaming at the top of your lungs? Do you feel like you are throwing money out the window? Maybe you purchased an item for $197.99 and you have $197.85 in your checking account. Congratulations, you have mastered the art of bouncing a check! Most banks will charge you anywhere from $30 – $36, for being short 14 cents. This has probably affected almost all consumers at one time or another.

According to a recent National Public Radio story by Chris Arnold, banks have always explored new ways to debit money from their customers. Almost all banks have adopted the policy of cashing your biggest transactions first, such as mortgage or car payments. This information will be provided in the terms and conditions of your account or in the account agreement. Here is a direct quote from a banks policy statement:

“When processing withdrawals from your account, such as those made through checks, in-person withdrawals, Automated Teller Machines, point of sale, or by any other electronic means, it is our policy to pay the largest item first.”

Let us assume you have $500 in a bank account and in one day, the bank debits your account for three of your checks and a cash withdrawal at an ATM. Chronologically, your account would be debited as follows: Check #1 for $25, Check #2 for $40, ATM debit for $22, and check #3 for $495, totaling $586. If the bank cashed the checks and ATM charge in the order they were processed, you would be charged only one overdraft fee ($30) for check #3 ($495). Instead, the banks clear the largest check first. By doing this you will be charged three overdraft fees totaling $90. This has been an expensive day.

How to Avoid Overdraft Fees

Overdraft fees are not only costly, but also aggravating, so learn how to use all the tools at your disposal to manage your accounts and avoid these charges. Most banks have a toll free automated system that provides 24-hour account access. You can check your balance, verify what payments have been processed and which checks have cleared. Most FDIC institutions offer online banking services as well, so take advantage of your banks website. Some banks can even issue alerts to your email or cell phone when bills are due and can automatically issue payments each month for your regular expenses, like car loans or mortgage payments. Almost all of the online banking services will archive your purchases and bill payments. This can help you keep track of which bills you have paid and on what date. Also, if you have the possibility to use a direct deposit feature through your employer, take advantage of it. Getting your paycheck transferred directly into your bank account can help tremendously. If using the internet is inconvenient, then just keep a small calculator with you and log each transaction into your checkbook. The most important part is to deduct every purchase from your total balance to avoid those overdraft charges.

I Keep Getting Overdraft Fees

The good news is that most institutions have some kind of overdraft protection plan. Overdraft protection is a service to help you prevent from exceeding your checking account balance with purchases. By being enrolled in overdraft protection, funds from a savings account, money market account or a line of credit can cover the amount of the transaction not covered by your checking. Most institutions offer this service free of charge for signing up, but can assess fees up to $25 for each overdraft. So if you are tired of acquiring overdraft charges and you have tried tracking your purchases, it may be a good idea to contact your institution to see what they have to offer for overdraft protection.

Facts About Debit Cards

December 8, 2022September 2, 2013 by Aldo Gonzalez

Debit cards also known as check cards, ATM cards, and express checking cards can be used to withdraw cash from your bank account via ATM and make purchases without using credit. They look similar to a credit card and work by taking the money directly out of your bank account.

Two types of Debit Cards

A traditional debit card is issued through your bank and requires a personal identification number, or PIN, to complete a transaction. A PIN-based or direct debit card removes a purchase price from your checking account almost immediately. These kinds of debit cards are accepted at gas stations, supermarkets and stores such as Wal-Mart, Walgreen’s and Target. A deferred debit card is also issued through your bank but bears a logo of a major credit card company. To use it you can enter a PIN or sign for the purchase as you would with a credit card. A signature-based or deferred debit card has a Visa or MasterCard logo. These cards are accepted anywhere Visa and MasterCard are accepted. Just hand the clerk your card and sign a sales slip and you’re done. The purchase amount will be removed from your bank account in two or three days. When you swipe your card through at the checkout line, you’ll be asked if you want to pay by debit or credit. If you hit “debit,” you’ll need to input your PIN number. If you hit “credit,” you’ll need to sign the sales slip.

PIN offers the best protection

Some consumer experts urge people to choose PIN-based, direct debit cards only. With a PIN-based debit card you have to know the PIN number to make a purchase. With a signature-based debit card, anyone could pick up the card and sign your name to it. It may limit the number of places you can use it. But that’s the tradeoff you make for extra security.

Return policies can vary

According to the ABA many merchants treat a debit card purchase as they would a personal check or cash. This means you may get several hundred dollars in store credit instead of a refund for debit card purchases. So as a dissatisfied debit card customer you’re pretty much stuck trying to resolve the dispute with a merchant on your own. It could go on for weeks or months and when it’s all said and done you may not get your money back. When you make a purchase with a credit card you have the option of withholding payment should you be unsatisfied with the quality of an item. This right is protected under the Fair Credit Billing Act. This federal law does not apply to debit card purchases. In summary it makes sense to use credit cards when ordering merchandise from the Internet or a catalog or for big-ticket items or expensive services. Debit cards are a great way to pay for everyday items such as gas or groceries. A debit card can also be a good money management tool if you’re diligent about recording every single transaction in your checkbook.

Fees

According to the Wall Street Journal one in five banks add a charge for each transaction completed by entering a PIN. Other fees are levied for minimum balance requirements, ATM use or even for having the debit card itself. The Board of Governors of the Federal Reserve estimates that 15% of all consumers with debit cards are subject to debit transaction fees. Therefore when you chose a debit card first find out what kind your bank offers and ask about the fees. If you chose to have overdraft protection, please refer to the overdraft protection article from DMCC for additional information.

Automobiles: Buying vs. Leasing

December 8, 2022September 2, 2013 by Aldo Gonzalez

There are many things to consider when deciding whether to buy or lease your next new automobile. To help you decide, we are reprinting an excerpt from www.leaseguide.com, with their permission. This website will give you the answers and information necessary for you to make an educated and informed decision.

Leases and loans are simply two different methods of automobile financing. One finances the use of a vehicle and the other finances the purchase of a vehicle. Each has its own benefits and drawbacks. It’s not possible to simply say that one is always better than the other because it depends on your own particular situation and preferences.

You must not only look at the financial comparisons but also at your own personal priorities. Is having a new vehicle every two or three years with no major repair risks more important to you than long-term cost? Are long-term cost savings more important to you than lower monthly payments? Is ownership more important to you than low upfront costs and no down payment?

Buying and leasing are different.

When you buy, you pay for the entire cost of a vehicle regardless of how many miles you drive it. You typically make a down payment, pay sales taxes in cash or roll them into your loan, and pay an interest rate determined by your loan company. You make your first payment after you sign your contract.

When you lease, you pay for only a portion of the vehicle’s cost, which is the part that you “use up” during the time you are driving it. You have the option of not making a down payment, you pay sales tax only on your monthly payments (in most states), and pay a money factor that is similar to the interest rate on a loan. With leases you may also pay extra fees and possibly a security deposit that you do not pay when you buy. You make your first payment at the time you sign your contract.

If you lease a car that costs $20,000 but is worth only $13,000 after 24 months, you pay for the $7000 difference (this is called depreciation), the finance charges, and additional fees. When you buy, you pay the entire $20,000 plus finance charges. This is fundamentally why leasing offers significantly lower monthly payments than buying.

Lease payments are made up of two parts: a depreciation charge and a finance charge. The depreciation part of each monthly payment compensates the leasing company for the portion of the vehicle’s value that is lost during your lease. The finance part is interest on the money the lease company has tied up in the car while you are driving it. The principal pays off the vehicle purchase price, while the finance charge is loan interest. However, since vehicles depreciate in value by the same amount regardless of whether they are leased or purchased, part of the principal charge of each loan payment can be considered as a depreciation charge, just like with leasing. It is money you never get back, even if you sell the vehicle in the future.

The remainder of each loan principal payment goes toward equity. It is what remains of your car’s original value at the end of the loan after depreciation has taken its toll. Equity is resale value – what you get back if you sell the vehicle. The longer you own and drive a vehicle, the less equity you have.

So, buying a car with a loan is essentially like putting money into a declining-value savings account. You never get out as much as you put in. A portion of every payment you make is lost to depreciation, a terrible investment by any measure.

Leasing is similar to buying but without the “savings account.” You only pay for what you use. It is true that you’ll own nothing at the end of a lease, but what you do not own is the same part of the car – the depreciated part – that a buyer also does not own at the end of his loan.

There are hidden cost differentials to consider. Automobile insurance options may differ when you lease rather than own a vehicle. When you purchase a new vehicle and sell it or trade it in you will receive a dollar amount that has been determined by means of a book value. When you return a lease vehicle, although the dollar value has been determined at the time you signed the lease agreement, you may be assessed other costs (i.e. excessive wear and tear, mileage beyond the agreed terms, etc.). You will be liable for these cost at the termination of the contract. Therefore, it is imperative you review all documents before you sign the agreement.

Advice For Dealing With Creditors

December 8, 2022August 28, 2013 by Aldo Gonzalez

At one time or another, all of us have forgotten to pay a bill or fallen behind on payments to credit cards, mortgages, autos, medical bills, or other situations involving bills. We have all therefore been contacted by a bill collector, ether through the mail or telephone call. Some these calls and correspondence can become a terror attack from creditors. Some creditors call at all hours at home and work. Some even may call the neighbors, the family, and/or employers. Some collectors can be obnoxious, condescending and downright rude. Despite laws governing their actions, many creditors and collection companies feel that an individual will not have the time, money or emotional strength to pursue them in court. Therefore, they get away with the outrageous and, sometimes, illegal acts.

If you have filed bankruptcy, and received an automatic stay, it is against the law for the creditor or his collection company to contact you without permission of the Bankruptcy Court. If your case is discharged, then creditors and their collection companies are permanently barred from contacting you unless they have received special permission from the Bankruptcy Court, or your debt is one that is excepted from your discharge.

If you have entered into debt consolidation or debt settlement with a non-profit debt counseling service, make sure you know your rights for protection from creditor calls from your representative.

You have other legal rights which protect you against certain collection practices. First, you should know what to do when you start getting bills. If you feel you do not owe the debt, or the amount the bill collector is claiming is incorrect, you should write a letter to both the collection company and the original creditor stating you do not agree you owe the money, or that the amount owed is incorrect. You should also ask for a record of your payments.

If the bill collectors report the debt to a credit reporting agency, you should write to the credit reporting agency and tell them the bill is in dispute. Whenever you write to a bill collector or to the reporting agency, you should sign the letter, date it, and keep a copy for your own file. Remember, just calling the bill collector to say you do not owe the money may not leave a permanent record of the call. Like most bureaucracies, if it is not in writing, it does not exist.

You can stop annoying collection. If the collectors continue to call you, you can send them a letter requesting they cease communication with you under the terms of the Fair Credit Collection Practices Act, 15 U.S.C.S. Section 1692. When you write your letter, do not forget to date it, sign it, and keep a copy. If you really want them to pay attention, send the letter CERTIFIED. By sending the letter CERTIFIED, you have proof that you sent the letter. If you send this letter, it will not only stop letters to you, but will also stop telephone calls to you.

Also, The Fair Credit Collection Practices Act forbids bill collectors from calling you at inconvenient times, such as before 8:00 a.m. or after 9:00 p.m.. The collectors or agents cannot communicate with third parties such as your neighbor, your friend, or your family members. They cannot contact you at work if they know (notice must be in writing) that your employer prohibits it. They cannot threaten you with criminal prosecution or call you on the phone repeatedly with the intention of harassing you.

Document all your discussions and communications with any debt collectors. If the collection company continues to ignore your warnings and refuses to comply with the law then you could sue them. But their behavior must be truly offensive, not just annoying. You could bring an action in small claims court, or hire a lawyer. But, you must have proof of their actions in order for any court to find in your favor.

Are You Buying A Lemon?

December 8, 2022August 26, 2013 by Aldo Gonzalez

Buying a vehicle can be both a stressful and rewarding experience, especially if you plan on purchasing a used vehicle. Even if you get great financing and find the exact car you want with all the extras, there is still a chance that the car may not be as reliable as you hoped. To avoid any future headaches, and empty bank accounts, be sure to do all of your homework first.

Read independent reviews from people who own the car you want. Web sties like www.edmunds.com and www.cars.com have a Consumer Review section for every car by make, year and model. Here, owners have the opportunity to share their views and experiences. These reviews are a great source of first hand information and can tell you exactly what to expect, from problems to compliments. Just make sure you read a few of them so as not to get a biased perspective. Once you found the car you like and know the good and the bad about it, all you need next is to find someone selling the car.

More specifically, you should find a car with a clean history. Worse then buying a car that with seats that seem to get more uncomfortable the longer you drive is buying a car with water damage. This usually means that the electrical system, the interior and the cars engine have been sitting in water for a period of at least two days. Traditionally these vehicles are taken to junkyards and are stripped for usable parts. However, this is not always the case.

The practice of selling damaged vehicles is kept alive by curbstoners. Curbstoners purchase damaged cars in volume, fix and resell them to dealerships and consumers who are interested in buying a less expensive automobile. Frequently, these cars are only minimally repaired and taken out of state to be re-titled as undamaged vehicles and are more commonly found after severe weather, such as after a flood or hurricane. Water damage to a car is tough to identify because the vehicle will continue to run, but its days are numbered. To ensure the safety of the future driver and the cars reliability, you will need to pull out a magnifying glass and start investigating.

What to do when looking at a used car:

– Have the car looked at by a trusted mechanic for a thorough inspection

– Check the reputation of the dealership

– If purchasing a vehicle through the classifieds, check for multiple listings by the same owner (compare the advertised phone number to call)

– Review the vehicles history. www.carfax.com, is a good website for this purpose (you will need the vehicles VIN number) Inspect the car for water lines and signs of rust (check the glove compartment and underneath the seats)

If you do not feel 100% comfortable with a seller (or the vehicle), then perhaps it is a sign you should walk away from the deal. Visit www.consumeraction.gov for free educational information and warning signs to look out for when purchasing a used vehicle. If you believe you have purchased a lemon, contact the Department of Consumer Affairs in your state to find out what you can do.

Budgeting Basics

December 8, 2022August 24, 2013 by Aldo Gonzalez

A budget, or spending plan, is the best way to get control of spending and review if your money is used the way that will benefit you best. Managing money is a skill, and like most skills it requires a bit of discipline and lots of practice.

Step 1: Journalize Your Spending

Using a spending diary can help identify areas where you can reduce unnecessary expenses. Logging your spending trends, such as the daily coffee and donut, the daily newspaper, or even the soda for lunch, can be a rude awakening. The coffee and donut can cost you $1,092 a year (assuming you are spending $3 for a medium coffee and a donut…$3 x 7 days a week = $21, $21 x 52 weeks per year = $1,092).

Step 2: Estimate Your Monthly Take-home Income and Expenditures

Gather all your bills including credit card statements, receipts for groceries, gas or anything else that you buy with cash. You should also have your checkbook register available to review additional expenditures. Write down all of your expenses, broken down into categories for (1) fixed expenses like the house payment, credit card payments and car payments; (2) flexible expenses that vary each month, including the phone and electric bills; and (3) discretionary expenses, such as a gift for someone’s birthday or a scheduled outing. Add up your total monthly expenses and total monthly income. Then subtract the total expenses from the total income. The difference is available for you to use as you desire. If the total difference is a negative amount, then you are spending more than you are earning. In this case you should take immediate action to adjust your lifestyle and expenses so you do not continue to accumulate more debt.

Step 3: Plan

It is comforting and almost second nature to think that you will have more money next year. But it will not happen without some serious commitment. Before making any promises and thinking that your financial situation will change automatically, plan for change. Sit down and make some goals. Goals give you direction to realize your dreams. Establishing goals for the short, mid and long term will help you achieve financial security. Short-term goals can be met within a year, mid-term goals would probably take a little longer, perhaps five years, and long-term goals may take ten to fifteen years to achieve. Be descriptive and define the means to the end. If your goals are specific enough, you will be motivated to cut down on your spending to reach those goals. For example, you can use this tactic:

Goal(s) _____________________________

Estimated Cost _______________________

Target Date__________________________

Monthly Savings ______________________

Step 4: Reduce Your Spending

The hardest part of the budgeting process is over; now comes the commitment. Although it may seem impossible to cut your ties with some of your expenditures, you will soon become comfortable with your new spending plan. Cutting expenses is perhaps the biggest challenge people face. This can be because they are already just meeting their financial responsibilities. However, it can be accomplished. There are a few suggestions to consider:

• Pay with cash instead of writing checks or swiping your credit card. It is so easy to just write out a check or to pay with plastic. The after effects are not felt until it is too late.

• Withdraw a set amount of money every week. If you only have $50 to spend in one week, you will monitor and perhaps be a little more frugal when it comes to buying something you do not need.

• Do not create more debt. If you cannot pay for it up front, do not buy it. Should you come across something you think you cannot live without, step back and reconsider. Do you really need the extra stress of one more bill? How is making that purchase going to affect your planned goals? Even when you know you deserve something, put your wants on hold until you have the cash to pay for them up front.

• Remember your weakness. If you like to shop for clothes on a weekly basis, try to avoid going to the mall or places of temptation. If you find yourself somewhere and you want to shop, only spend the allotted amount you budgeted for.

• Rethink your shopping style. Comparison shop! Plan your purchases before you buy. Make a list of things you need before you go into the grocery store – and stay within the list.

Step 5: Pay Yourself first

The easiest way to save is to think of this category as an expense. Try not to wait until the end of the month to see if you will have money left over to put into savings. Set up a separatmoney grow. It is very important to routinely compare your budget to how much you are actually spending. Once you become comfortable with the process you will be able to alter your categories and perhaps put a little more into savings.