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Property Taxes: Are you paying the right amount?
2007-09-26 06:38:00
Hi,The majority of homeowners in this country have their property taxes paid by their mortgage company. The remaining homeowners pay their taxes biannually on October 30 and April 30. If the mortgage company has been paying the property taxes over the years, there is a very good chance that when the property assessment is sent in the mail, we pay little or no attention to it other than noticing the appreciation and value of our investment. It is more likely that the people who pay their property taxes every year will notice an unusual increase in the assessment on their home or land. No matter which way you pay your property taxes, it is important to periodically make sure that you are being assessed in line with other similar properties or homes in your neighborhood. In most major cities, this information is readily available online. If it isn't available online, it can be found at the office of the tax assessor. If you uncover a situation in which you believe that you are paying ...
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Pre-Holiday Financial Check-Up
2007-09-24 05:29:00
Hi,The fall is always a good time to take inventory of our financial affairs. Once the holiday season is in full swing, many people find themselves short of time to address financial matters. Here are some steps to take so that you can go into the holiday season with the peace of mind that you know your financial standing.1) First look at your credit cards and and audit the following:a) Make sure the current interest rate being charged is the same interest rate which came with the card when you applied for it. If it has gone up, contact the credit card company to ask why. b) Make sure the due dates on your cards are the same as when the cards were obtained. Once again, if any were changed, make sure that you get clarification as to why. c) Check for any unusual late fees or finance charges and if anything seems out of the ordinary, immediately contact the credit card company.d) Check your credit limit on all your cards and make sure to write down the limits so you are aware of them ...
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Deficiency Balance Setttlement Offer
2007-09-04 20:10:00
Hi,For various reasons, many people find themselves faced with a sizable deficiency balance from a car, camper, trailer home etc., loan. In most instances, deficiency balances could be settled for far less than the amount represented by the creditors, or, in many cases, third party collection agencies. The keys to negotiating a successful settlement on a deficiency balance are:1) The length of time the deficiency balance has been owed. If the deficiency balance has been accruing interest for many years, the creditor will take substantially less money to settle.2) The payment history on the loan prior to the deficiency balance being created factors into the willingness of the creditor to negotiate a settlement on the balance.If only one or two payments have been made on the loan prior to repossession, it is unlikely that the creditor will be willing to offer much of a settlement.3) When a creditor receives a settlement offer, one of the first things the creditor does is analyze what ...
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Deficiency Balances: Auto Loans
2007-08-14 07:26:00
Hi,One of the most unexpected major debt problems that occur today for consumers is when a deficiency balance is created on their auto loan. A deficiency balance is usually created when a car has to be repossessed by the lender. The lender is then required to sell the car for what is defined as "fair market value", deducting the expenses of repossession and any other liquidation fees, then applying the remaining proceeds from the sale of the car to the balance of the loan. In many instances consumers are unaware of the fact that they are responsible for the full payment on the loan, and that their vehicle is only collateral on the loan. If a consumer gets into a situation in which it becomes apparent that he or she is not going to be able to continue making vehicle payments, and that the lender can no longer extend any more time without payment, there are a few actions a consumer can take prior to repossession:1) Make an agreement with the lender that the consumer will sell the vehi...
More About: Loans , Auto , Balan

Credit Counseling, Debt Consultants, Debt Negotiators: Do Debtors Need Thei
2007-07-27 01:53:00
Hi,Credit counseling services are quite good at giving people an organized look at their financial situation. After that, their usefulness is limited due to the fact that they have absolutely no legal right to enforce their suggested remedies to any of the creditors. In general, the offers credit counseling agencies make to creditors are unrealistic and many times rejected outright by the creditors. Exploratory conversation is usually an effective way to initiate the process of finding solutions to problems. However, in most instances, credit counselors will only deal with creditors in writing. Therefore any successful re-negotiations of initial proposals are highly unlikely to happen. Additionally, in many cases, debtors are not informed by credit counseling agencies that they have no binding authority to get a creditor to accept a repayment proposal. Debt ors may mistakenly assume that credit counseling agencies have more leverage and standing than they actually do when contacting ...
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Bad Credit! No Credit!, Bankruptcy OK! Car Loans
2007-07-20 08:20:00
Hi,A relatively new gimmick seems to have taken the credit world by storm: No credit, bad credit, bankruptcies all OK. We guarantee that you will get a car loan, credit card, new furniture etc., Let's look at the scenario that unfolds when a person buys a car under these terms. All "normal" avenues of exploring the best car, the best price, the most favorable interest rates and the most suitable loan term are non-existent. When the borrower approaches the car dealer, he or she is forced to choose among a small inventory of cars, and are at the mercy of the car lots financial department. One of the common ways these car lots hide their excessive interest rates and finance charges is to offer terms 24-48 months longer than conventional car loans. The borrower might believe that the car payment quoted by the dealer isn't all that bad without stopping to realize that he or she is paying an extra $300.00 a month for an additional 36-48 months longer than if he or she had a conventional...
More About: Credit , Loans , Bankruptcy , Bankrupt

Merchant Cards Masquerading as Credit Cards
2007-07-18 07:03:00
Hi,I ran across a mailer today, addressed to a 19 yr old, that I would like to share. First, let me describe the mailer as best I can. Attached on the top right hand corner is a card designed to look like a credit card. The only difference between a credit card and the attached card is that there is no magnetic strip. The mailer insert then goes on to describe the following:Congratulations, your card has arrived. Call immediately to activate this card. Credit purchase limit: $6,500.00. Cash on demand approved: yes. Interest rate: none. No cash deposit required for security. By calling to activate your card today we'll offset our standard member card activation fee of $200.00 by giving you $200.00 in credit. The above is what is described on the front page of the insert. On the back of the mailer is quite a bit of interesting small print such as:The activation fee for the card is $199.00, the annual membership fee is $198.00, and the user is encouraged to purchase the "securit...
More About: Credit Cards , Cards , Merchant , Merc

Avoiding Maxed Out Credit Cards
2007-07-15 03:07:00
Hi,This blog is not intended for any readers who pay off their credit cards without exception at the end of each month. For the rest of us, to maintain control over our credit card balances, it is a good idea to avoid the following:1) Consistently charging groceries on a credit card. The reason is that statistics show people purchase food on credit which they otherwise wouldn't purchase if using cash.2) Putting utility bills on a credit card. Utility bills should be part of the monthly fixed expenses and be paid on a cash basis each month.3) Making a car payment with a credit card. There are many reasons for this, but a significant one is that it's a sign that "Peter is being robbed to pay Paul".4) When traveling to places like Las Vegas, many people find it much safer if they leave the majority of their credit cards at home. 5) Avoid using credit cards for large purchases of stock or any other investment vehicles.To maintain a handle on our financial health at all times, it is ne...
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Questionable Bill Collection Techniques (continued)
2007-06-26 05:28:00
Hi,In my last blog, I referred to a few questionable techniques employed by a small percentage of bill collectors. Some additional ones to be aware of are:1) Bill collectors will often use the term "garnishee wages" as leverage to get a debtor to pay on an account. They often speak as though garnishment of wages will happen overnight. In reality, wages are only subject to garnishment after judgment has been rendered which takes 45-60 days minimum in most states. 2) Another form of leverage used by bill collectors is to mention highly inflated attorney fees that the debtor will be responsible for if a small balance isn't paid in full. For example, a debtor owes a bill of $400.00. The collector calls the debtor and tells him or her that the client is prepared to sue and the attorney fees will be $1,400.00-$1,500.00 to coerce the debtor into paying the bill. In reality, chances are the client will not sue for such a small balance. In addition, the attorney fees would not be as excessi...
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Questionable Bill Collection Techniques
2007-06-06 04:25:00
Hi,The majority of bill collectors that contact consumers and/or businesses are honest, hardworking reasonable people who want to resolve debts in a fair and equitable manner. Unfortunately, there is a small percentage of collectors that use questionable tactics to coerce people into paying their bills. Some of these tactics are as follows:1) They throw the word "judgment" around, as though it is an action that is going to happen within a few days or weeks. In reality, from the time a bill collector calls, to the time approval is given by a client to proceed with a lawsuit, and the lawsuit is served on the debtor leading to a judgment rendered, on the average 45-60 days have elapsed. In most instances, when the collector indicates that judgment will be quickly rendered, the agency probably has no legal department at all, and likely does not have the ability to sue the debtor. 2) The statute of limitations on judgments varies from state to state ranging from as little as six years to...
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Judgments
2007-05-23 06:22:00
Hi,The purpose of this blog entry is to take some of the mystery out of judgments. A creditor's last option in collecting a debt is very often done by obtaining a judgment. When a creditor obtains a judgment, it means that a court grants the creditor an order containing multiple remedies to collect an unpaid debt. To obtain a judgment, a creditor must do the following:1) Creditor files a lawsuit in the jurisdiction where the debtor lives for the amount of the debt.2) The lawsuit must be served on the debtor. This is usually done by a process server. If the debtor is successful in avoiding the process server for a period of time, sometimes the creditor may obtain service through publication in a local paper.3) In most states, the debtor has 21 days to respond in writing to the lawsuit.4) If no response is given, a default judgment may be granted to the creditor by the court. 5) If, after service, the debtor disputes any part of the amount that the creditor is claiming, he or she may...
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Caught In The Minimum Payment Trap
2007-05-18 20:27:00
Hi,The last two blogs set the table for how one can get caught making minimum payments on credit cards. Today I am writing about being caught in the trap. After the cardholder receives an additional credit card he or she gets some instant gratification from being able to cover monthly expenses. Thirty days later two credit card bills arrive and once again, due to lack of cash, only the minimum payments are made. Before long, the card holder has maxed out the second credit card. In many instances this scenario will continue over a one to two year period resulting in the individual maxing out seven to ten bank cards to the tune of $40,000-$50,000. The last resort that some borrowers choose is to transfer the balances from existing maxed out cards to new cards. This is a perfect example of "robbing Peter to pay Paul". Once the borrower has exhausted all means of generating cash from credit cards, he or she might resort to tapping into his or her home equity. By the time the borrower ap...
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The Minimum Payment Trap Part 2
2007-05-18 02:52:00
Hi,Yesterday, I discussed the simple version of the minimum payment trap. Today I'm going to discuss a more complicated and common minimum payment trap. This is how a more complex version of the minimum payment trap unfolds:A relatively new cardholder uses his or her card for a couple of years and pays off the balance faithfully every month. At the end of two years, the cardholder's credit limit has been quadrupled. In addition, he or she has received numerous additional solicitations to obtain other money cards from different banks. Two and a half years into activating the first card, the cardholder has an emergency that requires him or her to use most of the credit limit on the card. He or she does not have the financial resources to pay it off at the end of the month, as he or she has been doing for the previous thirty months. When the bill arrives, he or she does the right thing, and pays every available dollar on the credit card, but still leaves a substantial balance. The fo...
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A Word of Caution About The Minimum Payment Trap for New Cardholders
2007-05-16 21:22:00
Hi,One of the biggest risks for new credit card holders is falling into the minimum payment trap. The minimum payment trap can be described as the following:The card holder is very careful in making purchases that he or she can pay off with their monthly paychecks. The minimum payment trap begins when a cardholder purchases an item or items that that exceed his or her ability to pay off with the end of the month paycheck. The majority of the time, the purchases are prudent and made financial sense. A good example is when he or she comes across a sale of needed office attire that is significantly reduced in price. When the credit card bill arrives, the card holder is aware that there will be a large balance due. He or she usually has the best intentions of paying a significant amount of money on the bill and getting things back on track over the next few months. When the bill arrives, the number that jumps out on the statement is next to the phrase "minimum payment due." It is, of co...
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Young Adults: First Credit Card
2007-05-16 05:00:00
Hi,When young adults apply for their first credit card, they need to be aware of hidden costs and fees, interest rate fluctuations, and the minimum payment trap. If ever it's the time to read the small fine print on the back of forms, applying for a credit card is when to do it. No one should feel embarrassed if he or she does not understand all the verbiage on the back of one of those forms. It's important to ask someone who does understand to explain all the terms and conditions to the prospective card holder. Here is a list of some of the items typically included in the small print:1) If payment is late, by even one day, the interest rate may rise to the maximum allowed by state law in which the card is issued. For example, if the card is offered at 6% and the payment is one day late, the credit card holder reserves the right to reserve the interest rate to 19.9%+. 2) Most credit cards assess a $35.00 additional fee for any payment that is late.3) If the credit limit is exceede...
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Using Credit
2007-05-14 19:30:00
Hi,Credit only became a common financial instrument available to virtually anyone over the last thirty years. Before credit cards were made so widely available and marketed aggressively, applying for credit had a sense of seriousness to it which is lost in our current culture of debt. When my father started using credit, his intention was to consolidate purchases into one monthly bill and pay it at the end of each month. The thought of carrying a balance would have been appalling to him. Now we accept credit card balances and interest as a way of life. The barrage of credit card applications that students receive is unbelievable. It's possible that one reason many of them start early adulthood as indentured servants to the credit industry is that they were bombarded with credit card applications and applied for and received credit they were ill equipped to repay. Many of them started using credit without understanding how the credit agreements they signed even work. Over the next w...
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Customer Service: Communicating about Problems With Products
2007-05-11 19:13:00
Hi,At one time or another we have all face the task of calling a customer service department to complain about a defective product ranging from cell phones to washers and dryers. Before contacting customer service it is to determine what we want. Do we want the product fixed, replaced, or do we want our money back? We need to know in advance of the call whether a warranty exists, what the terms are, and if it is still valid. When calling customer service about a problem with a product, consider the following:1) Get the customer service representative's full name and ID number, if applicable.2) Clearly state the problems you have had with the product.3) Tell the customer service representative exactly what you would like done to resolve the issue.4) Hopefully the matter will be resolved at this point. However, if a satisfactory solution has not been reached, you may talk to the customer service representative's supervisor. In many instances the customer service representative doe...
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Customer Service: Communicating About Services
2007-05-10 21:50:00
Hi,At one time or another we all have problems with our telephone service, cable TV, or high speed Internet. Our problems may be caused by services which are intermittent or do not function at all. This is a common scenario during the winter months. In most cases, we are entitled to a large reduction in our monthly bill due to the problems. For example, cable companies and telephone companies will give you a negotiated credit for the time your service was unavailable. But, this credit is not automatic, it needs to be negotiated with customer service. Here are some things to consider when you call customer service:1) Prior to the call, determine what you will be requesting from the company and why. Have you facts available at the time you place the call: for example, the times and dates of interrupted service. Don't be vague in your complaint. 2) If the problem has been reoccurring, make sure the customer service representative is aware of the frustration you have experienced, and f...
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Collections: Customer Service- The Importance of Documenting Communication
2007-05-08 21:19:00
Hi:When an individual or a business finds it necessary to contact a collection department or customer service department, here are some tips on documenting the phone call:1) Get the full name, ID number, if applicable, of the person representing the company during the phone call.2) If it's a payment arrangement that is being requested, communicate it to the collections person and document his or her response. Most reasonable requests will be accepted, and it is important to put down everything in writing to validate the agreement.3) If the collector offers an alternative arrangement that is acceptable, document it the same way.4) If the initial payment arrangement is denied, but is reasonable, ask to talk to a supervisor. Make sure to get the supervisor's name and ID number as well.5) After a suitable payment arrangement has been hammered out, make sure to read it back to the collector, informing him or her that you've documented the call. 6) If the payment arrangement extends ov...
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Documenting Credit Inquiries
2007-05-07 22:53:00
Hi,When a small business owner or individual shops for financing, these are some important points to consider for every phone call to financial institutions:1) Write down the full name, phone number and extension of the individual with whom you communicated.2) Write down everything related to the particular financing that is being inquired about. 3) If applicable, inquire about the cost of insurance and service agreements.4) If the purchase is subject to warranty, write down the specifics of the warranty. This will allow you to compare warranties among financial institutions and/or manufacturers. 5) Request that the individual email you a copy of your conversation.By writing down all communication with financial entities, it will enable a more expeditious and prudent decision to be made. It will eliminate the unscrupulous salesperson, who does not disclose the full terms and conditions of various financial instruments until the customer is ready to close the document, to railroad yo...
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Loans For Equipment Purchase: Some Thoughts To Consider
2007-05-04 23:44:00
Hi,When a business owner makes the decision to purchase a piece of equipment, he or she needs to consider the following:1) Is it imperative that it is new? Due to depreciation, most used equipment can be purchased at a significant discount. For certain used equipment, such as for restaurants, buying used equipment can save the purchaser as much as 50%-60%.2) Do your homework. The Internet is a very good source when looking for new/used equipment. 3) Set up the financing for equipment prior to actually purchasing the piece of equipment. Your negotiation ability is much greater if it is a cash deal rather than relying on the dealer financing your equipment. The financial institution that has your business account should be more than willing to finance a piece of equipment.4) If buying used equipment, inquire about transferring any or all servicing agreements or warranties on the equipment at the time of purchase. 5) If the business owner is not familiar with the type of equipment that...
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Equipment Leases
2007-05-03 19:45:00
Hi,Equipment leases are available in a multitude of places ranging from commercial leasing companies, private leasing companies and many equipment manufacturers. The cost of leases varies considerably from one place to the next. In determining the lease best suited for your business consider the following:1) Determine the term of the lease before calling leasing companies.2) Have a general idea of the amount of monthly payments the business can afford before calling leasing companies.3) Ask if first, last and security payments are required with lease inquired about. 4) If the equipment being leased depreciates very quickly, and has a high residual value at the end of the lease, do not use it as a factor to determine whether or not that particular lease is suited for the business needs. 5) Ambitious lease salespeople often have very creative payment streams on leases to entice prospective customers to sign the lease. It is important to get full disclosure on any lease to make sure t...
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Rentals: How To Shop For the Right Financing-
2007-05-02 20:24:00
Hi,Once a business owner has determined what method of financing he or she needs for a purchase IE., to rent, lease or buy, there are many factors to consider:Rent als :1) First determine if it's a short term rental or a long term rental. 2) Many equipment suppliers have both short and long term rental agreements available in house. For example, if an equipment supplier has a piece of equipment returned, and is unable to quickly sell it, many times it will be made available on a short or long term rental basis. Also, inquire about their price breaks as determined by rental periods.3) Check with all local equipment rental companies to obtain quotes for the piece of required equipment. 4) It is worthwhile to check equipment rentals within a 100 mile radius, as sometimes the rental prices are lower in small towns and rural areas. 5) Decide whether it's the type of equipment, or brand which is important, as it may be worthwhile to check with various competitors to see what types of rent...
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Buy, Lease, Rent: Some Thoughts To Consider
2007-05-02 03:11:00
Hi:In my years in the credit business I have come across numerous instances involving farms to construction companies, medical offices to restaurants in which the type of financing did not suit the particular business. In the restaurant business, where the profit margin is very slim, in many instances, the restaurateur should have been leasing the equipment instead of buying it. There are several reasons for this: the first one is how quickly restaurant equipment depreciates. Restaurant equipment has little or no value once it is removed from the restaurant and almost no resale value. By leasing the equipment, the restaurateur frees up more operating capital which is sorely needed in the business. In farming there is usually one major problem with equipment purchases. Farming equipment is incredibly expensive, and in some instances farmers get railroaded into buying more equipment than they need to run their operation. They are then saddled with servicing a debt they can ill afford....
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Setting Up Collection Systems For A Small Business
2007-04-30 19:15:00
Hi,Every small business needs a well planned system to actively monitor accounts receivable. For a system to be successfully implemented, consider the following:1) Do most customers get paid on a regular basis for their goods and services, or are they contractual businesses who get paid on an irregular basis? It is a good idea to split these customers into categories according to criteria.2) For regular paying customers, a collection system needs to be in place consisting of three phone calls and three letters. The first phone call is informative notifying the customer of the past due amount and obtaining a date for payment. The second phone call is made three days after the promised due date and references the first call and promised due date and the fact that payment has not been received. The customer is told that payment is due immediately, setting the date. The third phone call is to say that if payment in full is not received within forty eight hours, all action necessary to c...
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Setting Credit Guidelines For A Small Business
2007-04-27 22:14:00
Hi,A small business owner needs to take the time to set up both credit and collection guidelines, so that the owner has a standard policy for customers in place before the customers ask the business owner if credit could be extended to them. In the business climate of today, a credit policy is an essential component of running a successful business. When setting up credit guidelines, consider the following:1) Is it really necessary to extend credit at all? An all cash business eliminates numerous costly and time consuming tasks.2) If extending business to business credit, consider the type of business to which credit is being extended. Net 30 days is a good starting point, but could be changed if necessary depending upon the needs of particular business customers.3) Set a maximum limit a particular account may charge. It is important that both parties are aware of the limit when the account is opened, in order to make future communication clear.4) When setting up an account, get all...
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Collection Agencies and Collection Attorneys: Things to Look For When Choos
2007-04-26 21:03:00
Hi,When choosing the right collection agency to recover debts for your small business, it is important to investigate the following:1) The majority of collection agencies work on a contingency basis, and are generally competitive with one another. Call a few agencies in your area to set up sales calls. After talking to a few salespeople, you will know what the going rates are for collection assistance in your area. 2) If your accounts are across the U.S.A., it is important to deal with a collection agency that has offices across the country.3) It is generally a good idea to visit the office of the collection agency to get a feel for how they do business. When visiting the office, inquire about the agency's reporting procedures on the status of accounts turned over to them for collection.4) Make a phone call to the Better Business Bureau and the office the State Atto rney General to find out if any complaints have been lodged against the agency. On larger accounts, small businesses ...
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Collection Phone Calls
2007-04-25 22:50:00
Hi:Many small business owners avoid calling their past due accounts for a variety of reasons. The most common one is that they do not want to create ill will with their customers. The second reason is that they do not have the time to set aside to make the initial calls, and then to follow up on those calls. What a business owner says during his or her initial call to a customer can determine whether or not a customer will bring his account current. There is a standard set of three collection calls a business owner may consider using:1) The first call is pleasant and firm, providing the customer with the exact amount that is past due. Whenever possible, a payment date should be set during the phone call. 2) The second call is short and to the point. The customer needs to know that the business owner will take whatever action necessary to collect the account. Once again, determining a specific payment date is very important.3) If no payment is received by the specific date, it is im...
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Collection Letters
2007-04-24 20:36:00
Hi:Many small business owners are hesitant to send collection letters and/or call clients that have past due accounts. The primary reason is that they are afraid of alienating their customers. Familiarity with collection techniques can give small business owners the confidence to contact past due customers. Here are some suggestions for effective collection letters: 1) The initial letter sent to a customer should be informative but firm. When the customer reads the letter, he or she should realize that immediate payment is required, or payment arrangements made with the creditor. Stamping a bill past due, in itself, is not a successful means of collection. 2) The second collection letter sent to a customer should give a specific date by which payment needs to be received, or the business owner will take whatever actions deemed necessary to collect the account.3) The final letter to the customer should inform the customer that their account has been turned over to a collection agency...
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Small Business Credit and Collection Problems
2007-04-23 19:44:00
Hi,Many small businesses have the same credit and collection problems as large corporations, only they do not have the staff to address these problems. If a small business owner is experiencing an increasing collection problem, it is important to identify the reasons why. In order to do that here are some suggestions of things to look at:1) Is there a definitive credit policy for extending credit to individuals or other businesses?2) When an account is opened, is the time taken to verify the information on the credit application? If there isn't a formal credit application, one might be considered.3) If NSF checks seem to be a continual problem, investigate obtaining a machine to electronically process checks at point of sale. If that is not an option, make sure all pertinent information about the customer necessary to collect on the check in case it's returned is recorded on the check. 4) Is a maximum limit set on charge accounts? Notify the customer of the maximum limit when the ...
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