The ONE Law You Should Be Breaking
October 11, 2008
There is a law all smart people break.
Parkinson’s law.
Parkinson’s law states that “work expands so as to fill the time available for its completion.” It was first coined by C. Northcote Parkinson in the book Parkinson’s Law: The Pursuit of Progress.
A common derivation of that is “expenses rise to meet your level of income.” Has that happened to you? It happened to me in 1991 and I’m particularly aware that it could happen to me again in 2005.
In 1991 I took my BS in finance and started a carpet cleaning business…like most finance majors, of course! I learned the business for a couple months and was earning a whopping $200-$300 per week working for someone else.
When I left that company and went out on my own, the ad I used FLOODED me with business. I had 15 calls by 10:30AM the day the small ad first ran. The answering service told me every “little old lady in Saratoga was calling”.
So almost immediately I went from making $200-$300 a week to making upwards of $1000 per week. WOW…23 years old and making that much money WORKING FOR MYSELF was great fun…had a great boss!
Whatever You Do….Dont Save Money!
October 2, 2008
No, that’s not a misprint. Even though falling interest rates are good when you want to get a loan, they are bad for people with savings accounts.
In this economy your best investment, the best place to put your money is into paying off debts. Think of it as investing in your debt because that is exactly what you are doing.
If you put $1,000 into a bank savings account earning 2%, at the end of a year you will have $1,020.
If you carry a $1,000 balance on a credit card with a 19% interest rate, and you pay the minimum monthly payments, at the end of one year you will have paid $190 in interest.
If you get $1,000 in a tax refund, small inheritance or from somewhere else you now have a choice to make. You can earn 20 bucks in a savings account or save $190 by paying off that credit card. Keep in mind that your 20 bucks is taxable income so you’ll be left with $15 or so after taxes.
Do you need a savings account for emergencies? That savings account may be causing those emergencies! Think about it this way…
Are You SURE Your A Bad Debt?
September 24, 2008
Many people who seek the advice and guidance of debt counsellors are driven to them in the first place by fear and ignorance ? two powerful emotions which often mask the real scale of the problems.
In many cases, what you made have been led to believe is a ‘bad’ level of debt, may instead need only some careful reorganisation and a new set of mortgage priorities.
Most adults have some experience with debt - and most of us receive (often painful) monthly reminders of the debts we owe courtesy of creditors and the postman.
Needless to say, debts can be large (mortgage or loan payments) or comparatively small (telephone or credit card bills).
Although the word debt typically carries negative connotations, there are some positives. For example, few people have the total asking price outright to purchase the home or car of their dreams. There are limited options for acquiring these big ticket items without incurring some debt. Also, assuming some debt makes it possible to pay your electricity and gas bills based on usage. You pay for the service after, rather than before, each month’s use.
Bouncing Back from a CCJ
September 17, 2008
Should you be unfortunate enough to face a CCJ ? but subsequently succeed in having it either set aside or reversed - the court will automatically remove the entry from the Register of County Court Judgments.
The court must send notification of cancellation to the Registry Trust within three days of the date of the order. The entry should be removed from the Register and from the credit reference agencies’ databases within three to four weeks.
If you show you have paid the debt in full within one month of it being entered on the Register, you can have the entry cancelled. Otherwise, once the debt has been paid, you can apply to have the entry amended to show the debt has been paid.
Bear in mind that this does not remove the entry, it only marks it as paid or “satisfied”. Whether or not a Judgment has been paid it will remain on your file for 6 years. After that time the records are deleted.
Debt: Dont Pay Your Minimum Balance
September 9, 2008
Almost all Americans carry credit card debt. Actually, over 40% of US families spend more than they earn. If you’re like most of us, you try not to think about how much money you owe and what that debt is really costing you. If you did, you might not sleep too well. However, by not fully understanding your current financial situation you are only prolonging the problem. In order to rid yourself of unsecured debt, you need to face the uncomfortable and often painful fact: it is very possible that your current debts may take you 30 years to pay off.
That can’t be possible you say! I only owe $6,000. This should be paid off a couple of years. My credit card company would not do something so unethical to me, would they?
As a matter a fact, they would. In fact, if you took 30 years to repay your debts, you are an ideal credit card customer. It’s important to realize that the credit card companies only allow you to make minimum payments because it benefits them. This is not a good thing for the credit card holder. They do not do this out of generosity; this is how they make money.
Eliminating Credit Card Debt
September 1, 2008
The overwhelming task of eliminating your debts can often seem like an uphill battle. Without the knowledge and expertise of a professional on your side, unfortunately, the odds are not in your favor. In order to reduce your debt, you have several options; however, if you want to maintain a “good credit rating”, you have to pay you bills on time; anything else will cause your credit score will suffer. With that being said please consider the following:
Option 1 - Consumer Credit Counseling
Consumer Credit Counseling companies were originally established to help credit card company’s recover revenue from clients that were falling behind on their bills. Choosing to use a Consumer Credit Counseling service can have negative effects on your credit that last up to 10 years. These services are also considered Chapter 13 Bankruptcy by most lending institutions. The bottom line is that Consumer Credit Counseling companies work for the creditors and banks.
By using their services, you will end up paying back your full debt, plus interest. These companies do not always provide financial relief as consumers often find out.
Option 2 - Debt Consolidation Loan
How to Deal with Bill Collectors
August 22, 2008
So you’ve screwed up. You’re drowning in debt. Maybe the credit card was burning a hole in your pocket and you just had to get the HDTV. Or maybe you or a family member had a medical emergency while you we laid off. It doesn’t matter to your creditors; they lent you the money and now they want it back.
The lender will try to work with you for a while and its best to try to negotiate with them at this stage. If you can’t work something out or just don’t pay, they will send your file to either an in-house bill collector or, more commonly to an outside agency.
Bill collectors are a tough bunch. They have heard all the sob stories and aren’t interested in yours. They mostly get paid on commission, so they just want to get money out of you and move on.
There aren’t many laws to get you off the hook as far as the debt goes (bankruptcy is your only choice). But there are laws that prevent harassment and abuse by bill collectors. Debt collectors tend to try to ignore these laws, but if you know your rights and insist on them, at the very least you might be able to collect damages if the bill collector persists in ignoring them.
Bankruptcy - Your Fresh Start
August 15, 2008
Most American consumers are living too close to the edge. They are carrying too much credit card and mortgage debt and have too little in the way of savings. When the inevitable unexpected crisis comes along, they have little left to handle it and quickly slip into a critical financial state.
According to many bankruptcy experts, most people file for bankruptcy due to life-changing experiences, such as a job loss, divorce or serious illness. Uninsured medical expenses are supposedly the cause of about 20% of bankruptcy filings. But excessive debt also plays a very large role.
If you are drowning in debt with little realistic hope of paying off your bills, bankruptcy is your only real option. Although far from pleasant, bankruptcy can be easier to handle than the constant pressure put on a debtor by lenders and collection agencies. You can immediately stop all harassment and legal actions, wipe out a good deal of your debt and get a new start on life.
Life After Bankruptcy
August 7, 2008
Bankruptcy and Credit - What Happens After Your Debts Are Discharged?
Bankruptcy will remain on your credit report for ten years. But you may be able to get credit fairly quickly - almost immediately after a bankruptcy - although you will pay dearly for it.
Due to anomalies in the credit scoring process, you’re likely to have a better score than you had while you were struggling with debt. Also if you handle debt responsibly from then on, you will find your credit score will be close to prime within a few years.
Credit scoring gives more weight to more recent events. So if you use of credit is down and you’re handling your debts responsibly, you score will go up. Remember you have to use credit to get a credit score.
Many lenders love to extend credit to recent bankrupts. They know you have more free cash because most of your debts were discharged. They also know you can’t go bankrupt again for another seven years. So they will extend credit, usually with outrageously high interest rates.
If you managed to keep your car and/or house through the bankruptcy, your first step is to pay these bills on time.
Slowing Spending - The Key To Your Debt Plans Success
July 30, 2008
Anyone who embarks on a debt reduction program should know the rules for success. There are two. You need to stop adding to your debt. You need to find extra money to pay it off quickly.
You also need to know the deck is stacked against you. The sellers of goods and services have gobs of information at their fingertips. They know where you live. They have a close approximation of your income. They are aware of your interests. They also know your buying habits.
The information to which they have access is endless. They know the age of your car through its registration. The appliances you have because of the warranty cards returned. Where you shop because of the credit and store cards you have used. How old your mortgage is and what you owe from public recording of the deeds.
Because they have this information, you end up on a number of lists. The sorting and use of these lists are an art and science. It is the source of the mail you receive, the offers you are made, and the advertising to which you are exposed.
