Wouldn’t it be nice if there were a magic formula or simple trick that allowed you never to have to worry about money or manage your finances again? While that may not be realistic, there are some simple things you can do right now to improve your money situation. Try these five steps for successfully managing your personal finances. Another bonus? If you stick to these five tips, your financial problems may start to diminish, and you can start reaping the rewards of lower debt, saving for the future, and a solid credit score. Detail Your Financial Goals Take some time to write specific, long-term financial goals. You may want to take a month-long trip to Europe, buy an investment property, or retire early. All of these goals will affect how you plan your finances. For example, your goal to retire early is dependent on how well you save your money now. Other goals, including homeownership, starting a family, moving, or changing careers, will all be affected by how you manage your finances. Once you have written down your financial goals, prioritize them. This organizational process ensures that you are paying the most attention to the ones that are of the highest importance to you. You can also list them in the order you want to achieve them, but a long-term goal like saving for retirement requires you to work towards it while also working on your other goals. Here are some tips on how to get clear on your financial goals: Set long-term goals like getting out of debt, buying a home, or retiring early. These goals are separate from your short-term goals such as saving for a nice date-night. Set short-term goals, like following a budget, decreasing your spending, paying down, or not using your credit cards. Prioritize your goals to help you create a financial plan. Carry out Your Plan A financial plan is essential in helping you reach your financial goals. The plan should have multiple steps or milestones. A sample plan might include creating a monthly budget and spending plan, then getting out of debt. Once you’ve accomplished these three things and have followed through on your new plan for a few months, you may find that you have extra cash, and the money you free up from your debt payments can be used to reach your next round of goals. Again, it’s key to decide what priorities are most important to you. Keep steadily working toward your long-term retirement goals, but also start to focus on the most important near-term goals you have set for yourself. Do you want to take an extravagant trip? Start investing? Buy a home or build your own business? These are all things to consider when deciding on your next step. Your goals, along with an emergency fund, will help you stop making financial decisions based on fear and help you get control of your situation. When creating a financial plan, remember these things: Your budget is key to success. It is the tool that will give you the most control of your financial future. Your budget is the key to achieving the rest of your plan. You should keep contributing to long-term goals, like saving for retirement, no matter what your financial plan stage is. Building an emergency fund is another key factor in financial success and stress reduction. Make and Stick to a Budget Your budget is one of the biggest tools that will help you succeed financially. It allows you to create a spending plan so you can allocate your money in a way that will help you to reach your goals. You can make your budget as high-level or detailed as you want, as long as it helps you reach your ultimate goal of spending less than you earn, paying off any debts, padding your emergency fund, and saving for the future. A budget will also help you decide how to spend your money over the coming months and years. Without the plan, you might spend cash on things that seem important now, but don’t offer much in terms of enhancing your future. Many people get caught in this quagmire and get down on themselves for not reaching the financial milestones they want for their family and their own life. Don’t forget to celebrate small victories along the way. For example, congratulate yourself once you pay off your debt, or reward yourself when you stick to your budget for three months solid, or when you successfully pad your emergency fund. If you are married, you and your spouse need to work together on the budget. Working together makes it feels fair to both of you, and you both have the same level of commitment towards achieving it. This unity can go a long way towards helping you prevent money-related arguments. Below are some tips for married couples who want to create a budget together: Consider switching to an envelope budgeting system that uses cash for spending areas that require more discipline. Use budgeting software with a mobile app so you can enter spending in real-time. Plan expenses in advance to avoid any overspending.
Financial Planning for A Secure Future
Having a financial plan in place is a good strategy to incorporate in your personal finances and in your business. Whether you are a business owner, an entrepreneur, or someone who wants to learn more about how to manage their finances, outlining and putting together your own financial plan can eliminate many of the headaches that are associated with managing money. Financial planning involves a variety of things like budgeting, retirement, planning, saving, insurance, and even getting out of debt. If you are someone who is interested in securing their finances, financial planning is the best route to take. A financial plan can take care of your today, tomorrow, and future. Looking at it from a different perspective, it is like a road map during your vacation trip, you know exactly how many stops you need to make along the way, how much time it will take to arrive at your destination, and how many times you are going to need to refuel if you are driving a car. Much in the same way, so is a financial plan, it is your personal guidance tool to healthy and sustainable finance management. Setting Financial Goals A good financial plan is built on a foundation of attainable financial goals. Goals are very important, because having set goals inspires you to complete the next steps and acts as a guiding light as you work to make those aims a reality. For some individuals formulating a financial plan is easy and for others it can be a bit of a challenge, in which case consulting with a financial advisor may be helpful. A financial advisor will help you create a custom plan for you according to your financial situation. Financial plans are usually physical documents to ensure that it is concrete and final, but with advances in technology, financial plans can be in digital format as well. Financial plans can stretch over years, months, or even decades, depending on the time line you set your financial goals. But through seemingly small steps, like having a monthly savings goal, or investing a portion of your paycheck, your financial plan can lead to much better preparation for the future. What Does a Financial Plan Consist Of? You will want to create an extensive financial plan for you and your family to ensure it’s as effective as possible. In regard to how detailed you want the plan to be depends on your financial goals and objectives, but there are a number of key elements that are typically involved in a good financial plan. Although they all affect your money in different ways, their cumulative effect dictates what your financial future will look like. Here are some areas of a potential financial plan to focus on: Budgeting • Cash flow statement showing your income sources and expenses • Balance sheet that reviews your assets and liabilities • Positives and negatives of your current financial situation • Education funding plan Investing • Investing portfolio return reports • Asset allocation plans • Overview of retirement account investments Retirement Planning • Post-retirement and Social Security income estimates • Post-retirement lifestyle plan Estate Planning • Estate/inheritance tax estimates • Completed will • Philanthropic gift planning Tax Planning • 401(k) and IRA contribution plan • Capital gains and income tax returns Risk-Management • Long-term care, disability and life insurance • Beneficiary and survivor benefit plan • Annuities Creating Your Goals Most people have a wide range of short- and long-term financial goals, from paying down debt to planning for retirement to building a college fund. But since everyone’s personal situation is unique, each financial plan will look a bit different. In general, though, there are five main steps to the creation of any in-depth financial plan: • Determine your financial goals • Pull together any relevant documents and account statements that paint a picture of your current financial situation • Create a short- and long-term plan to reach your financial goals • Begin putting your financial plan into practice • Adjust your financial plan as your life and goals change Setting your financial goals is a crucial step in writing a financial plan because it determines the future course for your plan for years to come. Here are some very common financial goals: • Paying off credit card debts • Creating a budget that you can live with • Saving an emergency fund of three to six months’ worth of your income • Spending less than you earn • Saving for your retirement • Saving for a down payment • Saving for college • Paying off your student loans • Increasing your income Putting the Plan Together With your financial standing and goals defined, you can start developing the actionable steps of your financial plan. It can take a bit of work at first, but the end results can be life-changing. Composing your own plan can put you on the path to greater financial health and a better future. Having a financial plan is not just for investors or bankers, it is for anyone who is interested in improving their finances. A financial plan enables you to ask specific questions, instead of generic ones. For example, you’ve probably asked yourself the question “Where do I want to be 10 years down the road?” Avoid generic answers like “I want to be rich” or “I want to have a big house” or “I want to get out of debt” Instead a financial plan enables you think of more specific, goal-oriented questions such as “How much money do I need to make per month to increase my yearly net income?” Or how much money do I need to set aside from my business revenue to set a down payment for a home?” In addition, if you want to get out of debt, ask yourself “How can I get out of debt faster?” These types of questions enables us to think critically to evaluate our financial situation and to therefore come up with a
Managing Your Finances During COVID-19
Since the outset of the COVID-19 pandemic, businesses in the restaurant and hospitality industry have been hit the hardest economically, especially with local and state restrictions and social distancing measures put in place, personal and business finances have felt the effects of the pandemic. During times of economic uncertainty, it can be easy to feel overwhelmed, especially when it comes to your finances and when you own a business, the headache can be even greater. According to a recent survey from the National Endowment for Financial Education (NEFE), they found that nearly 9 in 10 Americans say that the COVID-19 crisis is causing stress on their personal finances. It is evident, the pandemic has disrupted the economy of the nation in unprecedented ways. This disruption in the economy has caused scores of small businesses to close permanently and many people to lose their jobs. Finances. Research Your Options Finances. During times of great uncertainty, researching your options to stay afloat financially is a good starting point. Knowing what do if you can’t pay your bills is essential for protecting your assets. Maybe rent can be difficult to pay this month, it can be helpful to communicate with your landlord, as they are probably worried about payments as well. In addition, if you owe back on your student loans, you may be overwhelmed and bogged down by the amount you still need to pay back, yet many lenders have begun making accommodations to offer relief from the stress of COVID-19. Finances. In response to the pandemic, the government, and many banks and credit unions have temporarily adjusted their lending policies to better alleviate the financial hardship that has plagued businesses. In addition, the SBA loan program have provided small businesses with a helping hand which has helped them stay in business. Finances. Budgeting Money for Personal Finances If your paycheck or business income dried up due to a layoff, reduction in hours or lack of business revenue, you need a realistic crisis budget. Initially, if you are looking for savings benchmark for your emergency fund, it will depend on your monthly expenses and the stability of your income. The Certified Financial Planner Board of Standards teaches the following rules of thumb: Finances. If you are a single-earner household, you need a minimum of six months worth of expenses saved. Finances. If you are a double-earner household, you need a minimum of three months worth of expenses saved. Finances. If you are a single-earner household, with a second source of sizable income, you need a minimum of three months worth of expenses saved. Expenses includes both fixed and variable costs. In other words, how much you spend in a regular month on everything that allows you to maintain your lifestyle, mortgage or rent payment, car, food, credit-card payments, etc. Finances. Budgeting for Businesses Finances. For businesses, it is a little different and there is no denying it; all business owners need a solid emergency fund. While you are in charge of your own income, it’s bound to fluctuate and you may have some rougher months as a result. This is why it’s best to be prepared with a fully funded business emergency fund that you can fall back on during lower income months. If you are self-employed or run a business, you are probably wondering how big your emergency fund should be, well there are a few tips to consider. You can start by considering how much money you have been spending in your business over the past few months. It’s important to know your monthly numbers so you can then decide how long you’d expect your funds to last. Finances. For a business owner, it also critical to evaluate the industry you are operating in. Would it be easy for you to pivot and change your products or service offerings if the market changed? If your business is diversified, you will likely have a better chance of earning a consistent income. If you have a seasonal business or do work in a very specialized niche, you will want to set aside more money. In regard to how much money you should set aside for backup funds, setting aside an amount that is most comfortable for you and that brings you the most peace of mind is a good way to go about it. For business owners, 5 to 12 months worth of expenses is a good amount to set aside, which means that if monthly expenses for your business is $25,000 per month, you would set a maximum of $300,000 for a 12-month safety net. Finances. Finances. Finances. Finances. Emergency Savings in the Bank a Good Idea? Finances. Having to deal with a pandemic, such as the cornonavirus, is why everyone is in need of a cash reserve. It is highly recommended to always keep your emergency funds in an FDIC-insured bank or high-yield savings or an NCUA-insured credit union savings account, so it stays completely safe and accessible 24/7. Both FDIC and NCUA coverages protect you against loss up to $250,000 per depositor, per insured institution, per ownership category (such as single or joint accounts). The coverage includes your principal balance plus any interest accrued. Emergency funds are the backbone of strong, personal financial plans. Managing your budget can be a challenge for some people and can be a stressful process, especially if you have an unexpected emergency pop up. By building up a savings buffer (an emergency fund) you can be prepared to pay for unexpected emergencies without having to turn to credit card debt, family loans, or other borrowing options that create unnecessary stress. Finances. Staying Focused Finances. Staying focused is key when you are trying to manage your finances during challenging economic times. As circumstances are constantly changing, remember you are not alone and there are resources available to help you navigate and safeguard your finances. Staying focused on how you can protect your money is vital to a favorable financial future. Evaluate and adjust your spending plan, cut back on expenses and work with lenders and creditors
Bankruptcy Shouldn’t Be Your Only Option
When you are falling behind on your payments you may feel overwhelmed, frustrated, and in some cases even scared because you have no idea how you are going to pay back your creditors. You may find yourself considering bankruptcy. But, believe it or not, bankruptcy can be a smart financial decision in certain situations. Bankruptcy’s designed to give people a fresh start when they need one. And if you file for bankruptcy, there is no shame in doing so, you’re taking a big step towards getting your finances under control. But keep in mind that filing for Bankruptcy is a serious decision with serious consequences, your credit rating takes a big drop and your spending habits may need to change. Even though bankruptcy will fall off your credit report after 7-10 years, it is always better to pay off your debts rather than file for bankruptcy. A bankruptcy filing could also have an impact on your emotional life or your personal life. People who have filed for bankruptcy report feelings of regret and failure years after filing. What is Bankruptcy? Bankruptcy is a legal proceeding involving a person or business that is unable to repay their outstanding debts. The bankruptcy process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common. All of the debtor’s assets are measured and evaluated, and the assets may be used to repay a portion of outstanding debt. Things to keep in mind: Bankruptcy is a legal proceeding carried out to allow individuals or businesses freedom from their debts, while simultaneously providing creditors an opportunity for repayment. Bankruptcy is handled in federal courts, and rules are outlined in the U.S. Bankruptcy Code. There are various types of bankruptcy, commonly referred to by their chapter within the U.S. Bankruptcy Code. Bankruptcy can allow you a fresh start, but it will stay on your credit reports for a number of years and make it difficult to borrow in the future. Negotiating with Creditors Creditors would rather settle a debt with you than have it discharged in bankruptcy. It may be easier to negotiate a settlement if you’re already a few months late on the payment. Bankruptcy is a last resort, but that does not mean there is no other option and it shouldn’t be your only option. Finding the perfect financial consultant for your case is a step in the right direction. A financial consulting company that can help you resolve your financial obligations is what you need and this is where we come in. Other companies that deal with debt may tell you that filing for bankruptcy is your only option, and then you are forced to pay them large amounts of money to handle your case. Create a Budget to Pay Down Debt Often, a debtor’s problems can be resolved by learning better money management strategies. Using credit counseling and budgeting, you may be able to reduce expenses, find new income sources, and sell assets to pay down your debt. This will help you learn new strategies that will reduce your debt now and help you manage your finances in years to come. Seeking a reputable and experienced debt relief company is a good starting point. Pros and Cons of Bankruptcy Bankruptcy carries with it, considerable consequences that you need to keep in mind and this should not be taken lightly, as Bankruptcy can impact your financial future for years to come. Here are some advantages and disadvantages of Bankruptcy: Advantages of Bankruptcy No longer legally required to repay debt The collection calls and letters stop No stress over possibly getting sued You’re not liable to pay taxes on forgiven debts Disadvantages of Bankruptcy Bankruptcy appears on your credit report for 7 years May have to repay to 50% of debt if a Chapter 7 isn’t granted Negative accounts will show “Included in Bankruptcy” Negative accounts still appear on your report and hurt your score Credit score will drop significantly Could cost thousands of dollars to hire a bankruptcy attorney Will not be able to obtain new credit for years after a bankruptcy Should I file for Bankruptcy? This depends on your financial situation and what you are willing to settle for, but Bankruptcy should only be taken as a last resort if you absolutely cannot repay back your debts. On the other hand, if you are facing unpaid medical bills or other collection accounts, then bankruptcy is not always the best answer. To learn more, click here.
Debt Settlement at A Glance
There is nothing worse than being burdened by debt. Fortunately, there are methods and programs that might help reduce the amount you owe to your creditors. If you find yourself deep in debt and unable to meet your financial obligations, debt settlement, may be an option for you to consider. Whether you are working with a debt settlement company or negotiating on your own, the goal of debt settlement is the same, which is to get creditors to mark a debt as paid in exchange for a partial payment. How Debt Settlement Works Debt settlement occurs when you pay your creditors a lump sum that is significantly less than what you owe. Settling spiraling debts is sometimes the best solution for creditors, allowing them to recoup at least some of the money you owe them. But is important to keep in mind that debt settlement has a few major disadvantages: • Not all debt collectors accept offers to settle debts. • If they do, you’ll need to save enough money to make the lump sum payment required, which can take years. • Even if you manage to settle your debt, it is recorded on your credit report, causing your score to drop. • The forgiven debt can be considered taxable income, unless you qualify for an exclusion. There are a few ways to initiate the debt settlement process. You can write a debt settlement letter to your creditors, specifying the amount you can afford and stating that this is the sum you’ll pay in order for your debt to be settled. While it’s possible to negotiate a settlement yourself, many people choose to use the services of a debt settlement company. Experienced debt settlement professionals do the difficult work of negotiating with your creditors on your behalf. Reputable companies are transparent about the risks involved, the length of time the process could take and how much it all costs. Taking the First Steps If you feel that debt settlement is right for you, there are some steps you can take: 1. Find the right debt settlement company There are dozens of debt settlement companies out there. Do some research and set up several consultations to ensure you choose a company that’s reputable, trustworthy and affordable. Find out up front how much it’s going to cost, how long it’s going to take and what the risks are. The company should be transparent and give you this information. If they don’t, you should be careful because their may be a likelihood that they could be scammers. 2. Begin saving for your debt settlement Once you’ve started the debt settlement process, you’re typically advised to halt payments with your creditors. Instead, you should pay into the dedicated account set up by the debt settlement company until that account has reached the agreed amount for the lump sum payment. After about 90 – 180 days, your creditors write off what you owe as bad debt. This is when the debt settlement company approaches your creditors with evidence that you aren’t able to pay, and will start negotiations. During this time, put aside as much money as you can toward your lump sum payment. 3. Accept the settlement offer Your creditor investigates your case to find out how bad your financial circumstances really are. If they decide that you truly can’t pay, they may send a settlement offer. 4. Pay your creditor Once you’ve approved the offer, you’ll need to make the lump sum payment. 5. Pay the fees The final step is to pay the company’s fees, which are usually around 15 – 25 percent of the settled debt. Types of Eligible Debts Before deciding whether a settlement is the right choice for you, determine what kind of debt you have. For instance, unsecured debt is often settled, while secured debt almost never is. The most popular kind of debt that is settled is unsecured debt—money owed on credit cards, store cards or unsecured loans. This kind of debt doesn’t have property or other assets secured against it. If you can’t repay the balance and are on course for bankruptcy, the company won’t be able to recover what you owe. If the debt is settled, on the other hand, they recoup at least some of what you owe. Common types of unsecured debt: • Credit cards • Medical bills • Signature loans • Gym memberships • Store cards • Other unsecured lines of credit Debt secured against property or other assets, such as mortgages and car loans, is not settled often. This is because the creditor can seize your assets instead. The only circumstances in which secured debt can be settled is if the company has seized your property and you still owe money. In that case, you may need to enter into a settlement with them. Common types of secured debt: • Mortgages • Auto loans • Government loans • Secured personal loans • Tax/IRS debt Why Work with a Debt Settlement Company? In some circumstances, whether you can or cannot settle your debt depends on the specific situation. Keep in mind that, usually, you can only settle a debt if you’re experiencing genuine financial hardship. But if you opt to hire a professional debt settlement company, there may be some hope at the end of the tunnel. Suppose you owe $30,000 in credit card debt or other debt and so you hire a debt settlement company to call the creditors and they offer a smaller amount of $16,000 to those creditors. If the creditors don’t except the reduced amount, you may be forced to file for bankruptcy and those creditors will never get to see their money, in this scenario, those creditors have no choice but to accept the offer if they even want to get some of their money back. So they except the offer, and you get out of debt for $14,000 less than you owed. To learn more, click here.
Is Debt Consolidation Right For You?
One option that can help you get one step closer to resolving your debt is by considering consolidating your debt. Debt consolidation refers to the act of taking out a new loan to pay off other liabilities and consumer debts, generally unsecured ones. The process involves combining multiple debts into a single, larger piece of debt, usually with more favorable payoff terms. These favorable payoff terms can include a lower interest rate, lower monthly payments, or both. Consumers can use debt consolidation as a tool to deal with student loan debt, credit card debt, and other liabilities. Debt consolidation is a financial strategy which is especially effective on high-interest debt such as credit cards. It should reduce your monthly payment by lowering the interest rate on your bills, making it easier to pay off the debt. This debt relief option untangles the mess consumers face every month trying to keep up with multiple bills from multiple card companies and multiple deadlines. Instead, there is one payment to one source, once a month. Debt consolidation is also referred to as “bill consolidation” or “credit consolidation.” By any name, consolidating debt effectively should get you out of debt faster and eventually improve your credit score. With debt consolidation, you can save time and money! A Closer Look For some people, handling their debt may be easy, they may be able to organize their budget better and get motivated to pay down their debt by setting specific guidelines and goals, but for those consumers that may have a troubled time managing their debt, debt consolidation may be of great help. This is where a debt consolidation loan or debt management program can step in. Things to keep in mind: Debt consolidation is the act of taking out a new loan to pay off other liabilities and consumer debts, generally unsecured ones. Debt consolidation loans don’t erase the original debt but transfer a consumer’s loans to a different lender or type of loan. There are two different kinds of debt consolidation loans: secured and unsecured. Consumers can apply for debt consolidation loans, lower-interest credit cards, HELOCs (home equity lines of credit), and special programs for student loans. How Does Debt Consolidation Work? When a consumer is overwhelmed with different kinds of debt, they can apply for a loan to consolidate those debts into a single liability and pay them off. Payments are then made to the new debt until it is paid off in full. This is the definition of the term ‘consolidate’ which means to combine a number of financial accounts or funds into a single overall account or set of accounts. For consumers, this is good news because this simplifies the payment structure for them. For creditors, they are willing to except consumers who are interested in debt consolidation for several reasons. Debt consolidation maximizes the likelihood of collecting from a debtor. Debt consolidation loans are usually offered by financial institutions such as banks and credit unions, but there are other specialized debt consolidation service companies that provide these services to the general public. An important point to note is that debt consolidation loans don’t erase the original debt. Instead, they simply transfer a consumer’s loans to a different lender or type of loan. For actual debt relief or for those who don’t qualify for loans, it may be best to look into a debt settlement rather than, or in conjunction with, a debt consolidation loan. Example of Debt Consolidation Say an individual with three credit cards and a total of $20,000 owing at a 22.99% annual rate compounded monthly needs to pay $1,047.37 a month for 24 months to bring their balances down to zero. This works out to $5,136.88 paid in interest alone over time. If the same individual consolidated those credit cards into a lower-interest loan at an 11% annual rate compounded monthly, they would need to pay $932.16 a month for 24 months to bring the balance to zero. This works out to $2,371.84 being paid in interest. This results in a monthly savings of $115.21, with $2,765.04 saved over the life of the loan. Types of Debt Consolidation There are two broad types of debt consolidation loans: secured and unsecured loans. Secured loans are backed by one of the borrower’s assets such as a house or a car. The asset, in turn, works as collateral for the loan. Unsecured loans, on the other hand, are not backed by assets and can be more difficult to obtain. They also tend to have higher interest rates and lower qualifying amounts. With either type of loan, interest rates are still typically lower than the rates charged on credit cards. And in most cases, the rates are fixed, so they do not vary over the repayment period. There are several ways you can lump your debts together by consolidating them into a single payment. Below are a few of the most common: Debt Consolidation Loans Many creditors, traditional banks and peer-to-peer lenders, offer debt consolidation loans as part of a payment plan to borrowers who have difficulty managing the number or size of their outstanding debts. These are designed specifically for consumers who want to pay down multiple, high-interest debt. Credit Cards Another method is to consolidate all your credit card payments into a new credit card. This new card can be a good idea if it charges little or no interest for a set period of time. You may also use an existing credit card’s balance transfer feature—especially if it offers a special promotion on the transaction. HELOCs Home equity loans or home equity lines of credit (HELOC) are another form of consolidation. Usually, the interest for this type of loan is deductible for taxpayers who itemize their deductions. Student Loan Programs There also are several consolidation options available from the federal government for people with student loans. The federal government offers direct consolidation loans through the Federal Direct Loan Program. The new interest rate is the weighted
Are You Being Sued by a Collection Agency?
Are you being sued by a collection agency? It probably won’t be long until your other creditors and debt collectors take you to court as well. So what do you do? Once you’ve been served with a collection suit, you must act quickly. Depending on the rules for court cases in your state, you might have as few as five days to respond. The summons attached to the complaint will tell you the deadline for your response. If you don’t respond, the court could enter a judgment against you. The lawsuit starts when the creditor, collection agency, or more likely their lawyer files a “complaint” or “petition” with the court. The complaint will list you as a defendant. The complaint will also state why the creditor is suing you, and what the creditor wants, usually money. Expect the complaint to contain a lot of “legalese.” The creditor or collection agency must “serve” you with a copy of the complaint, along with a “summons.” The summons notifies you that you are being sued, and usually provides additional information such as when you need to file a formal response in court. Most courts require the creditor to “serve” the documents by handing them to you personally. Most creditors hire a professional process server or a local sheriff to do this job. If the server can’t find you, often he or she can leave the summons and complaint with another adult at your home or business and then mail a copy to you. Often, courts allow creditors to mail you the summons and complaint, along with a form for you to sign acknowledging that you received the papers. If you sign and return the form, you will have been deemed “served.” Often it’s a good idea to sign the form and return it. If you don’t and the creditor can later prove that you refused to do so, you might have to pay the process server costs, which can be between $35 and $150. The creditor may sue you in state civil court (these courts can have many names: municipal court, superior court, justice court, county court, to name just a few), or, if you owe money to the federal government, in federal court. Most states also allow creditors to sue in small claims court as long as the lawsuit asks for less than a certain amount. The amount varies by state and can be a few thousand dollars or as much as $10,000. So what do you do? Financial Warranty’s team of legal and financial professionals will go over your case and make sure that your rights – and money – are protected. We can handle future lawsuits and take the weight – and worry – off of your shoulders.
Need Help with a Private Student Loan?
Banks and other financial institutions make private student loans, which are separate from federal student loans. Do you need help with a private student loan? If you have federal student loans, you have access to many different repayment plans and other alternatives – like deferment, forbearance, and cancellation options – but private student loans are a different story. Which options you’ll get, if any, depends on the terms of your loan agreement, your lender, and, to some extent, the law. Before you do anything else, get a copy of your loan agreement. Private loan terms vary widely. If you don’t have a copy of your loan agreement, call your servicer and ask for one. Read the contract to determine if it includes repayment options. You might be eligible for interest deferment, forbearance, modification, and workouts. If you’re not in default, you might be able to refinance. The terms of these loans vary widely, so it’s best to shop around. If you have good credit and income, you could qualify for a lower interest rate or an extended term. If you’re in default, you’ll need a creditworthy cosigner to refinance. If you’ve defaulted on a private student loan, state law will determine the statute of limitations on the debt. A private lender must file a lawsuit within this period in order to collect the debt through garnishment or attaching to your other assets. You should expect a private lender to file a lawsuit within this period. Even if the lender hasn’t filed a lawsuit yet, you can negotiate a settlement after default. A good tactic could be to figure out how much the lender might be able to collect from you through garnishment and offer a repayment plan in the amount that can be garnished Even if the debt is valid, you might have a claim or defense that prevents the lender from recovering the full amount of the debt. Borrowers have rights under the Truth in Lending Act (TILA) against private lenders that don’t apply to federal loans. The statute of limitations is only one year. So you have a limited time to sue if your lender violates this law. Also, the Fair Debt Collection Practices Act (FDCPA) applies to student loan debt collectors, but does not apply to creditors collecting debts they own. The school that you attended is also an important factor. The Consumer Financial Protection Bureau has sued several for-profit schools in the last few years. If you attended one of these schools and have a private loan, you should have been notified about these actions and the status of your loans. You shouldn’t refinance any loans from any of these institutions until you know that the debt is valid and enforceable. To find out more about available repayment options for your private student loans or if you need help interpreting a private student loan agreement, Financial Warranty is here for you! Our team of legal and financial professionals will go over your case and make sure that your rights – and money – are protected.
Need Help with a Repossession?
Do you need help with a repossession? Is a creditor threatening to take your car? Has a creditor repossessed your vehicle but is still demanding that you pay? Is a repossession showing up on your credit report? Financial Warranty is here to help! If your car loan lender repossesses your car, you probably are not entitled to any notice prior to the repossession. However, in most states the car lender must provide you with certain notices after the repossession. Most states do not require car loan lenders to give debtors any kind of notice before they repossess vehicles, but, in many cases, they have to inform you about certain issues regarding the repossession after it occurs. In most states, the bank must notify you, in writing, within a short time, usually five days after it has repossessed the car but before it is sold or auctioned. This notice must include a written notice of your right of redemption and/or right of reinstatement, among other things. In the event you don’t reinstate the car loan or redeem the car, the lender is also required to send you a written notice if it intends to sell the vehicle. If the car is sold, the lender must provide you with an accounting of how the proceeds of the sale were applied against your debt. If the amount of the sale is not sufficient to cover all of these items, then you owe what is called a deficiency balance. The creditor must notify you of the amount of that deficiency. Normally, if you don’t pay the deficiency, the creditor may take further action, such as suing you for the balance. If the creditor recovers more than what’s owed on the obligation from the sale, then there is a surplus balance. The creditor must give you an accounting of the surplus and pay it to you. So where do you start? Financial Warranty’s team of legal and financial professionals will go over your case and make sure that your rights – and money – are protected.
Need Help with a Payday Loan?
Do you need help with a payday loan? If you need to get your hands on some cash, you might be thinking about getting a payday loan. Maybe you’ve got one already. While this kind of loan might seem like a great way to get money fast, you should know that these loans – in the states that allow them – have significant downsides, including punishing interest rates and short repayment timeframes. Before you apply for a payday loan, you should fully understand how they work and seriously consider the costs involved, as well as the risks. You might change your mind about getting one. Still, millions of Americans take out payday loans each year and, if you’ve got one already, this debt can quickly turn into a hole that just gets deeper and deeper. Financial Warranty is here to help! Not all payday loans are the same: they vary from state to state and sometimes even go by different names like payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan. These loans can be extremely complex and payday loan companies have big bank accounts and expensive lawyers that they can use to get your hard-earned money. State law sometimes limits the amount a lender can charge for a payday loan, limits the repayment period, or limits the maximum amount a borrower can get. Some states have gone as far as making payday lending illegal. The Military Lending Act (MLA) is a federal law that prevents lenders from gouging military servicemembers and their dependents with outrageous interest rates. The MLA caps the interest on many kinds of loans at 36% per year and generally prohibits the extension of payday loans, vehicle title loans, and other types of harmful loan products to military personnel (and their families). Federal regulators have established a rule that sets a nationwide set of minimum protections for consumers regarding payday loans. The federal law, which goes into effect on November 19, 2020, is called the “Payday Lending Rule.” Under the Payday Lending Rule, among other things, payday lenders have to perform a full-payment test before making a loan to figure out whether a borrower will be able to repay the loan. So where do you fit into all of this? Financial Warranty’s team of legal and financial professionals will go over your case and make sure that your rights – and money – are protected. We’ll act as your sword and shield against the payday loan companies that took advantage of you during your time of need.
