Good vs. Bad Debt: Avoid The Credit Card Collection Agency Blues
So the other day I spent some time on Free Credit Score’s website, making sure that I didn’t have any bad debt and hoping that a credit card collection agency wasn’t planning on raiding my bank account. While investigating the likelihood of bad debt I discovered that I have an outstanding credit score of 738 across the board! Not bad for a chap with no job and maxed out credit cards. I think that if I continue to max out Visas and don’t find a job soon I will have a credit card collection agency banging at my door waving a pitch fork and flaming torch. pointless to say I was thrilled.
Managing bad debt or averting the possibility of ever having bad debt is not a difficult task. I have never, as long as I can remember at least, had bad debt or have been exposed by a credit card collection agency. In the defense of those with bad debt, I will say that once a mistake is made and the bad debt devours your credit, it is very difficult to bounce back from. dealing with bad debt does not have to be overwhelming. Preventing a credit card collection agency from irritating you and surviving the cancer of bad debt can be as easy as paying your bills on time.
Here are some tips on avoiding bad debt that I learned from a grumpy old miser with a passion for gold and I am not talking about Old Ebenezer I am referring to my irritating grandfather. For starters you should compensate your bills. Bad debt is triggered by not paying your bills on time. Unfortunately for some people, paying your bills can turn out to be difficult especially when working with less money. If you find yourself in a state where money is tighter than your Thanksgiving belt size, it is time to make some cuts to the budget. Find some expenses that you can sacrifice i.e. magazine subscriptions, horse grooming lessons, whale hunting trips etc. Once you cut the unnecessary fat of unneeded expenses, Money can be found easily to ward off the evil credit card collection agency.
While paying your bills is an important responsibility, paying yourself is just as crucial. If you have a 401k or an IRA it is important that you keep pumping such benefit with cash flow. Eventually, your situation will perk up unless you enjoy swimming in bad debt and speaking to a credit card collection agency on a regular basis. While continuing to save money, you will in time have that nest egg of a retirement. Surrendering every penny to your bill collectors may be a wise decision currently but in the long run it will be one of your biggest regrets.
Of course this advice seems opposing. How am I supposed to save money and pay my bills on time? Well, the answer is not as simple as you would hope. Surviving bad debt is diverse for everybody. The sacrifices are different the credit card collection agency will never be the same and the assets may or may not exist. Everyone should find a positive groove that will allow them to provide for themselves but be responsible. The less expenses the better. The less wants you can survive without the stronger you can fulfill your needs. Avoid the credit card collection agency asking you to relinquish your bad debt and start saving money to pay your bills.
Looking for an online collection agency? Contact Rapid Recovery Solution today to find out more information on all types of debt including credit collections.. Also published at Good vs. Bad Debt: Avoid The Credit Card Collection Agency Blues.
The Very Basics Of Debt Collection Part One
This is the first article in a three part series on the very basic facts of debt collection. When you take out an account, and don’t pay your account bills on time, the account goes delinquent and your bills turn into debt. A debt collector is a person whose job it is to try and get in contact with you and get that money back, or in layman’s terms, collect the debt.
Debt collectors can also be called bill collectors, account collectors, or collection agents. A lot of debt collectors work for third party collection companies. A creditor is the financial institute that you originally set up your account with. For example, you set up an account with a contractor to do work on your house. When you don’t pay your bills, this creditor will often hire outside of their company to get their debt collected, especially if their accounts receivable department is small.
Other collectors are employed directly by the original creditors. These agents are called in house collectors. Typically companies with in house collectors are finance based institutions like health care providers, utility companies, or credit card and mortgage companies. In house collectors are working straight for the creditors, while third party collectors are working for their own collection agency, so both sets of collectors must follow different guidelines and regulations concerning debt and directing payment.
If you are being contacted by a debt collector, try to determine if they are calling on behalf of the original creditor or a third party debt collection agency so you have a better idea how to proceed. If you are dealing with a third party debt collection agency for example, you are always going to pay the agency, not the creditor.
Collectors working under the creditors do not always have to adhere to all of the rules of the Fair Debt Collection Practices Act, while collectors working for a third party collection agency must. Mail from a creditor informing you that you owe a payment may be marked accordingly, while mail coming from a third party debt collection company can’t indicate that it is an attempt to collect money. To Be Continued In Parts Two And Three
Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies. This article, The Very Basics Of Debt Collection Part One is available for free reprint.
Investing In Bonds- How Is It Done And Is It Safe?
Stocks and bonds. You have doubtlessly heard of them, and if you have been reading my articles, you know what they are. If you haven’t, here’s a quick update: stocks represent a fraction of ownership in a company, and a bond represents money that a company “borrowed” and has to pay back on set dates. You may have heard that bonds are “safer” to invest in than stocks, but is this true? How are bonds traded, and what are the differences between a stock market and a bond market? Hopefully, this article can put these questions to rest.
Unlike the stock market, bonds markets do not usually have a centralized trading system. Instead, bonds will be traded in decentralized, dealer based over the counter markets. When an investor buys or sells a bond, the counter party to the trade is almost always a bank acting as a dealer. Another difference between bond markets and stock markets is that sometimes investors don’t pay broker’s fees to dealers with whom they buy or sell bonds. Instead, the dealers get their money by collecting the spread, which is the difference between the price at which the dealer buys a bond from one investor and the price at which he sells the same bond to another investor.
In terms of volatility, bonds are usually somewhat safer than stocks, especially short and medium dated bonds, but the value of stocks can definitely change. Bonds are liquid – it’s fairly simple to sell a bond investment, and the safety of a fixed interest payment that you will receive twice a year is attractive. Bondholders additionally enjoy certain legal protections: in the United States if a company goes bankrupt, its bondholders will be paid before stockholders because they are creditors.
But, bonds also come with their risks. Fixed rate bonds are subject to interest rate risk, which means that their market prices will shrink in value when the interest rates rise. Bonds can also be subject to other risk factors such as call and prepayment risk, reinvestment risk, event risk, liquidity risk, credit risk, inflation risk, yield curve risk, volatility risk and sovereign risk. Price changes in a bond can also affect mutual funds that hold these bonds immediately. If the value of the bonds in a trading portfolio has plummeted over the day, the value of the portfolio will also have fallen.
Finally, in the case of bankruptcy, because there is a hierarchy of creditors that must be paid that bondholders are not on top of, there is no guarantee of how much money will go to repay the bondholders even though the money will go to them first before shareholders. Bondholders have been known to lose some or all of their money when this happens.
Mallory Megan works for Rapid Recovery Solution and writes articles on nationwide collection agencies. Check here for free reprint licence: Investing In Bonds- How Is It Done And Is It Safe?.
Bankruptcy: What Is It And What Do The Chapters Mean?
Bankruptcy in the United States is a constitutionally (Article 1 Section 8, Clause 4 to be exact) approved way for individuals and business entities to settle good sized amounts of debt. In charge of making the bankruptcy laws is Congress, and the most recent change was an amendment to existing laws through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. For other laws that are relevant to bankruptcy, refer to the United States Code.
Bankruptcy cases are filed in United States Bankruptcy Court, so federal law will govern the procedure in bankruptcy cases. But state laws are also applied when property rights are being determined. One example is that rules that protect property from creditors (the people who you owe money to) will come from state law.
Bankruptcy comes in a number of forms, or Chapters. Title 11 of the United States code contains nine chapters. Six of these will require you to file a petition. The remaining three have rules to govern these petitions.
Chapter Seven is the most well known form of bankruptcy. This involves a trustee who is appointed to obtain the property of the debtor that is not protected by law. Then, they sell it and distribute the proceeds to the creditors. Every state lets debtors keep essential property, so most Chapter 7 cases will let the debtor keep all of their property.
A Chapter Nine bankruptcy is only available to municipalities. It’s a form of reorganization, not liquidation. One notorious example of this was when Orange County, California filed. Bankruptcy under Chapter 11, Chapter 12, or Chapter 13 is more complicated. It involves letting the debtor keep some, or all of their property, and reorganization. They will use future earnings to pay off creditors. People generally file Chapter 7 or Chapter 13. Sometimes an individual will file for Chapter 11, but this is rare. Chapter 12 is similar to Chapter 13, but is only available to “family farmers” and “family fisherman” in some situations. Generally, chapter 12 has is more generous for debtors than a similar Chapter 13 case.
In 2005, Chapter 15 was tacked on to the list. It deals with foreign companies with U.S. Debts.
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