Stock 101 Part One
Did economics hurt your head in grade school? Do you believe that Dow Jones is a person? Well, then you will like my beginner’s course on stocks, a four part article series outlining the very basics of what stocks are all about. Shall we begin?
Essentially, the stock of a business represents the original amount of money that went into founding it. Since a business’ stock can’t be withdrawn to the disadvantage of its creditors, it serves as a security to them. When a new business is being formed, the stock of this business is divided into shares, and every share will have a particular declared face value that depends on the total amount of capital that was invested in the businesses. Shares represent a portion of ownership in a company, and there may be different sorts of shares with different ownership rules, privileges or share values.
Usually stock will take the form of shares of common stock or preferred stock. Common stock is a unit of ownership and generally comes with voting rights that can be used when corporate decisions are being made. Preferred stock usually doesn’t come with voting rights but people who own preferred stocks are legally entitled to receive a certain level of dividend payments before any dividends can be issued to other shareholders.
The rules and perks of stocks can vary though; some shares of common stocks can be issued without typical voting rights, or some shares might have special rights unique to them that are given only to specific parties. Preferred stock might have qualities of bonds blended in with common stock voting rights in addition to preference in the payment of dividends over common stock.
Any type of financial instrument whose value is dependent on the price of its underlying stock is called a stock derivative. The two main sorts of stock derivatives are futures and options. Stock futures are contracts where the buyer takes on the obligation to buy the stock (the buyer is long), and when they take on the obligation to sell the stock (the seller is short). A stock option is the right to buy stock in the future at a fixed price (a call option) and the right to sell stock in the future at a fixed price (a put option). So, you can see that the value of a stock future and a stock option changes as the value of the stock it is derived from fluctuates. To Be Continued In Part Two
Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies. This article, Stock 101 Part One has free reprint rights.
It Pays To Be Aware Of Who You Are Paying
Alright, so you owe some money, but who is attempting to get you to pay up? There are two kinds of people who may call you looking to collect money that you owe to a creditor. The creditor themselves (the business that you owe the money to directly – think Visa), or a third party collection agency that Visa may hire to collect their debts for them. The Fair Debt Collection Practice Act (FDCPA) was created in the 1970s and provides a wealth of protections for debtors. These are strict regulations and rules that a debt collector must follow, and if any of these rules are broken, there is a great possibility that take the agency that violated the FDCPA to court. But what about that deadbeat friend of yours who owes you five bucks? Are you required to grant them thirty days to refute your claim? Clearly, as both you and your friend’s wallet know, you don’t.
My point is that the FDCPA is a very special set of guidelines meant specifically for a very special set of people: third party debt collectors. Browse through Morency v. Evanston Northwestern Healthcare Corp. This was a district court case in Illinois from 1999. In this court case, a hospital issued and sent out pre-collection notices in an attempt to collect debt. For third party debt collectors, this is a definite no-no according to the FDCPA. What could have happened? Well, anyone that got the letter might have been off the hook for their debt. But after looking at the situation, the court held that the hospital was a creditor, because the money was going directly to it, and not a third party collection agency, so the FDCPA did not apply.
This case has not been the first of its kind, and courts will take many questions into consideration to determine if the creditor should also be deemed debt collector. In a lot of these cases they ask the following questions: Does it say on the letters that get mailed out if the debtor doesn’t pay up the debt will be sent out to collection? Did the creditor hire a collection agency only to send letters, not on commission? Is the collection agency itself just a mailing service?
Here’s another example: if a debtor neglects to respond to a letter sent out by a bill collection company, and said collection agency has no further contact with this individual, it probably won’t be held to third party bill collection company standards. If a collection agency doesn’t receive the files or information on the debtors, then it probably won’t be considered a debt collection agency either.
And thus completes our lesson on the difference between third party debt collection agencies and creditors attempting to collect, and why it pays to know who you are paying. And remember: good luck trying to get that five dollars back from your friend!
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If You Have A Debt Collector On The Phone….
If you owe money to a creditor debt collectors are permitted to report your debt to credit bureaus, file lawsuits against you, and should be taken extremely seriously. The best way to protect yourself and your financial situation is a methodical approach. First, know why you are being contacted. Know where the debt is from and exactly how much it costs.
Request the name of the person that is calling, the name of the agency, the name of the creditor, and the agency’s address and fax number. You have the right to tell a collector over the phone that you want all future contact to be in writing. Follow up all requests with a written request.
Keep in mind if you tell the debt collector that they are not permitted to contact you at all it the agency is entitled to contact you once more to inform you how it plans to proceed. Another request that can be made is that you are the only person that can be contacted. It might be a good idea to keep a file including dates and details of phone conversations and when you mail out or receive letters.
If you do send any correspondence to the collections agency you should do this by Certified Mail, Return Receipt Requested. This means that the letter reached the collector, providing you with a signed receipt as proof that it did. If you negotiate a re-payment plan over the phone, ask for the terms of the plan in writing. Additionally, any promise to remove or adjust credit history should definitely be documented.
Make sure that you pay the right party; payments should be made to the debt collector, not the creditor, unless otherwise instructed to do so. Carefully look over the amount you are being asked to pay. Get an assessment of any interest, fees or charges that have been added.
If you feel that your collector is being abusive, be certain to complain to the agency and keep this complaint on file. Finally, never ignore a collector even if you feel that the debt isn’t yours; they will continue to contact you and it may mean more trouble and time in the long run.
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When Do I Call In A Medical Collection Agency
Do you know how much debt your medical collection agency collected last year? If you don’t, how can you evaluate their effectiveness or your return? How could you possibly be aware?
Most patient balances forwarded to a medical collection agency are often considered “lost causes,” there would be little point in using such services if that were always the case. Logic dictates this much. Some of the reasons are as follows: Some patients simply do not respond to practice statements or internal collection letters. They will, however, respond when a collection agency states it will report their failure to pay to credit bureaus. Collection agencies have a number of resources on their hands. If reporting a debt to a credit bureau does not work, there are attorneys on hand that can assist you with problem consumers who refuse to pay.
It is a given that most medical practices acknowledge the need for collection agency services but they should evaluate and manage this collection method just like any other. Practices should have a full understanding of the terms of the agreement with their collection agency and the results of such arrangements; they must also understand how their own internal processes affect the agency’s success. And internal processes do have an enormous effect on the amount of money that you can collect.
Here are six questions you should ask when evaluating your current collection agency.
What is the total dollar value of accounts placed with the collection agency last year?
What is the protocol for turning accounts to collection?
What is the average age of transferred accounts?
What percentage of transferred accounts had balances less than $50?
How much did the agency collect last year?
What fees does the collection agency charge?
What reports does the agency provide?
Rapid Recovery Solution is a third party debt collection company. Get a totally unique version of this article from our article submission service