Money Matters: Dealing With Debt Collectors

Most people would do anything to avoid a call from a debt collector. Many people have called the 8 On Your Side hotline asking for help when it comes to dealing with debt collectors.

Some people feel the debts are not real. Others feel the the calls are a form of harassment. Regardless of your opinion of debt collectors there are ways to tell if the debt is legitimateand ways to determine if the caller is following the law.

First, the must provide written proof of the debt.

Second, they cant threaten you or use abusive language.

Third, if you ask them to stop calling, they must stop calling.

You have a lot of rights. 8 On Your Side Consumer Advocate Michelle Mortensen goes over them in tonights Money Matters report.

Report Debt Collectors to the FTC or to the State.

Copyright 2016 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


On balance, 0% credit card transfer deals are bad news

Have you ever been tempted by a 0 per cent balance transfer credit card deal? If you have debt, transferring it to a 0 per cent rate can seem like a great idea to ease your financial burden. But there are two key dangers that have always concerned me.

The first is the cost of transferring a balance. A typical charge is 3 per cent. So if you transferred £5,000 you’d have to pay £150. However most plastic cards will let you add that extra debt to the card.

And that brings me to my second fear. Because the deals now last for years, there’s no real encouragement to get on and pay off the debt and take advantage of the no-interest period. Psychologically, the longer you have to repay something, the less imperative there is to get on with actually clearing the debt.

So I find it extremely worrying that Halifax this week launched a 40-month long balance transfer deal . The Halifax isn’t to blame; the move is just the latest in an ongoing battle between plastic card companies to have the longest and, on the face of it, most attractive deal.

But giving someone three years and four months of no interest on their debt seems a little irresponsible. If it was linked to regular payments to encourage people to be debt clear by the end of the term, that would be good.

But it’s not. The deals seem designed to encourage people to not to worry about their debts rather than face up to them. If they do nothing they’ll eventually be switched to the credit card firm’s regular rate,  normally around 19 per cent, when interest will then mount up very quickly.

There are those who may be happy to pay £100 or so to simply switch their debt onto a new card every few years, but that’s simply delaying the inevitable time when eventually the debt will have to be paid. Being encouraged  to delay dealing with debt is no good for anyone. Credit cards should start being responsible with their deals and that means helping people clear their debt, not trying to persuade them to extend it.

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How Can Southwest Compete With Cheaper Low-Cost Carriers?

Southwest Airlines has always been able to compete with legacy carriers because it could offer low fares. Thanks to its no-frills service and savvy use of secondary airports, the Dallas-based airline has become one of the worlds most successful commercial carriers. It was able to fly high even when its competitors were dealing with debt, bailouts and bankruptcy.

Now, however, other airlines have taken the no-frills business model a step further. Compared to the likes of fee-happy airlines such as Spirit, Allegiant and Frontier, Southwest is often seen as the moreexpensive option. How can the established low-cost carrier compete with these cheaper upstarts and retain control of a market that it has dominated for so long?

According to CEO Gary Kelly, it will take a combination of things to keep Southwest at the top of the budget-flying heap.

READ MORE:Southwest Blasts Ancillary Fees With New Transfarency Campaign

Competing with ultra-budget carriers

Last week, Kelly was in Colorado to celebrate his airlines 10th anniversary at Denver International. While there, he spoke about being very wary of emerging competition in the budget air travel marketplace. He also talked about the need to make changes so that Southwest can remain competitive when it comes to price:

I dont think there is a really dramatic impact in the short term for that type of competition. But over the long term, we would be foolish to ignore any competition. We need to do everything we can to make sure our costs are not higher than theirshellip; And we still have to find a way to make sure that we are the low-cost provider. And theyre bringing really low cost and significant cost competition to us.

Cheaper overall cost

At leastfor the foreseeable future, Southwest will continue to be one of the only US carriers to not charge any fees for checked baggage on domestic routes. You might expect the airline to do away with this policy if it wants to develop another revenue stream so that it can lower its fares. That will not be the case for the time being, however. Southwests execsseemto be banking on the idea that customers will understand the difference between the price of an airline ticket and the overall cost of air travel. In the era of a la carte pricing, this is a very important distinction.

READ MORE:Southwest To Keep Free Bags Policy

Southwest has shown that it is quite savvy when it comes to marketing its no frills fares (Wanna get away?). It should be able to craft a message that will sell the idea that it is a more transparent low cost carrier, and that it is actually cheaper when it comes to the overall cost of travel (fare plus fees).

Every dollar counts

If it is not going to start charging for baggage, Southwest will need to find other ways to decrease operating costs and increase revenue so that it can compete with the ultra-budgets in the long term while keeping its current fee policies in place. Southwest recently updated its fleet, adding an extra row of seats to its planes so that they can now hold 143 passengers. Capacity used to be 137. The airline is also trying to further streamline its ground and gate operations so that its planes can have a quicker turn-around time and get back in the air faster.

Southwests image and business model are both dependent on it being able to offer low fares. That wont change. However, the airline, and other established low cost carriers who dont fall into the ultra-budget category, will need to convince fliers that they are the most customer-friendly option and the cheapest choice when it comes to the overall cost of a trip.

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‘We’ve helped footballers and doctors. Anyone can get into debt’: Charity boss reveals money problems can affect …

THE head of a debt charity says professional footballers and senior doctors are among those who have sought help for money problems.

Sharon Bell from StepChange in Scotland – which helped over 16000 Scots with money problems last year – said the range of calls the charity receives every year only goes to show people from all walks of life can end up in financial trouble.

She said: “We’ve recently had what we would class as a high-profile doctor couple, two very senior medical experts, who were in serious financial difficulty.

“Weve had professional footballers, to white collar workers right the way through to people on benefits.

“It can be a large cost like the car breaking down, or a tax bill that suddenly tips people over. Or some people are expecting a bonus and then the firm doesnt produce it but they’ve been relying on it to pay for something. We’re all human.

“More and more people nowadays don’t have savings – particularly with rates being so low – people spend their money and don’t have anything to fall back on when there is that bump in the road.”

At a time of year when many are facing paying off the debts run up over Christmas, weve again teamed up with Scotland’s Financial Health Service to bring you today’s (January 19) 16-page guide to getting out – and staying out – of the red in 2016.

The Scottish Government-backed service operates a helpline (0800 707 6696) and website (www.scotlandsfinancialhealthservice.gov.uk) directing Scots to the appropriate sources of help and information.

And, says Sharon, it is often the post-Christmas period when financial problems suddenly become all too real.

She said: “From the middle of January to the middle of March tends to be our busiest time of the year for a mixture of different things.

“There’s an element of Christmas debt, utility bills come in at this time of year, breakdowns with cars and boilers – these sort of things always seem to happen at the worst time.

“Also, people are thinking about holidays because they’re stressed and they want to get away from it but then realise they don’t have the money or can’t get the credit they thought they would.”

But, while the temptation for some may be to bury their heads in the sand and ignore the problem, those in debt are urged to seek help as soon as possible to minimise penalties and extra charges.

Sharon said: “A lot of people are put off seeking help by the thought of how they start to pay these bills.

“They think it can be complicated and make the situation even more stressful. What we try to do is take that stress away so they can address the issues.

“Don’t put it off. The longer you wait the more interest and charges can be applied, which can change what can be done to help. You can go from a position of being able to manage your debts and repay them in some form, to going into insolvency – and a lot of people don’t want to go down that route.

“For a lot of people it’s fear of the unknown, but it can happen to anyone.”

Fergus Ewing, Minister for Business, Energy and Tourism, said: “Many people will find their finances out of kilter following the festive period.

“While families manage their budgets carefully throughout the year, the cost of Christmas gifts and celebrations can be enough to tip some people into financial difficulty.

“If you find yourself in this situation, now is the right time to get yourself back on an even keel – and Scotland’s Financial Health Service is here to help.”

Sort your debt day

If you have money worries, or are simply looking for advice on managing your finances, this Thursday (January 21) will be your chance to find the answers.

We’ll have representatives from the StepChange Debt Charity and Citizens Advice as well as our own Money Doctor Fergus Muirhead and Sunday Mail columnist Elaine Colliar to answer your questions and help with any problems.

Follow us on Facebook to submit your questions from 1.30pm in our live blog or email webeditor@dailyrecord.co.uk if you want to contact us anonymously.

You can find information and links to organisations who can help with debt solutions, borrowing, managing your money, and financial education through the Scotland’s Financial Health Service website (www.scotlandsfinancialhealthservice.gov.uk) and free helpline on 0800 707 6696.

Plus Don’t miss our 16-page guide in today’s paper (Tuesday January 19) offering expert advice on dealing with debt, budgeting, saving and borrowing.


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Who Finds Out When You Get Help with Your Debts – Can It be Private?

Q: I was laid off for a few months a while back and I’ve been playing catch up with my debts ever since. Now I’ve really gotten behind with my payments and I think I will need help right away. But I’m worried that if I ask for help, it will affect my future. Will anyone find out that I’m in financial trouble and that I asked for help? ~Brian

A: Money is a topic no one likes to talk about, and certainly not once they find themselves in financial difficulty. When dealing with debt, the choice you make about how to resolve your situation will determine who can find out that you asked for help.

Some Things You do Reveal Financial Trouble

First of all, anyone you owe money to likely already knows that you’re struggling. Even if you haven’t started receiving collection calls, if you’ve missed payments, requested a few credit limit increases or have asked a lender for some relief, they likely know you are experiencing some challenges paying your bills.

Your Credit Report Will Reflect What You do with Credit

Since how you make your payments is reported to the credit bureaus, if you’ve fallen behind, it will be reflected on your credit report. The good news is, if you don’t apply for credit, or allow anyone to check your credit report, no one else will know.

Asking Questions amp; Gathering Information from Debt Help Services is Private in Canada

Asking questions and getting information about help with your debts from a service provider in Canada, eg a lender, credit counsellor or bankruptcy trustee, as long as you don’t allow anyone to check your credit report and you don’t enter into any payment arrangements, the fact that you asked for guidance will not be reflected anywhere publically. Someone’s financial circumstances however, typically dictate the best debt relief option or solution.

Reduced Payment Arrangements Are Noted on Your Credit Report

As soon as you enter into a debt repayment program and ask for reduced payments of some sort from a credit counselling organization a notation will be made on your credit report that you are receiving help from a third-party to make your payments. A reduced payment arrangement also typically means living without credit for a period of time, until you can pay off what you owe under the terms of your reduced payment arrangement, and rebuild your credit score.

Establishing a debt repayment program with a credit counselling agency is an arrangement that requires approval by your creditors. Once approved, it will be noted on your credit report and subsequently purged after completing the program according to the statute of limitation. There is no public record following your program once it has been purged. It will typically take 1 – 3 years to rebuild your credit but when you are done and have re-established your credit, no one will ever know you’ve had a problem with money.

Certain Repayment Arrangements Are a Matter of Public Record

If privacy is important, you have to be careful of the path you choose. If you declare bankruptcy or file a consumer proposal, a permanent record is created with the Office of the Superintendent of Bankruptcy. For $8, anyone can search your name and see if at any time in the past you entered into a legal agreement to reduce you debt.

When Can it Matter?

Is this important? It depends. Some employers will want to know your credit history, some landlords do a check before renting to you, and you might have trouble getting a loan or mortgage later on.

The Bottom Line on Getting Help with Your Debts

It can be hard to ask for help with financial hardship, but taking the time to find reliable information to help you make the right choice for your future is worth it. There are advantages and disadvantages to any form of debt relief or service. Just make sure you know the long term impact to your credit, financial situation and privacy before you make your final decision.

Related reading:

6 Things to Help You Find Canada’s Best Debt Help Services

If You Think You Might Need Financial Help Immediately, You Probably Do

12 Ways to Save Big on Groceries

Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott by email, check www.nomoredebts.org or call 1-888-527-8999.


Teams awarded £three.3m from Huge Lottery

Tenants struggling to make ends meet and young people missing out on education are in line for £3.3m funding from the Big Lottery Fund.

The Link Group, Article 12 and CLAN Cancer Support will all benefit.

They are joined by Glenboig Neighbourhood House, Crossroads Caring for Carers (Cowal amp; Bute) SCIO and The Phoenix Community Health Project.

Maureen McGinn, from Big Lottery Fund Scotland, said the awards will allow the groups to have a better future.

The Link Group will receive £548,462 to allow them to expand their tenant transitions advice service. The project helps 3,000 people in financial difficulty and gives advice on dealing with debt and household budgets.

An award of £535,361 means Article 12 will be able to continue to work with young people from the gypsy travellers community and help them access further education, training or employment.

The £408,274 given to the CLAN Cancer Support will provide support to children and their families in Aberdeenshire who are affected by cancer.

A Better Future

The Glenboig Neighbourhood House provides care for pensioners such as meal delivery and befriending in Glenboig and the surrounding villages of Annathill and Greenfoot in North Lanarkshire. It has received £640,966

In Argyll and Bute, the Crossroads Caring for Carers (Cowal amp; Bute) SCIO project helps people aged between five and 24 with their role as carers. They will benefit from £542,643 of funding.

Finally, the Phoenix Community Health Project which helps people in Inverclyde who have experienced long-term mental health conditions will receive £660,092.

Maureen McGinn, the Big Lottery Fund Scotland chairwoman, said: Our Big Lottery Fund support focuses on people and communities in greatest need. With todays awards, six projects across the country will help people facing a variety of challenge move through tough times to a better future.

From connecting with hard-to-reach youngsters and giving them the skills and confidence to move onto training, to providing vital advice and support to tenants at risk of spiralling into debt, this life changing money will make a huge difference to thousands of people across the country.

The Big Lottery Fund is responsible for the distribution of 40% of the money raised by the National Lottery, and invests £650m in projects across the UK every year.


How to balance the books

The household budget can be neglected because of the financial pressures of keeping the farm business up and running. There are also often external pressures to grow the business and invest.

With so many pressures it can be difficult to forward plan or budget or to discuss and make decisions on lifestyle choices.

The MABS experience of working with people who are self-employed – particularly small farmers – is that the costs of running a family home are very often not factored into the financial planning of the business.

To be viable, a farm needs to generate a profit that can sustain the household.

Otherwise farmers can end up borrowing from Peter to pay Paul in an effort to make ends meet and to keep the show on the road.

This approach will, of course, ultimately, end in failure and take a considerable toll on all concerned.

So the important questions that need to be asked are:

what is the business plan for your farm and how is it impacting on your family finances?

what does it actually cost to run your home each week, each month, each year?

how much money does the farm need to generate to sustain that?

Not answering these questions can, and does, have serious consequences often leading to family tensions, misunderstandings, arguments and a breakdown in communications.

Farm Household Budget

In the farming context there are all kinds of budgets. There is grass budgeting, fodder budgeting, dairy budgeting, nutrient budgeting. There should also be a family budget – after all, the primary focus of the farm business is to provide sufficient resources for you and your family.

There is nothing mysterious about drawing up a household budget.

It is simply a plan for the money you have allocated from the business to support your family in the short, medium and the long term and how you intend to allocate it for food, utilities, education, social life etc.

A household budget is important as it will show you and your family:

how much money you have allocated from the business for household expenditure

how much money is going out each week/month/year

how much money you can put aside for pensions, education etc.

how much you can put aside for a rainy day fund.

how much you can offer to those you owe money to

Having worked out a household budget you may realise that you are spending more than you have allocated, www.budgets.ie has some useful examples of budgets for different types of household.

Once you have developed a realistic budget for your household see whether your income from the farm is enough to sustain it.

If it isnt and you find you are struggling to make ends meet, you can:

see if you can allocate more resources from the farm business towards your household expenses

see if you can cut down on any areas of household expenditure without cutting down on basic items such as food, light and heat, social life etc. – unless you feel, in consultation with other family members, that you are spending excessively in these areas.

check that you are getting all that you are entitled to from the tax man, welfare, and other sources in order to increase your income to the business and so have more to allocate to your living expenses.

A great place to get this kind of information is on the Citizens Information website www.citizensinformation.ie

On the MABS website – www.mabs.ie – there is an interactive household budgeting sheet, a spending diary and much more information to assist you in drawing up a budget that is affordable and sustainable.

If you already find yourselves in financial trouble, the panel opposite shows that, with quick action, there are manageable solutions for all situations.

Michael Culloty is the National Development Officer with MABS

Case study…

John and his wife Mary farm 80 acres in the midlands. They have four children still in full time education.

John borrowed over EUR150,000 a few years ago for farm development. They also have a mortgage of EUR100,000 on the family home and debts to the co-op and credit union.

John and Mary came to MABS because they were finding it increasingly difficult to make ends meet.

The MABS adviser helped them to draw up a household budget which looked at their income and outgoings and their priorities were identified. The mortgage arrears was the most urgent priority so the advisor wrote to their lender seeking an affordable resolution of the arrears.

The adviser has also contacted their energy supplier to reach agreement on the repayment of arrears over time as well as writing to the co-op, credit union and other creditors to negotiate affordable and sustainable agreements.

The MABS adviser is also helping John and Mary to decide if any of the voluntary or statutory debt resolution solutions now available would assist them in resolving their financial difficulties.

Dealing with debt

Denial is one of the greatest problems that people face when dealing with debt. The putting your head in the sand approach often leads to bigger problems.

Making contact with those you owe money to and making offers that you can afford are the most important steps in achieving a resolution. On the MABS website there is a step by step guide to dealing with debt. Sample letters to creditors are also on the MABS website (www.mabs.ie).

If you are in mortgage difficulty, MABS now has a dedicated mortgage arrears service to assist you if you have not reached a final settlement with your lenders. This service can be accessed by calling the MABS national Helpline at 0761 07 2000, Monday to Friday from 9am to 8pm.

Debt Solutions

People who are over-indebted or insolvent now have more options than ever before.

Voluntary Debt Settlement Arrangements

These cover debts settled within a seven year timeframe for relevant unsecured debt, under a protocol agreement MABS has with the major banks operating in Ireland, for people who do not qualify or do not want to use the statutory resolution route.

Debt Relief Notice (DRN)

These deal with unsecured debts under EUR35,000 for people on a low income with little or no assets. If terms and conditions are met these debts may be wiped out. This is a free service and is available from your local MABS.

Debt Settlement Arrangement (DSA)

These apply to unsecured debts of any amount. These include credit card loans, personal loans and store cards.

Personal Insolvency Arrangement (PIA)

These cover both secured debts (such as mortgages) and unsecured debts (such as credit card and personal loans).

Bankruptcy

This is now a more fit for purpose solution that is being availed of by growing numbers.

While the insolvency options arent for everyone there is merit in considering if they can assist in removing the heavy debt burden being carried by so many at such a great cost.

The Money Advice and Budgeting service is particularly well placed to assist people in over indebted situations. MABS is free, independent, confidential and non-judgemental. MABS has over 60 offices nationwide.

More information www.mabs.ie

Indo Farming

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