Would You be a Remote Worker to Earn Money For Debt Settlement?

Working remotely has become a fact of life in America. According to a Census report released recently some 13.4 million people or 9.4% of all U.S. employees work from home at least one day per week. This is up from 7% or 9.2 million people in 1997. And it’s thought that by 2020, nearly half of all US employees could be working remotely.

If you’re interested in raising money for debt settlement, you should consider becoming a remote worker. Some remote or telecommuting jobs are full-time, but it’s also possible to find ones where you can work part-time or even have a flexible work schedule.

If you’ve never worked off-site, it’s important to understand the pros and cons of remote work as it’s not for everybody.

The pros

Remote workers don’t have to commute. If you become a remote worker you can kiss that commute goodbye, which will save you both time and money. Plus, you’ll be doing a good thing for the environment.

Working out of your home eliminates those noisy conversations and other distractions that come with working in an office. You would have more uninterrupted spans of time to think or to focus on detail work.

There is a big plus to not having to “get ready” and dressed to go to the office. Some people spend almost an hour every morning just getting cleaned up and made up. Eliminating this translates into the valuable time you could use for something personal or professional.

You will probably have more flexibility, which translates into more time for your family. We know of one work-at-home mom who is just out-of-pocket from 3 PM to 4 PM when she drives her kids to school and sports. That’s an hour she can easily make up at other times.

You may be able to tailor your work schedule to fit those times of the day when you’re most productive. Everyone isn’t productive at the same times of the day. If you’re a morning person or night owl, working remotely could mean working at those times when you are at your peak.

It’s likely you’ll have less face-to-face time with your manager and your coworkers. This can mean that when you do have meetings, time will be used more efficiently. Some of your meetings may even be via the telephone or computer, which can be a real benefit if you’re a bit of an introvert

The cons

Wouldn’t it be great if there were no downsides to working remotely? Unfortunately, downsides do exist.

For one thing, you may not receive a lot of feedback and there may not be much brainstorming. Working remotely can sometimes feel like working in a vacuum. If you need to train someone who’s new in your field, you may find it harder to mentor them.

Sometimes, there is just no substitute for face-to-face interaction. Working remotely can make that difficult, or in some cases, flatly impossible. If you’re in an office and need to ask your manager an important question, all you may need to do is get up and walk to her or his office. When you’re working remotely, you might not be able to reach your manager for several hours or even a day.

Working remotely puts you at the mercy of technology. Your Internet access could go down at a critical time, or you could lose access to servers. You may be constantly required to master new practices and software, which may be complex and difficult to use.

You may be faced with serious issues such as protecting your company’s databases and intellectual property. Worse, yet if your employer hasn’t gone paperless you may have a tough time accessing the information you need to do your job.

You may lose the feeling of being part of a team. Meetings held remotely simply aren’t the same as meetings held in person. You may not have a sense of common purpose, and you may find it harder to establish a good working relationship with a remote team than an in-person one.

You may run into problems of communication, or worse, yet miscommunication that leads to problems and errors. One of your team members could become confused over an assignment and leave you holding the bag.

Finally, some remote workers fall victim to burnout. You may be always on call or never really away from your job. You may find you have less downtime and end up overworking. The difference is that employees that work in an office may stay late, but once they go home, they’re home. For you, home is always your workplace.

In conclusion

Working remotely can be great – helping you earn money for debt settlement. Or it can turn into a living nightmare, as it’s just not for everybody. Make sure to consider the pros and cons you’ve read in this article before signing up to be a remote worker.

Would You be a Good Candidate for Debt Settlement?

There’s a good reason why many people have chosen debt settlement. It’s the only way to pay off debts for less than the amounts owed. In fact, in some cases, people have been able to settle their debts for 40% or 50% of their balances. This would reduce a $2000 credit card debt to less than $1000, making it much easier to repay.

Don’t think this sounds too good to be true because it is true. It’s possible to settle some debts for much less than their balances. But there are some things you need to know about debt settlement before you leap in, and here are five of the most important.

The type of your debts

To be a good candidate for debt settlement most of your debt must be what’s called unsecured debts. Typical of these are credit card debts, past rent, a personal line of credit, department store credit cards, civil court judgments, and collection agency accounts. Federal student loan debts are unsecured debts but cannot be settled thanks to federal law. Private federal student loans can usually be settled. If most of your debt is federal student loan debt, a mortgage, an automobile, boat, or RV loan, you would not be a good candidate for debt settlement. These are secured loans and if you were to default, your lender would simply repossess that car, boat, or house.

How much you owe

You must owe at least $10,000 to be a good candidate for debt settlement, and this is another of those cases where more is better. The reason for this is one of simple mathematics. Debt settlement companies generally charge a percentage of the amount of debt being settled. Let’s say you owe $8000 on credit cards. You might be charged the minimum – 15% – or $1600. If the settlement company were able to settle that $8000 debt at 50% or $4000, you would only save $2800. At that rate, you might be better choosing another form of debt consolidation.

How patient you are

It’s important to understand that if you owe a lot of money, it will take a lot of time to settle your debts. This is true whether you hire a debt settlement company or choose DIY debt settlement. Why is this the case? It’s due to the nature of the beast. Companies will settle only if you can promise to make an immediate lump sum payment. For the sake of an example let’s suppose you owed $6000 on one credit card, $6200 on another, $7400 on a third, and $5000 on a personal line of credit. If you chose DIY debt settlement you would need to save up $2500 or so to settle that $5000 line of credit. Then, you would have to begin saving around $3000 to pay off that first debt.

With a debt settlement company, you would transfer a set amount each month to an FDIC-insured account that you manage. But, once again, you’d need to have $2500 in your account before the debt settlement company could make a settlement offer.

As you can see, debt settlement takes a certain amount of patience because it could take literally years to get all your debts settled. And, in the meantime, some of your creditors may continue to harass you.

You must owe money to the right kind of companies

We’ve never heard of a credit card issuer that won’t settle. But there are some companies that just won’t. If you choose a reputable debt settlement firm, you will be told – before you sign up – if you owe money to any companies that refuse to settle. You’ll then need to do the math to determine if professional debt settlement would save you enough money to justify its cost.

You need to understand its effect on your credit

Make no mistake about this. Debt settlement will hurt your credit. No one knows for certain how it will affect your credit score, but it’s thought it will drop it by at least 80 points. Debts that are settled will stay in your credit files for seven years. Prospective lenders will be less likely to loan you money when they see that you settled debts instead of paying them off in full. You may have a more difficult time getting credit in the future and it will cost you more – in the form of higher interest rates.

In conclusion

Debt settlement has proven to be the best way out of debt for many people. But before you choose this option, you need to consider what you have read in this article. Do the math and make sure it would be your best choice both in terms of money and your credit.

es, You Can Get High on Debt Settlement

How often do you add up your bank accounts and other assets to learn where you stand financially? For that matter, do you bank online? If, so how often do you check your transactions and your balances? We check ours at least once a day and sometimes more often.

If we like the numbers, we feel pretty darn good – at least most of the time.

The fact is, money is like a drug. You’ve probably seen writers use this as a metaphor. However, scientists have found that your brain will react to money in some of the same ways it does to drugs. For that matter, the way your brain responds to different financial circumstances can actually cause you to feel pain or pleasure, get you feeling stronger, or even have you to refuse free money.

Money can be like cocaine

Scientists have used fMRI (functional magnetic resonance imaging) to scan the brains of people while they are thinking certain thoughts or engaging in specific activities. What these studies have done is help them learn more about the effect money has on our brains.

In one experiment, participants were hooked up to fMRI devices while they played a game for money. Believe it or not, the fMRI scans revealed that the way these people’s brains worked was almost the same as those of drug addicts high on cocaine. In fact, they found that even other things like corpses or naked bodies did not have the same effect on people as money. It just got people riled up the way food motivates dogs.

What another study found

Researchers found in another study they could predict that people would choose investments that were riskier based on the activity in their nucleus accumbens.

Two takeaways came out of these studies., The first is that people could use the money for a safer high than drugs. The second is that the “high” you get from money could lead to making riskier choices. In other words, if you’re feeling too excited about a financial decision, slow down, take a deep breath, and think about it.

Why your brain might have you refuse free money

There is a thing called the ultimate game. It’s an experiment with two volunteers. The way it works is that scientists specify a certain amount of money and then offers a portion of it to a “responder.” In the event the person who responds accepts the offer, he, or she gets the money and the person that did the proposing gets the rest. If the responder refuses the money, both get nothing.

Here’s an example of how this works. Let’s suppose that you’re the responder and a proposer offers you $20 of the $100 you get to share. You then have the ability to say yes or no. In the event, you say yes, you get the $20 and the proposer gets $80. If you say no then neither of you gets anything.

There is a thing in game theory that says proposers will offer as little as they can in order to keep more, and the responders will take any proposal rather than getting nothing. However, in practice, proposers usually offer about 50% of the money, and the responders often refuse low offers – especially if those offers are 20% or less of the money. And scientists get the same results worldwide, even if participants are playing for an amount equal to their salaries for three months.

One of the best examples of this is real estate. Sellers often turned down offers for their homes for less than what they feel the homes are worth. But they then end up actually taking less.

Debt settlement and your brain

Most people who find debt relief through debt settlement also report a feeling similar to using drugs. They say they feel elation at the idea of being debt-free, as well as a sort of euphoria. Some actually likened their emotions to being about the same as taking an opioid.

Money can relieve pain

There have been a number of studies revealing that money can actually relieve pain. In fact, there was one experiment that found when people counted money they experienced less pain when they put their hands in hot water afterward. Another study revealed that people felt more pain from the hot water when they first thought about their recent expenses. The researchers also found that counting money lowered the pain of social distress.

So, next time you get a headache or are feeling social distress, try counting money.

In summary

It’s clear from the studies that maybe money can’t buy happiness but it can get you high. And getting high on money is certainly better than getting high on drugs. Plus, it can be a lot cheaper.

Would Debt Settlement be Your Best Path to Debt Relief?

How much would you save through debt settlement? Unfortunately, this question can’t be answered with any certainty. You might be able to settle a debt for 50% of its balance, 60%, 40% of its balance, or some other number.

How long does debt settlement take? This is another question that can’t be answered unequivocally. If you hire a debt settlement company, you could be debt-free in 24 or 48 months. This will depend primarily on how much you owe. Settling debts yourself could take 48 months or longer again depending on how much you owe, but in this case, also on how good a negotiator you are.

What does debt settlement cost?

This is yet another question that’s tough to answer. DIY debt settlement is basically free because you’re doing all the work. Professional debt settlement companies are for-profits and charge for their services. Their fee could be as much as 25% of the amount of debt that’s forgiven. For example, if the settlement company gets $15,000 of your credit card debt forgiven, the fee might be around $3750.

Debt settlement also has a hidden fee. If lenders report your settlements to the credit bureaus, it will have a very negative effect on your credit score. This could cause your score to drop by as many as 80 points. Plus, those settlements will stay on your credit reports for seven years. When prospective lenders see that you have settled your debts, instead of paying them off, they may be less likely to give you more credit.

The first decision

The first decision you’ll need to make is to settle your debts yourself or hire a debt settlement company. DIY debt settlement can save you the most money but you’ll need to be an experienced negotiator and have the cash available for the lump sum payments you’ll be required to make.

Hiring a debt settlement company will save you less money but eliminates the need to have the cash available for those lump sum payments and relieves you of the negotiating process.

Understanding what types of debts can be settled

It’s important to understand the types of debts that can’t be settled. At the top of this list are secured debts like home mortgages and auto loans. Federal student loan debts, spousal support, alimony, child support, back taxes, secured lines of credit, and payday loans also can’t be settled.

Would you be a good candidate for debt settlement?

Just because you have a lot of debt doesn’t mean you’d be a good candidate for debt settlement. Most of your debt needs to be unsecured debts like credit card debts. You must be unable to make even your minimum monthly payments because of a financial emergency. This could be that you lost your job, had a serious illness, or maybe a divorce left you holding the bag for all your debts.

Some companies won’t negotiate

Lenders aren’t legally obligated to negotiate your outstanding credit card or loan balances. However, most credit card companies will negotiate if you can prove you’re having a financial emergency. This comes under the department of half a loaf is better than none. Credit card issuers understand they can often recover more money through debt settlements than other collection methods such as selling your debt to a debt collection agency.

Choosing a debt settlement company

If you decide to use a debt settlement company, it’s important to choose a good one. For example, reputable debt settlement companies operate transparently. An honest one will disclose all its fees and costs upfront before you sign a contract. Its contract will be easy to understand. It will give you an estimate how long it will take to settle all of your debts, and approximately how much money it can save you.

No honest debt settlement company will ask for any money upfront. In fact, if you’re asked to pay a fee upfront, run – do not walk away – as this is the sure sign of a swindler.

A legitimate debt settlement company will have you transfer your monthly payments to a third-party where the money will be held in escrow. And it will send all of its resolution offers to you for your approval before making any payments to your lenders.

Consider the alternatives

Last but not least, be sure to consider the alternatives before choosing debt settlement. It’s possible that you might be better off doing debt consolidation through a debt consolidation loan or consumer credit counseling. The advantage of these options is that they would not damage your credit as will debt settlement. The downside is that neither can do anything to reduce your debt.

In conclusion

f you believe you’re a good candidate for debt settlement and can live with its downsides, it could very well be your best path to debt relief.

Which is a Better Way to Debt Relief — Debt Settlement or Debt Consolidation?

Looking for debt relief? Two popular ways exist to achieve it – debt consolidation and debt settlement. If you’ve been considering your options you may be wondering which of these is best. There is no easy answer to this because each has its pros and cons.

The two forms of debt consolidation

Debt consolidation can be achieved several different ways. One is to get a debt consolidation loan. If you have a good credit of 661 or above, you could do this with a personal loan. However, if you owe more than $10,000, a home equity loan or homeowner equity line of credit might be your only option.

A second way to consolidate debts is by going to a consumer counseling agency where you would be given a debt management plan (DMP). This will consolidate your unsecured debts because you would then make just one payment a month – to the consumer credit counseling agency.

The pros and cons of debt consolidation

The biggest upside of debt consolidation is that it can be done very quickly. A debt consolidation loan can usually be obtained in just a few weeks. Getting your debts consolidated with a debt management plan shouldn’t take much longer.

If you choose a debt consolidation loan, you should have a much lower payment than the total of the payments you’re currently making on your unsecured debts. This is because you would have a lower interest rate and more time to repay the loan. You would also know exactly when you will be debt-free.

Going to a consumer credit counseling agency should also mean a lower monthly payment than the total of your current payments. This is because your counselor will work with your lenders to get your interest rates reduced and any fees waived.

The biggest negative of both these options is that neither can do anything to reduce your debt. If you owed $20,000 on credit cards before debt consolidation, you would still owe $20,000. If you choose a debt consolidation loan, all you do is move your debt from one set of lenders to a new one. With consumer credit counseling you would still owe the same amount of money to the same lenders but would have better terms.

The pros and cons of debt settlement

The biggest upside of debt settlement is that It’s the only way to get debts reduced. For example, you might be able to settle a $5000 credit card debt for $2500 or less. The way this is done is by offering a one-time, lump sum payment to settle the debt.

DIY debt settlement has one big downside. You must have the cash available to make those lump-sum payments. If you’re typical, it could take you two, three, or even more years to accumulate enough money for those payments. Plus, you would have to be a very good negotiator.

These negatives are why most people choose to hire a debt settlement company. This eliminates both the need to save money for your lump sum payments, and to be a skilled negotiator.

Using a debt settlement company also means debt consolidation.This is because you would transfer a set amount of money each month to an escrow account instead, of paying your lenders.

The biggest downside to using a debt settlement company is the cost. Most charge a percentage of the amount of debt being settled. This typically ranges from 15% to 25%. However, if you owe more than $10,000, you should still save money using a debt settlement company.

When you use a debt settlement company, it generally takes from 24 to 48 months to become debt free. Another important con is what debt settlement will do to your credit. Many experts believe it will drop your credit by at least 80 points. It will also leave a stain on your credit reports for seven years. Lenders will be less likely to grant you credit in the future as they will see you settled your debts instead of repaying them in full.

In conclusion

Debt settlement is s better option than debt consolidation for most people because of its ability to get debt reduced. However, the important thing is to weigh each option’s pros and cons carefully so that you choose the one that makes the most sense given your financial circumstances.

How to Know if Debt Settlement is Right For You

Do you feel like you’re drowning in debt but are unwilling to file for bankruptcy? One good option would be debt settlement. It wouldn’t be as good as just repaying your debts, but it can give you a good, second chance.

If you’re unfamiliar with debt settlement, it’s where you negotiate with your creditors to get them to agree to let you pay less than you owe by offering a lump sum payment. While it’s possible to negotiate settlements yourself, most people choose to use a debt settlement company. The major reason for this is that it eliminates the need to have the cash available to make any lump sum payments. Instead, you would make monthly payments to the settlement company until enough cash has accumulated in your account to settle your debts.

What else you need to know about debt settlement

Debt settlement definitely has some downsides. For one thing, it will have a negative impact on your credit. Any time a lender agrees to settle a debt, a notation will be made in your credit files that the debt was settled for less than you owed. This will stay on your credit reports for seven years. In addition, your credit files will contain all those missed and late payments you had before your settlements so that your credit score will basically hit rock bottom.

Would it be right for you?

Before choosing debt settlement there are some questions you must ask yourself. The first question is this a last ditch effort? In other words, debt settlement is for people who are so far in debt they see no way out. Debt settlement should be your last alternative instead of something you choose because you think it’ll save you a few dollars. In other words, to be a good candidate for debt settlement you must be at the point where you truly can’t make any payments on your debts no matter how frugal you try to be.

Second, you must be way behind on your bills. A company will never agree to a settlement if it thinks that it can eventually get the full amount you owe. It can be really frustrating because, if you’re still able to make at least some payments, you probably won’t be granted your request for a settlement. Many creditors won’t settle a debt until it’s close to a default.

Can you take what it will do to your credit? Debt settlement we’ll have a very negative effect on your credit reports and your credit score. Think about the totality of your financial situation, and what debt settlement would do to it. Of course, your credit may already be shot if you’re carrying big balances and are way behind on your payments. While your credit score will plummet as a result of debt settlement, at least you would be debt-free again and can begin to rebuild.

Fourth, can you trust the debt settlement company? You’re in a situation where you’re desperate and vulnerable, and some less-than-legitimate companies will try to take advantage of this. In fact, you need to practice extreme caution before employing any debt settlement company.

Red flags to watch out for

The first big red flag is if the debt settlement company contacts you. Reputable settlement companies just don’t do this. Second, are you asked to pay any upfront fees? The FTC made upfront fees illegal in 2010. But there are still companies that will try to get you to pay them.

The second red flag is if the company seems anxious to take your case right away. A reputable debt settlement company won’t take just anyone. It will evaluate your situation to make sure you would be a good candidate for debt settlement. It may even help you develop a budget so that you’ll have the maximum amount of money available for your settlements.

Is the company licensed or located in the state you live in? Has it been in business for only a few months? Does its website fail to include an address? Are there multiple names on its paperwork? All these are things that can tell you something just isn’t right, or maybe your gut tells you something’s wrong. In either event, you should run the other way.

In conclusion

Don’t choose debt settlement unless you can answer “yes” to the first four questions posed in this article. Beyond this, it’s important to understand that debt settlement can be a long, complex process. If you don’t have the patience, temperament, and organizational skills to deal with this process, you’d be better off hiring a debt settlement company.

Why Debt Negotiation May Not Help You With Student Loan Debts

Few things in life are more exciting than graduating from college. You get to toss your cap in the air, walk across a stage, get cheered, and someone hands you a diploma. You’ve survived four years of all-nighters, tough courses, and boring instructors. It’s a time that definitely calls for a celebration.

But then, three months later, things don’t seem so rosy. You’ll need to start paying back those student loans, and that can be a real burden. If you’re typical, you graduated owing $20,000, $30,000 or more. You’ll have 10 years to pay back the money and that means 10 long years of big monthly payments.

When debt negotiation can help

If you have private student loans or loans from a bank or an online lender, you may be able to negotiate them. But it won’t be easy. Your lender’s number one objective is to collect every dollar you owe. The first thing it may do is offer you a sort of timeout where you would not be required to make your payments for a period of time. Or, it may agree to temporarily reduce your payments. Unfortunately, all these things do is just sort of drop kicks your problem into the future.

If you want to settle the debt, you’ll have to make an airtight case. This means you’ll need to prove you’ve shrunk your budget as much as possible, and have eliminated all discretionary spending. You may have to provide the lender with your bank and credit card statements to verify your situation.

It will be a tough sell, but if you stick to your guns you may be able to negotiate a good settlement.

When debt negotiation can’t help

Federal student loans can’t be settled. It’s that simple. They can’t even be discharged in bankruptcy. Several ways exist to get them discharged or forgiven but never settled.

The good news is that options are available that could make repaying that money much less painful. When you graduated, you were automatically put on the standard or 10-year payment plan. This means your monthly payment will be 1/120th of your total debt, plus interest. But you don’t have to stay on that plan. Several other programs tie your payments directly to your discretionary income.

PAYE and REPAYE

The two most liberal of the federal payback programs are PAYE and RRPAYE.

PAYE or Pay As You Earn is for Direct Subsidized and Subsidized Loans, and Direct Plus Loans. It caps your maximum monthly payments at 10% of your discretionary income. Your payments would be recalculated each year based on your updated family size and Income. However, to be eligible for this program, you must be a new borrower on or after October 1, 2007. Plus, you must have received a disbursement from a Direct Loan on or after October 1, 2011.

REPAYE or Revised Pay As You Earn offers the same benefits as PAYE, with the payments capped at 10% of your discretionary income. The difference between it and PAYE is that anyone who got a direct loan is eligible for this plan.

Both of these programs would mean lower monthly payments at least initially. Before you sign up for either of them, think seriously about your future income. If you’ve chosen a career such as teaching or social work where your income will remain relatively stable, then one of these programs could make good sense. But if you’ve chosen one where you believe your income will increase substantially over the years, you might be better off choosing another option.

A third option

There is a third option that’s been gaining in popularity – a debt consolidation loan. It can be used to pay off both private loans and federal student loans. One of these loans could make sense if you have high-interest loans. The interest rate on this type of loans is at an almost all-time low. Getting one with a lower interest rate would mean lower monthly payments. You could also negotiate the term so you’d have the loan paid off either faster or slower – depending on your financial circumstances.

In summary

Don’t get discouraged about your student loan payments. As you have read, options exist that could make it much easier to repay the money. Get more information about the ones discussed here. It’s certain you’ll be able to find one that will make repaying those loans a lot easier and much less painful.

Should You Settle Zombie Debt?

You’ve undoubtedly seen at least one movie or watched a TV program about zombies. Whether they’re called zombies or the walking dead they’re all the same. They’re people who had died but then, through some miraculous happenstance, were able to force their way out of their graves to attack the living.

So, what is zombie debt? According to the website Investopedia, zombie debt is an old bad debt that you had forgotten you owed in the first place. It’s likely that whatever company you owed the money to initially has given up on it. A debt collector may have been bought your debt at a very low price and is now attempting to recover the money you owe. In other words, the debt has risen from the grave and is back to haunt you.

How a debt becomes a zombie

Let’s suppose you owed $2000 on a credit card. The card issuer made a number of attempts to collect the money. However, you either didn’t have enough money to pay or settle the debt or maybe you just chose not to. After three or four months of harassing you, the credit card company gave up and “charged off” your debt, which took it off the company’s books. After it’s six years old, the lender will stop trying to collect on your debt altogether because it’s then passed the statute of limitations. This means you’re no longer legally required to pay it.

Comes the zombie debt collector

In other cases, the lender will bundle up all its zombie debts, and sell them to a debt collector for pennies on the dollar. In fact, most collectors pay about 3% of the amount owed or $30 for a $1000 debt. Because they pay so little for these debts, they can make money if they collect just a fraction of what’s owed.

When you’re contacted

Let’s say that $2000 credit card debt was a number of years ago, and you’d totally forgotten about it. But a debt collector calls, out of the blue, and insists you pay it off. Don’t panic. It’s likely that your state’s statute of limitations has expired, and you’re no longer required to pay it.

First, ask the debt collector to provide written proof of its validity, as well as the name and address of the original creditor if the debt was resold. It should also include the last day there was activity on the debt, which is usually the date of your last payment. You have a legal right to this information per the Fair Debt Collection Practices Act (FDCPA).

Next, check with your state to determine its statute of limitations on debts. It’s five years in most states. If this is the case where you live, and the last activity on your debt was more than five years ago, you’re not legally required to pay it.

If the collector continues to harass you

Some unscrupulous collectors will continue to harass you. They may try to motivate you into paying the debt by using guilt, installing fear, or by taking advantage of your lack of knowledge. Their hope is that you’ll eventually give in, and settle the debt just to get rid of them. Never agree that the debt is yours. Also, never agree to make even a small payment to settle the debt. This would restart the clock on the statute of limitations so your debt will be valid once again, and you will owe it. The debt may even show up again in your credit reports.

To stop the harassment

If the collection agency continues to harass you, write it a letter that it cannot contact you again unless it’s by letter, or if it’s going to sue you. Assuming the debt is beyond your state’s statute of limitations, the collection agency probably won’t pursue any legal action against you.

Another important FDCPA Benefit

In addition, to protecting you from predatory debt collectors, the FDCPA offers at least two other important benefits. For one thing, you can’t be sued over any debt that’s been inactive for at least six years. And after seven years, the debt must be taken off your credit reports.

In Conclusion

if you receive a call from a debt collector regarding a very old debt, don’t panic. The odds are you’re no longer legally responsible for it. Check your state’s statute of limitations. If you find the debt has passed the date of its last activity, relax. You’re no longer legally responsible for paying it or settling it.

Can Student Loan Debts be Settled?

Borrowing money to pay for your college education seemed like a good idea at the time. And it was very easy. But now you’re out of school and those student loans are feeling more and more burdensome. You’re not alone, either. According to the Department of Education, more than one in seven people with federal student loans default within three years of when they began repayment.

You definitely would like to get out from under that burden, and you’ve heard of a thing called debt settlement. But can student loans be settled?

The simple answer to this is “maybe” and “no.”

The” maybe”

You might be able to settle your student loan debts if they are private loans. In other words, if you borrowed the money from a bank, a credit union, or some online source, you might be able to settle it. However, your lender(s) isn’t going to agree to settle just because you ask nicely. You need to be able to make the case that you’re having a financial hardship. You will need to show your current budget. You should also have a summary of your finances including all of your income, your other debts, and any liquid assets.

A lump sum payment

It’s unlikely you’ll be able to settle that loan unless you can offer a lump sum payment. For example, if you owe $21,000, you could offer a lump sum payment of $10,500 to settle the debt. This is where the “maybe” comes in as maybe you could offer a lump sum payment and maybe you couldn’t. If not, it’s very unlikely you’ll be able to settle that debt.

The “no”

The “no” is federal student loans as in “no” they can’t be settled. In fact, they can’t even be discharged in bankruptcy.

What you could do is change your method of repayment. The Department of Education now offers four income-based repayment plans. The most lenient of these is REPAYE or Revised Pay As You Earn. It caps your monthly payments at 10% of your discretionary income.

The second income-repayment plan is PAYE or Pay As You Earn. It also generally caps your payments at 10% of your discretionary income but never more than the standard 10-year repayment plan amount.

The third is Income Based Repayment or IBR. It also generally caps monthly payments at 10% of your discretionary income – if you’re a new borrower on or after July 1, 2014.

Finally, you could choose ICR or Income Contingent Repayment. With this plan, your payments would be the lesser of the following – 20% of your discretionary income, or what you would pay on a repayment plan with a fixed payment over the course of 12 years adjusted according to your income.

What this translates into

Here’s an example of what REPAYE can mean. Let’s suppose you owe $30,000 in Direct Unsubsidized loans and have a starting income of $25,000. In this case with REPAYE, your monthly payment would be $60. The term of the loan would be 20 years and you would end up paying a total of $32,358. If you’re a new borrower and choose IBR and PAYE, your monthly payment would also be $60, your term would be 20 years, and you would end up repaying a total of $39,517.

The big don’t

The big don’t is don’t default on your federal student loans. And, unfortunately, it’s easy to do this. In fact, you technically become in default the first day after you miss a payment. However, monthly default doesn’t occur until you’ve failed to make a payment for 270 days.

The consequences can be severe

The reason you don’t want to default on a federal student loan is because the consequences can be severe. For one thing, your entire unpaid balance and any interest will become immediately due and payable. Your loan will be assigned to a collection agency, and you’ll lose your eligibility for any more federal student aid and for forbearance, deferment, and other repayment plans. Your credit rating will be seriously damaged, and you may lose your federal and state income tax refunds. Worst of all, your employer could be required to withhold money from your paychecks and send it to the government.

In conclusion

If you have student loan debts, the best thing you can do is repay them. If they were private loans, you might be able to settle them, but only if you’re prepared to make a fairly hefty lump-sum payment. And while federal student loan debts can’t be settled, repayment options are available that might make it easier for you to pay them off. But make sure you do something or you could go into default, and that is something you definitely don’t want to happen.

Try this Revolutionary New Method to Pay Off Serious Credit Card debt

If someone asked you to picture your debt, what would you see? Would you picture it as a prison cell, an incredibly steep mountain, or maybe a huge pit?

Regardless of how much debt you have, or how you picture it, one thing is certain. You’re desperate to get rid of it.

So, What could you do?

The two proven methods

Until recently, only two proven ways to pay off debts existed. They were the snowball method and the avalanche method.

The way the avalanche method works is that you make a list of your debts in order from the one with the highest interest rate down to the one with the lowest. You then put all your efforts towards paying off the debt with the highest interest rate. This is because that will save you the most money. Once you have it paid off, you move on to the debt with the next highest interest rate, and so on.

The other way, the snowball method, is where you list your debts from the one with the lowest balance down to the one with the highest. Then, instead of focusing on the debt with the highest interest rate, you put all of your energy towards paying off the debt with the lowest balance. The psychology behind this method is that it should be relatively easy to pay off that first debt, which will give you motivation (as well as extra money) to begin paying off the debt with the second lowest balance and on and on.

The problem with both these methods

Unfortunately, both of these methods share a common problem. They rely on you budgeting money every month to make the minimum payments on all your other debts while throwing extra money at the debt you prioritized

This can be very taxing financially as both require you to come up with large payments every month.

Introducing the snowflake method

An alternative to both the snowball and avalanche methods was recently developed – the snowflake method.

The way it works is that instead of having to worry about coming up with those big payments every month, you just find ways to shave some money off your everyday spending. You then use this money to make small, frequent payments on your credit card debt. You may feel those small amounts are microscopic when compared to your overall debt balances. But over time, those little payments will save you hundreds of dollars and knock months off your repayment term.

Of equal importance, you can use the snowflake method in combination with any other repayment options.

Apply those everyday savings to your debt immediately

At the heart of the snowflake method is applying those everyday savings to your credit card debt immediately. As an example of this, let’s suppose your weekly budget for groceries is $50. However, thanks to coupons you only spend $46 this week. With the debt snowflake approach, you’d take the surplus or the $4, and immediately make a payment on your credit card account. Then, do this every time you save some money. Instead, of spending $60 for a haircut, go to Great Clips for $25. Then, put that extra $35 towards your debt the minute you get home.

Does this really work?

If you visualize your debt as that very steep mountain, the idea of paying an extra $4 or $5 here and there might seem kind of ludicrous. But, believe it or not, those little snowflake payments can end up having a big impact.

Here’s an example. Let’s suppose you have a credit card with a balance of $3000 that has an APR of 15%. Assuming your minimum monthly payment is $100, it would take you 38 months to pay off the debt and would cost you $784 in interest.

If you could save four dollars a week by clipping coupons and apply that extra $16 a month to your credit card debt, you would be able to pay it off in just 32 months, and you’d pages $647 in interest. As you can see, applying those snowflakes, or small savings, each month would get that debt paid off a full six months earlier.

In summary

If you’re trying to pay off a mountain of credit card debt, it can be unrealistic to try to find large sums of money to repay your balances. This is why the debt snowflake method can be effective. If you’re diligent about applying those little daily savings to your credit card debt, you’ll both pay off your balances sooner and save a lot of money to boot,