8 Important Questions to Ask Any Debt Settlement Company

There are a number of ways to manage debt. But there is only one way to get debts actually reduced and that is to settle them by offering to make a lump sum payment for less then you actually owe. This option has become increasingly popular since the Great Recession. In fact, it has become so popular that many of the major lenders have waiting lines of people queued up to discuss debt settlement.

Why people choose to hire a debt settlement company

You could settle your debts yourself. This is called DIY debt settlement. However, most people choose to use a debt settlement company. There are several reasons for this not the least of which is that most people don’t consider themselves to be good negotiators. Second, if you choose DIY debt settlement you’ll need to have the cash in hand to make the requisite lump sum payments. Hiring a debt settlement company eliminates this because you’ll be sending it a fixed payment each month until it has settled all of your debts to your satisfaction. Of course, debt settlement companies are for-profit organizations and charge fees for their services. This is why it’s critical that you ask any debt settlement company these questions before signing an agreement.

Are you a member of the American Fair Credit Counsel?

Reputable debt settlement companies belong to this organization. It’s the watchdog of the settlement industry and its members must follow a rigid set of guidelines that include proper disclosure for consumers and maintaining practices to maximize consumer experience and completion rates.

How do you collect your fee?

No reputable debt settlement firm will try to collect its fee upfront. In fact, this practice has been banned by the Federal Trade Commission. A reputable settlement firm will determine its fee (usually 15% to 25% of the total amount of your debt) and then add a percentage of it to each of your monthly payments. For example, let’s say you owe $18,000 in credit card debt and the settlement company charges you 20% or $3600. If your program is for 24 months, then the settlement company would add 1/24th of that $3600 or $150 to each of your monthly payments. However, it won’t collect the $3600 until it has settled all of your debts. This actually amounts to a 100% satisfaction guarantee because you could drop out of your program at any time and it won’t have cost you a cent.

Have you had many client complaints?

Virtually every debt settlement company has had some client complaints as that’s just the nature of the business. However, the good ones won’t have very many of them. The way you can determine this is by searching for the company on the BBB (Better Business Bureau) website to see the number of complaints the company has had and how many were closed (successfully resolved). If the company has had numerous complaints and has a short history then it’s one you should definitely avoid.

Are you a member of the International Association of Professional Debt Arbitrators?

Members of this association have passed a training and certification program. This program requires participants to read and understand the Fair Debt Collection Practices Act and have had training in negotiating techniques, proper ways to communicate with lenders and budget analysis.

What‘s your right-of-recession period?

Right-of-recession is the amount of time you have to cancel out of your agreement after you’ve signed it. The purpose of this is to give you time to review your paperwork one last time and ask any questions before committing to a settlement program. For example, if a debt settlement company has a three-day right-of-recession and you sign an agreement on February 5 you would have until February 8 to cancel without any cancellation fees or penalties. Naturally, the longer the right-of-recession the better.

Are you a full service company?

Some so-called debt settlement companies are basically marketing organizations. Once you sign an agreement with them your file will be immediately transferred to a second company that handles all the negotiations and provides the customer support. This second company may have so many clients you have a big problem just trying to contact it. In comparison, debt settlement companies that are full service will handle every aspect of your case from negotiating to consulting and client support.

Will I be able to access my account online?

A reputable settlement firm will operate very transparently so that you’ll be able to go online and see exactly what work has been performed on your behalf. You should be able to see recent activity and progress as well as all settlement offers that have been made and the responses from your creditors. And, of course, you should be able to send emails directly to the company’s customer support department.

6 Surprising Truths About Getting Out of Debt

You’ve made the big decision. You’re finished struggling with your debts. You’ve taken the pledge to do whatever’s necessary to become debt free. We say, “Good for you!”. You have a journey ahead of you that will be bumpy at times. But it will be a bit easier if you understand in advance these six truths about getting out of debt.

Changing can be difficult

Unfortunately, there’s no way to get out of debt without making some serious changes in your lifestyle. You will need to begin budgeting and tracking your spending so that you can see where your money goes each month. It’s likely that you will need to forget all about that muffin at work and those daily drive-through lattes. Instead of going to a decent restaurant for lunch you may have to go to Taco Bell or brownbag it. Or it might require you to make even more substantive changes. You may have to cut the cable and find inexpensive ways to stream your entertainment. If you have memberships in health clubs, salons or spas you may have to cancel them. You may have to dramatically slash your budget for eating out and for entertainment. But remember, you’ve made the big decision. You’re serious about getting out of debt so you’ll need to embrace these changes. There may be times when you’ll find this hard to believe but change is good when it brings great new things into your life.

You will need to learn the true necessities

Things we do over and over begin to feel like necessities. But upgrading to the latest iPhone is not a necessity. Buying a newer car is not a necessity. Trips to the gym are not a necessity. And upgrading your wardrobe every year is not a necessity

The fact is the only real necessities of life are food, water, oxygen, basic clothing and shelter. The faster you accept this the faster you will get your debts paid off. In addition, once you understand this, the pressure to always be upgrading and constantly buying stuff will go away and you’ll probably find your life to be less stressful and more peaceful. We drive a 12-year-old car that runs beautifully. Every time we step into it we feel at peace knowing that it’s totally paid for.

Not everyone will be supportive

This may be hard to believe but not everyone will be happy about your quest to become debt free. While most friends and family members will applaud what you’re doing, there are others that won’t be very supportive. In most cases these will be people that don’t have to worry about debt. “What do you mean you can’t go to the movie with us? It’ll only cost you like $30.” When you hear comments like this, stay strong. Keep reminding yourself that what you’re doing is right for you and your family.

Staying on track can be tough

One of the basic truths about getting out of debt is that it requires perseverance. You will run into roadblocks and setbacks. Maybe your hot water heater will quit working or you need to replace your roof. There may be unexpectedly big medical bills or there may be times when you just fall off your budget. When you run into issues like this you basically have two choices. You can either give up and go back to managing your money with no thought about your future or you can buckle down, persevere and keep going. As Newt Gingrich once said, “Perseverance is the hard work you do after you get tired of doing the hard work you already did”. And this is no truer then when it comes to getting out of debt.

You may have to face some underlying issues

You may find, as many people have, that accumulating debt is not just about the money. In many cases there were underlying reasons why you got into debt in the first place. Was it because you were afraid to disappoint your partner or your family? Were you trying desperately to keep up with the lifestyles of your friends or family members? Whatever were the underlying issues as to why you got into so much debt you need to face them, which will require courage on your part. However, if you can successfully overcome those issues you will permanently eliminate the effects they’re having on your life.

It will feel much better than you can even imagine

When you get all those debts paid off you may, for the first time in your life, be able to quit worrying about money. Living this way can be truly amazing. Just imagine how it will feel paying your bills every month on time because it’s simply something you do. There will be no more sleepless nights thinking about how you’ll be able to cover all of your bills. You’ll always have enough money to cover the necessities of life with money left over for those things that are not truly necessities. And wouldn’t this all be pretty great?

The True Facts You Need to Know About Debt Settlement

Debt settlement has become a very popular way to get debts paid off – especially since the Great Recession. The best part of debt settlement is that if you’re a good negotiator you might be able to get your debts reduced by 40% or even 50%. Unfortunately, there is a serious downside to debt settlement. You must have the cash in hand to pay for any settlement you negotiate. There are two reasons for this. First, it’s a great negotiating tool. If you can tell a lender, “I can only pay you 50% of what I owe you but I can send you the money tomorrow” you can almost bet your offer will be accepted. Second, if you can’t pay for the settlement immediately there’s actually no reason for the lender to settle with you.

It will be a very lengthy process

If you’re so seriously in debt you’re considering debt settlement you need to know it will likely be a lengthy process. Let’s say for the sake of the example that you owe $6500 to one credit card company, $4000 to a second, $3500 to a third and $6000 on a personal line of credit for a total of $20,000. If you were able to settle those debts for fifty cents on the dollar you’d still need to have $10,000. Since it’s pretty unrealistic to think you’d have that much money in one lump sum you would need to make a plan to pay them off one at a time, which will likely take you two or even three years.

You may have to get in line

Debt settlement has become so popular that when you contact a lender you may be told that you have to get in line in order to negotiate with someone. Or you may be told to call back in a month or two. Or even worse you might be told, “we’re just not doing debt settlement at this time”.

Your interest charges will continue to accrue

Your lenders won’t stop charging you interest all the time you’re working on paying off that first debt. So you’ll be incurring interest on all the others and it will continue to compound – even if you make their minimum monthly payments. Going back to that hypothetical $4000 debt to a second credit card company at 18% interest if you make a minimum payment of $120 a month your debt would be increased $1,394.68 after just two years and you would now owe $5394.68.

You would need to be a very good negotiator

When you first call a lender it’s unlikely you’ll be talking to someone with the authority to negotiate with you. It may take you some time to work your way up through the company’s customer service telephone tree to get to someone who does have that authority. And that person won’t be your friend. Her or his job is not to give away the company’s money. This person will be a very experienced and tough-minded negotiator. If you want to settle that debt for, say, 50% of what you owe you will need to be equally tough-minded and a very good negotiator yourself.

You need to prove you’re having a financial emergency

No lender will agree to settle a debt just because you ask nicely. You must be having a financial emergency. This could be that you lost your job, had a divorce, there was a death in the family or you had suffered a serious illness. Whatever the case you must have the documentation available to prove your financial emergency. This could be pay stubs, a termination notice, your divorce decree or a pile of medical bills.

Why people choose debt settlement companies

Now that you know the true facts of debt settlement you should be able to understand why so many people choose to hire debt settlement companies. First and probably foremost, using a debt settlement company eliminates the need to have lump sums of cash available to pay for the settlements. Instead, you will pay the debt settlement company a set amount each month.

The debt counselors at debt settlement companies such as National Debt Relief are trained and experienced. They are almost always able to negotiate better settlements than people can themselves. Equally important, they have excellent working relationships with all the major lenders so can get easier access to the right customer service people.

Finally, using a debt settlement company eliminates the need to prove a financial emergency.

How much do debt settlement companies charge?

Debt settlement companies are for-profit organizations. The reputable ones charge a fee that is typically a percent of your total debt. They divide this fee into the number of months it will take them to settle your debts and then apply that amount to each of your monthly payments. However, they typically do not collect that money until they have settled all of your debts. This essentially means a 100% satisfaction guarantee as you could pull out of your plan at anytime and not pay the settlement company a single cent.

Should You Try to Buy a Home With a Zero Down Payment?

If you are a veteran, you could get a VA loan with zero down. But a better question than should you try to buy a home with zero down is would you be able to keep it? Some people have described a house as a hole in the ground you continually shovel money into. And there’s more than a grain of truth to this. You could move into that zero money down house only to find two months later that your water heater had failed or you needed an expensive air-conditioner repair.

Make a five-year plan

A better idea than trying to buy a home with zero down would be to make a five-year plan to save enough for a really decent down payment. This might require you to make some sacrifices. You will need to determine your unnecessary expenses and then cut them out. What some people have done is consider themselves broke. When you do this you will stop all of that eating out and get rid of that expensive cable TV. There are a number of ways now to get your entertainment without spending $80 or hundred dollars a month. The DISH Network offers a plan called Sling TV where you can get 20+ channels including ESPN, AMC, TNT and Disney for just $19.95 a month. If you love movies you could add Netflix for $9.95 a month and get virtually all the entertainment you could want for less than $30 a month. Amazon Prime is also a good bargain as you can now subscribe to its Prime Membership Plan and get thousands of movies and TV programs for $11a month instead of having to pay $99 in one lump sum.

Get rid of your credit card debt

Americans are now carrying an average of $5700 in credit card debt. We hope you’re doing better than that average. But if you’re really serious about saving enough money for a down payment on that dream house you need to first get rid of your credit card debt. Since it’s unlikely you’ll be able to pay it off all at once you will need to create a plan. One of the most popular ways to repay debts is through a strategy called debt settlement. This is where you contact your lender’s and offer to pay off – or settle – your debts for less than you owe. If you’re experiencing a true financial emergency many lenders will agree to settle with you. And if you’re a good negotiator you might be able to get your debts whittled in half. Of course, you will need to have the cash available to pay off your settlements. Otherwise you will need to either find a different strategy or hire a debt settlement company.

Develop a new way to look at your spending

We read recently about a new way to look at expenses that made a lot of sense to us. Let’s say you get a drive-through coffee for $2.95. Since you didn’t really need the coffee or could’ve bought coffee with you from home that would be an unnecessary expense that you could have avoided. That $2.95 is now gone forever and you are now $2.95 behind where you were before and need to make another $2.95 to replace it. This means you are really out $5.90. That’s the $2.95 you just spent plus the future $2.95 you will have to earn to replace it. That’s the only way you will have the same amount of money that you had before you spent the $2.95.

Calculate the true cost of your spending

If you use this new way to look at your spending on unnecessary items, you should be able to cut out a lot of them. Take that $80 cable bill we mentioned earlier on. If you view $50 of it as unnecessary spending that’s really $100 a month you’re out of pocket or $1200 a year. Put that $1200 in a savings account and after five years you’d have $6000, which might be enough all by itself for your down payment. If you were able to find another $100 a month in unnecessary spending and add it to your savings account, you’d have $12,000 after five years. That should be enough to cover your down payment with money left over for those little unexpected expenses of homeownership.

Those sacrifices won’t look so much like sacrifices

If you can change your thinking and view your expenses as we have suggested – and learn to think long-term – the sacrifices you’re making now may not seem so much like sacrifices. Just try to think about cutting out those unnecessary expenses and saving the money as stairs to a better future and you’ll definitely have a better future to look forward to.

Is It Possible to Fit the Best Financial Advice on a 4”x6” Index Card?

Helaine Olen and Harold Pollack published a book earlier this year titled, “The Index Card,” subtitled “Why Personal Finance Doesn’t Have to to be Complicated”. The way this book came about is that Harold was challenged to put his best financial advice on a single index card. Believe it or not, he was able to do this. And from this emerged The Index Card Challenge where people were challenged to get their best personal finance advice on a 4″ x 6″ index card.

The most important part

The most important part of this book’s title may not be “The Index Card”. It may be “Why Personal Finance Doesn’t Have to Be Complicated”. That’s because the truth of the matter is that many people tend to over complicate personal finance when in fact it can be pretty simple. For example, the first piece of advice on Pollack’s index card is one that just makes common sense and that most of us already know – which is max out your 401(k), especially if your employer matches some percentage of your contribution.

How much to save?

If you sat down to write your financial advice on an index card probably the next thing you would add is to save some percentage of your money. Prof. Pollock suggest 20% though many people would say 25% as this would get you to retirement much quicker. What would you advise about buying stocks? This is another area of disagreement. Prof. Pollock advises you to never buy an individual stock because it‘s really hard to pick winners. Plus, the person on the other side of the table knows a lot more about that stuff that you ever will. If you agree with Pollock your financial advice might be to buy inexpensive, well-diversified mutual funds such as those offered by Vanguard.

Another one that just makes common sense

What would you tell one of your children about credit cards? You’ll be doing him or her a great disservice unless you write down on your index card, “pay your balance in full every month”. You may have read the famous Carl Sandburg line that “the fog comes in on little cat feet”. That was his way of saying that fog can creep up on you practically unnoticed. Unfortunately, the same thing is true of credit cards. If you’re not careful and fail to pay off your balance at the end of every month you could be deep in debt before you really notice it. And if you carry a balance forward you will quickly fall victim to the power of compounding interest, which is when you pay interest on interest. What’s even worse is if you pay only the minimum amount on a credit card debt.

Tax advantaged savings

If you’re not aware of tax advantaged savings plans you may not have written anything about them down on your index card. But plans such as a Roth IRA and a 529 account are always good ideas. Roth IRAs are tax advantaged in that you pay income tax on the money when you deposit it but it’s tax-free when you turn 55 1/2 and begin withdrawing it. In addition, any investments you make within a Roth IRA are also tax-advantaged. If you are self-employed you might open both a Roth IRA and SEP-IRA. SEP stands for Simplified Employee Pension Plan. It’s a variation of the traditional IRA as a way for employers to provide themselves with retirement benefits as well as any employees. One of the most significant advantages of a SEP is that if you are self-employed with no employees there are no significant administration costs. And since a SEP is a type of IRA you can invest your money the same way as with a traditional IRA.

Watch out for fees

The problem with fees is all they do is consume money you should be saving for retirement. You should also write down on your index card to avoid what are called actively managed funds as they have the same downside. More and more people are now using a Robo-advisor such as Betterment to manage their investments as the fees it charges are much less than you would pay a financial advisor. For example, as of this writing Betterment’s fee for managing $100,000 was just 0.15%. Since Betterment doesn’t have a minimum investment you could invest less than $10,000 and your management fee would only be 0.35% or $3 a month.

Don’t buy stuff

Pollock did not include this on his index card but it’s one you might put on yours. It’s don’t buy stuff, buy experiences. Stuff tends to get old and wear out or go out of fashion. In comparison, experiences can last a lifetime. For example, you could spend $1000 on a big, wide screen HDTV only to want to replace it in a few years with a 4K HDTV. Or you could spend that $1000 on a week-long camping trip in the high Sierras and have memories that would last forever.

See how simple this is?

You could spend countless hours reading books on personal finance or as you have read, you could just sit down and write your best advice on a 4” x 6” index card. Personal Finance is actually pretty simple. All it really requires is a little thought, some common sense and, yes, a 4”x 6” index card.

6 Half Truths and Straight Out Myths About Settling Credit Card Debts

Do you feel as if you were trapped under a mountain of credit card debts? If it makes you feel any better, you’re not alone. The average American household now owes $15,762 in credit card debt and this number gets higher almost every year., If you spend more than a few minutes on the Internet you may come away believing that it’s very easy to settle credit card debts. The promises you read can seem very appealing. I mean, who wouldn’t want to see their credit card debts slashed by 50% or even 60%?

Unfortunately, the Internet is full of information about credit card settlement that can be either half-truths or downright myths. It’s important that before you rush off and start contacting your creditors you know what is the truth about credit card debt settlement.

You need to pay someone to settle your credit card debts

This is sort of a half-truth in that there are instances where you could be better off hiring someone to settle your credit card debts than trying to do it yourself. If you are seriously mired in credit card debts and don’t consider yourself to be a very good negotiator than having an experienced one on your side could help. For that matter, there are so many people now trying to negotiate their credit card debts that when you contact one of your credit card issuers you could be told to “get in line” and the company’s attitude may be, “Sure you want to negotiate your debt and so does everyone else”.

You can get your credit card balances cut in half for any reason

This one is a myth. No credit card issuer will agree to cut your balance in half just because you ask. What you need to be able to prove is that you are having a serious financial hardship, which is why you have been unable to pay your bills. This could be due to a nasty divorce, a serious illness, a death in the family, because you lost your job or were forced to take a serious cut in pay. And you need to have the documentation to prove that financial hardship as no credit card issuer will just take your word for it.

If I hire a debt settlement company I will have to pay all the costs up front

This is another half-truth in the sense that if you choose the wrong debt settlement company you could be required to pay its fees up front. However, that’s not how legitimate settlement companies work. They will provide you with a program upfront that will include a monthly payment. And part of this payment will be to cover their fee. However, they won’t actually collect that money until they have settled all of your debts to your satisfaction. Your payments will actually be deposited in an escrow account that you control so no money can be withdrawn without your approval.

My credit score won’t be damaged by debt settlement

If a debt settlement company promises that credit card debt settlement will have no effect on your credit score run, do not walk away. That’s a total myth. While debt settlement will not damage your credit score as much as would a bankruptcy it will have a definite effect. This is because debts that have been settled are not reported to the credit bureaus as paid in full. They are reported as “settlement,” “settled”, or “settled for less than full amount”. Of course, if you’re so far behind on your credit card payments that you’re seriously considering debt settlement your credit score has probably been trashed already.

If you don’t settle a debt it will stay with you forever

Here’s another definite myth. There is a statute of limitations on collecting debts and credit card debts will fall off your credit reports after seven years. And once that statute of limitations has kicked in those debts are no longer enforceable in court. This means that if you receive a call from a debt collector regarding a debt from 2009 or earlier you can basically tell the collector to take a hike.

If you can’t pay then bankruptcy and debt settlement are your only options

The truth here is that there are other options besides these two. As an example of this if you have had a true financial emergency and call your credit card companies they may grant you a “forbearance”. This is where they allow you to make smaller payments or no payments at all for some period of time – though you will continue to be charged interest. There are also nonprofit consumer credit counseling agencies where you could get help. Contact one of them and you will have a counselor who will review your finances and explain the other options available to you including what’s called a debt management plan (DMP) where you would make monthly payments to the credit counseling agency and it would then take responsibility for paying your creditors. The good news of this is that your monthly payment to the agency should be a good deal less than the sum of the payments you’re currently making though do understand that these plans typically take five years to complete.

The Lessons One Woman Learned From Paying Off $42,800 Of Debt In One Year

If you have, say, $40,000 in student loan debt do you think you could pay it off in one year? This is not only possible it’s doable. In fact, one young college professor did exactly this and in doing so learned some very important lessons. For example …

Figure out where you are

This woman was a 39-year-old adjunct professor. She had not made over $30,000 in each of the five prior years. In fact, in a few of those years she earned less than $20,000. So to begin with she took a very hard look at what she was working with. She listed all the tools she had at her disposal – her car, her technical skills, people she could ask for work references, wardrobe pieces and people she could call in her network if she needed a referral. When she completed her list she realized that she had a lot more resources available that she had thought. She noted that even listing “Internet access” could help you understand how many tools you have available for changing your life. In addition, this list did something else for her. It made her see that, despite her financial predicament, she had many things to be grateful for.

Learn to love the math

A second important thing she learned is how much fun that she could have with math. She didn’t just love doing the subtraction in watching her balance go down but also loved the addition of seeing her payments take shape. She tried every day to apply for some kind of side hustle – part-time tutoring, focus groups, writing assignments, scoring jobs etc. While she didn’t get all of those for which she interviewed she did get quite a few. This enabled her to make bigger debt payments. As she took on extra income she also found that she loved to see how much she could amass in a month. An important lesson she learned is that the more she put herself out there the more opportunities she created to make money. While there’s no one but you that can manage your time it’s important to take on as many extra jobs as you can. The more you do this, the more money you will make and the faster you’ll get your debts paid off.

You are not exceptional

She quickly discovered that there were people in the personal-finance community that were doing exactly what she was doing. As she became more involved in both her debt payoff project and the personal-finance community, she discovered many inspirational stories. This taught her that rapid debt payoff is not novel. More and more people are paying off their debt as fast as possible. When she read their stories she realized that she was not exceptional and that this was a very good thing! Reading the stories of all those other debt fighters helped keep her motivated and helped save her financial life

Having a support system is invaluable

Another important thing she learned is that there is a very large and welcoming online community waiting to help you out and cheer you on. In fact, the personal finance blogosphere is filled with people who are enthusiastic and ready to urge you on. She started a blog, got on Twitter and commented on other sites dedicated to personal finance. When she did this she found herself surrounded by individuals of a like mind who understood that mindful spending leads to a much happier life. And reading their blogs and posts helped lift her spirits all through the onerous process of paying off her debt.

You can do the follow through

One of this woman’s greatest fears was that she’d pay off some of her debt – or even most of it – and then feel as if that was good enough. She had a history of struggling with follow-through. Some of the reasons for this included fear and indecision. She learned that a combination of support from friends and the personal-finance community, along with some determination kept her on track. She did not want her story to be a failure. She wanted to have it added to that stack of inspirational success stories. She found that this all by itself kept her taking on extra work and watching her spending very carefully. Anytime she felt her motivation lagging she would write a post about. She would then get support and encouragement from the personal-finance community that would help keep her motivated.

At the end of her 12 months

As the end of her year approached and she looked back at her progress she realized how disappointed she would have been if she hadn’t done the follow-through. She had created stakes that she really cared about. When she makes her final payment she’ll not only have paid off $48,000 in debt but, just as important, has learned that she did have follow-through. She just had to find it. The net/net of her journey was that she learned much about who she was and what she could do. If you have a big stack of debt, don’t despair. Make a goal and you will learn a lot about what you can do and who you are. Never be afraid. You will learn that some of the lessons are harder than others. However, each of them will be a revelation that may change your life forever.

5 Must Have Ways To Put Your Finances On Auto-Pilot

Managing your personal finances can be very time-consuming. This can be especially true if you have a budget and are attempting to stick to it. This means tracking almost every penny you spend, allocating it to the correct category and then reviewing things periodically to make sure you’re staying on track. Then there’s your savings program. Have you remembered to stash away the requisite amount of money in your savings account every week or two weeks? And we haven’t even gotten into bill paying, which by itself can turn into the night of the living debt.

If you’re the kind of person that just loves to micromanage your finances, then you can stop reading this article. It’s for people who are tired of managing their finances and would like to put them on autopilot. If you’re one of these people here are five “must-have” ways to automate your personal finances.


This handy little app can help you save money without having to think about it. The way it works is you connect it to your checking account so that Digit can analyze your income and spending. It will then find small amounts of money it can safely save for you. Then every two or three days, Digit will transfer some money (usually $5 to $50) to your Digit savings account. The app will never transfer more than you can afford so you don’t have to worry about over drafting your checking account. If the time comes when you need to tap your Digit savings account, all you do is send Digit a text message and it will transfer whatever amount you requested from your Digit savings back to your checking account — the next business day.


This app will help you get started in investing immediately. It’s sort of like Digit in that it will round up the spare change from your daily purchases and invest it for you. If you want to invest more you can set up a recurring daily, weekly or monthly investment amount. One of Acorns’ most important features is that it invests your money for you in a way that minimizes your risk. Acorns charges just $1 a month for accounts under $5000 or 0.25% a year for accounts over $5000.


If you agree with us that budgeting can be a boring task that requires a lot of self-discipline, then Mint is for you. It’s probably the most popular personal finance app and for good reason. It’s simple to use and eliminates all the bother of conventional budgeting. The way that Mint works is you connect it to your bank accounts, investment accounts and credit cards. It will then track your spending for you and organize it into logical categories to create a budget designed to help you succeed. If you overspend in any category Mint will send you an alert via email. It will also alert you as to any unusual account charges and provide you with customized tips for reducing fees and saving money. Mint will organize your bills in one place so that you will always know where you stand. In addition, you can use Mint to automate your bill paying. Plus, it will keep you up to date on your credit score and you can have Mint on your smart phone or tablet so you can manage your money wherever you are.

Personal Capital

It’s important to know your net worth and Personal Capital makes it easy for you to know what it is. It’s a free analytics tool designed to help you easily manage your complete financial life in one secure place. The idea behind Personal Capital is to help you reach your financial goals faster. When you register with Personal Capital you’ll have immediate access to its powerful financial tools as well as an award-winning dashboard. The way this dashboard works is that you input all of your accounts – your checking and savings account, your investment and IRA accounts, your credit cards and your home equity loan. Personal Capital then provides you with a complete picture of your net worth on any device and any time. It’s fee analyzer will give you a true picture of the fees you’re paying for your investment and retirement accounts to help you keep more of your money.


Do you think that getting some of your money back would be a good idea? Then you should sign up for Parabis. This is a relatively new app designed to help you get money back when you buy something online and the price then drops. If you are a savvy shopper, you know that prices change more often on e-commerce sites than in traditional stores. Amazon alone changes its prices on roughly 80 million items every day. What you may not realize is that there’s actually a way to get money returned when those online items go on sale. What Paribus does is track price changes related to your online purchases. Then if the price drops it will automatically file a claim on your behalf following the given store’s specialized procedures. To use this app, you will need to authenticate it with your email provider using the Paribus website. This gives its software the ability to scan your inbox and find receipts associated with your online purchases. The best part of this according to its founder is that it’s a “set it and forget it” type of service for online shoppers.

What To Do When Threatened With Foreclosure

One of the worst things that can happen financially is to get a notice from your mortgage holder that it’s started foreclosure proceedings. This is the kind of letter that can make you feel as if you’ve just been punched in the gut. It’s one thing to get dunning letters from your lenders but the idea that you could lose your house is the worst. But before you panic and start running around in small circles relax and take a deep breath. First, ask yourself if the house is worth saving. Thanks to the big real estate bust of 2007 many homeowners are deeply underwater meaning that they owe a lot more of their homes than they’re worth. If this is where you stand then letting that house go into foreclosure may not be that awful.

Talk to your lender

This is no time to be like a turtle and pull your head back into your shell. Contact your mortgage holder and ask if it would be willing to reinstate your loan. For example, if you could make a lump sum to bring the loan up to date then your mortgage lender might agree to reinstate it.

Could you refinance?

Even if you’re facing foreclosure you might be able to refinance your home. There are now two important government programs designed to help borrowers that are in crisis. They are the Homeowners Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP).

HAMP is for homeowners like you that are struggling to stay current on their monthly payments and headed for foreclosure. The way it helps is by modifying the terms of the  mortgage to reduce your monthly payments.

On the other hand, HARP is more for borrowers that are current on their payments but are unable to refinance because they’re underwater or have seen a reduction in their incomes. It would allow them to refinance at current mortgage rates. So, be sure to talk to a mortgage broker to learn if one of these programs could help save your house.

Do a deed in lieu of foreclosure

A third option would be to do a deed in lieu of foreclosure. What this means is that given your hardship your lender might agree to take back the property. If it does agree to transfer ownership back to it this is sometimes called a “friendly foreclosure” because this is basically what it is. Unfortunately, a deed in lieu of foreclosure will not protect your credit nor will it eliminate the rights of any secondary lien holders – such as a home equity loan (second mortgage) or Homeowner Equity Line of Credit (HELOC).

Get your loan modified

As noted above it may be possible to get your loan modified with the government’s HAMP program or from your lender. Loan modifications have certainly received some very negative press but there are still many people that have been able to get their loans modified down to as low as 1% fixed. This could literally cut your payment in half and you might even see your principal reduced. Plus, you can do this yourself and not pay thousands of dollars to some attorney to do it.

Understanding the type of loan you have

It’s also important to understand the type of mortgage you have. There are recourse and non-recourse mortgage loans. A recourse loan is a one that allows your lender to `sue you for whatever amount of money you owe in back payments even after it’s taken your house. In this case, the lender will bring a legal case against you and get what’s called a deficiency judgment.

Most home mortgage loans are recourse loans meaning that your lender could come after you for all the payments you missed even after it seized your house. Non-recourse mortgage loans – where the lender couldn’t come after you for back payments – are rare. But it’s possible that you could have one. So be sure to contact an attorney to review your mortgage to see exactly where you stand.

In addition, each state has its own laws regarding foreclosure and deficiency judgments. In fact, some states do not allow lenders to get deficiency judgments. So, again, be sure to get the help of an attorney to learn whether or not you have a non-recourse mortgage and about your state’s real estate laws.

Foreclosure and income taxes

Finally, if the lender does foreclose on you and you have a remaining balance this would normally be considered taxable income. However, thanks to the Mortgage Relief Act that our Congress passed in 2007 all distressed homeowners are allowed to exclude forgiven mortgage debt from their taxable income. While that might not make you feel much better it would at least be something of a silver lining.

Bankruptcy vs. Debt Settlement – And The Answer Is …

The fastest and simplest answer to this is that bankruptcy should always be your last resort. Bankruptcy is never a good option unless you’re so crushed by your debt that you simply can’t see any other solution. The biggest reason why bankruptcy should be your last resort is because of what it will do to your credit. The most succinct way to say it is that it will trash your credit. Once your bankruptcy has been finalized by a federal bankruptcy court it will be two to three years before you will be able to get any new credit. And when you do it will be “low balance, high interest” credit. This means you might be able to get a credit card with, say a $300 balance but your interest rate may be 21% or even higher.

What it will do to your credit reports

A bankruptcy will stay in your credit reports for 10 years. This creates a definite stain. When lenders see you’ve had a bankruptcy this is like a huge, red stop sign. All other bankruptcy references will also remain in your credit file for seven years including Chapter 7 public record items, any accounts that were included in your bankruptcy and third-party collection debts, judgements and tax liens that were discharged through your bankruptcy

The only good news is that as time goes by the impact the bankruptcy has on your credit will diminish – so long as you’re now handling credit sensibly.

Your student loan debts won’t go away

If you have student loan debts, here’s really bad news. A bankruptcy won’t discharge them. Since the money you borrowed came from US taxpayers our Congress is very protective of it. Unless you can prove you have what’s called an exceptional hardship (which is very hard to do) you will be stuck with those student loan debts until you repay them.
What it will do to your life

Even worse, the bankruptcy will stay in your personal file for the rest of your life. Many employers now routinely check the credit reports of prospective employees. Some actually refuse to hire people who have had bankruptcies. This means you could miss out on a good job because of your bankruptcy. Or even worse, your fiancé could decide to check your personal file before marrying you – and decide to cancel the wedding.

The one downside

First, it’s important to understand that debt settlement will also have an effect on your credit score. No one knows for sure how much it would ding your score but some experts think it would reduce it by around 80 points. Unfortunately, that could be enough to drop you from having “fair” credit to “poor” credit. The reason for this is because settled debts are not reported to the credit bureaus as “paid in full.” They are reported as “settled,” “settlement” or “settled for less than full amount”. However, this can be something of a positive because lenders will see that you did what you could to repay your debts instead of just walking away from them by filing for bankruptcy.

A big upside

Debt settlement does have a big upside. The biggest is that it’s the only way to get your debts reduced — maybe by as much as 50%.

And there’s more.

When you choose to work with a debt settlement company such as National Debt Relief you’ll no longer have to cope with angry lenders or worse yet with unscrupulous debt collectors. The debt settlement firm will contact all of your creditors, explain that it is now managing your debts and ask them to stop contacting you – and most will.

When you contract with a debt settlement firm you will begin paying it each month instead of your creditors. This money will be deposited into an FDIC-insured account that you control. As money accumulates in your account the settlement firm will use it to make lump sum payments to your creditors to resolve your debts. This settlement program typically takes anywhere from 24 to 48 months depending on how much you owe.

Third, debt settlement equals debt consolidation. This is because is because as you have read you will no longer be required to pay your lenders. You will be paying the settlement firm once a month. Your life should be much simpler when you no longer have to remember how much you owe to which lenders and when all your payments are due.

Your satisfaction will be guaranteed

When you choose a reputable and ethical debt settlement companies such as National Debt Relief you’ll have a 100% satisfaction guarantee. This is because you won’t be charged a single cent until all of your debts have been settled to your satisfaction. If you become dissatisfied for any reason during the settlement process, you can pull the plug and not a cent.