Debt collectors are rarely as unreasonable as we imagine them to be. They want to collect the money they’re owed, but they realize that they are more likely to succeed if they work with us. And the law prohibits them from threatening or harassing us. Here are five tips for effectively dealing with collectors:

1. Know your rights. It pays to familiarize yourself with the Fair Debt Collection Practices Act, which protects consumers from unscrupulous collection practices. If at any time you feel that your rights have been violated, you can report the incident to the Federal Trade Commission or file a lawsuit to collect damages.

2. Be honest. Let the collector know if there are extenuating circumstances that have caused you to fall behind or stop making payments altogether. This won’t stop them from trying to collect the debt, but it could buy you some time and make it more likely that they will work with you to get things resolved in a way that is acceptable to both parties.

3. Know how much you can afford to pay each month, and don’t let them convince you to pay more than that. Even if they take all of your obligations into consideration and tell you that you should be able to pay a certain amount, you may not be able to pay that much realistically. If the collector insists on not accepting less than a certain amount, you may want to seek legal advice.

4. Take notes. Each time you speak to the collection agent, write down the highlights of the conversation along with the date and time of the call. Keep these notes for future reference, and if the collector contradicts himself, you’ll have your notes to refer to. These notes will also be helpful if you end up filing a complaint or lawsuit.

5. If you reach an agreement, stick to it. As long as you keep up your end of the bargain, the collection agency can make no further efforts. If you find that you won’t be able to make a payment on time, contact the debt collector immediately and let him know when you will be able to pay.

No one looks forward to dealing with a collection agency. But if you are honest and reasonable, it’s rarely as bad as you think it will be. In most cases, you can work out a mutually agreeable arrangement, get your debt paid off and get on with your life.

Few people go through their entire lives without incurring some type of debt. When you go in debt, it’s important to know your rights and obligations. These rights and obligations vary according to the type of debt contract you enter into.

By definition, a contract is the exchange of promises between two people. This can take on many forms. When it comes to debt, there are four basic types of contracts:

* Oral contract – This type of debt contract has been around since the beginning of time. It simply involves one person lending another person money, and the borrower agreeing to repay that money. Nothing is put in writing.

Oral contracts are legally binding. The problem with them is that they are more difficult to enforce. This is due to the fact that there is no written proof of them. There may not even be any witnesses to the agreement except for the two parties. Due to these factors, it may be difficult for the creditor to collect.

* Written contract – A written contract may be as simple as an agreement written on a piece of notebook paper, or as complex as a multi-page document. When a loan is involved, the terms are defined and the contract is signed by the creditor and the debtor. This type of contract usually holds up well in court, even if it is created informally.

* Promissory note – A promissory note is very similar to a written contract, but there is an important difference. In a promissory note, the payment schedule and amount of interest charged are spelled out. Promissory notes are rarely informal agreements. Examples include mortgages and auto loans.

* Open-ended accounts – An open-ended account usually does not require a traditional contract. It is a revolving line of credit in which the balance varies. The most recognizable example is a credit card.

The category under which a given debt contract falls may sometimes be confusing. Oral contracts are easily identifiable as such, but there is often confusion about the subtle differences between a written contract and a promissory note. Credit cards are open-ended accounts, but there have been cases in which creditors have attempted to enforce them as written contracts. But in the absence of an actual written agreement, this would not hold up in court.

No matter what type of debt contract you enter into, it’s important to read it carefully. No matter how reputable the creditor may be, it’s essential to know the terms to which you’re agreeing before you sign anything. It’s also a good idea to familiarize yourself with the laws governing the different types of debt contracts. If you need assistance, an experienced consumer rights attorney can help.

Financial stress is a frequent trigger of mental health issues such as depression. Worrying about how you’re going to pay the bills and put food on the table can take over your thoughts, and it becomes difficult to enjoy the good things in life. Another common issue is anxiety, which may be accompanied by scary panic attacks.

Depression and anxiety can lead to physical health problems. These may include stomach ulcers, high blood pressure and insomnia. Left untreated, stomach ulcers can cause dangerous internal bleeding, and high blood pressure and insomnia increase one’s risk for a heart attack and other serious problems.

As you can see, financial stress can be the precursor to a nasty chain reaction. Here are five ways you can fight financial stress and avoid these grave health concerns.

1. Take time to enjoy the good things in life. When you can’t see past your financial troubles, you may forget those things that once put a smile on your face. Force yourself to forget about your troubles and do something that makes you happy, such as reading a good book, playing with your children or participating in your favorite sport or hobby.

2. Be proactive. It’s easy to fall into the trap of feeling sorry for yourself when it comes to money woes. While that may be warranted at first, the only way you’re going to get through it is to work at it. Sit down and think about ways to cut expenses and/or increase your income, then act on them. Even if you just make a small amount of progress, you’ll feel some relief and an increase in confidence.

3. Find a shoulder to cry on. Being upbeat is best, but sometimes a dire financial situation is going to get you down. When this happens, talk to a trusted friend or family member. She may be able to give you some good advice. Even if you don’t want advice, having someone to use as a sounding board will take some of the weight off of your shoulders.

4. Use stress relief techniques. A simple bubble bath can work wonders for your state of mind. If you want to try something more sophisticated, meditation has been proven effective against stress. Other things you might try include aromatherapy and massage.

5. Think about the things you’re thankful for. When you’re obsessing over your finances, take a break and think about the things that you do have. Better yet, write them down. This will help you see that financial security is only a small part of the big picture.

Stress is normal when we experience financial issues. But if you let it take over your life, your health will suffer. Fighting back will make you feel better, both mentally and physically.

Sometimes people end up with more debt than they can handle. Often it is not due to irresponsibility, but to circumstances beyond one’s control. Job loss, unexpected medical expenses and other such situations can cause finances to take a sudden turn for the worse. When such things happen, bankruptcy can ease the financial burden.

Bankruptcy should only be used when all other alternatives have been exhausted. It remains on your credit record for ten years, making it difficult or impossible to obtain loans and other types of credit. But in some cases, it is a debtor’s only hope for relief. If you’re considering bankruptcy, it’s important to know which type is best for your situation.

Chapter 7

Chapter 7 is the most common type of bankruptcy for individuals. It requires the debtor to turn all non-exempt property over to a trustee. The trustee then liquidates the property, distributing the proceeds to creditors to lower the debt. The remainder of the debt is usually discharged, as long as it doesn’t fall into categories that are ineligible for discharge.

Those filing for Chapter 7 bankruptcy must pass a means test to show that they are unable to repay their debts. Generally, they must have a total income below the mean income for their family size in their state. Those who do not qualify for Chapter 7 usually qualify for Chapter 13.

Chapter 11

Most Chapter 11 bankruptcies are filed by businesses, but individuals are also eligible for this type of bankruptcy. This type of bankruptcy is costly and complicated, and is only appropriate for individuals under certain circumstances that involve large amounts of debt and assets.

In Chapter 11 bankruptcy, the business (if applicable) may continue to operate. A repayment plan must be written and approved by creditors and the bankruptcy court. A trustee is not appointed unless there has been some sort of wrongdoing by the filing party.

Chapter 13

Chapter 13 bankruptcy is the second most common type of bankruptcy filed by individuals. In order to qualify, debtors must have an adequate amount of disposable income and their debt must fall below limits set each year.

Instead of turning over assets and having the debt remaining after their liquidation discharged, the debtor proposes a repayment plan in which he will repay creditors over a period of three to five years. Creditors may object to the payment plan, but the bankruptcy court has the final say as to whether it is accepted. The debtor is allowed to keep his property, and he pays creditors a reduced amount.

Bankruptcy is not something to be taken likely, but sometimes it is necessary to help debtors get a fresh start. A bankruptcy attorney can help determine whether you should file, and if so which type of bankruptcy is appropriate for your situation.

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Bankruptcy

Have you read the latest news about amusement park operator Six Flags filed for bankruptcy? This is unbelievable. Is it really necessary?

For those who feel that they are in serious financial distress, bankruptcy may have crossed their minds. Bankruptcy is not something to be taken lightly. While your debt may be wiped clean, there are far-reaching consequences for that “new freedom”.

When a person’s debt has risen to a level that they can’t hope to get under control, they may consider filing for bankruptcy. For a consumer there are two bankruptcy choices: Chapter 7 and Chapter 13. Chapter 7 bankruptcies involve wiping out the debts in part or in their entirety and liquidating assets to do it. Chapter 13 bankruptcies are more of a debt restructuring plan that gives you more time and a plan to pay back a portion of the debt that is owed to creditors.

Bankruptcy damages a person’s credit. A bankruptcy judgment stays on credit reports for as long as ten years. During that time, any credit that is applied for will disclose the bankruptcy to the creditor. If filing Chapter 13, you still have to pay back part of your debt and the judgment stays on your credit report for ten years.

In the past, people have taken advantage of the bankruptcy laws. For instance, people have been able to file more than once for Chapter 7 bankruptcy. They have used it as their own personal “debt eliminator”.

Each state decides on what assets they will exempt from being seized during a bankruptcy hearing. Knowing that, some may use available cash to purchase those items (homes, cars, etc.) in an effort to avoid payment and still retain the stuff they purchased. In this instance, creditors receive little or nothing from the bankruptcy settlement.

The new laws concerning bankruptcy have changed this. Whereas courts used to have the leeway of deciding who could file for Chapter 7 bankruptcy, there are now criteria that must be met first. In order to file for Chapter 7 bankruptcy, a person has to have an income that is below the median income for the state where they live. Their income must be put through a calculation that determines if they have enough disposable income to pay twenty-five percent of their outstanding debt.

More people that file bankruptcy will have to file under Chapter 13. The courts decide what a person could pay from the information provided to them. There is an allowance made for rent/mortgage, food, and other pertinent bills. With the new bankruptcy law, standards set by the IRS determine allowable values for each of these bills. A certain amount is exempted, and the payments are determined from the rest.

Because there are more hoops to jump through, bankruptcy lawyers are charging more for their services. The whole process of bankruptcy will cost the filer more than before, which will make them think twice about the process. Credit counseling sessions are also required as a precursor to filing for bankruptcy. A credit counselor may determine that they can help you and thus eliminate the need for bankruptcy proceedings.

Bankruptcy should always be a last resort. While it will give you a clean slate, it comes at a price.

Our credit scores play a big role in determining the results when we apply for a credit card or loan. A good credit score can help us get the credit we need at the best possible rate. A poor credit score could result in a higher interest rate or denial of credit. It is in our best interest to make sure our credit scores are as high as possible.

The credit bureaus keep the exact method for figuring credit scores a mystery. But there are a number of factors that are known to impact our credit scores. Here are five things you can do to improve yours:

1. Keep an eye on the information contained in your credit report. Sometimes the bureaus make mistakes, and identity theft can also wreak havoc on one’s credit report and score. Federal law requires each credit bureau to provide one free report per year to any consumer who requests it online, by phone or in writing, and we are also entitled to a free report if we are denied credit. So check your report regularly, and if you find any inaccuracies, dispute them in writing.

2. Always pay your bills on time. Even if you’ve made payments late in the past, keeping current bills paid on schedule will help raise your credit score. The longer your history of keeping payments current, the more it will improve your credit score.

3. Keep credit card balances low. Just because you have a $10,000 credit limit, that doesn’t mean you should use it all. A good rule of thumb is to keep each credit card balance at or below 25 percent of the limit. Even if you have a perfect payment history, carrying too large of a balance can adversely affect your credit score.

4. Avoid opening too many accounts in a short time frame. This is especially important if you have a short credit history, but it also applies if you have well-established credit. Opening lots of accounts in rapid succession raises concerns that you could get in over your head, hence lowering your credit score.

5. If you pay off an account, keep it open. This will help by lengthening your credit history. It can also reduce your balance to credit limit ratio, unless you transferred the balance to another card.

Improving your credit score is not as difficult as you might think. A few simple adjustments can really make a difference, but it does take some time. If you are planning to apply for credit, start working on your credit score a few months ahead of time. This will increase your chances of getting the loan or credit card, and it could save you lots of money on interest.

Nevertheless, we still need to survive. Here are 5 ways which you can use to survive through this recession.

1.  Pay down your debts and look at your investments. Cut up all credit cards and save one for emergencies only.  Put away enough money to last for a minimum of 18 months. Open a money market account or a CD.  If you have stocks, don’t sell; ride the tide. Continue contributing to your 401K plan.  If you are currently contributing to a Variable A Annuity, change it to the Fixed Fund Program which yields 8.25%.

2.  Sit down with your family and revisit the household budget. Make cuts where necessary, especially in the miscellaneous category.  Refrain from buying unnecessary items such ordering take-out food, magazines, lottery scratches, and other incidental items that add up.  If you tend to dine out once a week, reduce that to once a month.  Bring your own lunch to work.  Use public transportation when you can and/or carpool to work with a friend or neighbor.  Try to complete all outside errands and grocery shopping in one day.

3.  If you have items at home that are gathering dust in the attic or garage, consider selling them on eBay.  Do you have any clothing that is new or slightly used?  If so, you may want to take them to a consignment shop wherein you can sell them for a commission.
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4.  Do you love to write?  Can you spare a few hours a day online?  If so, you can earn money writing for blogs and websites.  Webmasters do not have the time to create articles for their websites or blogs, and having a good writer on hand to fulfill that need not only helps them but can also supplement your income substantially. ==> Make the Extra Income

5.  Look into applying for a second job.  Ask your boss if there is additional work requiring overtime.  If you have teens at home, perhaps they can apply for part-time work after school or on weekends, or assist neighbors by babysitting or dog-walking.

We will all have to buckle down on expenditures during this difficult time.  More importantly, do not panic.  Just do the best you can for you and your family and we will eventually see light at the end of this long, dark tunnel.

Credit repair agencies claim that they can remove bad entries from your credit report. But did you know that you can often have them removed yourself at a much lower cost? There are two methods by which you may be able to get negative entries removed from your report.

Option #1: File a Dispute with the Credit Bureaus

The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate any item on your credit report that you dispute. If the information is found to be false, inaccurate or unverifiable, it must be corrected or removed from your report. The bureaus have 30 days from the time they receive notice of the dispute to complete their investigation.

If there is any inaccurate information on your credit report, a dispute is certainly in order. But some people have had luck disputing items that were in fact accurate, including judgments, collections accounts and repossessions. If such items are not verified by the creditor (or the court in the case of judgments) within the time limit for investigation, they must be removed.

If you decide to dispute a legitimate entry, simply write a letter to each of the credit bureaus stating that you dispute that entry. No explanation is required. But keep in mind that if the entry is verified, it will remain on your report. And if the creditor verifies the information after the 30-day time limit, the credit bureau may reinstate the entry as long as they notify you at least 5 days before doing so.

Option #2: Negotiate with Creditors

Dealing with creditors can be intimidating, especially if you’re not on good terms with them. But speaking to your creditors directly may help you get negative information removed from your credit report.

If you only have a late payment or two on your account, a creditor might be willing to remove the derogatory information once you’ve resumed a regular payment schedule. If you’ve experienced repossession or had an account turned over to collections, payment in full might persuade them to remove the negative entry. It sounds like a long shot, but you never know until you ask. Requests to remove late payment information may be made after you’ve brought you account current. But if you’re hoping for removal of a repossession or collection action, it’s best to negotiate a deal before you pay anything.

If You Can’t Get the Bad Entries Removed

There is no guarantee that disputing information on your credit report or negotiating with creditors will get negative items removed from your record. If it doesn’t, the best thing you can do is try to build up some positive information on your report.

The first thing you need to do when trying to rebuild good credit is bring past due accounts current. Try to work out a deal with your creditors to accomplish this, or talk to a credit counseling agency. But don’t miss payments on current accounts to put money toward those that are past due. If it comes down to paying one or the other, keep the current account current.

Once you’ve brought all of your accounts current, put a priority on keeping them that way. Making your payments on schedule will raise your credit score, and with the passage of time, the good entries may outweigh the bad.

If so, then Zero Debt: The Ultimate Guide to Financial Freedom is the book to help you get back to your debt-free life. This book, which Dr. Phil himself has mentioned on his show, is one of the best books for great advice and a proven plan that you can put into action right away.

Zero Debt is written as a 30 day action plan. However, it won’t take you 30 days to read this gem. The information is delivered clearly and in a reader friendly format that anyone can understand.

In Zero Debt, you will discover:

* How to get annoying creditors off your back
* Insider secrets to reduce interest rates or eliminate credit card late fees
* Your legal rights and what bill collectors can and can not do under the law
* The best strategies to clean up your credit report or fix errors in your credit file
* How to make lifestyle changes that will save you money for decades to come

What makes Lynnette Khalfani the perfect candidate for writing this book is that she was over $100,000 in credit card debt herself and got herself out of it in only three years. Khalfani has written valuable step-by-step instructions on how to get out of a financial pothole. The instructions are simple and easy.

Zero Debt explains financial jargon like: FICO, IRA, adjusted rate, 401(k), etc. before information on the subject is presented. Regardless of your level of debt, you’ll find some useful tips in this easy-to-read book. In short, here are some of the basics to experiencing Zero Debt and financial freedom. Evaluate debt. Stop creditors. Talk to your creditors and let them know what’s happening. Get rid of the unnecessary; stick with the necessary. Pay more on debt. Check your credit yearly. Check your FICO scores. Write letters disputing discrepancies on your credit report. Don’t write the credit reporting agencies; write the creditors directly. Start a budget and stick to it. Consistency. Start a savings plan by making small deposits, and gradually increase them as your debt decreases.

Lynnette Khalfani starts the lessons by defining debt and how most people find themselves caught up in it. Whatever the reason for the debt, it seems Lynnette Khalfani has a plan for it. From simple requests like opting out of credit card offers to more complex tasks like gathering all your bills and finding out what you owe, ZERO DEBT is well-balanced and simple.

ZERO DEBT is written in an easily followed conversational tone, a helpful trait when talking about finances to those who are already stressed when they pick up the book.

It makes Zero Debt a book you’ll really want to have in your library.

Zero Debt: The Ultimate Guide to Financial Freedom focuses on not only how to get out of debt, but having money for the future. With how the economy is today, this book is timely for all who are in any amount of debt.

Living within your means is a liberating way to live your life.  It means no debt – debt is one of the most common causes of relationship stress.  Living within your means gives you the freedom to save money for special things rather than always scrimping to pay your bills.

Unfortunately, many people don’t live within their means.  They live above it, way above it.  This happens for many reasons.  Maybe they just don’t track their expenses, and purchases are made without thinking.  Maybe they’re trying to keep up with their friends and family.  Maybe shopping is a misguided form of therapy.  Whatever the reason, the end result isn’t a happy one.

If you feel that you could do more to live within your means, here are a few tips to help keep your life on track and your financial status right where it belongs:

Tip #1:  Keep track of your spending. It is important to know where your money goes.  Once you have an idea of what you’re spending your money on, you can begin to control it.

Tip #2:  Buy a used car or at least keep your new car for more than a couple years. A new car depreciates the moment you drive it off the lot.  Sometimes it depreciates as much as 50%.  A used car already has that depreciation figured into the cost.

Tip #3:  Don’t be afraid to grocery shop with coupons or stock up on items for sale. Personally I love it when the grocery offers “buy one get one free items”, particularly when the items are large ticket items like meats.  Not only do I save tons of money but when I can’t figure out what to make for dinner, I can just open my freezer and I have options.

Tip #4:  Do buy quality clothing items, not quantity. When you’re shopping for yourself, don’t make whimsical clothing purchases or follow the latest trend.  What’s better?  Spending $100 on a pair of jeans that will be out of style next season, or spending $150 on a pair of jeans you can wear for five years.

Tip #5:  If you have a credit card debt, develop a plan to get out of it. A debt elimination plan begins with reducing your interest rate.  A phone call to your creditor can usually start the process.  Next, stop the charging on those credit cards and get busy paying them down.  Pay more than the minimum balance or you’ll never get it done.  A great way to manage the process is to develop a monthly budget.  Your budget will contain your income, expenses including debt and your savings.

Living within your means is possible!  It is empowering to have complete control over your money and your finances, certainly less stressful than letting your money control you.

Click below to find out more how you can keep in control of your money TODAY!