Tuesday’s need-to-know money news

Today’s top story: 5 things debt collectors can’t do – and 5 they can. Also in the news: The pros and cons of dropshipping, protecting intellectual property, and how to choose a rewards credit card.

5 Things Debt Collectors Can’t Do — and 5 They Can
Learn the limits.

Dropshipping Cuts Your Inventory — and Control
The pros and cons.

Protecting Intellectual Property: A Guide for Entrepreneurs

How to choose a rewards credit card
Optimizing your rewards.

Tuesday’s need-to-know money news

bills-smallToday’s top story: Why you should validate a debt before paying a collector. Also in the news: How to choose a Medicare Advantage plan, how and when to report tips for tax purposes, and how people survived their financial nightmares.

Validate Debt Before Paying a Collector, Avoid Costly Errors
Make sure the debt is legitimate.

How to Choose a Medicare Advantage Plan
Open enrollment continues through December 7th.

How and When to Report Tips for Tax Purposes
Deciphering the rules on tips.

Scary Money Moments: How 5 People Survived Their Financial Nightmares
Just in time for Halloween!

Thursday’s need-to-know money news

teen-creditToday’s top story: What your high schooler needs to know about credit cards. Also in the news: Saying goodbye to foreign transaction fees, the new calling limits facing debt collectors, and how letting your adult child stay home could benefit you financially.

Credit Card Basics for High School Students
What your high schooler needs to know.

As International Travel Grows, Foreign Transaction Fees Get Left Behind
Bid farewell to foreign transaction fees.

Debt collectors could face new limits on calls
Changing the collection game.

Read This Before You Push Your Deadbeat Millennial Out of the House
Having your adult child at home could be financially beneficial.

Q&A: How to deal with debt collectors

Dear Liz: After struggling financially for seven years, I’m getting a good lawsuit settlement. After taxes, I’ll be set. I want to pay my bills but to the actual company — for example, the credit card company, not some bill-collecting clowns that threatened me with “the sheriff will come over and arrest you” or “your brother and sister will inherit your debt” and other lies.

I also don’t want to pay these inflated fees from bill collectors that have no rhyme or reason and sound like they are throwing darts at numbers board.

Finally, I’ve asked a couple of the bill collectors to provide me with the name and contact at the original company so I can verify that they have authorization. But with data being compromised every day, how do I know they are legit?’

Answer: You typically don’t have the option to pay the original creditor once a debt collector enters the scene. Chances are good the original creditor long ago wrote off the debt as a loss and sold it, often for pennies on the dollar. You’ll know the bill is in the hands of a debt buyer if you check your credit reports and the original creditor shows the amount owed as zero, said Michael Bovee, president of Consumer Recovery Network, a debt relief company.

You’re right to be concerned about paying the right party — not because of database breaches but because of the lousy records and bad practices that plague the debt collection industry. The same debt may be sold to multiple buyers or come with so little identifying information that it’s unclear who originally owed what to whom.

Before you pay any debt, you should ask in writing for it to be verified. By law, debt collectors must provide you with the name of the creditor, the amount owed and how you can dispute the debt or seek further verification. The Consumer Financial Protection Bureau offers sample letters on its site, www.consumerfinance.gov.

The CFPB also accepts and investigates complaints about collection agencies, such as those who violate the federal Fair Debt Collection Practices Act by harassing people or falsely threatening to arrest them (you typically can’t be arrested for debt).

It’s understandable that you don’t want to deal with a rogue collector or an unethical collection agency. If the debt is beyond your state’s statute of limitations and you can’t be sued over it, then there’s little reason to open negotiations with such bad actors. They could renege on any deal they make with you and simply sell the debt to someone else, starting the whole circus over again.

If you must resolve the debt — you typically can’t get a home loan, for example, if you have open collection accounts showing on your credit reports — then you should call the original creditor and verify which company bought the debt. If the debt wasn’t sold but assigned to a collection agency, get the name of that firm. Then you can call and negotiate payoffs low enough to offset any fees or interest that have accumulated, Bovee said. But do so before you apply for the loan and don’t let the collectors know you need to clean up your credit, since that weakens your bargaining position.

You’ll want to arm yourself with as much knowledge as possible before you contact any collection agency. You can download a free e-book at DebtCollectionAnswers.com, a site run by consumer advocate Gerri Detweiler, that can help you get started.

How to Pay Bills When You Can’t Pay Your Bills

stack-of-billsWhen Bruce McClary was a housing counselor, his clients regularly showed up for appointments with grocery bags full of unopened bills.

“It wasn’t unusual. They couldn’t pay the bills, so they didn’t open them,” says McClary, who now works in public relations for the National Foundation for Credit Counseling.

Ignoring bills seems to work — at least for a while. The repo man typically won’t take your car if you’re a little late with your payment (although he can). Credit card companies and student lenders may start to call, but you can always send them to voicemail. Foreclosures can take months, if not years, depending on where you live.

In my latest for NerdWallet, how to put a plan together when the money you have just isn’t enough.

Thursday’s need-to-know money news

refundToday’s top story: How to get your bank to fix a credit card error. Also in the news: How to overcome money anxiety, 12 odd tax deductions that could save you money, and a new government crackdown on aggressive debt collectors.

How Do I Get My Bank to Fix a Credit Card Error?
Be prepared to be patient.

The First Step to Overcoming Money Anxiety Is Facing Your Own Finances
Taking that first step.

Could these 12 odd tax deductions save you money?
Some of these mught surprise you.

The Government Cracks Down on More Debt Collectors
No more Mr. Nice Guy.

Dealing with collectors? Here’s a free ebook to help

dca-new-ebook-free-3DsmGetting calls from collection agencies, or spotting collection accounts on your credit reports, can be scary. You can deal with this, but not alone. Check out  “Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights,” which is now a free ebook on Smashwords. You can get it here: https://www.smashwords.com/books/view/520261.

Written by long-time consumer educators and advocates Gerri Detweiler and Mary Reed, this book will tell you what you need to know to deal with collection accounts and fight unethical collection agencies. Longtime readers of the column will recognize Gerri’s name, because she’s the person I turn to when I have questions about debt and debt collections.

Get the book and get started!

UPDATE: Gerri tells me some people have trouble downloading from Smashwords, so here’s another link:

http://www.debtcollectionanswers.com/buy-now.html

 

 

Wednesday’s need-to-know money news

homebuyerToday’s top story: How buying a home can give your credit a boost. Also in the news: What really happens when you default on your student loans, why it’s important to protect your digital assets, and what happens to your budget when your parents move in.

How Buying a Home Can Help Your Credit
Your mortgage can give your credit a boost.

What Really Happens When You Default on Your Student Loans
Consider the consequences.

Forgetting Digital Assets Like Facebook Can Create Lawsuits After Your Death
While not tangible, digital assets have value.

The Financial Picture When Your Parents Move In
Your budget is about to change.

What To Do When Debt Collectors Start Calling
Deal with them head on.

Q&A: Forgiving credit card debt

Dear Liz: Recently you wrote about debt being forgiven after seven years, but in your book “Deal With Your Debt,” I’m sure you said after four years credit-card debt is usually not collectible. Could you clarify? When I tell debt collectors about this, they merely laugh.

Answer: That’s understandable, because there is no forgiveness for most debt. It’s legally owed until it’s paid, settled or wiped out in Bankruptcy Court.

Each state sets limits on how long a creditor has to sue a borrower over an unpaid debt. Those limits vary by state and the type of debt. In California, credit card debt has a four-year statute of limitations. Creditors may continue collection efforts after four years; they’re just not supposed to file lawsuits.

Seven years is how long most negative marks, such as unpaid debts, can remain on your credit reports. Technically, most unpaid debts are supposed to be removed seven years and 180 days after the account first went delinquent.

Wednesday’s need-to-know money news

siblingsToday’s top story: The fear of outliving your retirement savings. Also in the news: Credit scores reach new highs, fun ways to teach your kids about money, and steps to protect yourself against credit fraud.

Big retirement fear: Outliving your savings
What you can do to prevent it.

Credit Scores Hit New Highs – But You Should Aim Higher
The higher the better.

4 Fun Ways to Teach Your Kids About Money
How to make teaching your kids about money fun.

9 Steps to protect against credit card fraud
Lessons from the Home Depot and Target breaches.

Help! 2 Debt Collectors Are Calling About the Same Debt
Twice the annoyances with none of the fun.