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Not All Student Loan Debt Is Created Equal

Student loan debt is often thought of as just something everyone has to deal with.  For most Americans, attending college means having student loans, but does everyone have the same opportunity to get student loans?  What’s more, does everyone have the opportunity to get the best interest rates?  You may be surprised to know the truth about student loans as they pertain to minorities in the United States.

What Is the Deserve Credit Card Platform?

Recently, the Deserve platform successfully raised a whooping $50 million, thanks to some big-time investors. Since the inception of the Deserve credit card platform, it has been successful in raising large amounts of money for different projects. However, before we delve into this amazing success of the Deserve company, it’s important to point out what exactly the platform is about. Even though, the Deserve platform has become popular for offering credit cards, a lot of prospective clients do not know exactly what the platform is.  If you happen to fall into this category, then you’re in luck, as this article will be all about the Deserve Credit Card Platform.

3 Ways to Use Your Tax Return

Let’s be honest, if you are eagerly awaiting your tax return, you are not planning to spend it on the right things.  Too often people get a chunk of money they usually do not receive at any other time in the year and their eyes light up.  If you are really excited to get your refund this year, it is doubtful that you plan to pay off credit card debt, take care of healthcare-related expenses, or pay down your car loan.  Read on to find out why you should do exactly those things.

PLEASE Use Your Tax Refund to Pay Down Credit Card Debt

If there is one good thing you do with even a portion of your tax return, make it credit card debt annihilation.  You would be hard pressed to find a loan with a higher interest rate than that of a credit card.  Use this year’s tax refund to reduce the savage interest payments you make every month and lower the principal balance.   The average tax refund in 2017 was about $3,000.  The average credit card debt was approximately $6,375.  If you are average, you could save yourself a lot of money in interest payments by cutting that debt in half.

Medical Expenses

The most common debt on a person’s credit report is that of medical expenses.  Medical expenses are the number one cause of bankruptcy.  Medical debt is often passed around from collector to collector until something is done about it.  Every day people are hassled and sued for medical debt worth less than $1,000.  If this is you, please use your tax refund to pay it off.  Negotiate with the collector and save yourself some money, but most importantly, improve your life by stopping the phone calls and snail mail associated with this sort of debt.

Pay Down Your Car Loan

Maybe you have always had a monthly car loan payment and you do not know what is like to exist without one.  Let me tell you, it is possible, and it is SWEET.  Imagine a world where you get paid and you do not have to fork over 25% of your paycheck.  Take your tax refund and pay off even a few months of your loan term.  Down the road, you will be so happy you did.  This will save you from paying expensive interest if your rate isn’t great.

Paying off debt with your tax refund is one of the best things you can do for yourself (albeit not fun).  If you are ready to take your debt seriously but you do not know where to start, contact Elias Dsouza.  Elias can help you plan and negotiate the elimination of your outstanding debt.

Is Refinancing Your Home to Pay off Credit Card Debt a Good Idea?

Having credit card debt is just a way of life for most people in America.  However, there may come a time when those people are ready to be free of the burden.  People with credit card debt that own a home or have equity in their financed home often look to their home equity for a way out.  This can be a great tool, but sometimes a refi leads to a higher monthly payment.

Why Would Someone Choose to Use Home Equity to Pay off Credit Card Debt?

On paper, it may seem obvious that having a loan with a much lower interest rate (mortgage) is better than one with a much higher interest rate (credit cards).  People may consider this option because:

  • Credit cards often carry an interest rate 3 to 4 times higher than that of a mortgage.
  • Credit cards carry the stigma of “bad” debt.
  • Loan consolidation is often thought of as a good thing.

When Using a Home Refi to Handle Credit Card Debt Is a Bad Idea

Some experts say it is always a bad idea.  When you utilize a cash out refinance loan to pay off credit card debt, you convert unsecured debt (credit cards) to secured debt (mortgage/home equity loan).  Secured debt is linked to an asset.  If payments are missed and the bank decides to foreclose, they can take the home as collateral and sell it to offset debt.  Because it is unsecured, credit card debt can be forgiven or settled using a tool such as bankruptcy.

When Refinancing Your Home to Pay off Credit Card Debt Is a Good Idea

For a home refi to be a good choice, there are considerations: 

  • The “rule of thumb” when considering a home refi to offset any debt is to avoid it if the resulting refinanced loan value equals more than 80% of the value of the home.
  • If the resulting monthly loan payment is lower than the sum of the mortgage payment and credit card payment each month.

If you are feeling overwhelmed with debt or you are behind on payments, a debt restructuring could be the answer.  Before you make a decision regarding a home refinance, contact Elias Dsouza to discuss, bankruptcy, debt settlement, credit counseling, and much more.  Elias has been assisting people with credit card debt for over 15 years.

Common Mistakes People Make When They Are Sued by a Debt Collector

It is a shock when you are served a court summons and informed that a debt collector is suing you.  You feel like a bad citizen, a low life, you feel violated.  If you are notified that you are being sued by a collector, now is not the time to hide. Read on for tips on what to do in this scary situation.

They ignore the law suit

The absolute worst thing you can do when you receive a court summons is ignore it.  When a court is involved,it is not going away on its own.  You have a limited window of time to respond to the summons.  If you ignore the summons and miss court, you get what is called a default judgment. This means you automatically lose and have to pay the debt as well as court costs for the plaintiff.

They admit guilt

A decent person looks at a law suit like this and probably feels like they are in the wrong.  They think,“well, I do owe this debt”.  You cannot admit to the plaintiff that you are guilty. When you defend yourself in court (or an attorney defends you), you are saying the debt collector does not have the right to this debt.  Do not admit guilt.

They assume they have no rights

It is only natural to feel bad about owing a debt and being sued for it, but that does not give debt collectors the right to harass you day and night.  The FairDebt Collection Practices Act (FDCPA) was created to protect you in situations like this.  The debt collector is not allowed to act like the mob.  They cannot threaten you, call you at odd hours, or deceive you in any way.

They think they cannot afford protection

If you are sitting there with a new summons in hand from a debt collector, now is the time to get on the computer and start shopping for an attorney.  Just like any other service,you often get what you pay for.  Do your research and choose an attorney that will go to bat for you and communicate with you throughout the process.  While it is possible to defend yourself in court, you should think about the repercussions if you are not secretly a law genius and lose your case.

If you are being sued by a debt collector, you need help.  If you let them, debt collectors will bully you and get as much out of you as they can. You need the skills and experience of Elias Dsouza with Dsouza and Strachan Lawgroup group.  Elias has been protecting people from debt collectors for 15 years.

Cyber Monday Scams and How to Avoid Them

One of the easiest ways to get your personal data stolen is online shopping.  Cyber Monday is one of the riskiest times of the year for credit card use.  Hackers and thieves gear up all year to prepare to hit retailers and gain the personal data of millions of unsuspecting customers.  What can you do to protect yourself or at least mitigate the damage caused by fraud?

Tip #1 – Search for Items on Websites Instead of Search Engines

Search engines can be misleading.  A good con-artist can create a link and send it up the rankings on a number of search engines like Chrome, Edge, and Bing.  You could click on a link that takes you to a fabricated page, takes you through the entire buying process, and steals your credit card information.  A good sign that a page is not real is the price.  If the price is ridiculously low even for Cyber Monday, take a look at the URL (the “www” address in the search bar) and make sure the address is correct.

Tip #2 – Phishing Email Coupons

If you get an email with a coupon from a store you NEVER visit online or in person, it is a good indication the email is fake.  Do not click any of the links and block the sender.  Most Cyber Monday deals do not require coupons.

Tip #3 – Do Not Purchase Anything Using a QR Code

Using the naked eye, it is impossible to determine a QR code’s validity.  Hackers have even been able to create an overlay containing fake QR codes and place them on top of real ones on official websites.  There are tools to help consumers avoid this problem.  Norton’s Snap QR Reader will scan a code and let you preview a website without actually visiting it (Android users can download it here and iOS users can download it here).

Tip #4 – Keep Track of the Payment Methods You Use at Each Site

If you know which card or other payment method you used to make a purchase, you can more easily narrow down which retailer was affected by a breach.  In addition, understand the protections in place for the payment methods you use.  If you use PayPal, know their fraud policies.  If you are using a credit card, understand how to make a claim and what their process is.

If you run into credit card or debt problems this holiday season, you may need the assistance of an experienced counselor and attorney.  Elias Dsouza has the skills and experience to get you back on track.  Contact Elias for a free consultation.

5 of the Worst Business Decisions Ever Made

If your business is having a tough time and you feel like it is your fault, this might make you feel better.  Some bad decisions can cost a small business a few thousand dollars.  Imagine how you would feel if your decision-making cost your business millions?

 1 – The Record Company That Declined to Sign the Beetles

In 1962, Decca Records said to then Beetles manager, “Not to mince words, Mr. Epstein, but we don’t like your boys’ sound. Groups are out; four-piece groups with guitars particularly are finished…The Beatles have no future in show business.”  This was after a 15-song recorded audition.  The producers at Decca went on to sign Brian Poole and the Tremeloes.  Needless to say, that was a swing and a miss.  In 2012, the tape from the Beetles audition was sold for 35,000 Euros and is now believed to be owned by Apple.  By 1964, the Beetles sold over $50 million in records in the United States alone.

2 – The Company That Passed on Google

It is estimated that Google is worth $132 billion.  How would you like to be the guy who was too cheap to buy the company for $1million?  Well, that guy is George Bell.  He was the CEO of Excite when the founders of Google approached him with the offer.  This may be the biggest missed opportunity in business history although we do not know if George Bell would have grown Google into the monster it is today.

3 – Blockbuster Thought Netflix Was a Fad

In the early 2000’s, the CEO of Netflix approached executives at Blockbuster to try to develop a mutually beneficial arrangement.  Blockbuster would advertise Netflix in their brick and mortar stores and Netflix would advertise Blockbuster online.  Executives at Blockbuster were not having it.  It is estimated that Blockbuster would have gained $50 million in market share.  10 years later, Blockbuster filed for bankruptcy.  Netflix is worth $13.5 billion.

4 – Ross Perot Says “No” to Buying Microsoft

When Bill Gates approached Perot to sell Microsoft, Perot was interested.  Gates wanted around $60 million.  This was in 1979 so that was no small chunk of change.  Perot felt that the price was too high because Microsoft hadn’t reached its peak.  Perot later admitted that was the worst business decision he ever made.  Microsoft may be the next member of the $1 trillion club (market value).

5 – Western Union Passes on the Telephone

In 1876, Alexander Graham Bell tried to sell his invention to Western Union for $100,000.  Western Union felt that the telephone would not take off and would fade.  Western Union then hired Thomas Edison to devise a similar invention.  Bell later sued Western Union and won.  Bell communications was born and would remain the largest telecommunications company in the United states for the next century.

If you made a mistake and your business is paying for it, you may be facing bankruptcy, foreclosure, or even abusive creditors.  If this is the case, take control of the situation.  Elias Dsouza has been helping business owners stop the harassing phone calls from creditors and climb out of debt for over 15 years.  Contact Elias for a free consultation.

Social Media Is the Latest Weapon for Creditors

Debt collectors have always been creative.  They use phone, email, mail, text messages, at home visits, and many other techniques to get in contact with a person in debt.  According to the Federal Trade Commission, all of those methods are legal except postcards with details anyone could see.  However, if creditors utilize these methods, they are not allowed to be deceptive or threatening.  The latest method? Social media and, per FTC guidelines, this is also legal.

Current Debtor Protections

The current Fair Debt Collection Practices Act (FDCPA) is a center- piece of legislation regarding debt collection practices.  Some highlights:

  • Collectors cannot contact you before 8:00am or after 9:00pm.
  • If a debtor tells a collector not to call them at work, the collector cannot do so.
  • Collectors cannot be deceptive.
  • Collectors cannot be threatening or vulgar.
  • Collectors cannot say they are going to sue you unless they actually intend to do so.
  • Creditors cannot impose charges unless the charges were agreed upon in the initial agreement. They are not allowed to create new charges.

What Collectors CAN Do

Debt collectors have rights as well.  They are legally allowed to:

  • Send correspondence through mail, email, phone (work and home), and text messages.
  • Set up payment plans with debtors.
  • Sue debtors if the debt is not resolved.

Where Does Social Media Fit In?

Under the current FDCPA, creditors are allowed to use social media to contact you and collect information about you.  They still cannot use any of the afore mentioned prohibited actions.  Some newer tactics are being used by collectors and it is getting the attention of the FTC.

In the last few years, there have been reports of debt collectors creating fake profiles and contacting friends of debtors to collect information.  Technically, they are not deceiving the debtor directly so these collectors are getting away with it.  Collectors have also been posting messages on debtor’s social media pages for all to see.  Using vague language so as not to release prohibited information, they shame debtors into paying.

So, What Can You Do to Prevent Social Media Harassment from Creditors?

The best piece of advice the FTC can give is to make your social media profiles private.  If your pages are private, collectors cannot see who your friends are, post on your wall, or get to you in an any other way using social media.  This is not say that you should dodge your debts.

If you are being harassed by credit card companies or other creditors, you can make it stop.  One phone call from a lawyer can halt the multiple phone calls per day, emails, text messages, etc.  You can get your life back.  Elias Dsouza has been defending people from the harassment of creditors for over 15 years.  He also offers credit counseling.  He has the skills and experience to get you back on track.  Contact Elias today for a free consultation.

5 Strategies to Tackle Your Credit Card Debt

In 2018, the average household owed $9,333 in credit card debt (for more see this post).  Almost 50% of Americans have revolving credit debt.  So, what can you do about it?  The easier answer: pay it off!  However, not everyone has thousands of dollars at a time to hand over to a credit card company.  Luckily, there are strategies to pay down revolving debt in an effective way.

1 – Target One Credit Card at a time

This strategy can be effective although the name is a bit misleading.  Using this method, you pay the minimum amount on each card on-time every month.  THEN, focus any additional money on one of the credit cards.  You should focus on the debt with the highest interest rate first so you accrue less interest.

2 – Debt-Snowball Method (coined by Dave Ramsey)

Tons of people swear by this method.  As explained on www.daveramsey.com:

  • List your debts from smallest to largest.
  • Make minimum payments on all of your debts EXCEPT the smallest.
  • Pay as much as possible on your smallest debt.
  • Repeat until all debts are paid.

3 – Consolidate Your Debt to a Single Card or Personal Loan

Sometimes people feel more in control when they just have one payment instead of 5 – 10.  If you are one of those people, consider moving all credit card debt to a single “balance transfer” card.  If you have a decent credit score, you may be able to find an option with 0% interest which can buy you some time to knock out the debt without accruing tons of interest.  Be careful with personal loans.  If you respond to an offer that says you were pre-approved, check the interest rate and payment options.  Too often, the interest rate is astronomical (20%-150%).

4 – Using Home Equity

Home equity can be an excellent tool when trying to pay down credit card debt.  Home equity loans usually have a lower interest rate than credit cards.  In addition, this type of loan can be tax-deductible.  One important note is that sometimes a closing cost can be a part of the home equity loan process.

5 – Negotiate!

You would be amazed at how much you can reduce your credit card debt by contacting the card company and negotiating.  If you are behind on payments, you can use that as leverage.  Tell the credit card company you will pay the entire balance that day if they reduce it to a certain amount.  Credit card companies often sell their “bad debt” to collections companies for less than $0.40 on the dollar.  It is in their best interest to collect your debt directly for $0.50 to $0.75 on the dollar.

If you find yourself saddled with credit card debt and you want a change, help is out there.  Elias Dsouza of Dsouza and Strachan Lawgroup Group is a skilled credit counselor and debt negotiator.  He has been helping people get their debt under control for over 15 years.

How Does Your Credit Card Debt Stack up Against Other People Your Age?

As of September 2018, the average amount of debt per person is $5,700.  The average balance per household is $9,333.  The total amount of revolving debt in the United States is $1.03 trillion.  41% of the people in the U.S. have some level of credit card debt.  Have you ever wondered how your level of credit card debt stacks up against other people’s in your age group?

0 to 35 – Average Credit Card Debt = $5,808

This group is among the lowest in terms of debt balance.  They are also among the least likely to have a credit card.  People in this age group typically have a lower “operating budget” so they cannot afford to manage much debt. Many Millennials are not opening lines of credit which is hurting their credit score and reducing their chance of getting a card.

35 to 44 – Average Credit Card Debt = $8,235

This is where credit card users start to pick up steam.  By this age, many people have had open lines of credit for more than 5 years.  They are typically in a higher income bracket than the previous group which allows them to get cards with greater spending limits and increases their ability to pay the bill.

45 to 64 – Average Credit Card Debt = $8,627

The “baby boomers” average the largest amount of credit card debt per person.  However, this age group also controls the largest amount of disposable income in the United States.  Additionally, they do not have as much student loan debt.

65 and over – Average Credit Card Debt = $6,326

This group is among the least likely to have a credit card.  However, this trend is changing.  Due to rising medical costs, the debt burden on this age group is increasing.  Some individuals in this group may have trouble getting a credit card even if they want one because, in the event of death, the credit card company could be stuck with the debt.  This fact often makes companies more hesitant to issue a card.

Credit card debt affects just about everyone over the age of 18.  Unforeseen events can lead to credit card overuse and things may get out of control.  If you find yourself in this position and creditors are calling you day and night or if you are ready to start paying down the debt and need guidance, contact Elias Dsouza at Dsouza and Strachan Lawgroup Group.  He has the skill and experience to get you back on track.

 

Data used in the post is from valuepenguine.com.