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Struggling With Student Loan Debt? Maybe You Should Move To New York

frustrated woman with credit card debtDoesn’t the term “loan forgiveness” have a nice ring to it? If you’re struggling under a huge pile of student loan debts than having them forgiven could be almost as good as having your sins forgiven. You have all that debt behind you and the rest of your life ahead of you. You could stop trying to live from paycheck to paycheck and actually start putting money aside for a new car, a wedding or even a house.

The lifelong effects of student debt

While you might think that getting those student loans repaid would be the end of things you’d be wrong. Student debts can have consequences that can drastically effect the rest of your life. For example, one recent study found that being in debt can cause you to choose a substantially higher-salary job and reduce the probability that you will choose a lower-paid “public interest” job. Why is this? It’s because if you have high student debts it’s most likely you’ll choose to work for a corporation in the private sector where you can earn high wages. If you have practically no student loans, you might be more willing to take a job involving public service such teaching or working for a nonprofit. Instead of being forced to put on a suit and tie and go to work every day, you might choose to move to one of the Third World countries and help fight hunger.

The same study found that high student debt can have a significantly negative effect on small business formation, which is sort of academic speak for people’s interest in becoming entrepreneurs. When you think about it, this just makes sense. If you go to work for a corporation you should have enough money to handle that student debt burden. But if you go out on your own, your income will be more volatile – at least to begin with. This can be harder to manage when you have student loans, which in turn can impact your credit rating.

Another consequence of student loan debt is that the average length that people are paying off these loans is up 80%. While it used to be the average length of repayment was 7.4 years it is now 13.4 years. If everything else is equal, a big increase in how long you will be repaying your student loans means that you’ll have to dedicate a bigger portion of your lifetime income to this. In turn, this can have a serious consequence on your ability to build wealth or just save for retirement.

Finally, another study found that every additional $10,000 in student loans decreases the probability of getting marriage by at least seven percentage points. Just think about this for a minute. If you added on $30,000 in student loans the odds of you getting married would drop by more than 20% or one in five.

So how does the state of New York come into the picture?

The state of New York is now offering some loan forgiveness programs on its own – separate from the ones offered by our federal government. If you are an attorney or an indigent legal services lawyer move to New York. You could earn an award designed to retain you if your are an experienced district attorney, an assistant district attorney or provide legal services to the indigent.

Licensed social workers can also earn an award if they have a minimum of one year of employment in a critical area of human services. Are you a nurse and could you teach? The state of New York has a nursing faculty loan forgiveness program the purpose of which is to attract more nursing faculty members and adjunct clinical faculty teachers in nursing.

What do you think about becoming a farmer? The New York State Young Farmers Loan Forgiveness Incentive Program is meant to inspire college students to become farmers in the state of New York. It provides awards for loan forgiveness to anyone who obtains an undergraduate degree from a New York state university or college and agrees to farm in the state of New York for five years on a full-time basis.

If you’re not an attorney, a social worker, a nurse and have no interest in farming

In this case, you would be better off staying where you are and trying for federal student loan forgiveness. This comes in three flavors.

Public service loan forgiveness

First, there is Public Service Loan forgiveness. To qualify for this program you would need to have certain types of student loans and make 120 qualified, on-time payments on those loans while working in a public service job. This could be working for a federal, state or local government entity or agency or for a nonprofit certified as a 501(c)(3) by the IRS. Those 120 on-time payments mean, of course, 10 years but at the end of that all your remaining balances would be forgiven.

Teacher Loan ForgivenessTeacher

Second, if you’re qualified to teach certain subjects, you could get as much as $17,500 of your student loan debts forgiven. You would need to teach for five complete and consecutive academic years in a certain elementary or secondary school or in an educational service agency that serves low-income families. What this translates into is that if you currently owe $30,000 in student loan debts this could reduce your burden to $12,500, which should be much easier to handle.

Perkins Loan cancellation

Since Perkins loans come from the school you attended you will need to contact it to apply for this type of cancellation. In general, you can usually have a percentage of your loan cancelled for each year that you work in one of these jobs.

  • Member of the US armed services serving in an area of hostilities
  • Medical technician or nurse
  • Teacher
  • Volunteer in the Peace Corps or ACTION program (including Vista)
  • Head Start employee
  • Corrections or law enforcement officer
  • Family services or child worker
  • Professional supplier of early intervention services

Programs that could assist you

If you don’t qualify for one of these three programs, don’t give up. There are some federal programs that could assist you in repaying your debts in return for a service commitment. This includes the US Office of Personnel Management Student Loan Repayment Program, the National Health Service Corp. Loan Repayment Program and the Armed Forces Student Loan Repayment Program. Each of these programs offers different rewards. For example, the US Office of Personnel Management Student Loan Repayment Program offers up to $10,000 a year for loan repayment to a maximum of $60,000. The National Health Service Corp. Loan Repayment Program offers an initial reward of $30,000 or $50,000 and the Armed Forces Student Loan Repayment Program could mean up to $65,000 of your eligible loans would be repaid – depending on your branch of service.

Income-based repayment

You say you wouldn’t qualify for any of these programs? There is a class of federal loan repayment programs called Income-driven Repayment that could help ease your burden. Here’s a brief video, courtesy of National Debt Relief, that explains what it’s all about.

Good News For First-time Home Buyers

If you have that American dream of owning your own home or if you’re just tired of paying rent, there’s good news. Buying a home may not now cost you as much as it used to.

It’s all about FHA mortgage insuranceHouse and calculator and credit score

FHA mortgage insurance is to protect the government if you were to default on your loan. It’s about to be reduced from 1.35% of a loan’s value to 0.85%. What this translates into is if you were to purchase a home for $100,000, your FHA mortgage insurance would have cost you roughly $1350 while it will now cost you $850. However, on the average a first time homebuyer will save about $900 a year on his or her mortgage payments.

Shut out of home ownership

The FHA decided to make this change based on the fact that many families that are credit worthy and want to buy a home are shut out of home ownership because of today’s tight lending market. In making the announcement of this change, the White House said it estimates these new, lower premiums will allow as many as 250,000 new buyers to buy a home.

The department of unanticipated consequences

This could actually fall under the department of unanticipated consequences. As a result of the financial meltdown and the foreclosure crisis that followed it, the FHA increased its mortgage insurance premiums to shore up its finances. The unanticipated consequence of this is that it froze many potential buyers out of the market. However, the jobs picture is getting better, foreclosures have fallen to their lowest levels since the year 2006 and home values are on the rise. As a result, the FHA announced last March that it would not need another bailout given these improving financial conditions. The White House said that even after premiums are lowered, the reserves in its fund are projected to increase by $7 billion to $10 billion annually.

The people that need FHA loans

Why are FHA loans important? There are many people that can qualify for conventional mortgages or mortgages backed by what’s called magic (MGIC) money. However, low-income people and those that are high-risk borrowers due to the recent financial crisis find that FHA loans are an important lifeline. This is also due to the fact that private lenders have tightened their lending standards. So for many borrowers FHA-backed loans with their small down-payment requirements and easier credit score hurdles are the only ones available.

More good news

If you are a first-time or low-income homebuyer there’s even more good news. Fannie Mae and Freddie Mac recently announced that they want to open up lending to more of these people. As a result they will begin backing mortgages requiring a down payment of as little as 3% of the home’s price. This represents a reduction of 2% from the 5% down that Freddy and Fannie are already requiring. Going back to the example of a $100,000 home, this means a qualified borrower would be required to put down only $3000 instead of $5000.

Strict criteria

However, to qualify for one of these 3% down loans you will have to meet some strict requirements. You will need to have a credit score of at least 620 and be able to provide complete documentation of your assets, income and job status. The agencies will also require you to take homeownership counseling – as another way to reduce their risk.

Fixed rate loans

These loans will be fixed rate for both programs and will be available to both first-time homebuyers and those that are seeking to refinance. Fannie Mae began offering 3% down loans effective December 13 while Freddie Mac will begin offering them as of March 23.

Young Couple Looking at BlueprintsWho will benefit?

This is aimed at expanding mortgage access to first-time home buyers that are typically younger people that have not yet had the time required to save a big lump sum for a down payment on their mortgages. As you can see, this is not exactly a radical departure from what FHA is doing now but should definitely help some people. Fannie’s and Freddie’s 3% loans should even have some advantages over the 3.5% down loans offered by the FHA. As an example of this, if you were to get an FHA loan you would have to pay for private mortgage insurance premiums for the entire term of your mortgage, which is typically 30 years. This would add an additional 1.35 points to your monthly payment. What this amounts to is that a loan with a 4% rate would become a 5.35% mortgage. That’s about another $80 a month extra for every hundred thousand dollars borrowed or $960 a year.

You could even cancel the mortgage insurance

If you have a Fannie Mae or Freddie Mac loan, you can actually cancel your private mortgage insurance premiums once your mortgage balance drops below 80% of your home’s value. This can be either because you’ve made enough payments or because your home’s value has increased. As an example of this, if home prices increase 5% a year for three or four years, you should be able to cancel your insurance, which would save you tens of thousands of dollars over the life of the loan.

Good news for those that are underwater

There’s also some good news for homeowners that owe more than their homes are worth. You might be able to use the government’s HARP (Home Affordable Refinance Program) program to refinance your mortgage and get your monthly payments lowered considerably. To be eligible for this program you must have a mortgage owned or guaranteed by Freddie Mae or Freddie Mac and it must have been sold to one of these entities on or before May 31, 2009. There are some other eligibility requirements that you would need to meet and you can learn about them by clicking on this link. But if you do qualify it’s likely you could see your monthly mortgage payments reduced by as much as $500. Plus, if there is absolutely no way you can continue homeownership, HARP offers a way to get out from under your mortgage and without having to go through foreclosure. Here, courtesy of National Debt Relief is a short video with more information about this program.

Debt Relief Options For Different Financial Situations

Debt Relief Options For Different Financial SituationsThere are many debt relief options to help you get out of your current financial crisis. Of course, it all begins with you understanding what got you in this situation in the first place. This will help keep you out of debt and also allow you to achieve debt freedom a lot faster.

Once you have identified that, you may want to take a look at your finances and the type of debts that you owe. There is no shortage of debt solutions. However, you need to know the right program that will suit your problems best. There is no one formula and to maximize your limited resources, you need to base your debt relief program on how much you can afford to pay your debts.

There is a specific solution depending on your financial situation. Each of our status is unique but we usually fall under one of three categories when it comes to our debts.

Before you find the category and debt solution that suits you best, take a look at your budget first. Identify your income and expenses (excluding debts) and get the difference. Whatever is left will be the disposable income that you can allot for your debt payments.

Debt relief options for people with money for minimum payments

The first financial situation is having enough disposable income to cover your minimum payments. The extreme scenario is having a little deficit on your monthly bills – but nothing significant. If this is your financial standing, you can afford to use a debt consolidation loan to solve your problems. The benefits of this includes the following:

  • Lower monthly payment

  • Possible lower interest rate

  • Longer payment period

  • Single monthly payment

  • Does not affect your credit score.

What you have to know, which is important too, is that this option will not reduce your principal balance. The lower monthly payment is possible because your current balance is stretched over a longer term. The lower interest rate is also responsible for this. But in terms of reducing what you owe, there will be none of that. You will still end up paying for everything that you owe. This means a steady and stable income is needed. You should also boost your savings so that you can meet your debt payments without a problem. This program takes 5 years or more to complete so you need to be sure that your income can keep up with such a long payment period.

There are two popular ways to consolidate your debts.

Debt consolidation loans. This option involves getting a low interest loan that you will get to help you pay for your multiple debts. Once the loan is approved, you can simply go to your creditors, pay them all completely and just concentrate on the single payment that is required from this one loan. To maximize this option, you need to make sure you will get a low interest – which means you either have a good credit score or a collateral.

Debt management. In case you do not have the ideal credit score or collateral, you can use debt management instead of getting a loan. This option allows you to work with a credit counselor who will help you come up with a debt management plan that will contain your proposed lower payment terms. The counselor will present this to the creditor. When approved, you will send a single monthly payment to the counselor who will take charge of distributing the funds to your different creditors.

With the latter, you need to be careful about your choice of company. Make sure you brush up on your knowledge of the Telemarketing Sales Rule (TSR) to help you identify the legitimate companies from the not.

Best debt solution when you cannot make your minimum payments anymore

In case your financial situation cannot afford to meet your minimum payments, you obviously need a more drastic debt reduction plan. This is when debt settlement becomes the better option for debt relief. The whole idea of this program is to convince your creditor that you are in a financial crisis. You want them to allow you to pay only a portion of your debts and have the rest forgiven. This program will give you the following benefits:

  • Eliminate collection calls (if you work with a debt negotiator).

  • Reduce your current balance significantly.

  • Get you out of debt in 2-4 years.

  • Possible elimination of interest rate and other charges.

The catch here is that you need to default on your payments in order to convince your creditors that you are in a financial crisis. This would mean you have deal with a damaged credit score temporarily. Instead of paying your creditors, you will send your money in a secured account and grow it there until you and the creditor comes into an agreement.

While you can do this on your own, you will get a lot of benefits by getting a professional to work with you. The debt negotiator will bring their expertise into the whole process. You will also be left in peace because part of their service includes taking over communication calls. Just make sure that they are certified by authority training organizations like the IAPDA or International Association of Professional Debt Arbitrators.

Credit relief for people in severe financial conditions

In case your conditions are quite severe, your last resort option is to file for bankruptcy. This means your income is barely enough to pay for your basic necessities or you have very little income coming in (or none at all). Most financial advisers will tell you to exhaust other options first before opting for this one. This will have severe effects on your credit score and that will make it even more difficult to recover after getting debt freedom. Having bankruptcy on your credit report will make it hard for you to get financial assistance for a home or a business that you want to put up.

When you file your petition, the court will assign the type of bankruptcy that you qualify for. This involves the means test. If your income is lower than the state average, you can qualify for Chapter 7 wherein your assets will be liquidated and anything that does not get paid will be discharged. If your income is above the average, you qualify for Chapter 13. This means you will be subjected to a repayment plan. This type of bankruptcy is not so different from debt settlement.

The US Courts website hold a lot of information about bankruptcy that will help you understand the whole process. It is best to gather information first so you know your options very well. That will help you make smart choices about your debt solution.

Consult with a debt relief expert to discuss all your options

National Debt Relief, a BBB accredited business, has debt relief experts standing by during extended business hours to explain all your debt relief options and find a plan that is right for you and your specific financial situation. You get a free debt analysis with no obligation and no judgment. Click here to speak with a debt relief expert or call 888-703-4948 today.

50 Side Hustles Or Simple Things You Could Do On The Side To Pay Off Your Debts

If you’re awash in a sea of debt you must be pretty uncomfortable. The worst thing about debts is they just never go away. You could ignore a debt for six months and you might stop hearing from that particular lender but trust us. It will sell your debt to a third-party so it won’t have gone away. It will only have moved. And it will probably have moved to a debt collector. If you don’t already have debt collectors harassing you then get busy before the harassment starts. Debt collectors are like the cockroaches of life. They won’t stop making your life miserable until you settle the debt. If that particular debt collector gives up on you, which is seriously unlikely, that debt still won’t disappear. The collector will simply sell it to yet another collection agency and so on and so on.

The good news is that if you seriously want to get out of debt it’s not all that difficult. There is a bunch of “side hustles” or simple ways to make money on the side. Pick one or several of the 50 we’re about to share with you and you could be debt-free in practically no time at all.

Happy BusinessmanBe your own boss

You really don’t even have to work for someone, as there are there are easy businesses to start that you could run in your spare time. Some of these could even be fun as well as moneymakers.

#1: Get crafty

Craftsmen were dealt an awful blow by today’s mass production technology. But they’ve been coming back these days in a big way. Many people have become sick and tired of assembly-line stuff made in China. Thanks to the website Etsy.com you could set up shop and sell whatever it is that appeals to you and that your tools and skills can handle. We’ve seen people making simple things such as shaving brushes, lamps, personalized notebook covers and hundreds of other items – and making good money.

#2. Got a degree in English?

There’s a big market out there for people who can be proofreaders and editors. This is a great how to make money on the side because the only tool that’s required is your brain. You might be able to start working for friends or former classmates. But as you build your “creeds” you should be able to branch out and find work in Craigslist postings and independent/indie author’s forums.

#3. Personal chef or meal delivery

Got a knack for cooking? There was a time when only the rich could afford a personal chef but now more and more middle class people are jumping on the bandwagon. You could go into the home and make meals for them several times a week or prepare the meals in your house and then deliver them. One note of caution. If you want to fix meals in your own home and then deliver them, be aware that there may be laws that requirimg you to make the food in a kitchen that’s commercially-certified. And it can be costly to get that certification. You might be able to work around this if your city has a commercial kitchen where you could rent time.

#4. Pick up dog poop

This might sound like a nasty side hustle but it’s one of the easiest business to start. For that matter, some people actually do this full time. All dogs have to poop and there are people who don’t want to have to go over their yards every week looking for their dog’s droppings. Get as few as 10 customers a week at $30 a week and there’s a cool $300.

#5. Troubleshoot computersManager working diligently on the computer

If you’re one of those kind of, well, geeks that are not afraid to tear apart a computer to replace a motherboard or install a hard drive, this could be a way to pick up some real cash. Most people don’t know much about their computers except how to turn them on. Become a repair service for those people and you could earn $50 or more an hour by teaching them how to use their computers and then fixing them when they freeze up.

#6. Create blogs and websites

There’s hardly a business today that doesn’t need a website and maybe even a blog. Pick a couple dozen local businesses, go check out their websites and you’ll probably find most are dull, boring and static. You could not only help businesses by upgrading their sites but then charge extra to make those sites rank higher in the search engines to get the businesses new customers.

#7. Be a pet taxi service

There are many families these days where both the husband and wife work and maybe very long hours. They simply don’t have enough time to taxi their dogs or cats to the veterinarian or to get it groomed or get a medical check-up. You could be a pet taxi, pick up the animals and transport them to their appointments.

#8. Clean windows

Another way to be your own boss is to get a squeegee, some cleaning product and wash windows. This is another area where many people simply don’t want to have to face the task and are more than eager to let someone take it over for them.

car wash cartoon#9. Detail automobiles

Some people and I’m certainly not one of them prefer to detail their own cars. But there are plenty of people who will gladly pay you to take this task off their hands and make their vehicles shine like new.

#10. Create a blog

I’ll be honest and tell you it’s not easy to earn money with a blog but it is possible – if you don’t mind investing a lot of your time and sweat. But pick the right niche, generate a lot of good content, get a bunch of readers and you could make excellent money selling them products.

#11. Make music

Are you good on the keyboards or string instruments? A good side hustle would be performing at small business events and weddings. See, all that practice really didn’t go to waste.

#12. Teach music

You don’t have to be a performer to make money with music. You could become a music teacher. You could either give lessons in your home or go to people’s’ homes.

#13. Create family histories

There are numerous people who would love to know their family’s history but have neither the time nor the skills to do the work required. People sometimes even have software to do this but are still confused and don’t know how to use it. Your how to make money on the side could be to help them create their family trees.

#14. Sell you own t-shirts/posters/mugs

It seems like it was just a few minutes ago that to make your own T-shirts meant screen-printing them yourself. However, the cost to get started in this business is now practically zero what with all those sites that will print on demand and then ship your t-shirts or whatever for you. You could create designs and put them on everything from shirts to coffee mugs. These companies do everything for you including even the shipping. Of course, it’s up to you to do the graphic design. Be prepared for the fact that the printer will take a big cut leaving you with a much smaller net profit. But it’s a great way to get started in a new area to determine if there are people who would pay for your creations.

#15. Refurbish stuff

Do you like to refurbish your furniture? Then why not charge people to do theirs? You could even specialize in refurbishing certain items like furniture, clocks, phonographs or old-time radios.

#16. Make “artisan” jerky

Yes, you read that right. You could become a jerky maker. When women think of easiest business to start they almost inevitably think cupcakes. But we guys have jerky. There are a lot of independent makers of jerky and jerky artisans that have emerged in the past few years as an alternative to that low-quality, mass-produced jerky you find in grocery stores.

#17. Teachteacher a school

What could you teach? The list is almost endless. You could teach a foreign language, origami, drawing, or basic computer skills. All you would need is a place to hold your classes and some willing learners. If you have the right skills or expertise you could give a class through CE (continuing education) sites, libraries and rec centers. There is also the new site dabble.com where it’s possible to host classes for students interested in your subject.

#18. Be a tutor

If you’re really proficient in math, language arts or the SAT test you could become a tutor as there is never a shortage of people willing to pay for this service. Finding these clients is fairly easy. Just call a few of your local public schools as many of them keep lists of available tutors to give the parents that need one for their children.

#19. Be a jack of-all-trades handyman

Do you live in an apartment complex Then you know there‘s that one guy that repairs all those small things that can go wrong. But people in homes have to call someone different to fix every different thing from the furnace to the dishwasher. One of the great side business ideas is to become a Jack-of-all trades handyman. You could actually try asking for a retainer where people pay you a fee monthly so they could call you whenever they needed you and for whatever reason just like in an apartment complex.

#20. Personal shopper

There are so many choices available today for just about every single item that finding the right one can be time-consuming and frustrating. Where could I find a sweater like this one? What’s the best computer for my needs? What’s the best-priced ticket for my flight later this month? Let your clients tell you what they need. You would then go to work sorting through all the available options and then present them the three best choices or, depending on their level of trust, make the purchase for them.

#21. Be a travel agent

Professional travel agents have sort of gone the way of the dodo bird leaving a wide-open niche for helping people find the best travel deals. You could even specialize by setting yourself up as that person who finds and books the best vacation packages.

cartoon cute girl shoot photo with camera#22. Shoot photographs

If you have a good DSLR, the requisite skills and experience you could set yourself up documenting people’s weddings, family moments and birthdays. You could also license the rights to your photos for commercial use as well as many other things. It’s easy to do this through Flickr.

#23. Become that dirty jobs guy

There’s just a ton of unpleasant stuff that people either don’t want to do or can’t do. If you’re not afraid to clean the cobwebs and old junk out of a basement or clean a shower that’s gotten so aeful looking that the owner is embarrassed to contact a maid service you could charge good money for this. Spend a few minutes thinking about all the gross things you could do. You’ll probably come up with a fairly lengthy list. Put up a listing on Craigslist and you might actually find yourself overwhelmed with work.

#24. Write content

Content has become the battle cry of almost all bloggers and website hosts as content is what attracts and keeps readers. You may not make a lot per 500-word article but if you can crank out a dozen or so a day it could be good money. Plus, traditional magazines also still pay top dollar for great stuff.

#25. Videography/video editorVideographer

Many people no longer want just photographs of their weddings. They want them professionally videotaped and edited. With more and more video being watched online the market for good videographers and editors is only going to keep going up. If you can make and edit short films, you could sell your service to people to “shoot” their wedding. Local businesses can also be clients. You might sell them on the idea of a brief video for YouTube.com or that the business could put on its webpage.

#26. Computer programmer

Practically everybody has that great, brilliant idea for a smart phone app that will make them a gazillion dollars. Fortunately for you very few of them have the skills necessary to create the app and reliable computer programmers are hard to find..

#27. Personal trainer/fitness expert

You would need to be certified to do this but once you get your creds you could help people with their workouts at their favorite health club. Or you could start what’s called a boot camp. There are people who need specialized workout programs to help them train for an event such as a triathlon. There are also people looking for good exercise without going to a gym. It seems to us that there is a really good market for people offering what you would call “off the wall” kinds of fitness programs.

mower#28. Landscaper and lawn care

One of the small business ideas for men is where you could make good money with just a mower, a pickup truck and an edging tool. Plus you could do it evenings and weekends. Our lawn care guy charges $30 a week. Get 10 customers and that’s $1200 a month.

#29. Do other people’s taxes

This is an easiest business to start because again all you need is your brain and the computer you already own. We know of people who do this for their friends and relatives and charge a just small percentage of their returns. If you were to charge $60 and do this for four people a week during tax season that would be $960 in a month. You could actually use TurboTax to do the work for you. This is just a perfect side hustle.

#30. Drop shipping on the Internet

Drop shipping is where you create a storefront on the Internet and sell products but then let the manufacturer or wholesaler fulfill the sale for you. This means you actually never touch the inventory. You won’t make as much money as if you were selling your own product because the wholesaler or manufacturer will take its cut. But the work is almost effortless and once you get rolling, it requires practically no more work on your part.

#31. Teach on Udemy

You could make an online course in just a few hours and then sell it on Udemy. We know of one guy who earned more than $10,000 in just a few months from an online course that took him less than seven hours to create

#32. Airbnb

Could you rent out your home while you’re away? This can be a great moneymaker. Alternately, if you have two bedrooms and your rent is $1000 a month you could rent out one of them at $70 a night. This could generate a profit of $1100 a month.

#33. Sell your services on Fiverr

If you can do something fast, whether it’s create a logo, make a jingle or do fan pages you could make good money selling your services on Fiverr. Of course, as you probably know you only make five dollars per “gig” but we’ve seen people making more than that by offering logical add-on services for another $20 or $30.Cooking girl holding cake

#34. Be a baker

Do you have a knack for baking cakes, cupcakes and the like? You could dominate your workplace. We know of one woman who loves to cook and started offering to make salads for her coworkers. She ended up turning this into almost a full-time business.

#35. Start a painting service

You might look down at painting services but the good ones charge $50-$70 a room. If you live in a college town you could paint student-housing complexes. Three rooms at $75 each means $225. Multiply that by 500 apartments and that’s a cool $112,500.

#36. Write and fine-tune cover letters and create resumes

Given the way hiring works these days people absolutely need great cover letters and resumes. But this is beyond the abilities of many people. Smart people will pay good money for great resumes and cover letters. You could charge more if you have to start from scratch but you could also make money just doing critical revisions.

#37. Be a mover

No, this isn’t like being a mover and shaker. If you live in a town where people seem to move around a lot, you could create a moving service with the help of one or two of your buddies. College towns are great for this because they generally have people moving around every several months.

#38. Pick up other people’s trash

People end up with a ton of junk in their homes because they don’t want to have to move it. Charge people to take the junk out of their homes and off their hands. If you don’t think this would be a good side hustle look at the money being earned by 1-800-got-junk.

#39. Be a tour guide

Do you come from another country or are you intimately familiar with a foreign country? You could start a small tour guide company for people who want to visit that country. We have one friend from Sweden who earns tons of money every summer tour guiding Americans through his nation.

cartoon bartender pouring cocktail#40. Tend bar

This is one where you probably would have to be certified and certification programs can cost $500 and up. However, some bars will actually teach you on the spot if they’re really desperate for help. The hourly pay here tends to be on the low side but where you really make the money is in tips. In addition, you get to meet a lot of people along the way, including people of the opposite sex (grin).

#41. Bike messenger

Do you own a bike and a backpack? That’s all you need to be a bike messenger. You would help companies (especially advertising and legal) that do business with each other and need to send original documents back and forth. Believe it or not even in this day and age of FedEx and UPS there is still the need for someone that can get an original document from a company to a customer in less than an hour.

#42. Plan events

Just because a person or a company wants to put on an event doesn’t mean they will know how to do it. There are banquets, anniversaries, baby showers, birthdays, weddings and anniversaries where people need help planning, coordinating and executing. If you enjoy doing this, there’ll always be events and you will always have business.

#43. Stage fundraisersbreast cancer design

Do you know of a nonprofit that wouldn’t like some extra money? We’ve personally never run into one. There are numerous websites that help nonprofits raise money online and then take a percentage of it. You could do the same if you can get to the right people in a room or put together a campaign or event that would help a nonprofit you believe in raise more money to do more good work.

#44. Do gardening

This is different than doing lawn work because you would actually be planting and caring for flowers and bushes. This is also a great repeat side hustle because once you create that garden and those flowerbeds you’ll have an ongoing job maintaining them.

#45. Assemble IKEA furniture

Can you read diagrams and are good with your hands? People buy furniture from IKEA, bring it home, open the carton and 100 pieces fall out. If you like building stuff you could put an ad on Craigslist offering to help people assemble IKEA stuff and other “shipped flat” items. All you really need is a wrench and a screwdriver.

#46. Life coaching

Are you that guy or gal your friends are constantly coming to for advice. Why not charge – other people – for the service. The reason why your friends and relatives come to you is because you’re a great listener and you appear to have everything together. People value this and will value you and your advice as a result of it.

#47. House sitting

People who are away from their homes for long periods of time often don’t like the idea of them sitting unoccupied. They might even have pets that need to be cared for while they are gone. Or they might live in a neighborhood that isn’t quite the safest. Whatever the reason might be, housesitting can be a great side hCleaning womanustle – especially if you’re a real homebody.

#48. Start a housekeeping service

While there are professional housekeeping services they can be pricey and pretty stringent about what they’re willing to do. You might be able to build a good side hustle business offering to do customized housecleaning where you do everything your customer requests and not just whatever can be done in four hours.

#49. Massage therapy

While you would need to be certified to do this it could be a great side job especially if you’re good with your hands. There are a lot of stressed-out people today and this stress tends to manifest itself in their backs, shoulders and other parts of their bodies. You could make a good deal of extra money by helping them work out those knots.

#50. Hairstyling

Did you grow up doing your sister’ hair? Did you develop a sort of a passion for it? Some people do and some people don’t. However, there is a ton of money in women’s hair care and design. Do a few friends a week and you could see your bank account fatten up considerably.

Everything You Need To Know To Deal With Nasty Debt Collectors

stressed old manWhat’s worse then being seriously in debt?

It’s being seriously in debt and having to deal with debt collectors.

The problem is that these people usually work on a commission basis and have a quota. If they want to get paid and keep their jobs they must collect money from you –by hook or by crook, which is an old English phrase that means by any means necessary. And trust us. Debt collectors will use any means necessary up to and including threatening to go to your employer or your relatives, to take you to court, to have you arrested or to sue you.

“I’m mad as hell”

If you’re one of the millions of Americans being harassed by debt collectors you may have reached the point where you’re like the character Howard Beale in the movie Network and are saying to yourself, “I’m mad as hell and I’m not going to take this anymore.”

Well, you’re right. You don’t have to take being pressured by debt collectors anymore. You have rights and when you know what they are you can either stop any more phone calls or at least negotiate favorable settlements of your debts.

The first thing to do

First of all, a debt collector has to be able to prove the debt is actually yours. We live in a nation of more than 330 million people, many of whom have the save names and have done business with the same companies. Last I looked there were at least 30 other people just on Facebook with the same name as mine and isn’t John Smith, Bob Jones or Tom Brown.

So the next (or first) time a debt collector calls, make him prove the debt he’s trying to collect is yours. You can ask him for the name and address of the original creditor and the exact amount you owe. If the collector is unable to provide this information, he has five days to send you a written notice with the information you’ve requested. You could also dispute the debt by writing a letter to the collection agency asking that it verify the debt. This could mean requesting a copy of the statement showing your balance, a copy of the original credit agreement or any other information you deem pertinent. Once the collection agency receives your letter it has 30 days to respond during which time it is not allowed to contact you.

If the debt is really yours

If the debt collector is able to prove the debt is yours, you have a couple of choices. First, you could try to settle it for less than you owe. One thing the debt collection agency doesn’t want you to know is what it paid for the debt. In most cases the original creditor (think bank or credit card issuer) bundled up a bunch of debts it had written off and sold them to the collection agency for pennies on the dollar. If your original debt was for $500, the collection agency mighjt have paid five dollars or even less for it. This means there is room to negotiate. You could offer to settle the debt for, say, $50. The collector can then either accept your offer or make a counter offer. In either event the odds are that you’ll be able to settle the debt for much less than its face amount.

Make the collector stop calling youDebt collector hollering into mic

A second alternative is to make the collector stop calling you and then just wait to see what happens. Yes, you read that right. You can make the collector stop calling you. In fact, all you need to do is write and send his agency a cease and desist letter. You can find samples of this letter by clicking on this link. Be sure to send the letter certified and return receipt requested so that you can prove the collection agency actually received it.

If the collection agency does indicate that it received your letter (which it may not do) it can contact you just one more time to either acknowledge it won’t be contacting you again or to inform you what legal action it will take next such as suing you.

If you’re lucky

Once the collection agency has stopped contacting you, start holding your breath to see what it does next. If you’re lucky it will simply go away and you won’t hear from it again. If it’s a big debt you may not be so fortunate. The agency might sue you or sell your debt to yet another collection agency, which would then start harassing you.

Get an attorney

A third alternative is to hire an attorney to represent you. Of coarse, you wouldn’t want to do this unless it was a very large debt as you will have to pay the attorney somewhere between $100 and $500 an hour for his or her services. But once the debt collector knows you are being represented by an attorney, he will generally stop calling you and will contact your attorney instead. This means the debt collector must know your attorney’s name and contact information. If you do have an attorney and receive a call from a debt collector make sure you tell him that that you are being represented by an attorney and that he should start contacting him or her and not you.

Understand your rights

Assuming a worst-case scenario – that the collection agency continues to harass you over the debt – it’s important to know what it can’t do. This is covered in a law passed by Congress several years ago called the Fair Debt Collection Practices Act (FDCPA). It sets out what a debt collector can and can’t do. The most important things it can’t do are …

  • Call you prior to 8:00 AM or beyond 9:00 PM unless you give the collector permission to do so
  • Contact your employer unless your debt is past-due child support
  • Call you where you work if he knows your employer doesn’t want you to be contacted there
  • Send you a postcard or envelope that clearly indicates it had been sent by a debt collector
  • Call your neighbors, friends or relatives about the debt in order to embarrass you into paying it
  • Use an envelope or post card that makes it appear that it came from a court or government agency
  • Call you frequently during a relatively short amount of time as this constitutes harassment and harassment is illegal under the FDCPA.
  • Force you to accept collect calls from the agency
  • Swear or insult you when you’re talking or threaten to ruin your reputation or have you jailed
  • Try to collect more than your debt unless the contract it has with the creditor allows this

What to do if the debt collector violates the FDCPA

If the debt collector does any of the things listed above, you could file a complaint with the Consumer Finances Protection Bureau either online or by calling (855) 411-CFPB (2372). You can report any problems you’re having with a debt collector to your state’s attorney general. You might also be able to sue the debt collector in your state’s or federal court. If you are successful you could win up to $1000, which is not a huge amount but you would also win a lot of self-satisfaction in having beaten the collection agency.

5 Questions To Ask Before You Use Savings To Pay Off Debt

debt and save targetDid you know that your savings can keep your finances from flying apart? In fact, you can use savings to pay off debt. These are only a few of the reasons why this is such an important part of your financial life. In fact, some experts are saying that you cannot be a financial success unless you have some form of savings to your name.

While we are all aware of the importance of savings, sadly, this is a difficult goal for a lot of Americans to reach. According to an article published on Mint.com, the ideal saving rate is 10% to 20% of consumer’s income. However, a report from the Federal Reserve Bank of St. Louis reveal that the current savings rate in the country is actually 4.2% only. That is not even half of what the saving rate should be. The article also mentioned why it is so difficult for consumers to save. It is because they have too much debt.

But if you think about it, that is not the only issue that we have about savings. While it makes sense to get rid of debt first, a lot of people are actually struggling to decide if it is a good idea to use savings to pay off debt. After all, this is already money that you have. Some experts will frown at the idea but if you do the math, you will be losing more if you keep your savings intact and your debt accumulating. Looking at the interest rate alone, debt has a higher rate compared to your savings account. It makes more sense to pay off debt first because you will be saving more in terms of the interest amount that you are paying.

However, that decision is harder to make than you think. Some people need the security of a savings – that is why they opt to keep it intact. But if you find yourself right in the middle of saving or paying off debt, there are a couple of questions that you can ask yourself to help you decide.

Ask yourself these questions before you pay your debts with savings

If you are torn between using your stashed cash to get rid of your debts, there are 5 simple questions that you can ask yourself.

Where will you get the savings from?

There are a lot of savings that you can use to finance your debt payments. According to WashingtonPost.com, debt has a high effect on our retirement savings. In fact, a study done by the Employee Benefit Research Institute revealed that 74.8% of their respondents cashed out their retirement savings after leaving their jobs to pay off debt. Whether you are leaving your job or not, it is never a good idea to use your retirement savings for anything other than your retirement expenses.

Do you have sufficient emergency savings?

Unless you have your emergency fund intact, you should never use savings to pay off debt. This is one of the requirements that you need to have. In case you do not have this yet, you need to save up for sufficient emergency savings. Anything in excess can be used for your debts. This emergency fund can actually help you sustain your debt payments. In case something happens, your reserve fund will allow you to continue paying off what you owe while taking care of that additional unexpected expense.

How much is your debt and the respective interest rate?

In case of multiple debts, list all of them down and take note of each interest rate. In case the interest rate is more than 7%, then you will end up saving more money if you pay off your debts first with your savings. But if you mostly have mortgage or student loans that have less than 7% of your debts, then to use savings to pay off debt is not really that beneficial. The best scenario to finance debt payments through your savings is when you have mostly credit card debt – a debt that can reach up to 36% of interest rate.

Are you expecting any extra money in the near future?

Another question to ask yourself is this: will there be any extra money in your near future? This should be something guaranteed like a commission that is already being processed, a confirmed holiday bonus or your tax refund. If you have this extra money, you can go ahead and use your savings and just replace it with the money that is coming your way.

Is it in line with your financial goals?

The last question that you should ask yourself is whether this move is in line with your financial goals. Smart money management requires you to set goals and that also means your decisions should be aligned with your goals. If you are saving up for a downpayment of a new home, then it might not be a good idea to use your stashed money to lower your debt. But if you need to lower your debt level to have better chances at a low interest home loan, then go ahead and use savings to pay off debt.

Other options to pay back your debts without touching your savings

In case the answer to the 5 questions point you towards not using your savings to pay off your debts, then that is okay. There are other means for you to eliminate debt without touching your savings.

PIOnline.com published a survey that revealed how more than half of Americans set saving goals. But when it comes to retirement, less than half are able to save through their employer’s saving plans. The current survey revealed that the number of Americans saving is basically slipping – that is why you may want to opt not to use savings to pay off debt. Use other options that will allow you to get out of debt while still adding to your savings.

Here are some of your options:

  • Debt Consolidation Loan. This debt relief program involves you borrowing a bigger loan that can help you pay off all or most of your existing debts. What will happen is you will consolidate your old debts under one low interest loan. That should make things easier to pay off.
  • Debt Management. This is also a form of consolidation – but this time, you get the help of a credit counselor. For a maximum fee of $50 a month, you can enjoy their service that includes a careful analysis of your debts and the creation of a Debt Management Plan or DMP. This plan contains your proposed lower monthly payment plan that stretches it over a longer period. That means you get a lower monthly payment requirement.
  • Debt Settlement. In case you are in need of debt reduction, this is a debt solution that can work for you. The whole idea is to convince your creditor or lender that you are in a financial crisis. Then, you will offer them a lump sum money that can pay for a percentage of your debt. You will ask them to accept this lump sum and have the rest of the debt forgiven (at least anything that this big payment cannot cover).

These are only a few of the debt relief programs that you can use to achieve debt freedom. If you do not want to use savings to pay off debt, then make sure you know your other options.

5 Reasons Why Your Debt Payment Plan Is Failing

calendar with pay credit noteA debt payment plan is one of the many financial plans that you can use in money management. But more importantly, it is one of the plans that you can use to improve your financial situation.

Too much debt is devastating financial condition to be in. It has enough influence in your finances and it is even powerful enough to control your future. It can dictate the type of salary that you need to have, what expenses you can make and even your future goals. If you do not solve this problem immediately, you might find yourself unable to grab opportunities that could have increased your net worth exponentially.

MarketWatch.com published an article that mentioned how American consumers are relying on credit cards quite heavily once more. In fact, in the second quarter of this year, consumers added $28.2 billion worth of credit card debt to the current unpaid balance. This is said to be the biggest amount in the past 6 years. Not only that, it is 200% more than the debt added in 2009 (the same quarter).

If our debts keep on growing, it is probably time for us to take a look at the debt payment plan that we are using to slowly but surely eliminate our credit obligations. If you do not have one yet, then it is about time that you think about creating one. When you have plan, your pursuit to pay off debts will be more effective than when you are just blindly making payments to every bill that you have.

What is making your payment plan for debts ineffective?

You can assume that our increasing debt may have been caused by our growing confidence when it comes to our financial security. According to the October 2014 survey done and published on Bankrate.com, 24% feel that their net worth is higher compared to 15% who felt that it was much lower. This confidence may have been causing consumers to rely on credit once more.

While total credit elimination is tough to accomplish at this point, you may want to consider checking your debt payment plan to make sure that your credit will be lowered to manageable amounts. If you leave your debts to chance, it might soon overtake your ability to pay it off.

Of course, you also need to check if your payment plan is working at all. If you find that you had been making payments every month but your debt does not seem to be getting any lower, you may want to check these 5 reasons why your plan may be failing.

Your plan is not realistic.

One of the primary reasons why most plans fail is because they are not realistic. The only way that you can assure yourself that your debt payment plan is realistic is when you consult your current finances. You need to be honest with yourself about how much money you can really afford to contribute towards your debts on a monthly basis. If not, you may find yourself with a plan that is doomed to fail from the very start.

You chose the wrong debt relief program.

In most cases, when your plan is not realistic, it leads to you choosing the wrong debt relief program. For instance, you could have chosen a debt management plan when all your money can really afford is a debt reduction. You need to look at your budget plan to choose the right debt solution. Otherwise, you might find yourself struggling to keep up with a plan that is too expensive for your income.

You do not have an emergency fund.

Another reason why you could be in trouble with your debt payment plan is because you do not have an emergency fund. Some people might not get the connection but let us explain. You may have just enough money to satisfy the debt payments but if something happens to compromise your budget, like a blown car transmission or a sudden illness – you might be in trouble. You should remove any possibility of you getting into more debt.

You are not committed to your plan.

If your debt payment plan is not working, it might be also because of your inability to commit to it. If you find yourself making late payments are failing to consider the penalty charges, you are already compromising the effectiveness of your plan. A plan, no matter how fool-proof it is will only be effective if you can follow it. Unless you can commit to it, then your plans of getting out of debt will not be realized.

You have not stopped taking more debts.

The last reason for your plan to fail is when you are still taking on more debts. This is one of the reasons why you need an emergency fund – to keep yourself from the need to take on more debt if the unexpected happens. But even if you have an emergency fund, if you continue to use your credit cards, you will find it hard to be completely be out of debt. You need to stop taking on more debts if you really want to complete your debt payment plan.

Steps to create a fail-safe credit repayment plan

In case you haven’t been working with a plan to get out of debt, there are a couple of things that you need to remember. First things first, know the importance of having a plan. That is because a plan will give your quest to eliminate debt some direction. It will give you a target and will allow you to gauge how far you have come. Creating a plan will force you to think forward into getting rid of your debts.

But for you to maximize the benefits of your debt payment plan, you may want to consider the following steps in creating it.

  • Consult your finances. Do not just create a plan. Make sure you consult your budget so that you will know just how much you need to pay off your debts. It will also tell you if you need to reduce or debts or at least lower your monthly payments. Once you know how much you can comfortably afford to contribute towards your debts, then you can determine how you can pay it all off.
  • Know your debts. The next step is to understand what type of debts you have. One article published on USNews.com tells a story of how some consumers paid off their debts. The article mentioned that if consumers had student loans and credit card debts, they should consider paying more towards the latter because it has a high interest rate. This is why you need to know what your debts are so you can prioritize appropriately.
  • Identify the cause of debts. The next thing you have to identify is what caused you to fall into debt. You need to see if it is your lifestyle or your complete disregard for what you can or cannot afford. Once you know that, you can easily identify the habits that you need to change.
  • Change your bad financial habits. The next, obviously, is you changing your habits. You need to make sure you will not fall into the same debt pit again. Unless you enjoy debt payment plans, you may want to make sure that you will not commit the same mistakes that got you in this financial position in the first place.
  • Create the plan. Once you have all these details, you can create your debt payment plan. If you consider all of these, you should be able to create a plan that is realistic and effective.
  • Monitor your finances. After creating your plan, that is not the end of your task. You need to monitor your finances so you can make sure that you are following your plan. You should try to monitor not just your plan, but also your spending, debt balance and your savings.

Read What Dick Blumenthal Wants To Do To Public Service Loan Forgiveness

female doctorSo whom you might ask is Dick Blumenthal? He’s Sen. Richard Blumenthal from Connecticut. Why might you love him? It’s because if you’re a government worker and have a load of student debt, he wants to help you. The way he’s done this is by introducing legislation that could make it easier for you to get those debts forgiven.

How it works now

If you’re not aware of this there is a program called Public Service Loan Forgiveness or PSLF. You would qualify if you work for the federal, state or local government or a not-for-profit organization that has been designated tax-exempt by the Internal Revenue Service (IRS). You must also have loans that you received under the William D. Ford Federal Direct Loan Program. If you got loans under the Federal Family Education Loan (FFEL) Program, a Perkins Loan or any other type of student loan program you would not be eligible.

10 years

In the event you qualify for PSLF you would be required to make 120 scheduled, on time, full monthly payments for 120 months or 10 years. These must be payments that you made after October 1, 2007 and you must have made them under what’s called a “qualifying” repayment plan. Finally, you must be working full time at a qualifying public service organization when you make these payments.

A “qualifying” repayment plan is where you repay your loans under one of the income-driven repayment programs, which includes Pay As You Earn, Income-Based Repayment or Income-Contingent repayment. You would likely also qualify if you were on 10-year Standard Repayment or any other program where your monthly payment would equal or exceed what you would pay under 10-Year Standard Repayment.

Loan forgiveness

Assuming you meet these criteria you would then have any remaining balance on your student loans forgiven after those 10 years or 120 payments. But, and here’s the big but, you can’t wait too long to get started on PSLF as the more payments you make, the lower your remaining balance will be, which means less money will be forgiven. In fact, if you were to make all 120 payments under this program, you would have a remaining balance of zero and there would be nothing left to be forgiven.

A word of warning

It’s important to also understand that under Income-Based Repayment, your monthly payments will likely be less than under any of the other PSLF-qualifying repayment plans and your repayment period or terms will be longer. This means that additional interest will accrue on your loan and with a smaller monthly payment; you will end up with a higher loan balance to be forgiven. What happens if you do not meet the eligibility requirements for PSLF? Then you would be responsible for repaying the entire balance of your loan, including all interest that had accrued. Of course, this would not be true if you qualify for forgiveness under the terms of Pay As You Earn, Income-Contingent Repayment or Income-Based Repayment.

What Sen. Blumenthal’s legislation would do

What Sen. Blumenthal has proposed is a plan that would make it easier for you, as a government worker, to get your student loans forgiven. His bill would alter the Public Service Loan Forgiveness program so that 15% of a government worker’s student loan would be forgiven after two years. Two years after this, another 15% would be canceled. If you work for six years in the public sector, you would see another 30% of your debts forgiven. Then, after 10 years on the job you would see the remaining 30% forgiven.

What the senator believes is that the way PSLF is currently structured is that it’s an all-or-nothing deal. You don’t get forgiveness unless you complete 10 years of public service. If you were to quit or lose your job after nine years and 11 months, you’d lose forgiveness. Since PSLF loans continue to accrue interest over those years, if you were to lose your public service job, you might feel as if you are being forced to start all over from scratch.

The downside of his proposed legislation

The biggest negative of Sen. Blumenthal’s legislation is that no one knows how much this would cost the US government – or, to put it bluntly, US taxpayers.

Also, while federal government workers might have been underpaid in the past, this is no longer true. The average US federal government employee now earns $14,632 more in direct income than his or her counterpart in the private sector. In fact, the average US federal government employee now earns$74,436 versus the average private sector worker at $59,804. In addition US federal government workers earn the equivalent of $26,632 in benefits so that their total compensation is $114,436 versus the private sector employee at $87,804. So while Sen. Blumenthal may be well intentioned, it would seem that at least federal government workers already have a major reason to sign up for PSLF and work for the 10 years – although this may not be quite so true for people who work for state or municipal governments.

What types of jobs qualify?

A public sector job is defined as any kind of job where you are paid directly by the government. This even includes civil service jobs such as working for the US Postal Service, the Federal Bureau of Investigation, the Internal Revenue Service or even holding public office. Beyond this, here is a list of the jobs that would definitely qualify for Public Service Loan Forgiveness:

  • Law enforcement
  • Military service
  • Public safety
  • Emergency management
  • Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten)
  • Public interest law services
  • Public education
  • Public service for individuals with disabilities and the elderly
  • Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
  • Public library services
  • School library or other school-based services

TeacherTeacher Loan Forgiveness

While most teachers would qualify for Public Service Loan Forgiveness under “Public education” (as listed above), there is another program specific to teachers called Teacher Loan Forgiveness.

If your five years of teaching service began before October 30 of 2004 you could have up to $17,500 of your student debts forgiven if you teach for five consecutive years in specified elementary and secondary schools and educational service agencies that serve families with low-incomes, and that meet other qualifications. The loans eligible for this program include Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford loans. Unfortunately PLUS loans are not be eligible for this program.

However, you could earn up to $5000 in loan forgiveness if the chief administrative officer of the school where you taught certifies that you are a full-time elementary school teacher that showed teaching skills and knowledge in reading, writing, reading, mathematics and other parts of the elementary school curriculum; or where you were a teacher full time for five years in a secondary school where you taught in a subject area related to your academic major.

After Oct. 30, 2004

If your five consecutive years of teaching began after October 30, 2004, you could qualify for that $5000 in loan forgiveness if you were a highly qualified elementary or secondary school teacher. To earn the $17,500 in forgiveness you must be certified by your chief administrative officer that you are a highly qualified full-time teacher of mathematics or science in an eligible secondary school; or are highly qualified as a special ed teacher where your main job was to teach children that had disabilities and taught them in an area that corresponded to your training in special education. In addition, you must have shown that you have knowledge and teaching skills in the content area of the curriculum in which you taught.

There are some other requirements to be classified as a highly qualified teacher and you can learn more about them by clicking on this link.

How To Talk Your Way Out Of Debt

woman looking at her credit cardDid you know that you could talk yourself out of debt?

Yes, really you could talk your way out of debt.

The solution is called debt negotiation, debt settlement or debt arbitration. But whichever you call it, it’s basically the same thing. It’s where you contact your creditors and talk them into helping you get out of debt.

Sound too good to be true?

Does this sound just too good to be true – that you could just talk your creditors into helping you? Well, it is true but only under certain circumstances. For one thing it’s not worth trying unless you owe a good amount of money. And second, you should already be behind in your payments.

How it works

For the sake of an example let’s say you owe $5000 on a credit card and you haven’t been able to make a payment for the last three months. Before you contact the credit card provider you need to have a goal in mind. It could be to get a reduction in your interest rate, to ask for forbearance (where you make no payments for some period of time), a temporary reduction in your payments or to settle your debt for less than you owe (debt negotiation).

The first thing you will need to do is get through to a person that has the authority to work with you. In many cases this isn’t as easy as it might sound. The first customer representative you reach probably won’t have that authority. In fact, you may have to keep making phone calls and talking with people until you finally work your way through all the various levels to get the someone who has the authority to really help you.

As a general rule it’s easier to get a concession such as a reduction in your interest rate, forbearance or a temporary pause to your monthly payments then debt settlement. Why is this? It’s because the whole idea behind debt settlement is to pay that credit card company less than what you owe – maybe much less than you owe. As you might guess, credit card companies are pretty much opposed to doing this.

If your goal is debt settlement

If your goal is to negotiate a debt settlement, you will need to be further behind in your payments than three months – probably something around six months. The reason for this is that most credit card companies are loath to talk settlement unless you’re this far behind. Plus, after six months most of them would sell off your debt to a third party such as a collection agency. This means it’s important that you contact that lender sometime between when you haven’t made a payment for five months but it hasn’t quite yet been six months.

Be honest

When you do finally reach a person that has the authority to help you be honest about your finances and explain them as clearly and comprehensively as possible. What you’re doing at this stage is building a case for settlement. You may also need to convince that person that if he or she fails to settle you will have to to file for bankruptcy. This is the old “half a loaf is better than none” deal where the credit card company understands it would be better to get a substantial chunk of what you owe than nothing at all.

What to ask for

Unfortunately there’s no hard and fast rule as to how much of your debt you should first offer to pay. If you have the necessary intestinal fortitude you might offer to pay 30% or 40% of your debt. You can just about figure that this offer will be refused. However, your customer rep will have to come back with a counter offer – after all this is called debt negotiation. Where you end up will depend largely on how good a negotiator you are and how much you owe. But if you are pretty good and if you do owe $5000, you might end up settling for 50%.

Get it in writing

Assuming that you are successful in talking your way into a settlement make sure you get it in writing. Also be prepared to pay for the settlement almost immediately. In fact, this can be one of your best bargaining chips – “settle with me today and I’ll send you the money by cashier’s check or wire transfer tomorrow.” Of course, this does mean you will need to have the necessary cash on hand. The Catch-22 here is that if you did have $5000 on hand you might not have to ask for any concessions let alone debt settlement. So where would the money come from? If you are fortunate you might be able to borrow it from a relative. Barring that you will need to get creative. For example, if you have a 401(k) or IRA you might be able to borrow the money from it. The best thing about this is that you will have to pay the money back with interest but you will be paying interest to yourself. And you will need to repay it within six months or it will be treated by the IRS as ordinary income and you will be taxed accordingly.

What can you do if you don’t have either a rich relation, a 401(k) or an IRA? You could get a second job and use the extra income to pay off your settlement. Our economy has rebounded to the point where there are a number of part-time jobs available. For example, we recently saw that both our local Best Buy and Staples stores were looking for help. While these jobs generally don’t pay more than $10 an hour you should be able to easily net $600 a month or more.

Does this sound just awful?

Make no mistake about it; DIY debt negotiation takes time, patience and steel nerves – as well as the cash to pay off any settlements you negotiate. Plus, it will seriously ding your credit score. This is why debt settlement should be low on your list of ways to deal with your debt.

Bankruptcy is worse

The one thing that can be said without argument about debt settlement is that it’s better than filing for bankruptcy. Yes, a chapter 7 bankruptcy would get rid of all or almost all of your unsecured debts such as medical debts, credit card debts and personal loans. But it comes at a very serious cost. For one thing, a bankruptcy will stay in your credit reports for either seven or 10 years and in your personal record forever. You could be turned down for a really great job 10 years from now because the prospective employer won’t hire anyone that has had a bankruptcy. It will probably be two to three years after your bankruptcy before you can get any new credit and when you do it will come with a very stiff interest rate.

couple with debt management consultantA better option

This means that for many people a better option is credit counseling. There’s undoubtedly a nonprofit credit-counseling agency near you that either provides its services free or at very low cost. When you go to one of these agencies you will be assigned a debt counselor that will review all of your finances and help you develop a budget or plan for getting out of debt. He or she will probably also work with your creditors to get your interest rates or even your monthly payments reduced. If you’re really stuck in a black hole of debt your counselor will probably offer you what’s called a debt management plan or DMP. This is where you send the agency one payment a month and it then distributes the money to your various creditors. The benefit of this is probably fairly obvious – that you get all of those creditors off your back and would make just one payment a month versus the multiple payments you’re probably now making. However, like many things in life there are downsides to a DMP. For one thing, it will probably take you as many as five years to complete it. And second, all of your accounts will be closed and you will be required to give up your credit cards. Sadly enough a large percentage of people who sign up for DMPs never complete them and these are probably the reasons why.

About The Statute Of Limitations And Your Old Debts

payment overdueOld debts can still be a pain. It can still haunt you for as long as it remains unpaid. It is either you pay it off, settle it or suffer the consequence of having debt collectors call on you to pay what you owe.

This is where the Statute of Limitations on debts come in. This is like an expiration date for your credit accounts. The time varies per state but it usually means that if your debt reaches beyond this time frame, no debt collector can win in a legal court against you. That is because you can use this as justification for not paying it. Even the original creditor whom you owe this debt to cannot win in court as long as your old debts have already gone past the statute of limitations.

This law does not remove your responsibility to pay back the debt. It is also known as a “time-barred” debt. Although you can use it as justification for leaving it unpaid, it will always remain to be your debt. You can still pay it off if you wish but most people will not do so.

If you have any old debts, you may want to understand how to use the statute of limitations to your advantage.

What does the statute of limitations say about old credit accounts

One of the most important protections that you can get from the statute of limitations is being abused by a debt collector. Although the Fair Debt Collection Practices Act (FDCPA) prohibit abusive debt collection for all types of credit, some states have made it illegal to collect old debts that are past the statute of limitations.

Here are some of the important facts about this that you should know.

There are two debt expiration dates.

When it comes to old credit accounts, it is important for you to define two important expiration dates.

  • Credit Reporting Time Limit. This is the time when your debt is removed from your credit report by the major credit bureaus. The general rule is that after 7 years, all of the old credit in your history will be removed. This excludes debts that are discharged by bankruptcy because that usually takes 10 years before it can be removed from your credit report. The longest debts that will be removed from your report are tax liens – which can stay there for up to 15 years.
  • Statute of Limitations. The other expiration, as we have been defining, is the one that will discourage debt collector from suing you in court for old debts. This is separate from the credit reporting time limit. Even if your debt is still in your credit report, as long as it is past the statute of limitations, both the original creditor or debt collector cannot win in court against you.

The statute of limitations vary per state.

First of all, you need to know the specific time frame in the state where you owe that debt from. Even if you moved, the time frame that you need to follow is the state where you borrowed the money from. For instance, you acquired the debt in Texas where both written and oral debt contracts expire in 4 years. Even if you moved to Louisiana (where the time frame is 10 years) your old debts will still follow the expiration of 4 years. You can view the statute of limitations per state online. There are website like NOLO.com that provides a complete list.

When does the time frame begin.

One of the most confusing parts about the statute of limitations is when will you know if your debt is already expired. This starts on the last date of activity that you have made on your credit account – not the due date. Do not confuse it with the date when your debt officially goes to default. If your last payment was March 2010, your debt usually goes to default after 90 days – which is on June 2010. If you live in Texas, your debt will go past the statute of limitations by March 2014 and not June 2014.

It is possible to restart the statute of limitations.

This is what debt collectors would want to happen. You have to be careful about what you say when you are talking to them about old debts. If you know that your credit is past this time frame, you should not feel intimidated by the threats that they will make. If you make a payment, promise to pay the debt, go into an agreement to pay it back or reuse the credit account, your statute of limitation will restart. When that happens, the debt collector now has a fighting chance when they sue you in court for that debt.

Not all debts are covered by this law.

Be careful about using this as justification that you do not have to pay back a debt. There are certain credit types that are not covered by this. These include child support, income taxes and federal student loans. When you are sued in court for these, the statute of limitations cannot protect you.

3 things the law about old credits will not do

It is important to note that while the statute of limitations will release you from the legal obligation to pay back unpaid old debts, there are certain things that it cannot do. Here are three important aspects of your debt that it cannot help you with.

  • It cannot stop the debt collector from suing you in court. You can use it to keep them from winning but if the collection agency decides to file a case against you, this is not illegal for them to do. It will bring you a lot of hassle of course, and that is probably what they want to happen. Their intention is still to intimidate so make sure you know the law enough to keep yourself from making any rash actions to restart the statute of limitations.
  • It will not erase the debt. Even if you are legally obligated to pay it back, you still have the moral obligation to do so. It will forever be your debt and it is up to you and your conscience to live with the fact that you left the debt unpaid.
  • It will not keep the debt from being included in your credit report. As long as it is not beyond the 7, 10 or 15 year mark, this credit account will remain in your credit report. It will continue to bring your credit score down – although the longer it stays there, the less impact it will have. But it will still be a stain on your records.

Be careful about zombie debts

The knowledge of the statute of limitations on old debts will help protect you from the burden of zombie debts. You have to know that there are certain practices wherein debt collectors will purchase unpaid credits from creditors and lenders. According to an article published on BloombergView.com, there are debt collection agencies who buy these debts for pennies on the dollar. Then, they call up the list of debtors, hoping that they know nothing about the statute of limitations. But even if these debtors know about it, these collectors will go through abusive methods to intimidate, threaten and harass consumers so they end up paying off the debt anyway. At the very least, they will try to trick you into restarting the statute of limitations.

Well there are certain ways to deal with zombie debt collectors and here are some tips that we have for you.

  • Always ask the collector to send you a written notice about the debt.
  • Ask them to validate the debt and send you a document proving that you owe it.
  • Make sure you are already past the statute of limitations before you decide to do anything.

When you have confirmed it is an old debt, there are two things you can do.

First option is to send them a letter asking the collector not to call you again. The FDCPA states that they should honor this if you requested it. However, that will not stop them from selling your old debts to another collection agency so the process will start again.

The second option, if you want to avoid the consequence of the first, is to check your finances if you can try to settle the debt. These companies bought your debt for pennies on the dollar so they should not mind you paying lower than what you really owe. They will still make profit from it. Remember that getting into a settlement agreement will restart the statute of limitations but if you get a good deal, it can stop future collectors from ever calling you again.

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