What is Bankruptcy featured image

Top 10 Most Common Bankruptcy Questions

Below is a list of the Top 10 Most Common Bankruptcy Questions. Please take the time to read through it as you may find it useful. DISCLAIMER: We are not lawyers and are not giving legal advice. Before filing bankruptcy, talk to a lawyer in your location.

1) Does Bankruptcy Clear Debt?

In general, bankruptcy clears out most unsecured debt. Unsecured means the loan is not backed up by a guarantor or asset. Unsecured debt can include medical bills, overdue utility payments, credit cards, personal loans, and certain contracts, like gym memberships. Secured debt includes purchases on a secured credit card and large purchases like homes and cars.

Federal student loans are unsecured but typically cannot be wiped out in bankruptcy. Child support, alimony, and most tax debt are also not included.

2) How Much Debt is Needed to File Bankruptcy?

For Chapter 7, there is no minimum amount of debt. It depends on your individual situation. The court will look at whether you are able to repay debt outside bankruptcy, if creditors are willing to work out a repayment agreement, and what types of debt you have.

For Chapter 13, you can not have more than $1,184,200 in secured debt or $394,725 in unsecured debt. These numbers are adjusted periodically.

3) Should I Declare Bankruptcy or Seek Debt Settlement?

This depends on your specific case. In debt settlement, you and your creditors agree on a lesser amount to be paid than what is owed. Bankruptcy erases most of your debt depending on what type of debt it is, and which bankruptcy you filed. Bankruptcy can also be very expensive, largely due to the legal fees. Not to mention, there is a pretty bad stigma that comes along with it that nobody wants to be associated with.

Both methods may negatively impact your credit score. Debt settlement is not a public record but missed payments could stay on your credit report up to seven years, while a bankruptcy is public record and can show up to 10 years. With debt settlement, you may be required to stop making credit card payments before the creditor will consider working with you. Once you have paid off the agreed upon (settled) amount, your credit report will show the account was paid off, but for less than what was originally due. As you pay off your debts and use any new credit carefully, your credit score should start to improve. Rebuilding your credit rating takes both the careful use of credit and on-time payments. With care, you could start to see improvements in a fairly short period of time.

Pacific Debt offers a FREE Consultation to anyone looking at debt settlement options. Our Debt Relief Program is designed to try to get you out of debt in two to four years.

4) How Often Can You File Bankruptcy?

As a general rule:

Chapter 7 then Chapter 7 –  You must wait eight years from the date you filed the first case.

Chapter 13 then Chapter 13 – You can’t get another discharge for two years, but you can file a second as soon as the first case is closed.

Chapter 7 then Chapter 13 – Commonly referred to as a Chapter 20 bankruptcy. You must wait a minimum of four years.

Chapter 13 then Chapter 7 – You must wait up to six years from first filing date unless you have paid off all unsecured debts or made a “best effort” to repay at least 70%.

For more information on how often you can file a bankruptcy or more information on the bankruptcy basics, check out National Bankruptcy.

5) What Happens When You File Bankruptcy?

In a Chapter 7 bankruptcy, your previous debts are usually wiped out, along with your good credit history. You have the opportunity to rebuild your credit. In Chapter 13, you repay your debts for a reduced amount over four to six years. In both cases, the bankruptcy will stay on your credit report for up to ten years.

6) Can You File Bankruptcy on Medical Bills?

Medical bills are considered unsecured debt and can be easily wiped out in most cases. In a Chapter 7 bankruptcy, you must first pass a means test. There Is no limit to the amount of medical debt.

In a Chapter 13 bankruptcy, your debt can’t exceed the debt limits. You repay the bills based on income and expenses, but usually not the full amount.

7) How Long Does a Bankruptcy Stay on a Credit Report?

A bankruptcy can stay on your credit report for up to ten years.

8) Can I be Approved for Credit Cards After Bankruptcy?

Yes. Depending on the credit card company, you may apply for both secured and unsecured cards. With a secured card, you must have a certain amount of money on hold with the credit card company to ensure the bill will be paid. You may have to meet fairly stringent requirements to apply for an unsecured credit card.

Are you wondering how much money you are spending on credit card interest? Our credit card calculator can help you figure out exactly how much money you’re paying on interest and principal each year.

9) Is Buying a House After Bankruptcy Possible?

Yes, within certain guidelines. After Chapter 7, you must wait two years for an FHA or VA loan, and four years for a conventional loan. After Chapter 13, the wait time is roughly halved. Often, you will have to show a 12-month consecutive record of on-time payments and have the court’s permission.

Check out our recently published article on How to buy a house with bad credit.

10) How Long Does It Take to File Bankruptcy?

It takes roughly three to six months to file and receive a discharge. In Chapter 13, the repayment time may take three to five years to finish paying existing debts.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.

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Disclaimer – We are not lawyers and we are not giving legal advice. These are merely some bankruptcy options and information. Consult an attorney who specializes in bankruptcy law BEFORE you do anything.

How to improve your credit score in 30 days

How to Improve Your Credit Score in 30 Days

Your credit potential lives and dies by your FICO rating. You’ve probably heard that term but may not know what it means to you and your credit. In this article, we will go over some common techniques you can follow in order to start improving your credit score in 30 days.

What is My FICO Score?

FICO, or Fair, Isaac and Company, started in 1956. It is a data analytics company focusing on credit scoring services. Before 1956, you had to know someone to get a loan, or have a lot of collateral, or pay outrageous interest rates. FICO changed all that and allows people to get loans based on their history of paying back loans. FICO is a brand name, but credit reporting agencies either use My FICO or VantageScore.

The higher your FICO score the better loan rates are most of the time. Since your FICO score is very important, find out what you can do to start improving it right away. In some cases, you can start to improve your credit score in 30 days.

To have a FICO score, you must have at least one account open for six months or longer that has been reported to the credit bureau in the last six months. You cannot have a deceased person on the account. The report is not just late or missed payments, all formal loans are reported to the credit bureau.

Pacific Debt can help you become debt-free with their debt settlement program. Get your FREE consultation today!

Guidelines to Build Good Credit:

  • Pay your bills on time
  • Use credit sparingly
  • Stop applying for new credit cards. Each query by a credit card company lowers your score
  • Use your credit responsibly

You can get your FICO score very easily. You are entitled to one free report a year from TransUnion, Experian, and Equifax. You want one from each because they do not share data among themselves. To get your FICO report, contact:

TransUnion https://www.transunion.com
Experian https://www.experian.com
Equifax https://www.equifax.com/personal

On the report, you will see your score and a list of your creditors. There will be a section for all your open and closed accounts, defaults, bankruptcies, and any credit inquiries for the last seven to ten years.

Check this over very carefully. Mistakes happen. People often discover they have been victims of identity theft through their credit scores.

Generally, lenders prefer to see a 680 credit score or better. If yours falls below that, you can improve your credit score fairly quickly.

How to Improve Your Credit Score in 30 Days

Below is a step by step guide to start improving your credit score right away. In some cases, this can take longer than 30 days to see positive results.

Step 1: Request your annual reports and examine them carefully.
Step 2: Correct any errors you find. This is a lengthy and difficult process but stick with it.
Step 3: If you have late payments, make them up and then stay current on your bills.
Step 4: Pay off smaller balances.
Step 5: If you are in collections, contact them to see what you can do to resolve the issue. The collection report will stay on your report for seven years, but it won’t have as big an impact.
Step 6: Remove older, closed accounts. You need some of these older accounts to show that you do pay off your debts, but too many are a red flag.
Step 7: Ask your credit card company for either a lower interest rate or an increase in your credit limit. DO NOT use that increase for more purchases!
Step 8: Get secured credit cards. These require a deposit to show that you can pay off the card.
Step 9: Try to have no recent revolving balances (unpaid balances).
Step 10: Remove credit inquiries.

How to Remove Credit Inquiries Fast

Whenever you apply for a job, fill out credit card paperwork or even get a new cell phone, the company will usually do a “hard” inquiry on your credit. Each time this happens, it could drop your score by five points and stays on your credit history for two years.

To remove credit inquiries from your credit report

  1. If you did not authorize the inquiry, send a certified letter to the credit bureau
  2. Tell them you did not authorize it, to investigate it and then remove it from your account
  3. Include a copy of the report with the inquiry highlighted
  4. Request they send another report once the inquiry is removed within 15 to 20 days
  5. Keep a copy of the letter for your records
  6. Follow up

How Long Does It Take to Improve Your Credit?

You can make improvements to your credit score in 30 days. To make larger, more significant improvements will take time. A bankruptcy will stay on your report for at least six years and has a huge impact on your score. Missed payments and defaults take about 18 months to be considered less important.

My Fico Summary

The simplest way to maintain at least a 680 credit score is to pay your bills on time, use credit wisely, and avoid getting into debt in the first place. Unfortunately, that can be easier said than done. If you need help, a reputable debt settlement company like Pacific Debt, Inc can help.

Pacific Debt, Inc offers a FREE consultation. Their debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all the program details. Depending on your financial situation, Pacific Debt, Inc works directly with you to become debt free in less than two years. The company does not make money unless your debt relief program works for you. You have nothing to lose and everything to gain by contacting Pacific Debt for your free consultation.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.

FREE CONSULTATION

5 ways to get debt relief from credit cards

5 Ways to Get Debt Relief from Credit Cards

Credit card debt is a problem for many Americans. For many people keeping up with monthly credit card payments is increasingly difficult. Causes vary. An illness, job loss, low income, or poor spending habits may be at the root. Spending more than you earn is very easy to do, especially with the convenience of a credit card.

If you cannot make your monthly credit card payments, act immediately! It’s easy to get caught up in increasing debt. You may not be able to break free without the help of a debt relief professional.

What types of debt relief help are available? We’ll discuss some options that may help you pay off debt. Hopefully, you can use these options to pay off your debt and start enjoying a debt free life.

What is Debt Relief?

Debt relief can come in the form of debt settlement which is the ability to negotiate or settle, your loan amount with the creditor. You may be able to lower the interest rate or even eliminate your entire debt.

Your situation is unique, and no one method fits everyone. Explore your options carefully and pick the one that makes the most sense for your situation.

Get a Free Consultation and find out how our Debt Settlement Program can start helping you live a debt free life today!

What Are My Debt Relief Options?

  1. Make Your Monthly Payments – Use our Credit Card Interest Rate Calculator to see exactly how much you’ll be paying on interest and principal.
  2. Debt Settlement – negotiate a lower balance on your debt amount
  3. Debt Consolidation – taking out a loan to pay off other debts
  4. Debt Management – working with a credit counseling agency
  5. Bankruptcy – a legal remedy to settling out of debt. Make sure to consult a lawyer in your area for more information

The last four options come with credit consequences on your Fico score. However, not paying your debt on time may also result in negative credit consequences. The biggest benefit of paying off your debt is that you will be able to rebuild your credit later. You can improve your credit score with effort and learn better money management skills.   

There are several types of debt that cannot be eliminated or settled. These include child support, student loans, and other secure loans.

What Do Debt Relief Companies Do?

Debt relief companies negotiate on your behalf with your creditors to help settle your debts. The debt specialists have worked with thousands of creditors. They know which creditors are willing to work out solutions and which are completely unwilling to settle.

Debt specialists know state and federal laws that govern lawsuits, collections, and statutes of limitation. Your debt specialist will guide you through each step of the process. The credit repair program takes two to four years and you’ll be in contact with your debt specialist at least once a month.

Once your debt is relieved, a reputable credit repair company will help you repair your credit rating. A good credit score makes it easier to buy a car, get a mortgage or even get better rates on credit cards and loans.

Steps Debt Relief Companies Take

  1. Your debt specialist will access your free annual credit report from Equifax, TransUnion, and Experian. You are entitled to one report each year, but they can be confusing. A debt specialist will guide you through the report.
  2. A debt specialist will go through your budget with you to see how much you can afford to pay each month
  3. Your debt specialist will work with your creditors to help settle your debts. They may be able to lower interest rates, settle on a lower amount, or even get the entire debt erased.

Who’s the Best Debt Relief Company For Me?

Pacific Debt, Inc has an excellent track record with credit repair. In business since 2002, they are in downtown San Diego. Pacific Debt has earned an A+ rating from the Better Business Bureau and is a BBB Accredited Business. They have settled over $200 million dollars in consumer debt. BestCompany.com ranks them as one of the best debt settlement companies.

Pacific Debt offers a free consultation. Their debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all options and all the program details. Depending on your financial situation, Pacific Debt works with you to be debt free in one to two years. The company does not make money unless your debt relief program works for you. You have nothing to lose and every to gain by contacting Pacific Debt for your free consultation.

Read real reviews from people who have used Pacific Debt to settle their credit.

A Certified Debt Counselor can help you from drowning in debt!

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How to stop drowning in credit card debt

How To Stop Drowning in Debt – A DIY Guide

Learn How To Stop Drowning in Debt Yourself

People fall into debt each day – it might just be a national epidemic. The problem with being in debt is that once you’re in, you’re in! It’s very difficult to get out of debt because it can be a financial trap.

If you can’t keep up with your credit card payments, or miss a payment, your credit will take a nose dive right into the toilet.

Cash is king, but good credit is just as important! Most people do not have cash reserves for a big purchase and must depend on credit. This is where good credit can be a godsend. Let’s discuss the necessary steps to take to keep you from drowning in debt.

Figure Out Your Debt Situation

Your first step in getting out of debt is to identify all your debt.

  • Get a copy of your credit report from annualcreditreport.com or creditreport.com. This gives you a list of all your creditors
  • Figure out the current debt amount, interest rate, monthly payment, due date and any other important information
  • Record all this so it is very clearly laid out

Once you have all the information you can make an informed decision. It might be depressing but it is important to know.

Most experts encourage you to pay off the highest interest debt first. Others suggest paying off the smallest debts first. Sometimes paying off the smallest debt makes you feel like you are making progress. It depends on your unique financial situation.

You may be able to refinance or renegotiate terms, interest rates, and other debts. Many people are drowning in student loan debt. Student loans are difficult to renegotiate, but refinancing can be done.

If you need help learning what your interest charge on purchases will be, try our finance charge calculator.

Start a budget

Next, find out where all your money is going. Write everything down. Include where your cash is going, where you use your credit card, and what you can eliminate.

This is the basis of your budget. Budgeting doesn’t have to be a chore, but it is the only way you are going to get out of debt.

Your budget should include necessary and discretionary expenses. Your budget should consider the following, although you may not have expenses in every category. Don’t forget annual expenses like car registration.

  • Housing
    • Mortgage/Rent
    • Property Taxes
    • Household Repairs
    • HOA Dues
  • Utilities
    • Electricity
    • Water
    • Heating
    • Garbage
    • Phones
    • Cable
    • Internet
  • Groceries
    • Food
    • Alcohol
    • Toiletries
    • Cleaning Supplies
  • Personal Expenses
    • Gym Memberships
    • Hair Cuts/Salon Services
    • Cosmetics
    • Babysitter/Child care
    • Child Support
    • Alimony
    • Subscriptions
  • Transportation
    • Fuel
    • Tires
    • Oil Changes
    • Maintenance
    • Parking Fees
    • Repairs
    • DMV Fees
    • Vehicle Replacement
  • Healthcare
    • Primary Care
    • Dental Care
    • Specialty Care
    • Medications
    • Medical Devices
  • Clothing
  • Gifts
  • Emergency Money
  • Entertainment Money
  • Household Supplies
  • Insurance
    • Health Insurance
    • Homeowner’s Insurance/Renter’s Insurance
    • Auto Insurance
    • Life Insurance
    • Disability Insurance
    • Identity Theft Protection
    • Longterm Care Insurance

Figure out how much you spend in each category. Be honest. If you eat out every day, include that! Now you have a good picture of where your money is going and how much/where you are spending it.

Your next step is to decide necessary and discretionary expenditures. You may have to give up eating out, drop a gym membership, or stop buying coffee for a while. It won’t be forever.

See if there are places you can cut down your necessary expenses. Could you get a less expensive car, move to a new place, or save money on other expenses?

Do What You Can Yourself

  1. Consider refinancing debt
  2. Call credit card companies, etc. and renegotiate your interest rates
  3. Drop or decrease expenses
  4. Consider consolidating debt through a home equity loan
  5. Use cash to avoid the temptation to whip out a credit card
  6. Wait 24 hours before purchasing a non-essential item
  7. Add another/better job if possible

Get Professional Help Paying Off Debt

A debt elimination agency may be able to help you set a budget, renegotiate interest rates, and teach you how to manage money more effectively.

Ask about

  • Services offered – look for a range of services
  • Free educational information
  • Developing a plan for the future
  • Fees/Contributions – get them in writing
  • Contracts or Agreements
  • State Licensing
  • Counselor qualifications and how they are paid (commission, etc)
  • Security of personal data

Getting into debt is easy. Paying off debt is what takes work and effort. Following these suggestions can definitely help you to stop drowning in debt.

A Certified Debt Counselor can help you from Drowning in Debt!

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Different Types of Credit Cards

What Types of Credit Cards Should I Have?

Different Credit Card Types For Different Reasons

There are many different types of credit cards available today but which credit card is perfect for you? Though the first official credit card is nearly 70 years old, the idea of buying items for immediate consumption and paying for them later has been around since 1865.

However, it’s only been in the last few decades that companies have expanded the types of cards they issue. There’s an ideal fit for everyone, depending on your goals, financial situation, and credit history.

In this article, we’ll provide a brief description of all your choices and help you narrow down the selection to one that’s right for you.

Why Should I Have a Credit Card?

Admittedly, a credit card can be dangerous. There’s something about the idea of not having to immediately pay for something that can make money seem almost unreal. The average US household owes more than $16,000 in credit card debt, further demonstrating the appeal (and potential danger) of “buy now, pay later.”

However, credit cards can also be incredibly helpful for the following situations:

  1. Emergencies: If your car breaks down, and you’re nowhere near payday, paying on credit may be your best choice. This is especially true if your paycheck has already been spent on other expenses. Having a credit card allows you to pay back the purchase over time and on your own schedule.
  2. Convenience: Remembering to have cash on hand can be a headache. Being able to pay for something, regardless of how much money you have in your wallet is a first world convenience.
  3. Rewards: Some cards, which we’ll discuss in a moment, come with rewards. If you’re saving up for a vacation or need to earn airline miles for a trip, a credit card can help get you there faster.
  4. Build a credit history: If you plan on buying a house, car or taking out a business loan, credit cards help you build a solid financial history. Many lenders won’t allow you to borrow unless you can show that you’ve handled credit responsibly. Click here for tips on buying a home with bad credit.

What Are The Different Types of Credit Cards?

Annual Membership: These cards come with a yearly membership fee. Typically, the fee comes in exchange for higher rewards. American Express was the first company to charge a membership fee, and most of their cards also require full payment of each month’s balance.

Other companies, such as Capital One, have recently followed suit with cards that charge an annual membership, though these cards don’t always come with rewards. Instead, it’s more like an insurance deposit for those with spotted credit history.

Rewards Cards:

As the credit card business became both more competitive and lucrative, more companies duplicated the American Express model of offering rewards for using their cards. However, many waived a membership fee.

Now, you’ll see rewards credit cards offering cash back on purchases ranging from one to two percent on airline miles, hotel stays, gift cards, merchandise, and more.

Airline Specific Credit Cards:

In an effort to diversify revenue streams, airline companies have begun issuing credit cards. Some can be used anywhere as a regular credit card, while others are only for use with the airline. Using these cards allow you to earn airline miles that you can use on future flights. For universally accepted cards, you’ll often get bonus points when you sign up or make purchases from the airline or at the airport.

Low Interest Credit Cards:

Some cards offer very low or zero interest for an introductory period. This is helpful if you need to make a large purchase and plan on paying it off before the regular interest rate kicks in. These cards are often reserved only for those with top-tier credit.

Gas Cards:

Gas stations have been issuing credit cards for decades to encourage brand loyalty. Some can only be used at gas stations, while others are universally accepted. Most will give a cashback reward for general purchases (usually one percent) and pay you back five percent for purchases made at the gas station.

Retail Cards:

Many department stores and retail stores have their own credit cards that they issue to loyal customers. This allows retailers to recoup some of the credit card transaction fees while also using consumer behavior for market research.

These cards are worth it if you get a discount on an initial purchase and cash back for repeat purchases. Otherwise, it’s just another hunk of plastic to keep track of and an additional bill to remember to pay on time.

Business Credit Cards:

A business card is similar to a personal card, but with some additional perks. There may be lower fees, better rewards, and higher credit limits. In addition, you can often add multiple members and allocate different credit limits for the users. For example, if you run a business and have employees who travel, you can issue cards to employees and allow the ones who travel the most frequently to have higher credit limits than those who don’t.

These cards also offer helpful reports based on business and personal expenses, which helps keep your finances organized if you mix business with pleasure.

Student Credit Cards:

College campuses are notorious for signing students up for credit cards and offering them free gifts like toasters in the process. A student card often comes with higher fees and lower limits, but if you’re a young adult with limited credit history, this is an ideal way to start small with charges and prove that you’re responsible.

Secured Credit Cards:

If you’re in the process of repairing bad credit and trying to rebuild, you may not be able to get approved for a regular line of credit. In cases like these, you may need to get a secured card. This requires you submit collateral that’s valued at an amount equal to or greater than the amount of credit you’ll be able to use.

There may even be fees involved. It’s definitely not ideal, but if you’re recovering from a financial crisis and need to rebuild, it might be your only option.

Pre-Paid Credit Cards:

These cards aren’t actually credit cards, but they serve a similar function in allowing people with poor credit histories to use something that resembles a credit card. Instead of submitting collateral, you pay funds in advance and “load” the card with funds. Then, you can use it as a credit card.

Often there are fees involved to reload and apply, so double check and compare the options before making a decision to use one particular credit company.

Which Types Of Credit Cards Should I Have?

Your lifestyle will determine the best credit card for you. Think realistically about what you plan on using credit cards for, your credit score, and what you hope to gain from a credit card.

For example, if you have average credit and you’d like to plan a vacation, you should try a general rewards card or an airline card.

If you’ll be paying your balance in full each month and want the highest rewards, you might want a premium membership card like American Express.

For people trying to rebuild their credit, you’ll have to shop around. Be prepared for rejection, but don’t settle for anything that’s unfair. A secured card or a card with a membership fee may be your best bet.

There are countless scenarios, so again, think about your goals and choose from there.

Is There A Perfect Credit Card for Me?

While there’s no one perfect card, we do highly recommend rewards credit cards that offer cash back and other bonuses. Most major banks issue them, and the interest rates are relatively consistent, depending on your credit history. We suggest choosing one that has the highest daily rewards percentage but also has quarterly events that can double, triple or quintuple your rewards.

For example, a credit card may give five times points at all grocery stories for an entire quarter. Often, it caps at a modest amount, but you’ll still be getting significantly more rewards than you would without the event.

The Final Credit Card Conclusion

Credit cards are convenient, easy to use, and new technology is making them more secure than ever. Most companies are eager for your business, even if your credit is less than perfect, so before committing to a card, shop around for the best rates and highest rewards.

If you’d like to find out exactly how much money you’ll be spending on principal and interest, check out our Credit Card Interest Rate Calculator.

Certified Debt Counselor can help you get rid of debt and stay out!

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How to spot financial scammers

How to Spot Financial Scammers

Perhaps the more difficult part about making money, is actually keeping it. We have expenses, debts, and everyday necessities that need to be fulfilled before putting our money safely into our bank accounts. Sadly, we’re also losing money to sheer gullibility.

Anthony R. Pratkanis points out that “every year, Americans lose over $40 billion in telemarketing, investment, and charity fraud.” Why do we fall so easily to financial fraud? Why are we so gullible? Debt is a burden that most of America is trying to overcome. It is also a burden we would do anything to shake — this means we are willing to fall for financial fraud because we want to believe there is a quick way, an easy way, and a shortcut to breaking free of debt.

According to Comet, 80.9% of baby boomers, 79.9% of generation x, and 81.5% of millennials are in debt today. That’s a huge portion of our economy that is just trying to keep its head above water. Put in this perspective, it’s easy to see that you aren’t alone. Unfortunately, this rising percentage of debtors has awoken a different kind of corruption beyond simple debt — financial scammers are targeting those in need of debt relief.

So how do you spot the scammers? How do you shake the financial sharks?

Grow Confident, Gain Knowledge

We succumb to scammers because we want the easy, quick way out — that is our first financial mistake. We must learn to become confident and independent.

The first step is to improve your own financial decision-making ability. Though you’re currently in debt, that does not mean you can’t grow, learn, and adapt. You should be aggressively attempting to learn everything you can about finances — you must believe that you can dig and claw your way out of this financial predicament.

A key component to gaining confidence is to prepare correctly. As Dante put it, “The arrow seen before cometh less rudely.” So put the time in to prepare for your upcoming challenges. For example, if you have struggled with filing taxes, prepare your documents beforehand and stay organized so that, when the time comes, you will be able to get a bigger tax refund in less time and with less stress.

If you have made financial mistakes in the past (as we all have), it’s time to get over the guilt. What did you do wrong? How do you get past it? What decisions should you make in the future to avoid similar mistakes? It is absolutely vital that you ask yourself these questions before achieving financial freedom.

Though sometimes we must lean on the advice of financial experts, your confidence can only quicken the speed at which you approach financial stability. Whether you are currently employing a debt relief service or are thinking about it in the future, you should be strengthening your personal financial responsibility.

Scamming Scare Tactics

I have received several calls and messages over the past few weeks that start out with phrases like “this is your final notice before we terminate” and then end with something like “lower your credit card rates.” Though not exactly a scam, the company that keeps calling me

Scammers will often use extreme language to evoke feelings of urgency. Words like “terminate,” “final notice,” and “warning” are meant to alert you to a fake-serious situation.

First of all, I do not currently own a credit card, so it was pretty easy to spot the scare tactics. However, even though I did not yet know what the phone call was about, I could not help but feel my heart flutter just a bit. Fear is the most common friend of financial scammers.

Nobody wants to lose thousands of dollars, so scammers will usually promise to instantly end some looming threat of debt. Quick debt relief is a goal that hasn’t quite been achieved yet. Most debt relief companies can square issues away between 24-48 months. Even for financial experts, debt relief is a process. Don’t be fooled by those who promise to wipe away a debt in just a day.

The Most Common Scams

While many scammers use scare tactics, there are many others that will play on all of your emotions to get your money. Don’t fall prey to the most common scams that promise wealth, safety, or security in exchange for personal or financial information.

According to ConsumerFinance.gov, some scammers will pose as members of the “nonexistent ‘Consumer Protection Bureau.” Government officials at the CFPB continue, adamantly stating “This is not us. We are the Consumer Financial Protection Bureau, or CFPB. Some scammers may claim to be with the Federal Trade Commission’s (FTC) Bureau of Consumer Protection. Others may claim to work for the CFPB or FTC, but neither of these agencies calls consumers to alert them of winning a lottery or sweepstakes. ”

The CFPB also warns that scammers will often claim that they are from the IRS and that you owe debt. Such scammers threaten lawsuit or arrest if customers refuse to pay. It is important to note that debt collectors cannot use unfair or abusive collection tactics — such threats would be considered illegal collection tactics. To avoid tax identity theft, try staying ahead of your taxes, carefully inspect your credit reports, and be ready to freeze your credit if you suspect identity theft.

Read Up on Financial Services

Never accept a financial service without first looking at customer reviews. If you are considering working with financial experts to relieve your debt and lift your burdens, be sure that the company has the requisite accreditations (like the AFCC and the IAPDA for debt relief companies).

Customer reviews should act as a supplement to all of your research into each individual company. If you find that the vast majority of customer reviews oppose what the company or service claims, then you should move on. On the other hand, if you find a debt relief service whose customers support the company’s claims, you know when you’ve found a reliable and trustworthy company.

No matter your financial situation, you are always in danger of financial scams. Always be skeptical of those who threaten and ask for personal and financial information. Do not be intimidated by cheap scare tactics or promises of quick wealth. Your confidence and ability to spot a scammer will protect you on your personal path to financial wellness.

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