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IconHarassing Collection Calls The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, My husband and I have one credit card debt to the tune of about $3,500. I cancelled the account so we can't charge any more. We have been making payments of $100 every month, which is well below the minimum payments that the credit card company requests. They call nearly every day, most often more than once, hounding us for the rest of our minimum payment, which has reached in the neighborhood of $800 a month. Although we are not paying what they request every month, we are making a payment. Is there any way we can stop the phone calls? Are we breaking the law by not paying the entire minimum payment? We do plan on making a large payment when we can, but with 3 kids and one income, $800 is hard to come by. Thanks for any help. Tina Tina's not alone. In calendar 2000 the average U.S. credit card debt per household was $8,123 according to Cardfacts.com. The American Bankers Association indicates that 5.4% of credit card accounts were delinquent at the end of the year. Recent reports show that there was a surge in bank card delinquencies in the 2nd quarter of 2001. So a lot of people are falling behind in their payments and will be dealing with bill collectors. In fact, in 2000 the FTC received approximately 22,000 complaints about both 'in house' and 'third party' collectors. To answer Tina's first question, yes, she can stop the collection calls. The Fair Debt Collection Practices Act prevents harassment by bill collectors. It is a federal law so it applies to all 50 states. Section 806 specifies that "a debt collector may not engage in repeated personal contacts with a consumer with such frequency as to harass him". If Tina notifies the collector in writing that she wants all communications stopped, they must cease any attempt at contacting her. This includes both phone and mail contact. She would be wise to get a return receipt so that she can prove that her letter was received by the collection agency. Some bill collectors are persistent despite the law. According to the Federal Trade Commission approximately 500 consumers complained that notifying the collectors didn't stop the calls. If Tina has this problem she can get relief by contacting the FTC (1-877-FTC-HELP). Tina didn't mention it, but collection agencies are also prevented from telling others about her situation. Nor can they threaten her with physical violence. To answer Tina's second question, she has not broken the law so she won't end up in jail. But she has not lived up to the contract that she made with the credit card company. Notifying the collection agency to quit contacting her does not prevent the credit card company from trying to collect the debt. In fact, they may be more likely to file a law suit if Tina asks to be left alone. That suit could require repayment or force bankruptcy. So getting the collection agency off her back is only the first step for Tina. The $3500 debt is costing her over $800 per year in interest. And each month that her payment is less than the minimum a penalty is tacked on. Her $100 payment isn't really reducing the debt. Now is the time to take drastic action. At her current rate of payments Tina will be repaying this debt forever. She needs to recognize that the longer this goes on without a solution the worse her credit score will be. She could get in a situation where it's almost impossible to borrow money to buy a car or home for many years. So getting the collection calls to stop is only the first step. In fact, it's the easier step. The bigger challenge is to get the debt current so she doesn't hurt her future borrowing ability. Hopefully Tina and her husband will find a way to put this debt behind them. Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website www.stretcher.com/save.htm You'll find hundreds of free articles to help you save time and money. Visit today! More >>

IconAir Pockets Reduce Heating Bills The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, Do you have any hints on making windows a little less cold inside? Would you enclose them with plastic?Thanks,Lori Using numbers from the U.S. Department of Energy, I calculated that air leaks could cost Lori between $50 and $100 this winter. So saving some heat is certainly a good thought. Let's start with the idea that Lori is considering. She's on the right track. Air can be used as an insulator. Storm windows are important because they create an airspace between the two windows. That pocket of air will keep the cold air out and the warm air in. You can use sheet plastic on the inside of your window to create airspace. It works whether you have storm windows or not. This strategy can reduce heat loss through the window by 25%. You can attach the sheet plastic to screen frames, cardboard or wooden frames, or even simply tape it to the inside of the window opening. Another option is to hang blankets in front of the windows. Naturally, you'll pull them aside to allow any available sunlight to enter during the day. Along with creating an insulator between windows you'll want to eliminate cracks and crevasses that allow cold air in. A very small draft of outside air can make a room seem much colder than it is. Your body will react to it's coldest part. If you feel a draft against your neck your whole body will feel cold even if it is wrapped in sweaters. The only good way to find leaks is to check all of the outside walls of your home. Light a candle and slowly move near the outside walls. If the flame flickers or the smoke is blown in one direction, you've found a leak. Pay particular attention around doors, windows and baseboards. And don't forget under kitchen cabinets. Access holes for pipes can allow cold air to enter. Once you've found a leak you'll want to plug it with plaster, caulk or weather-stripping. Also, insulate behind your switch plates. Rubber gaskets are available or you can cut Styrofoam from meat trays to do the job. If you want to get the most bang for your buck, keeping the cold air outside is your best strategy. You can save quite a bit with a few dollars in caulking, weather-stripping and sheet plastic. But, there's more that you can do without spending a lot to keep warmer for less this winter. Your furnace is a good place to start. Check it to make sure that everything is working properly. Unless you're handy you might want to have it professionally checked. Not only do you want your furnace to work efficiently, but you also want it to work safely. Clean your furnace filters and air registers. That can increase your furnace's efficiency by up to 10%. Naturally you want to set your thermostat for the lowest temperature that will keep you comfortable and close off rooms when they're not being used. If you have forced air heating, leaking ducts can cut your efficiency by up to 40%. If your ducts leak you don't lose hot air. Rather cold air is drawn into the ducts when the blower fan is on. That cold air is then delivered to your living area. Also, if the ducts are in an unheated area (attic or crawlspace), they should be insulated. In the summer we talk of "air conditioners". In the winter the condition of our air is equally important. Especially the moisture content. The combination of winter and heaters tends to dry out the air. Additional moisture in the air makes it feel warmer. There are a number of ways to add water to your air. A humidifier is the easiest. But, if you don't have one, there are other options. Bowls of water on your countertop will evaporate. Consider drying your clothes on racks or lines hung inside your house. When you've finished baths or showers allow the extra steam to escape into the rest of your home. Use every opportunity to allow water to evaporate into the air. Another consideration is to recognize that a room isn't equally warm in every spot. That means that ceiling fans are useful in the winter, too. Remember that hot air rises. So your ceiling fan can help to gently push it back down where you are. Have children play on the sofa or at a table. That will be warmer than the floor. If possible, move your furniture so that it's away from outside doors and windows. No sense sitting where your room will be coldest. Your mind can make it feel warmer, too. Adding some warm colors to a room will make it seem hotter. In the summer you add cool blues and greens. Now is the time for reds, oranges and yellows. Just a few throw pillows could be enough to get your mind thinking 'hot'. Consider heating only the spaces where you are. Portable electric space heaters are inexpensive to buy. They start at about $20. Always take proper precautions with heaters. Be careful of fires, fumes, electrical problems and burns. And always use caution when children are present. Finally, spend a little time thinking about heat. For instance, if you turn on your electric blanket an hour before bedtime your bed will be comfy when you climb under the covers. Your body heat will quickly reduce the need for the extra warmth. So turn off the electric blanket when you go to bed. It won't save you big money, but just thinking about when and how you use heat will help you find other ways to get the most heat for your buck. Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website www.stretcher.com/save.htm You'll find hundreds of free articles to help you save time and money. Visit today! Permission granted for use on DrLaura.com More >>

IconThe Check Out Check Up The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, My family is really struggling with our budget. We are a family of five spending approximately $500 per month on groceries and household items. Do you think we could do better? I use coupons, buy only generic and sale items at the local grocery store. What else can I do?! Would I save more money or get more for my money if I shopped at the big warehouses like Priceclub? Pam According to the U.S. Statistical Abstract the average large family (five or more) spent $405 per month on food eaten at home. Pam and her family probably are a bit on the high side. So what can she do to reduce the amount she contributes to her local grocery store? The first thing to consider is the non-food items that end up our grocery carts. Most of us are in the habit of picking up cleaning supplies and paper products when we grocery shop. And that's a good way to boost your bill. At your grocer you'll find shelf after shelf of specialty cleaning products. Check the ingredients. They're all pretty similar. Most cleaners contain a combination of ammonia, vinegar, baking soda, bleach and a generous helping of good old-fashioned water. They also add a fragrance so that things smell clean after you've done your work. You can save some money by making your own cleaners. Recipes are available in books, magazines and on the web. Most are simple and just as effective as what you'd buy in the store. If you really don't want to mix your own, then at least locate a janitorial supply store. Most will sell to the public. They carry industrial strength and concentrated cleaners. You won't get pretty packaging, but you will get more cleaner per buck. Now on to the food in Pam's grocery cart. Next time you return from the grocery store take a look at what you bought. Pay specific attention to 'convenience' items. You won't find this definition in Webster's Dictionary, but it's the one that the food conglomerates use. When they call something a 'convenience' food, it means that they're going to charge big bucks and the consumer won't complain. In fact, we'll thank them for saving us some time! Examine your purchases. How much of your money is really buying something that you're going to put in your mouth and swallow? And how much is going to packaging, individual serving sizes and 'convenience'? I don't ever recall seeing convenience on a nutrition chart! If you want a shock compare the price per pound of a whole ham an the sliced ham at the deli counter. Sure, for some people being able to buy just a few slices justifies the higher price. But a little thought here could open up a whole new way to look at shopping. Pam mentions that she's using coupons. Depending on where you live coupons may be helpful. In some areas stores still double coupons or allow you to use both a manufacturer's and a store coupon on the same item. That can make a big difference and is well worth the time spent. But, even without doubled savings, coupons can help. Some families insist on nationally advertised brands. Coupons can reduce the name brand cost to the price of the generic equivalent. Warehouse clubs can be a help, too, but you need to be careful in how you use them. First, and this is obvious, don't buy food that you're not going to use. Buying more than your family needs is wasteful no matter how cheap the item is. We almost instinctively think that bigger is better. That's not always true. Secondly, do not assume that buying a large size will reduce your per unit cost. Sometimes it's true and sometimes it isn't. Manufacturers know that we assume that the 'large economy size' is the best value. And sometimes they take advantage of that. Always compare the per unit costs. Not only between the large and small package sizes, but between your local grocer and the big warehouse stores. Finally, Pam can take advantage of something that no professional buyer would be without. That's a price book. When a buyer gets ready to place an order they know when they've bought in the past, who they purchased from and how much they paid. That information is priceless. Pam doesn't need a fancy system to take advantage of the same information. A simple three-ring binder will do. Use one page for each item that you buy on a regular basis. As you shop compare the prices you see to the appropriate page in your price book. If the price you find is low, add a new line showing the date, store and unit price. And stock up on the item. You've found a bargain. But, often you'll find an item with a big 'sale' sign that's still more expensive than the low prices in your book. That's the time to buy only enough for current needs. It's not uncommon for people to save up to 20% on their grocery bills by using a price book. It sounds as if Pam is already starting to take control of her food spending. Here's to healthy diet and a healthy budget for her family. Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website www.stretcher.com/save.htm You'll find hundreds of free articles to stretch your day and your budget. Permission granted for use on DrLaura.com More >>

IconLast Minute Tax Tips by Ginita Wall Hey, tax procrastinators! With just a few days left until taxes are due April 15, here are some last minute tips to help ease the pain. Don't Rush Just because you are filing at the last minute, don't get flustered and overlook deductions. Take time to review last year's activity to be sure you claim all the deductions to which you are entitled. Deduct Points If you bought a new house last year, the points you paid to acquire the mortgage are deductible, as are interest and property taxes. If you refinanced your house last year, the points you paid must be written off over the length of the loan (on a 30-year loan, you can deduct 1/30 each year). Be sure to deduct any remaining unamortized points from the prior loan when you refinance (unless you refinance with the same lender). Educate Yourself If you spent money on education, you're in luck. If you were a full- or half-time student pursuing a degree, and your income is under $51,000 if single ($102,000 if married filing jointly), you can claim the Hope Credit for up to $2,000 of tuition you pay during the first two years of college. The Lifetime Learning Credit is available for up to $5,000 of tuition in 2002, and you don't have to be pursuing a degree. . Deduct Job-Hunting Expenses You can deduct all the expenses of hunting for a new job, even if you didn't find one. This doesn't apply to the cost of finding your first job, or changing careers. Claim Child Care Expenses You can get credit for the first $3,000 of expenses ($6,000 if more than one child) for caring for a child while you work or go to school. Expenses include nursery school, private kindergarten, after school programs and day care. If only one spouse works, you can still take the credit if the other parent is a full-time student or is disabled. Deduct Your Work Expenses If you spend money for business and you aren't reimbursed, you can claim a deduction. Toting up the cost of using your car to run errands, supplies, business dues, and so forth, can add up to a healthy deduction. Invest in an IRA If you aren't covered by a retirement plan at work, you can deduct $3,000 if you invest by April 15. (If you are 50 or older, you can contribute another $500 over the regular $3,000 limit.) If you have a retirement plan at work, your deduction for IRA contributions phases out when your income is between $34,000 and $44,000 for singles ($54,000 and $64,000 for married filing jointly). Don't Blow it Off Even if you don't owe taxes, file a tax return if you are due a refund of withheld income taxes. If you wait more than two years to file, the IRS is not required to issue you a check. Extend if You Must If you file for an extension by April 15, you'll have until August 15 to file your return. But that extension doesn't extend the time to pay your taxes - send in what you owe with the extension to avoid penalties for late payment of tax. File Even if you Can't Pay If you owe taxes, send in what you can with the return, and the IRS will bill you for the rest. You can use Form 9465 to ask to make monthly installment payments, but you'll still owe interest and possibly late payment penalties. Invest Your Refund If you filed early and are getting a tax refund, consider putting part of that refund into a Roth IRA. You have until April 15 to put up to $3,000 into a Roth IRA for last year ($3,500 if you are age 50 or older at the end of the year), and you can contribute $3,000 (or $3,500 if you are age 50 or over) for 2003 as well. Your contributions aren't deductible, it's true, but the funds won't be taxable when you withdraw them at retirement. (Roth IRA contributions are limited to those with income of under $110,000 for single or head of household ($160,000 for married filing jointly). You#146;ll find many other helpful tax tips in the booklet150 Ways to Save Taxes Through Life#146;s Transitions .(Note from Candace: We started the non-profit Women#146;s Institute for Financial Education in 1988 when we realized there was very little reliable, independent financial education and advice for women. The acronym wife is intentional. After all, it is usually the wife in a relationship who councils and empowers, listens and advises, and offers comfort when needed. Our mission is to empower women to succeed and prosper #150; we are here as your support and guides. Our new concept, The Money Club ( www.the moneyclub.org ) offers an exciting new way to help yourself and your friends learn about money. It#146;s completely free, non-fattening, and will give you a chance to hang out with your friends.) Permission granted for use on DrLaura.com More >>

IconCredit Card Payment Pinch The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, We have a few high interest credit cards. We know now that we were using poor management when we started using these cards and now we are feeling the squeeze from them. Could you tell us how we can pay these cards off? It seems like we never get close to paying them off. Linda from TN Linda has discovered a secret. The credit card companies don't want you to pay off your balance. Those balances led to $50 billion in finance charges last year. And business keeps getting better for the card issuers. All the statistics show that people are relying more on their credit cards and falling deeper into debt. The average balance is now $5,800 per person. Plus the price that consumers pay for the loans also continues to increase. Even with record low interest rates, people are paying 15% or more for their credit card balances. Ultimately, to prevent the payment pinch Linda must make payments that are bigger than any new purchases plus this month's interest charges. So to solve the problem Linda can spend less each month, reduce the amount of interest that she owes or write bigger checks. How can Linda need find a way to charge less each month? A review of her monthly credit card statement could be fruitful. If she finds a series of small purchases or items that she doesn't remember buying, it's time to consider leaving the cards at home. She needs to find a way to identify purchases that could be avoided or postponed. Next, try to reduce the amount of interest that's charged each month. Linda should contact her creditors. Some will reduce her interest rate if she picks up the phone and asks. She'll want to pay off the highest interest cards first. If possible, she should move her balance to a lower interest rate card. Only use the card with the lowest rate for new purchases. Finding a lower interest rate will help, but to really solve the problem Linda needs to see if she can manage to write a bigger payment check each month. Based on a typical minimum payment, Linda can expect to be writing checks the rest of her life! The only permanent way to eliminate the payment pinch is to reduce the balance. Suppose that Linda and her husband were the average couple and had $11,600 in debt at 18% interest. If she made no new purchases and wrote the minimum payment check for $230 she'd only be reducing her balance by $55! Fortunately, it doesn't take much to begin to reduce the balance. What would happen if instead of paying the minimum she paid $250 per month and kept it at that level? She'd have the balance paid off in seven years! So where can she find the extra money? It may not be easy so Linda needs to be motivated. The thought that she's paying $175 each month in interest and not getting anything for it should help. That's money that isn't buying any new clothes, cars or groceries. Could Linda find $25 a month to increase her payment? Tough? Sure! But a little sacrificial cost cutting could yield $5 a week. That's one coffee per day. Or one lunch out per week. One night out per month. Or the premium channels on your cable TV. Perhaps Linda has an asset that could be sold with the money going to pay her debt. Or if she has an asset that can't be sold, maybe she can borrow against it at a lower rate than she's paying on her credit cards. Borrowing against her home equity is an obvious possibility. But look beyond the obvious. She might have a life insurance policy that allows for loans. Or perhaps she could borrow from her 401k plan. It might be time for Linda to consider a part-time job until the card balances are paid off. Although it's tough having a second job, knowing that it's only for a short time makes a big difference. Suppose that she fails in reducing the balance and it keeps going up. She can expect the card companies to begin to increase her interest rate. Each month the financial noose will get a little tighter. If Linda can't reduce her balance and is struggling with the minimum payments she might be wise to seek credit counseling. They will negotiate a payment plan with the card companies that Linda can afford. She can expect to give up her credit cards and her credit history will reflect that she sought assistance. But struggling with the minimum payments is a warning sign of upcoming disaster. Unless immediate changes are made things will only get worse. It's important for Linda and all credit card users to recognize that the minimum payment is dangerous. The first warning sign isn't when paying the minimum is hard. It's when the total that you owe on all of your cards continues to creep up month after month and year after year. If you can't afford to make more than the minimum payment each month slowly but surely you're heading for even more pain in the future. The only safe credit card balance is one that's shrinking each month. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com/save.htm You'll find hundreds of articles to help you stretch your day and your dollar. Permission granted for use on DrLaura.com More >>

IconInherited Debts? The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, I've heard that when parents are in debt and they die the debts are left to the children to pay off. Is this true? My parents had gotten a divorce a few years ago. My mom is doing well because she is a saving queen. My dad had remarried two years ago. His wife does not work but loves to spend money. So now they have a $20,000 debt. If my father dies, his wife is responsible for the debt, right? What happens after she dies and there is still that debt? Also, what happens if she dies first, and then my father--who gets the debt? Judy Judy asks a question that comes up often. Can someone die and 'leave' their debts to you? The answer is no. Parents can't leave their debts to you. In fact, they can't even leave their debts to their spouse. Typically a will controls financial affairs after a person's death. A will distributes assets, not debts. But, before any money can be distributed to heirs, all the debts must be paid. So enough assets are sold to pay for any debts that remain. Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will. The key point to remember is that you are only responsible for debts that you contractually created. There are certain circumstances that would put Judy at risk for her dad's debt. But she would have had to do something to cause that responsibility. Suppose that Judy's dad asked her to co-sign a loan. Signing would make her responsible for the debt. Not only if her Dad died, but also if he failed to make a payment. But she shouldn't be surprised. When you 'co-sign' a loan, you do just that. You put your signature on the loan application. A similar situation occurs with a joint credit card. A joint account allows anyone named on the account to use it to create a debt. But it also means that everyone listed on the account is responsible for the entire debt that's created. Suppose Judy had a joint card with her dad. And he was the only one using the card. Any debts he left at death would be Judy's. But once again, it should be no surprise to Judy. She signed the joint application for the account. And it's her responsibility to be aware of whether it's being paid off or not. It wouldn't be unusual for Judy's dad and step-mother to have a joint account. In that case the survivor would be responsible for any balances on the account. Joint credit card accounts often create problems in a divorce. Often a couple has a joint account before the divorce. The credit card company isn't going to split the bill just because a couple throws in the towel. As far as they're concerned, both the ex-husband and wife are responsible for the entire amount of the bill until it's paid. And while a court can instruct one party to pay, sometimes it still doesn't happen. Another way that people end up paying someone else's debt is when you let someone use your credit card. Again, it should be no surprise when the bill comes in. So what happens to the debts of someone who dies? The credit card company will first try to collect from the estate. As mentioned earlier, assets will be sold to pay the bills. Then, if the account was a joint account, any survivors will be left holding the bag. If the debt belonged solely to the deceased, then the credit card company will end up eating the debt if there aren't enough assets to cover it. But Judy isn't completely off the hook. She might still want to advise her dad to control his spending. As her father and step-mother get older they could have trouble keeping up with the minimum payments. And, once they fall behind things will get tough. Credit card companies are quick to bump up interest rates when you miss a payment. And that would be trouble. Judy's father will probably be living on a fixed income during retirement. So the payment that was a struggle at 12% interest becomes impossible when the interest rate goes to 20%. And unless they have some assets that can be sold to reduce the debt, the minimum payments will dominate their finances. And that's where Judy comes in. I don't know her relationship to her father, but it would be awfully hard to watch a parent struggle to put food on the table. Even if they caused the problem by foolish past spending. It actually would be interesting if parents could 'leave' their debts to someone after they die. I suspect that many children would treat their parents much better if that were the case. Instead of parents threatening to cut a child out of their will, parents could run up large debts and threaten to put a child into their will! Never mind! It's a good thing that the law doesn't read that way. Somehow I don't think that it would be good for family relations. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com/save.htm Permission granted for use on DrLaura.com More >>

IconDebt Collection The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, I had an outstanding judgment against me for $1,000 to pay off an apartment lease that was broken when my ex-husband and I divorced. The total amount owed prior to the judgment was $1,700. The third-party collector who's been calling me insists that I pay that amount. The court said I owe $1,000, which has been paid in full. What can I tell the collector to make him go away? Sheri Fortunately for Sheri she can take control of this situation without too much trouble. Her biggest ally is something called The Fair Debt Collection Practices Act. It's a federal law that governs what debt collectors can do. It's easy to get a bill collector to stop calling. All Sheri needs to do is to notify them in writing that she doesn't want to hear from them anymore. She doesn't need to give them a reason. A simple "please don't contact me anymore" is sufficient. Certified mail is best. After the letter is received the collection agency can only contact her to let her know that they won't be calling her again or to inform her of pending legal action. Even if Sheri did still owe the money, she has quite a bit of protection under the law. The same request to stop calling works even if you still owe the debt. Obviously stopping the calls doesn't relieve you of the responsibility of paying your debt. Collection agency tactics are regulated by the Fair Debt Act. It's acceptable for them to contact you by mail, phone, in person or by telegraph. But they cannot call before 8am or after 9pm. If you tell them that your employer doesn't approve of personal calls, they can't contact you at work. They can't embarrass you. They can only ask others for your phone number or mailing address. They can't say that you haven't paid your bills. When they contact you they cannot use foul language. No physical threats to you or your reputation. They can't say that you'll be thrown in jail or demand a post-dated check. In short, all they can really do is bug you a bit to collect the debt. Please understand that we're not saying that Sheri or anyone else shouldn't pay their debts. We're just pointing out that you don't need to tolerate abusive collection practices. Getting the debt collector off her back is only the first issue for Sheri. The second one is to make sure that her reputation isn't being harmed. She'll need a good report the next time she applies for credit. Sheri needs to find out why she's being contacted by a collection agency. Either the landlord isn't aware that she's paid them fully or there has been a miscommunication between the landlord and the collection agency. The fact that a judgement is involved could be the cause of the confusion. But it's also a good way for her to document how much was owed. In any case, Sheri's credit rating could be seriously hurt if incorrect data is allowed to stand without challenge in her credit file. To find out what's in her file she'll need to get a copy of her credit report. It'll cost about $8.50 depending on where she lives. There are three large credit rating companies. Sheri can order the report by phone and pay with a credit card. They can be found at: Equifax 800-685-1111; Experian National Consumer Assistance Center(Formerly TRW)800-682-7654; TransUnion 800-888-4213. Once Sheri gets the report she'll need to make sure that the lease is either not mentioned at all, or is shown as closed by full payment. If her landlord wasn't a corporation it's possible that she won't find an entry in the report. If she does find that it shows the lease as still owed or in dispute, she'll need to write two letters. One to the former landlord asking him to notify the credit bureau that he's been paid. A second letter to the credit reporting agency should explain what happened. Sheri will want to include copies of the court decision and her cancelled check proving payment. At that point the credit reporting agency will be required to change the status of the entry and include her side of the story. Since Sheri is recently divorced she should also check the credit report for any other problems that might relate to her ex-husband. Problems can occur when couples split. Just because your ex said that he would pay a bill on a joint account doesn't mean that it was actually paid. It's a lot easier to get things straightened out before the collection agencies start to call. Sheri's in a pretty good position to solve this problem. One letter will stop the harassing phone calls from the collection agency. And a check of her credit report will make sure that she doesn't have problems with this the next time she wants to apply for credit. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com/save.htm You'll find hundreds of free articles to stretch your day and your budget. There's even a free weekly ezine. Visit Today! Permission Granted For Use On DrLaura. More >>

IconPatriotic Spending? The Dollar Stretcher by Gary Foreman gary@stretcher.com Dear Dollar Stretcher, During times of national crisis the general public has a natural tendency to conserve. That is actually the worst thing we can do right now. The economy will take a nosedive from the recent tragedy. If you really want to do something for your country go out and spend $20. Then, next week, spend another $20. Always be sure to buy American made from American businesses. By doing so, the country's economy will bounce back much faster, which helps us all in the long run. Donna North Carolina Donna makes an interesting point. Our normal instinct in uncertain times is to conserve our resources and spend less. Yet, after the terrorists' attack, the economy is struggling and could use some stimulus. Consumer spending could be part of that stimulus. So is going to the mall each week and spending an extra $20 a patriotic thing to do? When Donna buys that pizza it does help a local merchant. If enough people join Donna, employees work hours won't be reduced. And, the merchant will buy more ingredients. So Donna's spending will have a ripple effect. But, let's remember that something else happens, too. Donna has either taken money out of savings or borrowed the money. So she has less money than before. And, if she used a credit card she'll repay the loan with interest. So Donna has taken money out of the investment world (banks, the stock market, etc). That means less money is available for businesses to borrow to help meet payrolls. If they can't pay their workers, they'll need to lay them off. So spending alone might not be the answer. Then how can Donna make a decision that helps her country? She can do the most good by making 'normal and prudent' purchases. The terrorists assumed that it would be very hard for business to recover. Fortunately, the capitalist system is resilient. There are many companies that can supply most products or services. If one company is crippled another steps in. The result is that any disruption is pretty quickly fixed. But, being able to supply the goods and services that people need isn't enough. Americans, and consumers around the world, will need to buy what business has to offer. The 'nosedive' will be corrected if we just return to our normal spending patterns. That means going about our business and our lives in our usual manner. If we spend the same amount that we did before the terrorist attack the economy will be just as big as it was before. We really don't need to do any unusual spending. Just go back to doing the same things economically that you did before the attack. If your family goes out for pizza on Tuesday nights, go out this week. If you were going to visit Grandma at Thanksgiving, buy those plane tickets. Donna's right. In any emergency, our instinct tells us to conserve. That's where the 'prudence' comes in. We know that feeding our families tomorrow is more important than buying non-essentials today. So, is buying a new car now prudent? It really depends on your situation. Suppose your old car is worn out. You've saved for a newer one, can afford the payments and had planned to make the purchase now. Then you should start shopping for the car. But if you have a year to go on your present payments and your car is running fine, buying a car to prove your patriotism is foolish. The reason is simple. You don't create wealth by spending money. Wealth is created by producing something of value. Yes, you'll help keep the car salesman employed. But if you borrow money that you'll struggle to repay, you've actually become a burden to our society. More debt makes our society weaker. If you have too much debt you can't afford to help others. You'll be in a worse position if something interrupts your income. Then you could end up asking the government to help pay your bills and become a burden. So what should Donna do? She can ask herself a few questions before making any purchase. Do I need this item or service? Would I have made this purchase before the attack? Can I afford to pay for it? Am I using patriotism as an excuse to spend? Will American businesses benefit from my purchase? One final thought. Now is a wonderful time to contribute to charities helping those who have been affected by the attacks. Perhaps Donna could do more good by giving the $20 to a local food bank. The money will be spent and help people keep their jobs like she wants. But instead of another pair of shoes in her closet, Donna's $20 might help replace a pair of holey sneakers for a child who's parents are unemployed. Do we need Donna and everyone else to help speed up the economy? You bet! But reckless spending will only make it weaker later on. So let's think before we act. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com/save.htm . The site contains hundreds of free articles to help stretch your day and your dollar. Permission granted for use on DrLaura.com. "The Dollar Stretcher, Inc." and DrLaura.com does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation. More >>

IconFrightening Future The Dollar Stretcher by Gary Foreman gary@stretcher.com Dear Dollar Stretcher, War is on the horizon. What should we do to prepare ourselves? I was a young teenager during most of Vietnam and I didn't have to make the financial decisions for my family. What do I need to know in order to plan for this frightening future? Wendy W. Charlotte, NC Good question. How can we prepare for uncertain times? As a long time Florida resident, I think that hurricane preparation could provide a good example. At the beginning of hurricane season you don't know whether you'll be affected by a storm or not. But, you know that it's much harder to recover from a storm if you aren't prepared. And that it's much easier to prepare well in advance of the storm. Last minute preparations are the hardest. You also know that you'll need basic supplies, good neighbors and a willingness to tough it out. And that it's not possible to do all your preparations in one day. It takes time. Preparing financially for a war is the same. We know that it's easier to prepare before the event. There's no one big thing that we can do to be 'prepared'. We need to do many small things. And, even if we're untouched by war or terrorists, the preparation won't hurt us. We should do these things anyway. Begin with a regular savings plan. First, because you may need it. Some workers will lose their jobs. They'll depend on savings until a new job is found. Second, because we may have disruptions in the banking system. The enemy would like to cripple the financial system. Have some cash available all times. Your bank could be closed for days. It's also possible that ATM's wouldn't work and stores would be unable to process your credit card. Remember, you can always spend cash. Savings will also help our country. Saved money doesn't just sit in a vault at the bank. It's loaned to businesses to help them grow. And that growth means new jobs and opportunities for all of us. Some argue that consumers need to spend more. That's foolish. You don't create wealth by spending. You create wealth by producing something of value. If you can, buy some stock. No one knows what the stock market will do tomorrow. I believe that the U.S. will come through this and be even stronger ten years from now. If so, now is the time to buy stocks or mutual funds invested in stocks. Over the past 200 years we've seen tough times. Yet, every generation has been more prosperous than the one before it. Don't panic sell the stocks you already own. As we've already seen, the economy is resilient. It will bend. But it's very unlikely that it will break. A note. I'm not suggesting that we profit from other's suffering. Owning stocks is a vote for our future. A vote that says that our loved ones did not die in vain. Resolve to make small sacrifices to build up a 'war chest'. Bring your lunch to work a couple of times each week. Give up your premium cable channels. Or cable itself. Put whatever you save into your 'war chest'. You'll find opportunities to use it to help yourself and your nation. Once you have a war chest be willing to share it with others. But, begin by being certain that your gift is used properly. The best charities use no more than 20% of the monies they receive for overhead and fundraising. All charities are required to provide you with that information if you ask. Do something for a needy neighbor. Many families will suffer financially. Don't wait for the government or someone else to help them. Share your blessings with those who need it. Provide dinner once a week for a family with a laid off breadwinner. Share the clothes your kids have outgrown. Be creative. Think of what you'd need if your income were drastically cut. Then take action. Stockpile some groceries. You might need to survive a week on the food you already have in your home. Almost everything you eat is trucked in from somewhere. Interruptions are possible. Be ready to share your supplies with your neighbors. Make a friend. We're so rushed that we don't really know the people around us. After a hurricane we all check to make sure our neighbors are OK. Why not check on those folks today before the storm? Your new friendship will provide comfort today and be invaluable if times are hard. Learn to cook more and buy fewer prepackaged foods. Plastic starts out as oil. We could face oil shortages. But, even if oil is plentiful, you'll make a dent in your grocery bills by eliminating those individually wrapped items. Think of ways to get more use out of what you already have. It's a 'throw away' age. Perhaps you can't fix your VCR. But you can sew a patch on a pair of jeans. Think before you pitch it out. Hold a garage sale. Our homes are full of things that we no longer need. But someone does. The poorer among us shop at garage sales. If you're embarrassed to take their money, give the items to a charity that will recycle them for you. Look for waste around you. We'll probably never get to the point of saving tin foil, but you'd be surprised how little things add up to a lot of waste when millions of people contribute. None of these things by themselves will win a war. But they will make us better prepared to take care of ourselves, our families and our neighbors if the storm hits our home. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com/save.htm . The site contains hundreds of free articles to help stretch your day and your dollar. Permission granted for use on DrLaura.com. "The Dollar Stretcher, Inc." and DrLaura.com does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation. Permission granted for use on DrLaura.com More >>

IconJoint Credit Card Trouble The Dollar Stretcher by Gary Foreman Dear Dollar Stretcher, I have three joint account credit cards with my brother. I was the only user of the cards and now the cards are over the limit and behind in payments. I am on the path to paying them off but my credit history is not perfect any more. Because the credit card accounts were joint accounts my brother's credit history is also effected. He wants to purchase a house and I would like to remove the credit card items from his credit history. I have called the credit card companies regarding removal of my brother's name from the account but they will not do it. I am now thinking about getting a debt consolidation loan but have had no success because I am not a home owner. Is there a way to get a debt consolidation loan to pay off those cards? Thanks, Norm Norm and his brother have gotten into a pretty tough situation. But there are some things that they can do to help his brother to get a mortgage. There's also a lesson for all of us in how to avoid similar situations. A lesson that also applies to couples involved in divorce. First, let's take a look at the facts of the situation. When Norm and his brother opened a joint account they both agreed to be completely responsible for paying off any charges. No matter who used the card. That means that the credit card companies can collect from either brother. Legally it's just as if Norm's brother used the card and has fallen behind in his payments. The credit card company won't remove the brother from the account. That would reduce the odds of them getting paid. So what can the brothers do? Norm is already investigating the best option. That's to pay off the debts entirely. Once closed the accounts will show that they were late but are now repaid. Getting a consolidation loan may be tough. Most lenders want to be able to have a mortgage on a home or some other asset. A 'secured' loan (one guaranteed by real property) offers lower rates. Norm may have some other property that he could put up as collateral. Cars, jewelry, antiques or anything else that has value could work. If he has something like that, the best source for a loan would be a local bank. There are other sources for loans that Norm should consider. If he has a 401k plan at work, he might be able to borrow against that. Typically there's a fixed rate of interest which would be lower than what he's probably paying the card companies now. Another option, although it might be touchy, would be to borrow the money from his brother. It's possible that his brother would get a lower interest rate on his mortgage if he took some money from his down payment and used it to pay off the credit cards. Assuming that none of that is possible, they can include an explanation in his credit report. Norm's brother should request a copy of his report. Everyone should check their credit report regularly. Especially before buying a house or car. Independent surveys show that 70% of all reports contain errors. Ten percent of the errors are significant enough to cause credit to be denied. Norm's brother will want to send a letter to each credit card company. Get a return receipt. In the letter he should simply state the facts. Ask that a note be placed in his credit report. It won't change his credit score, but a potential mortgage lender might consider the information when they evaluate his mortgage application. In a few weeks he needs to recheck and make sure that the information was added. He can write the credit reporting agencies at: Equifax , PO Box 740241, Atlanta GA 30374-0241; 800-685-1111 Experian , PO Box 2002, Allen TX 75013; 888-experian Trans Union , PO Box 1000, Chester PA 19022; 800-916-8800 Norm's brother should tell any potential mortgage lender of the situation before he submits an application. By bringing up the problem first he won't be asking the lender to reconsider a rejection. He'll be advising them of a potential problem and asking that they give it proper, but not undue attention. It's possible that Norm's brother will have to pay a higher interest rate because of the problem. What can we all learn from this? Joint accounts can be dangerous. Especially if you're not the one using the account. Sure, it's hard to turn down a family member when they ask for help. But if they need your credit rating to borrow money, they probably shouldn't be borrowing. Don't help them to dig a deeper hole. If you really want to help them out financially, loan them the money yourself. Even if it means that you have to borrow it first. At least that way if they can't make the payments your credit rating won't get hammered. Couples in the process of divorce should also be careful. A divorce agreement may specify that one partner pay off a joint account. But if they don't, the other partner is still liable as far as the lender is concerned. If you're in that situation make sure that you get statements on the account so you know it's being paid properly. Hopefully Norm will get the debts paid and his brother will find a home and mortgage. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website. You'll find hundreds of free articles to save you time and money. "The Dollar Stretcher, Inc." and DrLaura.com does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation. Permission granted for use on DrLaura.com More >>

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