3 Unique Ways to Think About Getting Out of Debt

Introduction:

As a personal finance counselor, I hear many stories from individuals struggling with debt.  Some fell on hard times due to financial misfortune, and others suffered from poor spending habits.  But every now and then you come across someone who started with only a little debt, then tried to get themselves out, but because they didn’t know the system and what questions to ask, they somehow became mired in debt. So for those friends of mine out there, this article is for you.

To begin, let’s start off by reimagining debt as someone sitting in a leaky boat in the middle of shark-infested waters, wondering how they got themselves into this situation.  What would you advise this person on how to not become fish food? I’m going to venture that more or less, in order of urgency, you would say: Plug the leak, See what tools you have available, Start bailing out water from your boat.

In many situations debt is no different than an ocean full of sharks, and those same rules apply rather well to the debt situation.  So let’s see how our own advice can be used to get us out of debt.

1) Plug the Leaks

If you’re spending more than you earn every month, then your boat has a leak.  This is the first and most pressing issue we must address. The math is rather simple: you can either increase your earnings, or you need to decrease your spending.  And because you’re reading this article, a big portion of that spend also probably comes from payments on your debt.

Increase Earnings

Consider getting a second job or becoming a Uber or Lyft driver on the side.  Uber says it’s drivers makes $25 an hour, but after you account for commision, gas, depreciation and taxes, you’re taking home about $11.77 an hour.  Working at 4 hours a day for 6 days a week, that’s still an additional $1,224 a month a month though. This isn’t bad for a side job, but you may want to look at whether this works for your area as some areas may be better for side hustles than other areas.

In The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, Marie Kondo’s challenges us to ask the question of whether an item that you own or treasure sparks joy. If not, then sell it.  Many second hand stores will buy decent clothing and sports equipment. If you have an old phone or computer lying around, try selling those too.

For more ideas, consider exploring Hack The Entrepreneur’s 176 Side Hustle Ideas.

Decrease Spending

You can find a million ways and blog posts on how to save money.  I’ll just focus on a few big ticket items here to get your creative juices flowing:

Do you need the vehicle you have, especially if it’s purchased on a loan?  If you sold it and downsized to something smaller, could you reduce your monthly payments? Having a car loan doesn’t just increase your expenses, it also makes getting additional loans more challenging, because it inflates a ratio that many lenders use to assess you called Debt-To-Income ratio (DTI).

Can you reduce your cable and internet expenses?  I had a good friend who was evicted for being unable to pay rent, yet she continued to pay $150 a month for her cable and internet.  I wish she had just listened to my advice and applied for Xfinity’s Low Income Housing program where internet can be as low as $10 a month (also available to students, but you need to ask around).  If you buy your own modem, you save $13 a month by not renting theirs. And for TV, you can just buy an HD Satellite. In all, that would have saved her $140 a month. That’s a large fixed expense that she now doesn’t need.

Shut off all monthly subscriptions.  I had a friend that paid $70 a month for credit monitoring services that offered more or less what CreditKarma offers for free.  That was an easy cancel. I also joke that I pay for fitness club memberships so I can tell people I go to the gym. If you’re anything like me, then just pay for a daily pass if you do go, or better yet, just do pushups in your living room or go for a run outside if you’re able to.  If you have to be part of a gym, then consider community centers and the local YMCA. They often offer very competitive rates for membership or single-use cards.

Regarding food, look for deals and avoid eating out and going to bars.  I used to spend $8 a meal at Chipotle and $2 for a cup of coffee. That ended up being $540 a month for just the basics.  Add in the fancier restaurants and going out for drinks on Friday nights, and my food bills was around $1,000 a month. After I decided to prepare my own food, I started each week by buying only items that were on sale or that I had coupons for.  I also start shopping more at the grocery stores that consistently had lower prices (Ethnic supermarkets and farmers’ markets often sell groceries at 50% of what large corporate chains do) and quickly found I was only spending $4 a meal and saving about $700 a month or $8,400 a year.  It’s not as fun or convenient, but it helped me quickly stop some of my leaks.

Decrease Your Debt Interest Rate

If you have a credit score above 600, you might qualify for a lower interest credit card consolidation loan so you can pay off your more expensive credit card bills.  If you have excellent credit, you can also qualify for certain credit cards that offer 0% APR for balance transfers for the first year. This will buy you 12 months of funding interest free to pay off your debts.

Buyer Beware:  If you know you don’t have the fiscal discipline, then stay away from this strategy.  Better yet, cut up those credit cards. I’ve come across too many customers that tried to consolidate their debt by taking out a personal loan, but the moment they received the cash, they spent it all and instead got only further in debt.  Needless to say, the same goes with the credit card. If you can’t pay off your bills in 12 months, then don’t do it.

Double Beware:  Certain lenders will only give you a personal loan if you offer collateral, such as a car or the title to a home.  I would strongly recommend against this. I believe Shel Silverstein sums up that strategy best with this poem:

My dad gave me one dollar Cause I’m his smartest son,
And I swapped it for two shiny quarters
Cause two is more than one!

In summary:  don’t trade unsecured debt for debt that requires collateral. It’s a bad deal.

2) See What Tools You Have Available

In addition to Credit Card Consolidation, which I mentioned above, there are many programs out there that offer assistance with debt.  I’ll cover the most popular ones here:

Paying off Your Debt

Do this the old fashioned way, by applying all your newfound savings from above, and paying off your creditors:

Pros:  It feels good to do it yourself.  Best effect on your credit score too.

Cons:  It can take a while and requires a lot of discipline.  Also, it might not be enough if you’re completely swamped in debt

Recommendation:  If you can afford this, this is the most honorable approach.  If you do want to pay off your debt on your own, check out different key methods to pay off your debt such as the snowball or avalanche method.

Do nothing:

For all your credit card debt and most other unsecured loans (excluding student loans, childcare, and liens) if you do nothing for 7 years, technically your slate is wiped clean and the creditors can no longer legally pursue you or ding your credit score any more.

Pros:  You don’t have to pay anything

Cons:  Your credit score can be destroyed for 7 years, and you will suffer the agony of being hounded by collections agencies for years on end.  These will still continue even after the 7 years. Even though the collectors have no more legal rights to pursue the money from you, they will still harass you in hope that you’ll pay up out of ignorance.

Recommendation:  I would not recommend this, especially if your debt is large.  Chances are good you’ll get sued at some point by the creditors, which means going to court and wage garnishments.

Debt Management Plan:

These are offered by nonprofit organizations that help consolidate and then renegotiate your  interest rates with your creditors. This option can be an alternative to debt settlement.  They usually charge a monthly fee, legally it can’t be over $79 a month, but most run around $25 a month.

Pros:  They have minimal impact on your credit score

Cons:  Their program lengths can run for 5 years, which means you’d be paying around $1500 in fees before you’re done

Recommendation:  You can use these if you don’t have a lot of debt and you can be quickly in and out of the program.

Debt Settlement Plan:

These programs, also known as Debt Relief, withdraw a predetermined amount from your bank account each month that they put into escrow for you.  This option is often an alternative to bankruptcy.  They then negotiate with your creditors to reduce your overall debt amount, and use the money they have been saving up for you to pay off that debt.  

Pros:  You can get out of debt within 2 years and pay as little as 27% of your original debt, although it averages out to be around a 55% discount

Cons:  In order to get your creditors to be willing to negotiate, you’ll have to let your bill payments fall behind.  If they aren’t already behind, this could have a big impact on your credit score. Also, many debt settlement programs charge exorbitant fees up to 25% of your original debt amount.  This often leaves debtors paying more than if they had just stuck with their original payment schedule.

Recommendation:  There are many Debt Settlement Company where the representatives are not honest with their counsel or their high settlement rates. If you use debt settlement, make sure you find a good company, go through an exhaustive list of pros and cons and always ask about their rates and payment plans. For example, one of the biggest pain points is the credit score impact, which we go into great lengths to explain and simulate in this blog explaining debt settlement credit score impact.

Payday Loans & Title Loans:

Going back to our metaphor, these tools are drills that will help you poke more holes in your boat, if your goal is to sink as quickly as you can.  

Pros:  You get instant cash

Cons:  The interest rate can be so high that it will keep you in the debt cycle.

Recommendation:  I can go into horror stories here, but just please take my advice and avoid these. Reach out to us if you have any other questions as we’d like to help you stay away from these options.

3) Start Bailing Water

Once you decide on a strategy, the most challenging part is having the discipline to actually start bailing yourself out of debt.  The key to this is budgeting and cash flow management. Ascend is building a cash flow management app, called Flow, to help folks in our debt settlement program manage his/her spend effectively.

For those that haven’t budgeted before, I recommend to start simple. Start so simple that you are literally only tracking and documenting how much you make and how much you spend in one month. Too often, we try to jump into hyper-complex budgeting apps/methods that burn us out in 5 weeks.

For those that want a more informative budget, such as how much you really did spend at Starbucks this last year, Ascend is developing a cash flow management app that allows you to input all your credit and debit cards.  It then monitors all your non-cash spending and categorizes each expense before summing up your category spend by month. This will be a great way to see which areas you need to focus more attention, when it comes to saving. Before then, Steve Rhode from GetOutOfDebt.org has a fantastic blog post, titled Budgeting 101 that outlines budgeting basics and existing applications that one can use.

Also, if you struggled with credit card debt in the past due to uncontrolled spending, then cut up your credit cards and only use debit cards.  Watch Marie Kondo’s special on Netflix (but don’t get the subscription if you don’t already have one) and find ways to really cut down on your spending.

The work isn’t easy.  Sometimes it might not feel like you’re making an impact.  But like the metaphor goes, bucket after bucket, if you put in the time, discipline, and effort, you will rescue yourself from debt.  I’m rooting you on, and if you want to share your success stories, I’d love to hear about them in the comment sections below. Every success is worthy of a boast and celebration.

This article by Ben Tejes first appeared on Ascend Blog and was distributed by the Personal Finance Syndication Network.

Ads for diamond jewelry should be crystal clear

If friends know you’re shopping for diamond jewelry, they may say, “Remember the 4Cs: color, cut, clarity and carat.” Here are three more important letters for jewelry shoppers: F-T-C. The FTC enforces laws against false advertising and created the Jewelry Guides, which show jewelry businesses how to avoid making deceptive claims. FTC staff recently looked through diamond jewelry ads on Facebook, Instagram, Twitter, YouTube, and other sites to find out what shoppers are seeing. They found eight businesses using ads that might be deceptive, or not in line with the Jewelry Guides, and sent warning letters that urge the businesses to review their advertising, make any necessary revisions, and tell the FTC what they’ve done to address the concerns.

The Jewelry Guides say a seller should use words that correctly describe a precious stone, so shoppers know what they are buying. Some of the ads reviewed by FTC staff may have suggested that jewelry made one way was actually made another way, including suggestions that a diamond was taken from a mine when it was really made in a lab. And some businesses only put information about how a stone was really made on a “diamond education” webpage, rather than in or near an ad where shoppers were more likely to see it.

Before you buy, compare quality, price, and service from several businesses. To check on a business, enter its name and the words “complaint” or “review” in a search engine. Get to know common phrases like natural, lab-created, or imitation. Those stones have different values and different qualities, and need different care. If you have a problem with jewelry you purchased, try to resolve it with the jeweler first. If you think you were misled by an ad for jewelry, please report that to the FTC at FTC.gov/Complaint.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Need help with your credit card debt? Start with your credit card company!

If you’re struggling to keep up with credit card bills, you’re not alone. According to a 2017 Bureau report, from 2015 to 2017 overall credit card debt increased by 13 percent, while people with very low credit scores saw their debt rise by 22 percent

Even if you’ve hit a rough spot, lost your job, are dealing with family illness, or facing emergencies, you still have options. The earlier you act on those options, the better your chances are for avoiding a debt in collections, damage to your credit report, a potential lawsuit or bankruptcy.   

Address your credit card debt with your credit card company

Contact your credit card company. When you think you might miss a credit card payment, or you already have, contact your credit card company as soon as possible. Many will work with you to find a repayment plan that suits your current situation. Once you’re late or miss a payment, you’re considered delinquent. If you don’t pay, the credit card company may block your ability to use your credit card and report the delinquency to the credit reporting companies. Generally, that delinquency can stay on your credit report for up to seven years. You could also face debt collection and be sued.

Find out what repayment options your credit card company offers. Credit card companies can, and often do, provide alternative repayment options. They depend on, among other factors, your income, how much you can afford to pay, and the amount you owe. They offer loss mitigation programs, sometimes called forbearance or hardship programs. Often these programs let you postpone a set number of monthly payments or pay a lower monthly payment at a reduced interest rate, until you repay the balance in full. If the credit card company determines that you cannot afford a full repayment plan within a certain timeframe, you might be able to negotiate to settle the debt for an amount lower than what you owe. This would depend upon the company’s policies and your account-specific circumstances. Remember to get written confirmation of any alternative repayment option to which you agree.  

Debt settlement companies are typically for-profit companies that often state that they can
negotiate with your credit card company to reduce the amount you ow
e. Credit card companies generally do not have
special offers available to only debt settlement firms, so you are paying the
debt settlement company for work that you can do yourself. Typically, the debt
settlement company will ask you to stop any payment and will ask you to stop communicating
directly with your credit card company. Stopping payments might have a negative
impact on your creditworthiness that you could avoid by working directly with
the credit card company. Stopping payments could also result in a lawsuit being
filed against you by the credit card company or a debt collector.  

Debt settlement companies charge fees–often 20 to 25 percent (or more) of the settled debt. You may face additional fees as well. You should carefully review all the terms and conditions of the debt settlement company’s fees and know your rights . For example, it’s illegal for companies that sell debt settlement and other debt relief services on the phone to charge a fee before settling your debt. 

Also, while credit card companies’ own loss mitigation policies are available to all eligible consumers, according to the 2017 Bureau report, often credit card companies will not work with debt settlement companies.

Comparing Costs: Debt settlement company vs. Credit card company

To better understand the difference between working directly with your credit card company and working with a debt settlement company, let’s take an example of a $10,000 credit card balance that is more than 120 days past due. This example assumes the credit card company would agree to a 60 percent settlement on a $10,000 debt, meaning you pay $6,000 plus any fees if you work with a debt settlement company.

This article was distributed by the Personal Finance Syndication Network.

FTC to Send Refund Checks to Consumers who Lost Money in Business Opportunity Telemarketing Scam

The Federal Trade Commission is sending refund checks totaling more than $7 million to people deceived by the operators of an alleged business opportunity fraud that targeted seniors and others living on a fixed income. The refunds stem from a settlement the FTC reached in 2017 with Advertising Strategies, LLC, under which the defendants surrendered virtually all their assets to provide consumer refunds.

According to the FTC’s complaint, the defendants – who operated under names such as Building Money, Prime Cash, Wyze Money, and Titan Income – telemarketed bogus online investment opportunities to people across the nation. The descriptions of the “opportunity” varied, but typically involved buying or investing in e-commerce websites, or participating in a profit-sharing program involving credit card companies and e-commerce websites. The defendants took hefty payments from consumers. At the FTC’s request, a federal court halted the scheme and froze the defendants’ assets pending litigation.

The FTC is mailing 10,365 checks averaging $684 and totaling $7,097,257 to consumers. Recipients should deposit or cash checks within 60 days, as indicated on the check.

The FTC never requires people to pay money or provide account information to cash a refund check. If recipients have questions about the refunds, they should contact the FTC’s refund administrator, Rust Consulting, Inc., at 1-888-227-9829.

FTC law enforcement actions led to more than $2.3 billion in refunds for consumers in a one-year period between July 2017 and June 2018. To learn more about the FTC’s refund program, visit www.ftc.gov/refunds.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Operators of Arizona Business Charged in Telemarketing-Related Fraud and Identity Theft Scheme Aimed at Senior Citizens

Two owners of an Arizona business were charged in an indictment unsealed today for overseeing a scheme to forge hundreds of thousands of counterfeit documents containing improperly obtained personal information, primarily relating to senior citizens, which they allegedly sold to their clients, who then allegedly provided this information to telemarketers.

Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Jill Sanborn of the FBI’s Minneapolis Field Office, Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office, Acting Special Agent in Charge Joseph Carrico of the FBI’s Phoenix Field Office and Special Agent in Charge Gary Loeffert of the FBI’s Buffalo Field Office made the announcement.

Anthony J. Pavone, 44, of Scottsdale, Arizona, and Joseph E. DiPrima, 49, of Penfield, New York, were charged in an indictment filed on April 23, 2019 in the District of Arizona with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit identity theft, seven counts of identity theft, and seven counts of aggravated identity theft.

According to the indictment, Pavone and DiPrima operated a Phoenix-based business called Hybar Media (Hybar).  Hybar specialized in selling “sweepstakes leads,” which are documents listing the phone numbers and personal information of individuals who have responded to mass mailings notifying recipients that they may have won, or were likely to win, expensive prizes and large cash payouts. 

The indictment alleges that beginning in approximately 2013, Pavone and DiPrima acquired lists of names and contact information for thousands of people—primarily senior citizens—and used this information to create fake sweepstakes leads, which they then sold to their clients as authentic.  The indictment further alleges that Pavone and DiPrima directed a team of employees and associates to write the personal information of the victims onto the counterfeit sweepstakes forms, even though the victims had not agreed to this use, and even though many of the victims had never responded to a sweepstakes mailing.  According to the indictment, the counterfeit sweepstakes leads were then sold to Pavone and DiPrima’s clients.  Many of these clients then contacted the people named in the leads.  Other clients provided the leads to telemarketers, who used them to contact the people named therein.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The FBI is investigating this matter.  Trial Attorneys Timothy A. Duree and Philip Trout of the Criminal Division’s Fraud Section are prosecuting the case.

This article by the Department of Justice was distributed by the Personal Finance Syndication Network.

School Owner Indicted for Defrauding Department of Veterans Affairs Program Dedicated to Rehabilitating Disabled Military Veterans

The owner of a physical security school has been indicted by a federal grand jury for defrauding a U.S. Department of Veterans Affairs (VA) program dedicated to rehabilitating military veterans with service-connecting disabilities and for making false statements to the VA. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Special Agent in Charge Matthew J. DeSarno of the FBI’s Washington Field Office’s Criminal Division and Special Agent in Charge Kim Lampkins of the VA Office of Inspector General (OIG), Mid-Atlantic Field Office made the announcement.

Francis Engles, 63, of Bowie, Maryland, was charged on April 18, 2019, in a 20-count indictment by a federal grand jury in Washington, D.C.  The indictment was unsealed today.

The indictment alleges that Engles was the co-owner and operator of Engles Security Training School (Engles Security).  Engles Security was located in Maryland and specialized in security guard and related courses.  In August 2015, Engles Security became an approved vendor of the VA’s Vocational Rehabilitation & Employment (VR&E) program, which provides disabled U.S. military veterans with education and employment-related services.  Thereafter, Engles submitted documents to the VA representing that he was providing 15 veterans with months-long courses for 40 hours per week and over 600 total hours.  In fact, Engles Security allegedly offered veterans far less than what Engles represented to the VA.  Engles allegedly ended some classes after less than a month, even though he represented to the VA that the veterans’ classes would last for several months.  In some instances, he allegedly offered only a few hours of class per day, while representing that the students would be in school for 40 hours per week.  According to the indictment, Engles frequently cancelled classes without notice or makeup classes and instructors showed up late and ended class early.

To advance and prolong his scheme, Engles allegedly created and sent to the VA “Certificates of Training” stating that veterans had completed courses that they in fact had not completed or, in some instances, had not taken at all.  Similarly, Engles allegedly submitted letters to the VA falsely stating that the veterans had been employed by Engles’ private security business.  Engles also allegedly instructed veterans to sign attendance sheets representing that they had attended class sessions, which they did not in fact attend.

Engles allegedly charged the VA thousands of dollars more for veterans’ courses than he charged non-veterans who took the same or similar courses.  In total, the VA paid Engles Security over $300,000 for the purported education of 15 veterans. 

An indictment contains only allegations.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The FBI’s Washington Field Office and the VA OIG are investigating the case.  Trial Attorney Simon J. Cataldo of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney David Misler of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.

This article by the Department of Justice was distributed by the Personal Finance Syndication Network.

Snack subscription service leaves bad taste

Food delivery services can be a convenience for people with busy lives. Free trial offers and online reviews can help people decide which service they want to use. But when reviews are deliberately skewed and subscription terms are hidden, that’s not just unhelpful. It’s against the law.

Recently, the FTC announced a settlement with UrthBox, Inc., a California-based food delivery service, and its owner, Behnam Behrouzi. According to the FTC, UrthBox offered customers incentives, including free snack boxes, to post positive reviews online. But the company didn’t clearly tell people that customers who posted those reviews were rewarded. The FTC says these reviews were deceptive because they appeared to be independent reviews when, in fact, they were not.

The FTC also says UrthBox didn’t adequately disclose key terms of its “free” snack box offer. A key term left hidden? When the free trial expired, UrthBox would automatically enroll customers in a subscription plan. And charge them the total amount for six months of shipments, sometimes as much as $269.

The settlement bars UrthBox and Behrouzi from engaging in similar conduct and requires them to pay $100,000 to customers deceived by the trial offers.

The next time you plan to buy anything based on an online review:

Think about the source of the review. Where is it coming from? Is it from an expert organization or individual customers?

Do the reviews sound legitimate, like they’re from real people who used the product or service? Sometimes, awkward language or reviews that all sound alike are a tip-off that the reviews may be fake.

If you’re thinking about a free trial offer or subscription service:

Compare online reviews from a wide variety of websites. While you’d want to read critically, user reviews on various retail or comparison sites give you a good idea about what’s going on. Complaints from other customers can tip you off to “catches” that might come with the trial.

Check the terms and conditions for the offer. If you can’t find them or can’t understand exactly what you’re agreeing to, don’t sign up.

Find out how to cancel. If you don’t want it, do you have to pay? Do you have a limited time to respond?

Read more at “Free” Trial Offers? and watch this video, Online Reviews and Recommendations.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Unhappy With Your IVA? Here’s How to Cancel It

So, you joined the sky-rocking numbers of consumers who today use an IVA. Except things aren’t going exactly to plan. For whatever reason, you’re unhappy.

Here’s what you should do now (and what you really need to be aware of before going ahead and cancelling your IVA for good).

Why you may be unhappy with your IVA

There are many reasons why you may not be happy with your IVA, including, but limited to, the following situations…

Your circumstances have changed – such as where your income has fallen or expenses have increased, and you can no longer afford your repayments. In this instance you should speak with your IVA provider as soon as possible, as they may be able to re-negotiate the IVA repayment plan.

You may have come to a late decision that an IVA isn’t the most suitable debt solution for your needs – in this case it’s important to have an alternative plan to action following the cancellation of your IVA.

You might be unhappy with your IVA provider – in this instance you can either transfer your IVA to another provider, or you can cancel it and start afresh.

How to cancel your IVA

If you’ve thoroughly researched your options and have spoken with your IVA provider, cancelling your IVA is relatively straightforward.

First, you will cancel your monthly IVA payment by asking your bank to cancel the standing order (or you may be able to do this with your telephone or online banking).

Second, you should confirm that you want to cancel the IVA in writing – sending this either by post or by email to your IVA provider. They’ll then begin a process known as ‘failing the IVA arrangement’.

Once your IVA has failed, you’ll receive a written notification. At this point, as you’re no longer using an IVA, you can expect your details to be removed from the Insolvency Register.

An IVA typically takes around three months to fail (this usually occurs after three monthly repayments have been missed). Over this time period you will still enjoy the protection from your creditors that an IVA provides.

Cancelling your IVA: key questions

“What happens to the money that I’ve paid into an IVA after I’ve cancelled it?”

Following the cancellation of your IVA, your Independent Provider will likely take their fees and costs from the balance you’ve paid so far. Following this, any money that remains will be sent to your creditors.

Unless you’re a significant way into your IVA, you’ll likely have considerable balances left to pay – for which you’ll be 100% liable.

Because of this, you must ensure that you have a plan moving forwards as to how you’ll deal with your debt. For most, the two main options are a Debt Management Plan or Bankruptcy. However you are also free to start a new IVA if you so wish.

“If I cancel my IVA, will I have to go bankrupt?”

Many IVA users are concerned that cancelling an IVA automatically means that they’ll be forced into bankruptcy. However this is a relatively rare situation, and usually creditors have very little to gain from this manoeuvre.

It’s far more common for creditors to begin their collection processes again – such as using a debt collector or taking you to court.

There is a single exception to this however, and that’s with debts owing to HMRC. In this instance, you may have had to adhere to terms in the IVA that you’ll meet certain obligations, otherwise HMRC will petition for your bankruptcy.

If a HMRC debt has been included in your IVA, check the terms of your IVA and seek suitable independent advice.

That said, for some people bankruptcy may be the most sensible and suitable debt solution.

This article by Darren Burgess first appeared on National Debt Help UK and was distributed by the Personal Finance Syndication Network.

Going on vacation? Wear contacts? Looky here.

If you’re like some of us here at the Consumer Blog, even though you make a list of things to pack when you go on vacation, you may accidentally leave something behind. Sure, you can buy shampoo, flip flops, and sunscreen almost anywhere. But if you wear contact lenses, it’s important to carry a spare pair of lenses — or prescription glasses.

Case in point: we have a friend who went on a long vacation to Hawaii last year and lost a contact lens during a ziplining adventure. And wouldn’t you know it, she hadn’t packed a spare pair. The rest of her vacation would have been a literal blur but for the fact that, fortunately, she had saved a copy of her prescription on her phone.

You see (no pun intended), you can buy contacts from someone other than your eye doctor, but the seller will need a copy of the prescription to fill your order right away. If you don’t provide your prescription to the seller yourself, the seller has to verify it with your eye doctor. And that can take time away from your fun in the sun.

To learn more about your prescription rights, see the FTC publication, Prescription Glasses and Contact Lenses.

For advice about healthy contact lens wear, visit the Centers for Disease Control and Prevention.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Scammers and your Notre Dame donations

Following the recent devastating fire that destroyed much of the famous and historically important Cathedral of Notre Dame in Paris, fundraising efforts have begun. Many generous people may decide to donate money toward rebuilding efforts – and scammers know that. They’re ready to take donations, too, so here are some things to consider before you give to an organization or a crowdfunding project:

  1. Research the organization first. Search online for the name of the organization plus the word “complaint” or “scam.” Read what others say the about the organization.These organizations can also help your research.
  2. It’s important to ask questions. If you get a call from someone asking for money to help rebuild the Cathedral, ask them how exactly your money will be used. Do some research before donating to any organization you are not familiar with.
  3. Crowdfunding sites may not monitor how donations are spent. Research any charity before you give. Online fundraisers should tell you who gets your donation and how your money gets to the charity. They should also tell you if they keep any part of your donation as a fee. These details should be clear and easy to find without hunting through fine print. If the details are not clear, consider taking your donation money elsewhere.
  4. Donations to foreign organizations generally are not tax deductible. If tax deductions are important to you, make sure the group is established in the U.S. Check the IRS’s Tax Exempt Organization Search to see if your donation would be tax deductible. Remember that donations to individuals, like in crowdfunding sites, are not tax deductible.

For more tips on how to donate wisely and avoid scams go to FTC.gov/Charity. Check out the article Before Giving to a Charity for specific tips on donating through social media and how to handle calls from telemarketers.

This article by the FTC was distributed by the Personal Finance Syndication Network.