The Harsh Truth I Just Learned About Postdated Checks

Recently, I was preparing for an extending trip, including ensuring that I dropped off my rent check early. Well, when I wrote said check, I dated it for the first of next month (as I assume most people would). This is a practice often referred to as “postdating” that I thought meant one thing but, as luck would have it, I was wrong.

While you can probably tell where this one is going, let’s back up and take a look at what postdating is and how my eyes were opened this week.

What is Postdating a Check?

Put simply, postdating a check just means filling in the “date” section of a check with a day that’s sometime in the future. I presume most cases of post-dating come in situations similar to mine — where a tenant may be dropping off rent for a landlord but is subtly asking them not to cash the check until it’s actually due so that paychecks can be processed when funds become available. While postdating checks is a move that can also be associated with check fraud (which is of course a crime), there’s nothing illegal about the practice on its own and, while I have no data to back up my assertion, it seems pretty commonplace to me.

If you’re like me, you may have assumed that banks would be unable to cash checks that bore future dates — but you know what they say happens when you assume…

Postdating misconceptions 

As it turns out, there are no rules in place that prevent a check recipient from cashing a postdated check nor are banks obligated to recognize postdating. That’s what I found out after coming across this post from NerdWallet regarding the apparently meaningless practice. In their post, they note that many banks even state in their account disclosures that they will accept future-dated checks as long as everything else is properly filled out. For what it’s worth, the date on the check actually does mean something as some banks won’t accept checks that bear a date that was more than six months beforehand. Then again, with the ability to deposit checks at ATMs and on your mobile phone, one can’t help but wonder how enforced these rules really are these days (again, speculation on my part).

So postdating isn’t a thing — heartbreaking, isn’t it? Given this reality, it’s in your best interest to ensure that you have the necessary funds in place in the event your subtle request is ignored. Financial advisor Mathew Dahlberg may have put it best, telling NerdWallet, “In short, if you don’t have the money in your checking account, then don’t write the check!”

But… what if it’s too late?

What went wrong

Ever since my first entry of this column, I’ve always been more than happy to share what I’ve been learning and where I’ve gone wrong. In that initial post, I also shared how I had put my days of overdrafts far behind me. Well, my friends, the streak has come to an end.

In my defense, the checks that I’ve been using to pay rent have been from my Discover checking, mostly because I ran out of Wells Fargo checks (my main account) some months back. Since my Discover account is mostly a backup account that I don’t maintain much of a balance in, I hadn’t yet bothered to transfer the money over for rent. Hence my dismay when I woke up to an e-mail from Discover notifying me that my account had been overdrawn with my needlessly postdated check  — and, may I add, a bit of hast on the part of my landlord — being the culprit.

Thankfully, I have two saving graces in this case. The first is that Discover actually allowed the check to post instead of bouncing it. Especially with me being out of town, the latter scenario would have been a major headache in this case and could have ended up costing me more due to potential late fees and returned items fees when all was said and done. As for the other lucky break, Discover actually has a “First Fee Forgiveness” program where they’ll waive and credit you for the first eligible fee you incur each year, including overdraft fees. Because of this, it looks like I’ll escape the $30 penalty this time. Phew.


No matter how much I think I know about personal finance, it seems that there are always some nasty surprises waiting for me up ahead (see also: that time I got schooled on 401(k) force outs). In this case, I can say with certainty that I learned some important lessons from the experience, while still managing to make it out relatively unscathed. Hopefully this insight I just gained can help you avoid the same postdating mistakes that I made. Maybe you will even pass on this eye-opening info to your friends, letting my mistake become a pay it forward momentum to help others.

This article by Kyle Burbank first appeared on Dyer News and was distributed by the Personal Finance Syndication Network.


Servicemembers’ “immediate actions” for financial success: pay down debt, make a plan, start early

As a member of the military, you are called to serve every day in challenging environments to secure the freedom and prosperity of our nation. To meet these challenges, you engage in “immediate actions” training to better prepare yourself to respond to all kinds of threats and situations. You may also face challenges in another environment—your personal finances. On a daily basis, you may encounter hurdles and threats to your financial freedom and future prosperity. The SEC and the Bureau of Consumer Financial Protection are joining forces to set out specific immediate actions that you can take while navigating your personal finances. These immediate actions will help you secure your financial freedom and ensure that you and your family prosper now and in the future.

Our websites, the SEC’s Investor.gov and the Bureau’s Consumerfinance.gov, provide tools and resources to assist you in preparing for the lifelong mission of financial success. Along with general savings and investing tips, both agencies provide detailed information aimed specifically at addressing the unique personal finance challenges of military personnel through the SEC’s Financial Readiness brochure and the Bureau’s Navigating the Military Financial Lifecycle webpage.

The immediate actions toward financial freedom include three basic steps: first, pay off high-interest debt; second, set goals and make a financial plan; and third, start saving and investing early.

Immediate action #1: ⬇ debt – pay off high-interest debt, ⬆ improve credit score

Before you invest in anything, it’s important to pay off any high-interest debt first. With the average interest rate on a credit card nearing 17 percent , the money you’re paying on interest far outweighs the money you can normally make on most investments. Maintaining good credit and trying to improve your scores go hand in hand when managing your debt. Whether you’re renting an apartment or applying for a mortgage, your credit scores play a prominent role in your financial plan. Trouble with your personal finances can even put your duty status, potential promotions, and your military career in jeopardy. Learn more about how to maintain good credit scores.

Immediate action #2: ✔ set goals and make a plan

Saving and investing for the long term is the best way to achieve financial security. Start off with determining what you want to save for in life—an emergency fund, a vacation, a house, or college. Decide what’s most important and make a plan accordingly. You can use the SEC’s Savings Goal Calculator to see how much you need to save each month to meet your goals. It’s easy. Plug in your desired final savings goal, how much money you have readily available to invest, how long you plan to save, and a few assumptions. The calculator will show you how much money you need to contribute each month in order to reach that goal.

Immediate action #3: ✔ start saving and investing early

The fastest way to see your money grow is through compound interest, especially when you start early. The power of compound interest calculated on the initial amount of money you invest, and also on interest earned, can provide tremendous long-term benefits. For example, if you want to save $500,000 for retirement at age 65, by starting at age 25 and investing in a mutual fund averaging seven percent a year, you’d only have to contribute roughly $200 per month. If you get a later start and don’t begin saving until age 50, you’d have to save more than $1,500 per month, nearly eight times the amount, to reach the same total savings. 

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


Deep Dive Into NY Suit Against Student Loan Assistance Companies

Earlier today I wrote NY Sues a Bunch of Student Loan Debt Relief Companies and Equitable Acceptance Corporation and now I have a few minutes to take a deep dive into the complaint.

Let’s see what the State of New York claims the facts to be against Debt Resolve, Hutton Ventures, Progress Advocates, Progress Advocates Group, Student Advocates, Student Advocates Group, Student Advocates Team, Student Loan Care, Student Loan Support, Equitable Acceptance Corporation, Bruce Bellmare, and Stanley Freimuth.

The material in quotes comes from the complaint filed by New York, unless otherwise sourced.

“Many of the Defendants hold themselves out as loan experts, when they are not, and provide advice to borrowers that can make them worse off in the end. In addition to charging over $1,000 for services that are available for free, they worsen some borrowers’ already precarious financial situation by providing incomplete and harmful advice.

For example, they advise some borrowers they should consolidate their federal student loans without explaining that, in some cases, by doing so, consumers would lose months or years of loan payments they had already made that would qualify toward forgiveness of their loans under the Public Service Loan Forgiveness Program (“PSLF”). Relying on that advice, some of those borrowers consolidated their loans to their detriment.

Other borrowers even take out additional loans based on Defendants’ erroneous advice that with the assistance of their programs, the debt on the new loans will be forgiven.”

Here is an interesting finding, “Because Equitable remits to Defendants the full amount of the consumer contract before the services promised have been fully completed, these arrangements also constitute illegal, upfront fees.”

The complaint says the activities that raised concerns impacted people not just in New York. “Through their deceptive and unlawful practices, Defendants have collectively misled thousands of borrowers nationwide, including thousands of New Yorkers, into paying thousands of dollars to purchase student loan debt-relief services that the borrowers could have received for free.”

Parties Named in Suit

Debt Resolve

Defendant Debt Resolve, Inc. (“Debt Resolve”) is a publicly traded company, incorporated in Delaware, with its principal place of business at 22 Saw Mill River, 2nd Floor, Hawthorne, New York. Debt Resolve entered into a joint venture with LSH, LLC, a Delaware limited liability company, to start Defendant Progress Advocates, LLC in 2014. Debt Resolve entered into a joint venture with Defendant Hutton Ventures, LLC to start Defendant Student Loan Care, LLC in 2016. Debt Resolve is the majority owner of both Progress Advocates, LLC and Student Loan Care, LLC and has conducted business at the same address as both, namely, 1133 Westchester Avenue, Suite S-223, White Plains, New York. Debt Resolve also signed a 2017 agreement with Equitable Acceptance Corporation in which it agreed to “absolutely, unconditionally, and on a continuing basis” pay any debts Student Loan Care, LLC owed to Equitable Acceptance Corporation.

Hutton Ventures

Defendant Hutton Ventures, LLC (“Hutton”) is a Delaware limited liability company with its principal place of business at 4 Hutton Centre, Suite 210, Santa Ana, California. According to the Debt Resolve Form 10-Q SEC filing for the period that ended September 30, 2017 (“Debt Resolve 10-Q”), Hutton partnered with Debt Resolve to form Student Loan Care, LLC. As a partner with Debt Resolve in its joint venture Student Loan Care, LLC, which as described below in paragraph 24, is located in New York, it engages in business in New York.

According to SEC 10-Q Statement – Debt Resolve, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on April 21, 1997. The Company offers its service as a Software-as-a-Service (SaaS) model, enabling clients to introduce this collection or payment software option with no modifications to their existing collections computer systems. Its products capitalize on using the Internet as a tool for communication, resolution, settlement and payment of delinquent or defaulted consumer debt and as part of a complete accounts receivable management solution for consumer creditors.

In December 2014, the Company, jointly with LSH, LLC, organized Progress Advocates LLC, a Delaware limited liability company for the purpose to provide services in the student loan document preparation industry with ownership interests of 51% and 49% for the Company and LSH, LLC, respectively.

In February 2016, the Company, jointly with Patient Online Services, LLC, organized Payment Resolution Systems LLC, a Delaware limited liability company for the purpose of assisting Medical Groups and Hospitals in the online negotiation and settlement of delinquent accounts, with ownership interests of 51% and 49% for the Company and Patient Online Services, LLC, respectively.

In May 2016, the Company, jointly with Hutton Ventures LLC, organized Student Loan Care LLC, a Delaware limited liability company for the purpose of providing document preparation services for holders of Federal Direct Student Loans, with ownership interests of 51% and 49% for the Company and Hutton Ventures LLC, respectively.

The Company operates Payment Resolution Systems within Debt Resolve, Inc., whereas Progress Advocates LLC and Student Loan Care LLC operate as independent subsidiaries.” – Source

SEC Document Talks About Problems at Progress Advocates and Student Loan Care – “Student Loan Care LLC was launched in June 2016 and has already established itself as a financially viable company. This new joint venture is a partnership with Hutton Ventures LLC., a California based company with extensive experience in the federal student loan document preparation industry. The business model for Student Loan Care, specifically addresses the issues of high marketing costs and customer churn, both of which were significant negative impacts on the Company’s majority owned joint venture, Progress Advocates LLC.

The quarter ending September 30, 2017 was a challenging quarter for Student Loan Care. As the Company was slowly recovering from the seasonality of the Direct Mail industry that slowed response rates to our marketing campaigns in the second quarter ending June 30, 2017, a number of sales personnel unexpectedly left the Company during the month of August 2017. New sales management was put in place and the hiring and training of new sales personnel was completed by quarter end.” – Source

It appears the issues of Progress Advocates and Student Loan Care go back to 2015 and 2017 respectively. “New York State Attorney General Subpoena – In December 2015, the Company and Progress Advocates, its majority owned subsidiary, received a subpoena requesting documents regarding the operations of Progress Advocates. It is our understanding that this request was one of several requests sent to companies operating in the Federal Student Loan document preparation space in New York State. We have provided the requested information that was available, both from Progress Advocates and its vendors. Additional information has been provided subsequent to the Company’s initial response. We are confident that our compliance with payments aligned to the consumer’s receipt of benefit and our vendor’s responsible marketing has been accurately demonstrated in the information provided.

In August 2017, the Company and Student Loan Care LLC, its majority owned subsidiary, received a subpoena requesting documents regarding the operation Of Student Loan Care. We have provided the requested information regarding Student Loan Care and respective vendors’ services. We are confident that our compliance with regulations regarding marketing, sales, advanced payments, and our focus on helping consumers select the best programs for their financial situation supported by on-going people-based customer service, demonstrates our commitment to helping federal student loan holders.” – Source

Statements Made About Equitable Acceptance

“Defendant Equitable Acceptance Corporation (“Equitable” or the “Financing Defendant”) is a Delaware corporation with its principal place of business at 1200 Ford Road, Minnetonka, Minnesota. Equitable has an F rating from the BBB.

Equitable finances loans for borrowers who enter into agreements with certain of the Contracting Defendants, including Progress Advocates, Progress Advocates Group, Student Advocates Team, and Student Loan Care. Equitable also finances loans for borrowers who enter into student loan debt-relief agreements with more than thirty other debt-relief companies. Equitable is not a licensed lender in New York.

While the financing agreements, titled “Equitable Acceptance Revolving Credit Plan” (the “Equitable Credit Plan”) are ostensibly installment credit agreements between the Contracting Defendants and borrowers, Equitable in fact provides the financing, not the Contracting Defendants. Equitable purchases the Equitable Credit Plans from the Contracting Defendants within days of the borrowers signing them and before any payments on them are due. Accordingly, borrowers make all payments under these financing plans directly to Equitable, which: 1) drafted the agreements; 2) requires that its Equitable Credit Plan be used by the Contracting Defendants if they want Equitable to purchase those agreements from them, as Equitable routinely does; 3) requires that borrowers sign a Credit Request Authorization authorizing it to perform credit checks of the borrowers who have signed the agreements; and 4) requires borrowers to authorize Equitable to use ACH to debit their bank accounts monthly to pay it for its financing of the agreements.

Thus, Equitable purchases the Equitable Credit Plans from Progress Advocates, Progress Advocates Group, Student Advocates Team, and Student Loan Care and collects payments from borrowers.

Equitable is the assignee of the Equitable Credit Plans it purchases from the Contracting Defendants.

All of the borrowers’ Equitable Credit Plans provide that Equitable, as the holder of such credit contracts is subject to all claims and defenses that can be asserted against the seller of the goods or services obtained with the proceeds of the financing.

By financing and purchasing the contracts between borrowers and the Contracting Defendants, Equitable aids and abets the deceptive and fraudulent business practices of the coDefendants.

Equitable has received hundreds of complaints from the BBB, the CFPB, and other sources over the past several years, which describe in detail the illicit practices of the Marketing and Contracting Defendants alleged herein. Thus, Equitable knows of its co-Defendants’ deceptive and fraudulent activities. Equitable also provided substantial assistance in furtherance of these deceptive and fraudulent practices by providing the financing borrowers need to make purchases from the other Defendants.

Equitable is responsible for the fraudulent and illegal conduct alleged herein and is a necessary party to award complete relief.”

“Equitable entered the student loan industry in 2015 when it began financing and/or acquiring borrower contracts. Equitable has partnered with over forty student debt companies, including the Contracting Defendants.”

If you would like to read claims about the marketing and skills of commissioned sales representatives, start on page 24 of the complaint.

The complaint makes an interesting statement that the loans made by Equitable Acceptance for student loan debt assistance may be void and no payment is due since the interest charged is above the state usury laws.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Student Debt Relief Operators Agree to Settle FTC Charges

The operators of a student loan debt relief scam have agreed to settle Federal Trade Commission charges that they bilked millions from consumers by falsely claiming to enroll consumers in loan forgiveness programs, for which they charged up to $1,000 in illegal upfront fees.

The five settlements are part of a coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief scams announced by the FTC in October 2017, called Operation Game of Loans.

The settlements are with the following individual defendants and their associated companies:

Benjamin Naderi and his companies, Alliance Document Preparation, LLC (also doing business as EZ Doc Preps, Grads Aid, and First Document Aid) and SBS Capital Group, LLC (also doing business as Grads United Discharge) [Stipulation] and [Proposed Permanent Injunction and Final Order];

Shawn Gabbaie and his company, SBB Holdings, LLC (also doing business as EZ Doc Preps, Allied Doc Prep, and Post Grad Services) [Permanent Injunction and Final Order];

Avinidav Rubeni and his companies, United Legal Center, LLC (also doing business as Post Grad Aid, Alumni Aid Assistance, and United Legal Discharge) and United Legal Center, Inc. [Stipulation];

Ramiar Reuveni and his company, Grads Doc Prep, LLC (also doing business as Academic Aid Center, Academic Protection, Academy Doc Prep, and Academic Discharge) [Stipulation];

Farzan Azinkhan [Permanent Injunction and Final Order]; and

Michael Ratliff [Stipulation].

The Commission obtained default judgments against two more corporate defendants, Elite Doc Prep, LLC (also doing business as Premier Student Aid) [Default Judgment], and Elite Consulting Service, LLC (also doing business as First Grad Aid) [Default Judgment].

FTC’s Complaint

The FTC alleged in its complaint that the defendants deceptively telemarketed their document preparation service by misrepresenting an affiliation with the Department of Education or consumers’ loan servicers, and that consumers who paid defendants an up-front fee were qualified for or approved to receive permanently reduced monthly payments or their student loans would be forgiven or discharged. The defendants used deceptive advertisements on Facebook and other social media that touted their ability to qualify, establish eligibility for, approve, or enroll consumers in loan forgiveness programs, when, in fact, only the Department of Education can qualify or enroll consumers in such programs.

Conditions of the Settlement

Under the settlement orders, the defendants are banned permanently from engaging in any type of debt relief activities and from making misrepresentations related to financial or any other products or services.

The proposed and final orders include a total of over $19 million in monetary judgments, all of which are partially suspended due to the defendants’ inability to pay the full judgment amounts. The defendants’ combined unsuspended payments total over $5 million, which will be made available for consumer redress. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

The Commission vote approving the stipulated final orders in this matter was 5-0. The U.S. District Court for the Central District of California entered the orders against defendants Ratliff and Reuveni and Reuveni’s companies on August 8, 2018, against defendants Azinkhan and Rubeni and Rubeni’s companies on August 9, 2018, and against defendant Gabbaie and his companies on September 5, 2018. Default judgments against two of the corporate defendants, Elite Doc Prep, LLC and Elite Consulting Service, LLC, were also entered September 5, 2018. The Commission filed the stipulated final order with Benjamin Naderi and his companies on September 24, 2018. – Source

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

How Do We Get Rid of Our Debt So We Can Go to College?

Question:

Dear Steve,

Credit card debt. Working overtime to pay%. Two years didn’t miss any payment. All money goes to live and pay cards. We want to study. Before applying to college, need help with this 70 K debt which in two years went down only to 60K. We are from NY.

We need financial guidance related to CC debt before applying to a school.

Answer:

Dear Off to School,

It seems what you are telling me is your joint income is insufficient to reduce your debt by paying more than the minimum.

Honestly, I’m not making any moral judgment here but if going to college is a higher priority and you feel you must go then your most logical option is bankruptcy. It is the fastest and least expensive way out of debt you can’t repay.

But the bigger picture here is if going to college and incurring debt for that is going to be a better end result. Just don’t assume it will be. I’ve seen plenty of people who make poor financial choices when selecting schools and wind up in careers making insufficient income to satisfy their student loans.

I feel like there is a lot of logical planning and research you should embark on before you rush to file bankruptcy and head to college.

It’s time to think about what you want your future to be? Is a trade school a better option to get you specialized skills and earning faster? How about going to a local inexpensive community college first?

Was your credit card debt the result of living beyond your means? If so, how will you avoid doing that when you head to school?

What you need most now is a wise friend to talk this all through with.

The facts are that filing for bankruptcy will not prevent you from applying for federal student loans but may require you to ask someone to cosign for private student loans. Don’t ask anyone to cosign. Don’t drag them into what has the odds to be a future financial mess.

You need a life plan and not a rush to take action about your debt.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Can I Use My American Express Points to Settle My American Express Card Balance?

Question:

Dear Steve,

I have a $19,000 balance with American Express. I also have like 500,000 points. If I settle what will happen to the points? Can they be applied against the settlement amount?

Jose

Answer:

Dear Jose,

You ask a great question.

You will need to do something with your points before you even begin to settle your American Express card. By the time your card gets to a condition where you are ready to settle you will have to be in default. When you default you lose your points. So let’s get some value out of those points before you just lose them.

American Express reward points can be used for things like:

  • Gift Cards
  • Paying for Card Charges
  • Book Travel
  • Transfer Points to Another Reward Program
  • Go Shopping

Each category of point usage has pros and cons. You might find that some combination of point categories makes the most sense for you. Not all categories are created equal. Using points to pay for balances gives you less return than purchasing a gift card. And not all gift cards give you a 1:1 return. Some only give you 70 cents for each dollar in points redeemed. Frankly, redeeming your points for absolute maximum value is almost a college course of knowledge and hours with a spreadsheet. Just find what works best for you.

Here are some of the places you can use your points to shop with.

Keep in mind that American Express can be aggressive when you default to settle. They are also quick to sue. But if you are prepared for that in advance, it can be managed. This is one of those times when having a knowledgeable professional coaching you through the process or assisting you can be very beneficial.

Be prepared to have funds on hand to settle in a lump sum. And also know that after this is all over you may never get another American Express card again. American Express doesn’t forget who settled or went bankrupt with one of their cards.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Separating Finances After a Divorce

I am about to get a divorce. We currently have a joint account as well as separate accounts. Can my soon-to-be ex withdraw an enormous amount (more than half) legally from our joint account even though we agreed (verbally) that the joint account would remain intact for paying bills (mortgage, maintenance, utilities, etc.)? We both are still living in the home.
Nicole

I’m sorry to hear about Nicole’s pending divorce. Sadly, she’s got plenty of company. According to the CDC (Center for Disease Control), there were approximately 830,000 divorces in 2016.

Nicole is right to be concerned about her finances as she goes through the divorce process. Just as money is often the source of marital problems, it often causes headaches during the separation and after a divorce has been finalized. Even couples that have made an effort to keep their finances separate will probably find some areas where their financial affairs have become entangled.

The simple answer to Nicole’s question is “yes.” Her nearly-ex can make major withdrawals from a joint checking account. In a joint bank account, either person can withdraw all of the money, regardless of any agreements between the parties. That’s true even if it were Nicole’s account before they were married, she’s made every deposit, and her nearly-ex was added to the account merely for convenience. Even if her nearly-ex puts it in writing, he still can go down to the bank and take every cent before or after the divorce.

A joint account is only good for people who completely trust each other. Usually, that’s not the case in the middle of a divorce.

What can Nicole do? One solution would be for each of them to write a check for one half of each household bill. More work? Sure, but a whole lot safer.

Nicole really needs to look beyond their checking account. Joint debts can become a real problem. The lender will look for payment from anyone listed on a debt. The same thing is true for mortgage payments and credit card accounts. If both of them are on the loan, the lender can go after either of them for repayment of the entire loan, regardless of what Nicole and her nearly-ex agreed upon during the divorce.

And just because the court orders her ex to make payments doesn’t guarantee that he won’t lose a job and fall behind. If she’s still on the loan, the lender will start calling to ask her for payment. Any missed payments will reflect on her credit score. Short of making the payments herself, there’s really not much she can do but plead with her ex to catch up.

Any loan or credit card that has both Nicole and her nearly-ex listed should be closed out or refinanced by one or the other. That might not be easy. For instance, the bank won’t think that a loan to one of them is as safe as a loan to both. The reason is simple. Now the lender only has one possible source of payment instead of two. Because of that, the lender may want a higher interest rate.

Nicole and her nearly-ex should also retitle any jointly owned property. Owning joint assets with your ex can be troublesome. Even if the divorce was friendly. Joint ownership creates both privileges and responsibilities that aren’t shared very well by divorced people.

For instance, both parties must agree to sell any joint property. Nicole wouldn’t be happy if a year from now, her ex refused to sign off when she wanted to sell her car. But if both names are on the title, she’ll need both signatures to sell it.

Once all that’s completed, Nicole will also want to check her other financial documents and make the appropriate updates. Her ex might be listed as the beneficiary of her IRA and life insurance. Nicole will also need an updated will. Don’t forget bank safe deposit boxes or auto and homeowners insurance policies.

Is that a lot of work? Sure it is. But just like divorce means separating a lot of possessions and memories, it also means separating your financial affairs.

This article by Gary Foreman first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.


Managing someone else’s money: New protection from ID theft and fraud

If you manage someone else’s money, protecting your loved one from financial exploitation and scams is among your important responsibilities. Starting September 21st, 2018, a new federal law lets some financial caregivers request a security freeze, also called a credit freeze, on their loved one’s behalf. Taking this step can help protect them from identity theft and fraud.

Anyone can be a victim of identity theft

Identity theft happens when someone steals personal information, such as a Social Security number. That lets hackers, thieves, and even people you know open new credit cards and other financial accounts in your name. A security freeze restricts access to your credit reports and makes it hard for identity thieves to open new accounts in your name. Under the new law, it’s free to freeze and unfreeze your credit file at all three of the nationwide consumer reporting agencies – Equifax, Experian, and TransUnion.

Help for financial caregivers

But what about people who can’t manage their finances on their own? The new law lets people with certain legal authority act on someone else’s behalf to freeze and unfreeze their credit file. The new law defines a “protected consumer” as an incapacitated person, someone with an appointed guardian or conservator, or a child under the age of 16.

If you’re acting on behalf of a protected consumer, you must give the credit reporting agencies proof of authority before you can freeze and unfreeze the protected consumer’s credit. Proof of authority includes:

  • A court order (such as an order naming you guardian or conservator), or
  • A valid power of attorney.

To freeze or unfreeze the credit file of a child under 16, you must provide other proof of authority. 

You’ll also need to provide proof of your identity, which can be your Social Security card, your birth certificate, or your driver’s license or other government issued identification.

To learn how to request a security freeze, read this blog

More resources to help you manage someone else’s money

  • If you’ve been named to manage money for an adult who needs help, the Managing Someone Else’s Money guides will walk you through four different fiduciary roles and provide tips on spotting financial exploitation and avoiding scams.
  • If you believe a credit reporting agency is not placing a security freeze properly, you can submit a complaint to the Bureau of Consumer Financial Protection at consumerfinance.gov/complaint.

If you think you or someone you know is a victim of identity theft, visit the Federal Trade Commission’s IdentityTheft.gov to get a personalized step-by-step recovery plan.

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

We Are Stressing Over Our Payday Loans and Moving

Question:

Dear Steve,

My wife and I moved to Las Vegas, NV. two years ago we fell into the payday loan and installment loans from plain green, rapid cash, and opp loans. We stopped making payments because we were going to end up homeless. We owe a total of about 7,000. We are moving to Georgia next week. The loan company’s say they are going to start legal action.

I guess my question is… how long before they can hit my wife’s check and can we file bankruptcy on the loans. They tried to settle but we cannot afford what they want per month. We are Stressing! Than you!

Anthony

Answer:

Dear Anthony,

If you are already delinquent on the loans then they could already report that payment history. You may want to take a look at your credit reports for free and see what is on them. Go to AnnualCreditReport.com or CreditKarma.com for the report and free tools.

Filing bankruptcy as you leave town is a bit problematic.

The 730-Day (2-year) Rule
Before you can use a state’s bankruptcy exemptions, you must be continuously domiciled in that state for at least 730 days (2 years) prior to your bankruptcy filing date. Otherwise, the 180-day rule determines which state’s exemptions you must use. As a result, if you recently moved to a new state and want to use that state’s exemptions, you will typically need to delay filing your bankruptcy.

The 180-Day Rule
If you have not lived in your new state for at least two years, then you have to use the exemptions of the state where you were domiciled for most of the 180-day (6 month) period before the two years preceding your bankruptcy filing. So if you still want to use your old state’s exemptions, this rule can help you as long as you file your bankruptcy within two years of moving (otherwise you will have to use your new state’s exemptions). – Source

You will be able to discharge the payday loans through bankruptcy and I suspect you have little in the way of assets that would not be protected in bankruptcy in either state. However, the only way to tell is to contact a licensed bankruptcy attorney in Nevada or Georgia and discuss your situation with them.

Decide which is the most pressing issue. Is it the move or dealing with the debt?

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

How Can I Stop the Nightmare Abuse From Student Loan Collectors?

Question:

Dear Steve,

I borrowed around 100k to go to college, as I did not have a choice in borrowing, only in how much and if I needed to borrow 70k for SUNY school than why not 100k for private.

That was in 2007 before the recession. I am now turning 30. I owe 175+k. I have been paying on time, between 600 and 1000 a month, since 2012. I have been medically treated for depression and anxiety that is a direct result of the abuse and harassment I have faced at the hands of Navient, formerly Sallie Mae.

In December of 2017, I was left with no choice but to stop paying them. I was unemployed and destitute. Additionally, they “advised” me, more like emotionally manipulated me into putting my loans on credit cards, so I am in 20k of credit card debt as well.

I recently found employment within the past 6 weeks and they have already begun to send notices to my new place of employment and contact various family members multiple times asking for my phone number (I was forced to change it as they called me upwards of a dozen times daily).

How can I stop the harassment and emotional abuse I am suffering?

Will I find better options or help if they sue me since NY has such a long stature of limitations?
I believe they have violated my rights and caused irreparable harm to my financial and emotional wellbeing and livelihood, how can I go about seeking damages or even reporting their abuse?

Is there any hope to this nightmare ending?

Kim

Answer:

Dear Kim,

I have no doubt this has felt like a personal attack and has exacerbated your depression and anxiety.

From an outside point of view, I have the luxury of not being personally involved in the situation and can offer an alternative point of view. My opinion should in no way be a comment on how you are feeling because of the situation.

I do have to take an exception to your initial statement that you had no choice but to borrow. It’s a lesson I hope many can learn from your misfortune. There are options to avoid borrowing. For example, find a less expensive school to attend like starting at a community college. Some people even need to consider if it makes financial sense to pay for a degree that will only return X income. A classic cost vs. benefit analysis.

It is clear you feel victimized by the outcome. And it is clear it is causing you great emotional pain. What is also clear, from an outside perspective is that we can only allow ourselves to be victimized by feeling like a victim. I’m not discounting how you feel at all.

What I am suggesting is that if it is at all possible, taking charge, doing your research like you are doing, and understanding what the logical course is, helps to diminish those feeling of being an out of control victim. I want you to stand up and take charge instead of letting this all feel like it is raining down on you.

Collectors are good at getting people to do what they want because they practice at it all day long. It doesn’t make them bad people. It just makes them better at collections than the person who is the subject of the calls and emotionally sensitive.

The best outcome to end this nightmare is to get you to a place where you accept what the facts are, you recognize what is logically and not emotionally possible, and you accept and live with that.

Tell friends and family members if they get a call from someone who is looking for you to disregard it. You are dealing with it. Take the emotional power away from the collector to embarrass you.

If you can’t afford the credit cards then bankruptcy may be the least expensive and fastest way out of that debt. That would free up some room to make room for student loan payments.

But I think you have some issues you should discuss with an attorney licensed in New York. You need some facts before you leap to make assumptions about what the future of dealing with these loans is going to be.

I would suggest you contact attorney Jay Fleischman or Austin Smith.

This situation is not going away with hopelessness, a feeling of being a victim, or inaction. I would approach this by getting your mental health on a good footing to weather the storm and getting some professional legal advice about what your options are under New York law.

And one of those options may be to not pay what you can’t afford and manage the consequences. This story has not had the ending written yet. There is light ahead but your current vision of the future is clouded by how you emotionally feel about the situation. Our feelings are real, but not reality.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.