- Dora the Explorer is singing about cocaine. Is that why my kids have so much energy? #
- RT @prosperousfool: Be the Friendly Financial “Stop” Sign http://bit.ly/67NZFH #
- RT @tferriss: Aldous Huxley’s ‘Brave New World’ in a one-page cartoon: http://su.pr/2PAuup #
- RT @BSimple: Shallow men believe in Luck, Strong men believe in cause and effect. Ralph Waldo Emerson #
- 5am finally pays off. 800 word post finished. Reading to the kids has been more consistent,too. Not req’ing bedtime, just reading daily. #
- Titty Mouse and Tatty Mouse: morbid story from my childhood. Still enthralling. #
- RT @MoneyCrashers: Money Crashers 2010 New Year Giveaway Bash – $7,400 in Cash and Amazing Prizes http://bt.io/DDPy #
- [Read more…] about Twitter Weekly Updates for 2010-01-16
Debt Scams
When you are up to your eyeballs in debt, praying for a step-stool, sometimes life–more accurately, con-artists–try to trip you when you are vulnerable and look for a solution. They aren’t muggers on the street. They come at you wearing ties, invite you to a real office, with real furniture and a real nameplate on a real desk. They are a real company, but that doesn’t mean they aren’t trying to scam you out of the little money you have left to put towards your debt.
Yes, I am talking about debt management scams. These scams come in 4 main varieties.
Debt Settlement companies instruct you to stop paying your bills completely and send them the money instead to be placed in a settlement fund. When your creditors get desperate enough, they will be willing to settle for pennies on the dollar.
In theory, this can be a good strategy for some debtors. Unfortunately, it has some drawbacks, even if the company is legitimate. They tend to charge high fees as a percentage of your deposits. Some take another fee when a settlement is accepted. The entire time you are building your settlement fund, your credit rating is sinking, leaving you open to being sued or garnished. The bad companies take the fund and run, while even the good companies can’t guarantee your creditors will play ball.
Ultimately, they aren’t doing anything you can’t easily do yourself. If you want to go the settlement route, stop making your payments and funnel the money into a savings account that you will use to offer settlements from. It takes discipline, but there is no upside to paying someone else for the same function.
Debt Management plans are used when you owe more than you can afford to pay. These companies work with your creditors to adjust interest rates and minimum payments and they try to get some fees waived for you.
A good company will work with you and your creditors to make sure everyone is working together towards the goal of eliminating the debt. A bad company will tell you they are working with your creditors while ignoring any contact from the creditor. They’ll tell you the creditor isn’t willing to negotiate while never stepping up to the negotiation table. Another trick is to offer the creditor a set payment, with a “take it or leave it” clause. Any input from the creditor is interpreted as a refusal to participate. This, coupled with high fees paid by the debtor, make debt management firms a risky proposition. Most states require the firms to be licensed. Check to make sure they are before giving them any information.
Debt/Credit Counseling companies work with you to establish a budget and eliminate expenses; in effect, they are training you to be in control of your finances. They are often organized as a nonprofit, but not always.
Some–the sleazy ones–lie about what they are doing, or attempt to misconstrue what you are agreeing too. Be careful not to use your home as collateral to consolidate unsecured debt and don’t walk into a Chapter 13 bankruptcy without that being your intention. Both of those are common debt counseling scams. If the company isn’t able to provide all of the details of a transaction–company name, address, licensing information–or they aren’t willing to spend as much time as necessary explaining the details of the transaction, walk away. This is your life, you are in charge of it. Don’t let anyone bully or prod you into signing something you aren’t comfortable with.
Credit Repair is almost always a scam. There are ways to get correct bad information removed from your credit report. If the information is correct, those methods are illegal. There are two legal methods to repair your credit. First, stop generating bad credit. Make your payments on time and eventually, the bad items will fall off. Second, write letters disputing the actual incorrect items on your credit report. There are no quick fixes, and anybody telling you different is flirting with a jail sentence, possibly yours.
How do you avoid the scammers?
- Be skeptical. If it looks to good to be true, it probably is. There is no such thing as a magic wand to fix your credit and make your debt disappear. Bankruptcy + 10 years of your life is the closest thing to magic credit repair in this world.
- Only use a legitimate credit counselor. Verify them through the Better Business Bureau and the National Foundation for Credit Counseling (1-800-388-2227 or www.nfcc.org)
- Check the license. Most states require credit and debt counselors to be licensed. If they’re not, run away and report them.
- Read the find print. Don’t sign anything you don’t understand. Like every other piece of your financial life, own the transaction. Know what your are doing, or don’t do it.
- Are they willing to work with you? If they’ve got a generic plan that doesn’t account for your specific situation, they are probably a con. At the very least, they are a worthless company and a waste of both time and money.
- Are they willing to work with your creditors? If not, they won’t be accomplishing anything for you.
- How much do they cost? Higher fees may not be an indicator of a scam, but call around and find out if they are in the right ballpark. Triple or quadruple the going rate is a sign of someone who will disappear late one night, with your hopes, dreams and savings in tow.
- Above all else, trust your gut. If it doesn’t feel right, it probably isn’t. There is nothing a counselor can do that can’t wait a few days while you check them out.
There is no magic bullet to kill debt. You’re not fighting a werewolf, you’re fighting a lifetime of bad or unfortunate choices and circumstances. It’s important to keep a realistic outcome in mind.
Update: This post has been included in the Carnival of Debt Reduction.
Did I Die?
If you’re reading this, you should probably be able to guess that I have not, in fact, died.
So your next question may be “What the heck are you up to, if you’re not posting here?”
That’s a valid question.
It’s been a rough year, and I won’t share details about all of it, but here goes:
I’ve been trying to focus on my marriage. We’ve had some problems that take time to work out. One of the problems is that I’m traveling for work at least monthly. That sounds like staying in a hotel with nothing to do would be great for writing, but it never seems to work out that way. There’s always something going on.
One of the solutions for that–in relation to my marriage–is that we are going on weekly date nights. Every Friday, the boy watches his sisters and the wife and I go out. We usually have a dance lesson, followed by dinner and some activity, which has meant actual dancing in actual bars on actual dance floors with actual bands playing live music. It’s fun, but it sidesteps frugality completely. The dancing lessons run $95 each. Most nights, there’s a $5 cover at the bar where we dance, and dinner is somewhere between $50 and $100, depending on the restaurant and drinks. So, we’re dropping $150-200 per week on dates.
Totally worth it.
The date nights have also spun off into a new venture. Dating & Dining (click the link!) is the site where we document and review our dates. We’re not reviewing our date, because that would be weird. “Honey, you rocked my world when we got home, bu you were kinda crabby tonight. I’m only going to give you 3 stars.”
No.
We are reviewing the restaurants and activities we’re doing, using the traditional “Pants Off” rating system. A really good restaurant will knock our pants off, sometimes literally.
That’s more writing and a lot of time gone.
On top of that, Linda has gotten both her motorcycle license and her carry permit, so there’s riding and shooting(never together!) to fill in the time.
And kids. Kids–much like our dog, but totally unlike our pythons–want attention. And food. And games. And a freaking overpriced American Girl Doll. And time. So we play games and bring out the Daddy/Daughter date.
In short, since we got our finances in order, I’ve been trying to draw back from being an obsessive workaholic and focus on the reason I became one in the first place: my family.
Making Up Stories
Saturday night, as I was walking out of the pizza place, I saw a beautiful young brunette standing on the sidewalk talking on her cell phone.
As I walked past, I heard, “I could pay my rent if they’d just give me my last paycheck! They owe me like $200.”
That’s it.
Have you ever heard a tiny piece of a conversation and used that to build a back story in your own mind?
I do that all of the time.
In fact, I’m going to do that now.
First, what can I know from those two sentences?
- She was unemployed. She was more worried about her last paycheck than her next one.
- She had worked for a scummy, fly-by-night, something-or-other. Good companies don’t withhold paychecks.
- She had no emergency fund. If she had one, $200 would be an inconvenience, not a disaster.
- She rented, and had roommates. This conversation occurred in the parking lot of a pizza place in a reasonably affluent suburb. For $200, she wasn’t living alone. Whether she rented a room or shared an apartment would be a mere guess.
Those items can–I believe–be taken as fact, given the evidence at hand.
Now for the conjecture:
- She was a waitress. A $200 final paycheck probably means her hourly wage was low. Besides, pretty, young, unskilled girls often become waitresses. It’s one of the few ways to make good money without a degree of any kind.
- The restaurant wasn’t a chain. Chain stores have lawyers and procedures. They don’t withhold final paychecks.
- She invites drama into her life. When you work for a company that makes a habit of shady practices, like withholding final paychecks out of spite, you know it happens. It’s not a surprise. If you continue working there, you are just waiting in line for your turn to have problems.
- She wasn’t close to her family. In an emergency, $200 from Mom & Dad is nothing. In my mind, she only has one parent and isn’t close to that parent, but that’s purely invention.
- Her friends are in the same boat. Short-term planning, no reserve cash, no room to let a friend couch-surf for a couple of weeks.
- Next month, she’ll be having the same problems, but she’ll find someone else to blame. Her ex owes her money, or her roommate stole the last of her cash.
That’s my entirely unsupported guess of a young stranger’s life story. My opinion isn’t flattering, but how could it be, when $200 is enough to make the young woman panic?
Have you ever played this game?
Indio Downey: The Cost of Drug Addiction
Indio Falconer Downey, the son of actor Robert Downey Jr., was arrested Sunday, June 29, 2014 on drug possession charges. At the time of his arrest, Indio was a passenger in a vehicle that was stopped around 2 PM. At the time of the traffic stop, Indio was found to have what appeared to be cocaine as well as a smoking pipe. He posted bail around 9 PM that evening and was released.
Father’s Drug Problems
Indio’s father had many well-publicized drug addiction problems throughout the 1990s, attending a number of rehab facilities in an attempt to beat his drug addiction. The 49-year old actor says he was introduced to drugs by his father at the age of eight, and by 20 was a full-fledged addict. Just two years after Indio was born in 1994, the actor was stopped by police driving his Porsche on Sunset Boulevard naked and in possession of cocaine, heroin and a .357 Magnum. Just days before he was due to be charged for those crimes, he was arrested after being found passed out in a neighbor’s home. Indio’s father spent 12 months in prison and, in 2000, when Indio was six, Robert Downey Jr. was arrested in a Palm Springs hotel room with cocaine and wearing a Wonder Woman Costume. Before a preliminary hearing could be held on the charges, Indio’s father was arrested for being under the influence of an undisclosed stimulant. Indio’s mother, Deborah Falconer, divorced his father in 2004.
Indio’s Drug Abuse
According to reports, Indio’s father has been helping his son deal with addiction problems for many years. Indio has been in and out of treatment centers, and some reports say he had remained clean and sober for some time, in some part due to his father’s counseling. In 2013, there were reports that Indio was being treated for a “pill problem,” which his mother claimed was not a significant problem. According to Deborah Falconer, Indio was taking “one pill a day” and that he was not addicted. She said Indio was being treated with “holistic, natural and orthomolecular therapy.” After Indio’s arrest on Sunday, however, Robert thanked the Sheriff’s Department for their intervention, stating that there was a “genetic component to addiction” and that “Indio likely inherited it.” Robert has been clean and sober since late 2001.
Children of Addicts
One of the unknown costs of addiction is that children of addicts are eight times more likely to develop an addiction than those whose parents are not addicts. Many studies have confirmed that addiction is a combination of genetics and poor coping skills. In addition, sons of addicted fathers are four times more at risk for developing an addiction than the sons of non-addicted fathers. Much of this is because addicted parents often lack the ability to provide structure or discipline, and the sons of addicted fathers receive harsher discipline than those of non-addicted fathers. These statistics clearly show that the cost of addiction on offspring is high, and indicates why Indio may have turned to substance abuse.
It is clear that this recent arrest shows that Indio may be facing an escalating drug problem, similar to what his father faced in the 1990s. After seeing his father as an addict, as well as the well-known genetic connection regarding addiction, Indio may need intensive therapy in order to fight his addictions.
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Shopping Online: The Money-Saving Secret
I try to do as much of my shopping online, if at all possible. The one exception is groceries. The two local companies that offer online grocery shopping and delivery have a markup that just doesn’t balance out with the convenience of not having to fight crowds at the grocery store.
I buy books, CDs, movies, even toilet paper online. It’s so much easier to spend 5 minutes on a website than to pack up the kids, drive to the store, wander around while trying to avoid coming within view of the toy aisles, get what I need and get out without buying a bunch of crap I don’t need.
For a long time, I’d just accept the price as the price. I’d pay whatever was asked. Eventually, I quit overlooking the magic money-saving option on almost all e-commerce websites: the coupon field.
Here’s how it works: While you are checking out, you will usually see a box marked “coupon code” or “promo code”. Put in a coupon code, and poof! you save money. Magic is fun.
What happens if you don’t have a coupon code?
I crank up my second brain, aka Google. For example, if I’m shopping at the Gap, I’ll type in “Gap coupon code“. When the search results come up, I open the top 4-5 pages all at once and look for the best deals. If a site is trying to charge $30 for shipping, a free shipping coupon is a winner. If I’m ordering $300 worth of Christmas presents, a 15% off code is a real prize. Other times, I will concentrate on the buy-one, get-one type of coupons. Those are handy when I’m trying to buy presents for all of my nieces and nephews.
The real secret is coupon stacking. It’s usually not allowed, but some sites allow you to stack different types of coupons. If I can find a “15% off $300” coupon and a “free shipping” coupon for the same site, I’ll try to use them both. One Christmas, I was able to get $100 of free stuff shipped for $5 by stacking BOGOs, discounts, and shipping coupons. I love to get free stuff. Always try to use extra coupons, if you can find them. This isn’t extreme couponing, just using the system as it was designed.
I search coupon codes every single time I order anything online. No exceptions. How do you save money when you shop online?
Written on behalf of Dealtaker.com
