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Would You Willingly Pay The Govt to Reduce The National Debt? Some Gladly Do

Interesting Reuters story about people who willingly – even gladly – fork over their hard-earned money to help slash America’s multi-trillion-dollar national debt. It seems there’s a federal office in West Virginia that accepts public donations to lower U.S. debt. Before you laugh, consider this: that office raked in $3 million in 2008 in voluntary contributions. My first thought was: Well, I guess these people didn’t have debt of their own! Which would, of course, be a rare thing in a society where:

* the average household has $10,000 in credit card debt

* the typical car loan is more than $27,000

* the typical mortgage debt exceeds $200,000 (based on national stats)

* the average college grad leaves school with more than $20,000 in student loans

Read on, though, and you’ll discover who these individual donors are … and why they contribute in this way. You might be surprised by who’s giving. http://tinyurl.com/yll4ktk

The U.S. Economy Is Batting a Perfect 10 For 10

 

As I crunched some numbers today, it occurred to me that the U.S. economy is batting a perfect 10 for 10 (in a manner of speaking).

Here are some statistics about America’s economy – and its people – that may surprise you. Depending on your perspective, a few of these numbers will make you want to laugh, cry, or perhaps beg for mercy.

10 – The unemployment rate, in percentage terms, in the United States

(Source: U.S. Labor Department)

10 – The number of states in America that face looming budget disasters

(Source: Pew Center on the States)

10 – The amount, in billions, that Facebook is valued at by investors

(Source: The Wall Street Journal)

10 – The amount spent per month, in billions, on the wars in Iraq and Afghanistan since 2001

(Source: The National Priorities Project)

10 – The percent of disposable income that the average American spends on food

(Source:  U.S. Agriculture Department)

10 – The number of Americans, in millions, that are shopaholics

(Source: American Journal of Psychiatry)

10 – The average amount of credit card debt, in thousands, per U.S. household

(Source: Bankrate.com)

10 – The percentage of uncollectable credit card debt that banks charged off in the second quarter of 2009

(Source: Federal Reserve)

10 – The number of Americans, in millions, who are victimized by identity theft each year

(Source: Javelin Strategy & Research)

10 – The number of U.S. households, in the millions, that are unbanked or “under-banked” and use checking-cashing firms or payday lenders instead of traditional banks

(Source: FDIC)

Copyright Lynnette Khalfani-Cox, The Money Coach. All Rights Reserved. http://www.TheMoneyCoach.net

What to Expect if Your Bank Closes

A Facebook fan read about some local banks closing, and wanted to know how – as an account holder – this will affect her. Here’s what you need to know if your bank fails.

So far this year, 115 banks have collapsed in the U.S., and many of them are local banks. The Federal Deposit Insurance Corp. maintains a “watch list” of problem banks, those with troubled finances. In August 2009, that watch list contained 416 banks, so experts predict that half or more of those banks could also fail. Once a bank that is “undercapitalized” get taken over by federal regulators, it is either run by the FDIC, as is the case with IndyMac, or the institution gets sold off by the FDIC to another bank.

Here’s how bank failures affect you and other consumers.

If you currently have money sitting in a deposit account at a bank, and that bank is FDIC insured, then your money is protected up to $250,000. In 2008, during the height of the biggest financial crisis most of us have ever experienced, the FDIC raised the limits on insured accounts to $250,000 from $100,000. This $250,000 limit – per depositor, per account – will be in place until Jan. 1, 2014, at which time it is scheduled to go back to $100,000. The FDIC insures so-called deposit accounts, which include the following:

• Checking Accounts
• Savings Accounts
• Negotiable Order of Withdrawal Accounts (also called NOW accounts, which are savings accounts that allow you to write checks on them)
• Time Deposit Accounts, (including Certificates of Deposit or CDs)
• Negotiable Instruments (such as interest checks, outstanding cashier’s checks, or other items drawn on the accounts of the bank)

The good news for most people is that even if your bank goes out of business, if you’ve put your money in a FDIC-insured institution, you can rest assured that your money – up to the limits described – is perfectly safe. In fact, since the FDIC’s inception, not a single dime of insured deposits has ever been lost.

Got a financial question? Ask The Money Coach! You can reach me here on Facebook: http://www.facebook.com/themoneycoach

Wall St. Is Winning: Elizabeth Warren : Tech Ticker, Yahoo! Finance

Kudos to Elizabeth Warren, chair of the Congressional Oversight Panel, for her straight talk on what’s going on with banks during this ongoing credit crisis. Warren makes several key points to bolster her suggestion that banking conditions are actually worse than they were a year ago — despite the $700 billion in taxpayer money Wall Street received. Warren notes, specifically, that:

– Many “big” banks have gotten bigger (So much for the idea of making sure that there are no institutions that are “too big to fail.”

– Toxic Assets remain a problem (Even the TARP program was designed to get rid of illiquid, non-performing assets, these so-called toxic assets continue to drag down banks’ balance sheets)

– Stress Tests haven’t worked (Warren accurately observes that one worst-case scenario – the one predicting how bad unemployment could get – has been “blown through” but nothing is being done about it)

I would add one additional pointed observation to Warren’s analysis, namely:

– The credit crunch remains alive and well (The credit crisis reared its ugly head in 2007, when consumers couldn’t get home loans, then it spread to institutions in 2008, when banks wouldn’t even lend to themselves. Here we are in late 2009, and consumers and small business owners alike all know how tough it is to get credit – whether it’s a business loan for expansion or a consumer loan, such as a mortgage, credit card, or student loan.

Warren said the banks are carrying on like it’s a big “party,” and acting like “it’s business as usual.”

Hopefully, the Obama Administration will insist that the bank play by new rules – customer-friendly ones – especially since it was the consumer (i.e. taxpayer) that bailed these banks out of financial ruin.

Why You Should Answer a Summons on Debt Collection

If you can’t pay a debt, creditors are willing to settle out of court with you for a lump sum payment of less than the amount you owe, or a monthly payment plan, but they also will not hesitate to sue you for the full amount of the money you owe them.

So what should you do if you receive a summons and complaint from a creditor? Answer it.

What Happens If You Do Not Answer the Complaint
If you choose not to answer the complaint, the Court will enter a judgment against you, determining that you owe the creditor whatever amount they asked for. You may even be told to pay their attorney fees. The creditor can then use that judgment to garnish your wages, take money from non-exempt bank accounts or put a lien on your property.

If You Do File An Answer
If you answer the complaint (and you usually have about 20 days to respond to the plaintiff’s claims), you preserve your right to be able to argue your position in Court. You also will be notified of any future Court dates. You can use your time in Court to state why you don’t owe the money they claim.

What If You Do Owe the Money they Claim
Even if you do know for sure that you owe the exact amount the debtor claims, you can still use your time in Court to state another amount that you can afford to pay. Although typically if you admit you that amount, you will receive a judgment against you for said amount. The real leverage comes simply by answering. The debtor does not want to appear in Court no more than you do. They simply want to get paid. Once they see how time-consuming this may become for them since they are not receiving a default judgment, they may be more willing to enter a settlement agreement with you.

Debtors will take you to court for their money

What If You Don’t Have the Money to Pay?
It doesn’t matter if you don’t have the money. The debtor can still sue and the Court can still enter a judgment against you. Being broke is not an excusable reason to back out of your financial responsibilities, as the debtor is willing to shake the money out of you if it could. In cases like that you might just want to consider filing for bankruptcy instead. However, if in your financial statement and affidavit you can show how you don’t have the funds to pay, nor have a steady income, the debtor may be more willing to negotiate with you for a settlement plan.

What If You Offer to Make Monthly Payments?
A debtor does not have to enter into a payment plan with you. They can reject your offer and then sue you for the full amount. A debtor is more likely to reject a payment plan if they believe you have the means to pay, you have wages they can garnish, property they can attach a lien to, or a bank account they can raid. It is often, however, in the debtor’s financial interest if they reach a settlement plan with you if you don’t have the means to pay.

Try to settle a debt

Negotiate Your Debt
You’re in a better position to negotiate your debt before you stop making payments. However, if you’re receiving debt collection notices, that means you’ve already stopped. So, the older your debt gets, the better your chances are to get a good deal on a lump sum payment. At some point some creditors may have “written off” your debt as a bad debt expense. If they’ve written it off but then you come to offer to make a payment, they should be willing to take almost any amount from you, as any amount is better than no amount. If you’re offering a lump sum, try offering one-quarter or one-third of what you owe. Be careful with offering a monthly payment plan. Because if you miss a payment, the clock can start all over again for the full amount of the debt you owe.

If you need further guidance, sign up for a free consultation about how you can improve your financial situation.

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Health-Care Related Loan Forgiveness

By Lynnette Khalfani-Cox, The Money Coach

Did you go to med school or nursing school? If so, you may qualify to have some of your student loans forgiven.

If you have PhD or MD
A little-known loan repayment program at the National Institutes of Health can provide eligible college grads with up to $35,000 a year if you work or do research in the general clinical medicine, pediatrics, fertility or health disparities.

If you have a nursing degree
The Nurses Reinvestment Act is a scholarship/loan repayment program helps those graduates who serve in critical needs areas. The Nursing Education Loan Repayment Program (NELRP) will pay 60 to 85 percent of loans for registered nurses who work in areas where there is a shortage of medical staff.

This post is adapted from my book Zero Debt for College Grads: From Student Loans to Financial Freedom. Get the book now at Amazon.com.

Reflecting on today’s church sermon: Why we should all serve. Moms know about serving others. But R U also serving URself, esp. financially?

Student Loan Cancellation and Discharge for Military Service

By Lynnette Khalfani-Cox, The Money Coach

Effective Oct. 7, 1998, all borrowers of Perkins loans are entitled to have those loans discharged if they served in the U.S. armed forces. This cancellation privilege applies to Perkins loan recipients regardless of when the loan was made or what the terms on the original promissory note are. Military personnel qualify for loan cancellations in an amount up to 50 percent of their Perkins loans if they serve in areas of hostility or regions of imminent danger.

For other ways to qualify for a loan cancellation, read:

• Student Loan Cancellations for Teaching and Community Service
• Student Loan Cancellations for School-Related Issues and False Certification
• Student Loan Cancellation Due To Disability
• Student Loan Cancellation Due to Death
• A Student Loan Cancellation Success Story

My book “Zero Debt for College Grads: From Student Loans to Financial Freedom” has even more helpful information. Get the book now at Amazon.com.

Just finished taping the Dr. Phil Show in L.A.
Had a great time, got a lot of freebies, and also gave away a ton of money!