debt

American students to collectively owe $2 trillion by 2021 – What is Trump planning?

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As per a recent analysis, it has been seen that the student loan debt in the US is gradually moving towards a new milestone and it will witness a 30% rise in the approaching 36 months. The Federal Reserve Bank of New York says that as the debt climbs higher in order to reach a record high level, up from $1.55 trillion, the ROI for fresh college graduates is shrinking pretty fast. As the student loan debt costs is growing by $30 billion in every quarter and hence it is soon racing towards $2 trillion by 2021. As there were hosts of protests regarding the crossing of $1 trillion in 2012 and now it is even going to cross that level too.

What are the experts saying?

As the overall population of the nation grows and as college tuition costs keep rising, the US student loan debts will also continue to soar like never before. The CEO of an online lending platform has seen a noteworthy rise in the total number of student loans being taken out from community banks and credit unions.

Since the year 2010, there has been an increase in the number of federal loans that are being made available to the students. Students are also taking up second jobs in order to pursue passive income so that they could pay off the $20,000 in the form of student loans. Whenever you make free flow of credit with access to credit, this inflates the asset class. If you take a glance at the Great Recession, mortgages were made available and then you remember what had happened.

The constant rise in student loan debt

It was just in the last decade that student loan debt had surged by around 60% and if you take a look at the recent forecast, this will only speak about the financial pain. Millions are joining the latest cadre of 45 million American education loan borrowers and it is seen that an average undergrad in 2017 has owed $40,200. There are couple of people who owe $200,000 and this is a rather scary amount.

How is Donald Trump planning to solve this debt dilemma?

Donald Trump is also alarmed at the burgeoning student loan debt level. Here are few things to watch out for.

  • PSLF can be stopped for new borrowers

As the Congress passed a measure to boost the amount of funds available for PSF by $350 million, Donald Trump has chosen to stop this program. PSF is a federal program which forgives federal loans of the borrower who work in the public or non-profit sector.

  • Federal loan repayment options can be changed

Presently there are 8 different categories of loan repayment programs under the federal government loans. The Trump administration simplifies the choices of the borrowers by creating a repayment plan which is income-driven. Under the repayment plan, monthly payments will be capped at 12.5% of the discretionary income of the borrower.

  • Changes in discharging debt during bankruptcy

The Department of Education issued a request for comment on evaluating undue hardship claims, which is the standard used to check if a debt is discharged through bankruptcy.

Therefore, with the current state of student loan debt that is grasping the entire nation, it is vital to repay your student loan debt as soon as possible in order to avoid a bad impact on your credit score.


Women hold a major share of student loan debt in the US – Any reasons behind this?

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As per a recent report, women are carrying around 2/3rds of the outstanding student loan debt of the nation. This alarming statistic has been given by a new report offered by the American Association of University Women which is an education advocacy group. In order to be sure about the statistics, 58% of the college students are women and hence it can be easily concluded why so many women are carrying student loan debt. Student loans are gradually becoming a burden as too many of them are pursuing their higher education.

At present, 7 among 10 students take resort to loans so that they could obtain their degree. The average student leaves school with $30,000 in debt and nearly 25% of them owe more than $100,000. Majority of the Americans are extremely burdened with educational loans and these loan amounts are way more than what they owe on car loans and credit cards.

Implications of student loan debt on the economy of the nation

As long as the conversation on student loan debt is concerned, this starts with definite demographics which are harder and tougher than others. Even though you might compare apples to apples, still women are carrying more debt individually. As per recent statistics, in the year 2016, the average woman left undergraduate education owed $22,620 as against $18,650 for men. Hence there is a huge difference between the two amounts. In fact, black women are taking on disproportionate debt amount and they’ve racked up $25,000 in the form of student loans to obtain bachelor’s degree.

Besides, women are more likely than men to have household responsibilities to balance their coursework and hence they might take too long to graduate. As they spent more time in school, this can lead to more and more loans.
Is there a wide wage gap too?



The fact that as compared to men, more women are borrowing in bigger amounts is troubling the women. It is also true that women earn 28% less as compared against their male counterparts outside school. This clearly implies that women will take longer than men to pay back their student loans and hence they can dig deeper into debt.

What do the personal finance experts have to say?

While the men are seen to pay back 14% of their debt annually, women can just pay off 10% of their debt, as per a recent study. 3 years post graduation, women have been seen to pay back less than a third of their debt and during the same time period, men has successfully paid back 40% of the entire amount. These numbers can clearly indicate the irony of education and the system that prevails in the country.

Education certainly plays the role of an equalizer within the nation and in case the rising tuition costs are setting an impact on few people, few more than others, this is now demotivating them to take any step. Hence, as long as you wish to pay off your student loan debts, make sure you are proactive about them.


Financial Options Compared: Which Is Better, Debt Settlement or Debt Consolidation?

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As you’re looking for reliable methods to eliminate your debt, you’ll come across two terms: debt settlement and debt consolidation. How are they different? Which one is right for you?

The answer will differ based no your unique needs, but both exist to provide relief in situations where your debt is simply too much for you to handle alone. Here’s an overview on the difference, and what each entails.

Debt Settlement

Debt settlement is where a company enters negotiations with the companies you owe money to. In some cases, the savings can be incredible. Let’s assume you owe $4,000 on a credit card. Debt settlement can see you paying this debt off for a one-time lump sum payment of $2,500.

Now, if you have a large enough amount of cash to do this, it can be great. Getting rid of a debt in one large payment, with a balance reduction of 30-50%, is amazing. But there are a few drawbacks to choosing settlement.

The first is that it can take time. Some sources report that finalizing their debt settlement took a few years. During this time, you’re discouraged from making payments, which means your balance climbs in penalties and interest. Which, as we know, is bad for your credit score.

This can be exacerbated by the fact that you won’t be settling all of your debts at once. The company you choose – and you should be very discriminating when choosing – will have to negotiate each debt separately, meaning there could be mixed results overall.

Debt Consolidation

Debt consolidation is an option for people who have a flood of statements coming in, and are looking to seriously reform their spending habits. While there are a few different kinds of debt consolidation, they usually involve rolling all of your debts into one and getting the best loan to pay it all off.

What this means is that from here on out, you are making one payment. The loan has covered your debt, and now you’re paying it back.

Therefore, like debt settlement, this can take a few years to accomplish. The biggest problem is that once you consolidate, you have to avoid creating more debt while you’re paying off your consolidation loan.

Remember that with consolidation, you aren’t paying a reduced amount; you’re just taking care of your debt with one payment at a time. If there’s any reduction in what you end up paying, it should be thanks to the single, agreeable interest rate you have, as opposed to multiple interest rates across your balances.

So, before you sign up for debt consolidation, do a complete breakdown of what you would pay to eliminate your debt as it stands now, interest included. If consolidation somehow ends up costing the same or more, try another company.



Financial experts typically regard debt consolidation as a more practical option, reserving settlement for extreme cases only. And if you choose a reputable company to walk you through it, it can even end up improving your score. Any way you look at it, both are options worth exploring before you consider bankruptcy.

 


Take these steps if you wish to pay off your debts as soon as possible

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If you have taken long to think about the best indicator that will prompt you to trigger off your credit card debts, then remember that it isn’t dependent on your income or the total amount of debt that you owe! Rather it mostly depends on the way you plan to trigger off your debts. Researchers, Michaela Pagel and Theresa Kuchler published the works in their latest working paper by the National Bureau of Economic Research.

More than 520 customers were chosen as a sample in between the months of September 2014 and 2016 and it was made sure that all of them linked their checking accounts, received bi-weekly paychecks and appeared to link all credit card accounts. After they signed up for ReadyForZero, the customers made a plan on the total reduction that they wished to make on their debt every month. This turned out to be the biggest predictor of how much they’ll be able to pay down. However, the American consumers have got a long way to go as the Americans collectively owe a mammoth amount, that of $1 trillion in the form of credit card debt.

People still give more priority to their short term wants

Even after the consumers were provided with such improved odds, they still fell short of achieving their goals. On an average, every individual was just able to reduce their debt by 25-30% of the dollars that they planned to pay off. It was seen that the consumers got impatient and they wished to fulfill their short term goals which they gave more priority over paying off their debts. If you ask about this to the behavioral economists, they will name this as present bias which including giving more priority to short-term wants rather than on long-term wants.

This is not the first study which concluded that the commitment to repay debt is a vital ingredient which lets you actually do it. Majority of the people are more likely to pay off their credit card bills when they get a called where an automated voice asks them to commit themselves to paying back the debt within a short time span, like 24-72 hours. This was found out by the researchers who studied this in the Boston University’s Questrom School of Business.



Millennial women are lagging behind men with their finances

Both the millennial men and women are gradually giving more priority to their family and household but there is a sharp difference in the way in which they plan to achieve a goal. Men usually tend to give more value to money and they are given more pressure about offering money to the family. For the women, it’s just flexibility and time. Their long term goal is to just have that balance between life and work.

One more divide for women and men is parenthood. More than half of the millennial parents are of the opinion that having kids has got a positive impact on the advancement of their career. This half is mostly the male generation. It is not that having kids will always have a positive impact as 25% of the female millennials reported that their career advancements were halted due to the fact that they had kids.

Therefore, as the American consumers are all drowning in debt in all forms, it is high time that they take up immediate actions to bid goodbye to debt and live debt free.


Thinking About Debt Consolidation?

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If you’ve been dealing with credit card debt, or other unsecured forms of debt, and times have gotten tough, you may be considering debt consolidation. While this option is indeed a good fit for many, there is no such thing as a one size fits all solution to debt. With that said, there are a few things that you should consider when thinking about moving forward with a debt consolidation loan or program.

What Is Debt Consolidation

Debt consolidation, in its most basic of explanations, is just what it sounds like. It is the consolidation of multiple debts into one single account. However, when you break it down, debt consolidation does much more than turn multiple payments into one. Ultimately, there are two basic types of debt consolidation:

  • Debt Consolidation Loan – A debt consolidation loanis exactly as it seems. It is essentially a new loan provided to those with multiple debt accounts for the sole purpose of paying these accounts off and combining them. The goal with this type of loan is to reduce overall interest by combining several high interest loans into a single, lower interest loan. Ultimately, this reduces the minimum payment required and creates a fixed payment schedule, not only making it easier on a financial level, but on an accounting and organizational level.
  • Debt Consolidation Program – Those who cannot qualify for a debt consolidation loan, often look to debt consolidation programs. Based on the idea that the borrower is going through a financial hardship, debt consolidation programs differ greatly from loans. With these programs, a debt consolidation company is generally granted power of attorney over your accounts. This means that they make the decisions and payments for you. From there, the company will negotiate a lower interest rate based on your financial hardship and willingness to pay the take a proactive step to ensure that your debts don’t go unpaid. Once lower rates are negotiated, the debt consolidation accepts a single payment encompassing all minimum payments and fees associated with the program, later dispersing the payments to the lenders which hold the accounts.

Benefits Of Debt Consolidation

At the end of the day, there are several benefits that come with debt consolidation, whether it be a loan or a program. Some key benefits include:

  • A Single Monthly Payment – Financial management resource DebtConsolidation.com found that the average American owns credit cards owns between 3 and 4 credit cards (3.7 is the exact number). Having several monthly bills to follow can be cumbersome. However, debt consolidation offers the benefit of breaking your debts down to a single monthly payment.
  • A Lower Monthly Payment – Another major benefit, especially those dealing with financial hardship, is the fact that debt consolidation will generally lead to a lower overall monthly payment. Ultimately, this allows you to keep more of your hard-earned money.
  • A Fixed Payoff Schedule – Whether you go with a debt consolidation loan or a debt consolidation program, you will be placed on a fixed payment schedule. Usually, debts included in these programs, like credit card debts seem to never have an end in sight. Not to mention, the payments on these accounts can fluctuate wildly. With a fixed payment schedule, you’ll not only know how much money your bill will be each month, but when you’ll finally stop receiving those bills.

Drawbacks Of Debt Consolidation

While perfection is something we all look for, it very rarely exists, and chances are, it doesn’t exist across any debt relief option. There will always be some drawbacks. In the case of debt consolidation, these drawbacks include:

  • Damaged Credit – Often times, debt consolidation can lead to damaged credit. This is particularly the case when it comes to debt consolidation programs, not loans. With the changed terms, the closure of revolving accounts, and the various financial hardship programs likely included, borrowers can expect to see a negative impact on credit. If a loan is the route you plan to go, it can actually improve your credit, but it has to be done right. First and foremost, closing your credit cards once paid off will lead to closure of longest standing accounts and reductions in available credit. These factors can lead to declines. Therefore, to avoid declines in your credit score when choosing the consolidation loan option, keep your other accounts open and in good standing. Just don’t over use them!
  • Amount Of Assistance – With debt consolidation, only so much assistance can be provided, and it is usually provided through the reduction of interest. However, you’ll still owe the same amount of money, and minimum payments will have a limit as to how much they can be reduced. While they will cause more harm to your credit, if your financial hardship doesn’t allow you to make the minimum payment required with debt consolidation, you may want to consider debt settlement.



The Takeaway

The takeaway here is that debt consolidation is indeed a great program for many. However, it’s not the one-size-fits-all solution you may think it is. The truth is that as the borrower, you have many options, and before making any financial decisions, it’s important that you get a good understanding of these options.

 


6 qualities to look for in the best Credit and Debt Consolidation Programs for 2018

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Life can be quite overwhelming when you are saddled with lots of debt from several creditors. It is best to find a loan program that can help you get your financial situation back on track, especially if you have several credit card balances and high-interest personal loans to pay. Rising debt can make your budget more uncomfortable because of countless repayment dates that you must adhere to. A debt consolidation program will be your best bet because it can help you get your credits organized while reducing your monthly repayments. Here are a few guidelines to choose the right Credit and Debt Consolidation Programs for 2018.

Reputation

When choosing a debt consolidation program, you must consider the reputation of the creditor you are dealing with. You need to find a debt consolidation company that meets the minimum qualifications and upholds set consumer financial laws. You can compare debt consolidation firms based on several factors such as employee certifications, compliance with the federal regulations, average consumer reviews and ratings.

BBB Rating

A good company should have an excellent rating with the Better Business Bureau (BBB). The BBB is a nonprofit organization that promotes ethical business behaviour and monitors compliance of their 400,000 accredited businesses. Consumers that wish to make more informed financial decisions when looking for the best debt consolidation companies can check out the BBB website. Here, they will be able to identify trustworthy firms and check out unbiased customer complaints and reviews on BBB.org.

Qualification

Most financial institutions that offer debt consolidation loans usually set requirements depending on the amount of debt that the client has before they request for the loan. In addition, they will also consider the types of debt that the client has, debt to income ratio, enough monthly income, and the borrower’s ability to meet their set financial obligations. Some companies will require you to only have unsecured loans like medical bills credit cards, and student loans. Irrespective of the company you settle for, they should have loan qualifications that suit your current financial circumstances.

Pricing and Fees

The essence of taking up a debt consolidation loan is to ensure that you have a loan that you can easily handle and pay off. Therefore, you need to avoid debt consolidation firms that offer expensive loan processing fees and pricing. A good company will openly disclose the basic aspects of their credit services such as the loan terms, the consumer fees for the service, and any other information regarding their loan pricing and fees. It is illegal for any debt settlement firm to misrepresent their services or make any false claims regarding what their services are meant to accomplish.

A variety of loan services

With debt consolidation, there is no one size fits all kind of loan. This is because different clients will have varying amounts of debt they want to consolidate and different financial abilities. You need a lender that will provide a wide variety of debt consolidation programs to choose from. This will ensure that you settle for a loan that perfectly suits your budget and financial needs to ensure you eliminate debt over time.

Fixed interest rates

Debt consolidation loans are available in both variable and fixed interest rates. With a fixed rate, you have a more stable option as you will have a monthly repayment that is predictable and safer because you will not have any surprises that you must instantly fit into your monthly budget. Always opt for a lender that offers a fixed interest rate for your loan as it will be more manageable and predictable and you will avoid any surprises.

Affordable payments

The major objective of combining several debts is to ensure that your loan repayment becomes more affordable and manageable. This is why you must ensure that you choose a debt consolidation company that offers you a better and more affordable monthly repayment option. Before you take up any loan, you must ensure that your monthly payments will perfectly fit into your budget. This is crucial because if you cannot afford the repayments, then you will end up inmore financial trouble in the future.

Late or unsuccessful payment charges

Some creditors may not charge you for late payment; however, there are those who will. Usually, late payment fees will include a blend of flat fees and a percentage of the loan amount, and you must pay special attention to the language used to explain these in the loan terms and conditions. Always opt for lenders with reasonable fees and an origination fee that does not exceed 6%, 5% of the entire monthly past due, and late repayment charges of less than $25.

Pre-payment charges

Be sure to check whether your creditor will charge you for making early monthly payments on your loan. This is important, especially if you want to clear your debt early. Most creditors will charge you for early repayment to make up for the interest charges that they lose when you pay the loan ahead of the scheduled date. Be sure to get lenders that do not offer a pre-payment charge.

Legitimacy

When looking for a creditor, you must ensure that you are getting a legitimate debt consolidation loan. This is because there are countless debt and credit consolidation scams in the market today. You must ensure that you get a loan from a legitimate financial institution. You should avoid creditors who ask you for an upfront fee in order to secure a loan. You should always trust your instincts and keep off programs or loans that do not seem right.

When your current debt becomes stressful to handle, it is best to always seek assistance to make your credit manageable. If you are searching for the best debt consolidation company, then it is crucial for you to shop around and check out various available options like balance transfer credit cards, credit card hardship programs, and personal loans. With a good credit score, you can significantly save on interest rates and be able to consolidate all your loans. Take time to compare at least several lenders before making your final decision. This way you will be able to get the best creditor who offers excellent loan terms and choose the right debt consolidation program.

Author Bio
Isabella Rossellini is a marketing and communication expert. She also serves as content developer with more than seven years of experience. She has previously covered an extensive range of topics in her posts, including debt consolidation and start-ups.


Could A Bad Boss Get You In Debt?

A bad boss is worth avoiding for a plethora of reasons. They can make your working life hell, they can steal your accomplishments, fail to show any recognition, and can make you fall out of love with your career. But while you might think of soldiering on and tolerating bad behavior until you can make a more positive move, there’s one impact of the bad boss you shouldn’t tolerate: the financial kind. If you don’t acknowledge and prepare for these risks, a bad boss could genuinely get you in debt.

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Not knowing your worth

It might not be enough to get you in debt by itself but being underpaid for your job can certainly contribute to it. If you have the pay to match your expenses, especially if your expenses are higher precisely because of where you live and work, you can and will fall into debt. Learn how to negotiate a higher salary and craft the most irrefutable argument that you can. If they still won’t budge an inch, take your proposal elsewhere.

What free time?

Overtime, especially unpaid overtime, should always be treated with some degree of caution. Sometimes, it’s a way to show your dedication to the workplace and to lend a helping hand when it’s really necessary. But the time and energy you spend adding a little more earnings could better be spent building wealth elsewhere, whether it’s budgeting to pay off existing debts, finding your side-hustle, or investing. If you want to build enough wealth to escape the prospect of debt, you can’t rely on your job alone.

Pay problems

Now we’re getting into the real issue: when a bad boss costs you money. If they are disorganized, or unable to deal with their own finances, an employer’s failures cross into your pay. Though you might get it eventually, the cost of late payroll can add up, putting you in debt, which means you lose more money in the long run. This isn’t just a small error, it’s a crime, and it’s well worth considering the help of a wage theft lawyer if it happens to you often. You might be inclined to forgive an error in pay once or twice, but when it becomes a semi-regular occurrence, you are biting the costs of your boss’s negligence.



Making you sick

Health and safety standards are still a huge concern in the workforce. Many employers are rushing to improve their own, but negligent bosses might run a workplace more inclined to make you sick or see you suffer an accident. Workplace accidents are damaging to the whole business, but that doesn’t mean you should accept the personal costs. Never turn down the opportunity to claim if you’re going to be paying for your own health care because of an injury or illness that’s your boss’s fault.

No matter how much you love the work you do or how much you want to avoid rocking the boat, you shouldn’t let anything get you in debt where you can avoid it. Protect yourself from a bad boss before they get you in trouble they won’t be there to help you with.


Getting Yourself Out Of Deep Water

When it comes to money, it is really easy to become stuck in a bit of a rut. One thing will lead to another and before you know it you’ve got debts up to your eyeballs. Even if you don’t have debts, you can come to a point where you’re barely scraping by from paycheck to paycheck. When it gets to this point, you need to find a way of getting yourself out of deep water. There’s more to life than stressing about money, and most of the time you’re stressing due to things that you have caused yourself. So before you start spiralling completely out of control, here’s the ways that you can get yourself out of deep water.

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Debt

Debt is one of the scariest situations to be in in your life. It’ll seem like there’s absolutely no way out of it, and in a way it can actually consume you. But the sooner you face your demons and deal with it, the sooner things will get better for you. If you’re at the point where you have debts on top of debts and you can’t even meet the minimum payments, you will have to file for bankruptcy. It’s either than or face big fines from the company’s you owe the debts to. Fines that you won’t be able to pay which will just lead to more issues. There are different types of bankruptcy you can file for. To make sure you don’t make mistakes, check out this chapter 13 vs chapter 7 guide. There’s no shame in declaring bankruptcy, and it’ll take more of the stress away from you. If you’re not at the stage where you can’t even meet minimum payments, then you need to work through each one you’ve got bit by bit. Just making the smallest dent is going ease your stress a little. Methodically work out which one you’d like to pay off first, and make sure you’re remembering to make your minimum payment for any other ones.

Paycheck To Paycheck

If you’re living paycheck to paycheck, you really aren’t alone. Whilst it isn’t as serious as being in debt, it is still awfully stressful. But half of the time it is down to the lifestyle choices you’re making, and a few quick changes will solve all of your problems. For example, if you’ve got the most expensive phone contract out there, you’re wasting your money. Cutting down to a more affordable phone contract will give you money to spend on the things you actually need. If you know you’re a sucker for ordering a takeaway to celebrate the weekend, then cut down on these too. Just have one treat night every two weeks and the money you save could be used to put fuel in your car etc. If you live in your own home, then the bills you pay are likely to be what is crippling you. Try and cut down on things such as electricity by turning off all the lights when they’re not needed. Turning off the plugs when you go out is another good way of getting them down.


Welcome the New Year and resolve never to fall in debt again – Preparing for 2018

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During the run up for the biggest festival of the US – Christmas, it is pretty easy for you to brush apart all the debt worries that you were facing. You have got many things to plan for, presents to buy, dinner to cook and New Year drinks. But now as we are all set to welcome the New Year, 2018, it’s high time we start facing the facts. Are you in your overdraft? If the answer is yes, then you’re in debt. In case you’ve reached the overdraft limit, you’re on the threshold of debt. As soon as you enter the New Year, your credit card bills will come down to haunt you.

If you wish to pay off your debts forever, here are few steps that you can take. In case you have got more debt than what you can handle, you can even contact a debt planner. Nevertheless, before seeking professional help, here are few steps that you can take on your own.

• Determine your debts

To start off with, you will require identifying your debts, including the overdraft. You have to make sure you know the amount that you’re paying on the fees, the interest rate and the principal amount. You can this way prioritize what you need to pay off. One of the best ways in which you can do this is by taking a quick look at your credit report.

• Reconsider your expenses

In case you think of sorting out your debts, you have to again focus on spending less amount and paying back more. Do you think you are a big spendthrift? If it is so, then what is the item on which you’re spending cash? Did your income suddenly drop or did you make a small error due to which your penalty fees soared out of control?

• Draw a budget and follow it

Take a close look at your bank statements and know where you can cut down on. Once you get to know these, rethink your habits of making expenses. You can even install financial apps to manage your expenses.

• Negotiate with your lenders

If your debt accounts are delinquent, you can definitely speak to your lenders. In case you owe money on mortgage loans, the lender might come to an agreement with some improved way of repaying your debt amount.

• Choose a debt management plan

If your debts are getting too stressful, you might require seeking third-party help. Sign up with some debt management plan where you have to pay a fixed amount every month. However, don’t just sign up with anyone who offers you a plan. You have to make firm decisions about your debt management plan.

Therefore, now that you know the ways in which you can welcome the New Year with a newly adopted debt-free attitude, you should take into account the above mentioned tips and advices offered by the experts.


How to Deal with Collection Agencies

If you are in debt and having trouble paying off your creditors, then you may fear the inevitable call from the debt collector. Or you may already be receiving these calls and filtering them out by not responding to them. Or you may be making promises to them that you know you can’t keep.

What many people don’t know is that there are ways to deal with debt collectors that will make your life a lot easier. You don’t need the constant stress of them calling you and demanding money. So, we want to show you a few tactics you can use to get them out of your hair, so to speak.

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You Can Refuse

When debt collectors like IC System calls you, your first response may be to comply with them. You may feel like you have no choice but to give them at least some money. What you don’t realize is that these debt collectors take more money from you than the original cost of the loan. They need their fee, and they take that out from what you are spending to repay your debt. Once a debt collector becomes involved, you will always pay more than you originally did.

You can simply tell the debt collectors that you don’t want to deal with them and that you will deal with your creditor directly. IC System or whoever else is bothering, you can relay that message to their bosses. You can also tell them not to bother you anymore. If you don’t want to be hounded by creditors and debt collection agencies, then you can simply tell them that.

The takeaway is this: You can say “no” to debt collectors. You don’t have to give them money. They aren’t your creditors, and you are often better off dealing with the creditor directly.

Make Smaller Payments

You also don’t have to accept the figure that your creditor or a debt collection agency is asking you to pay. If you owe $150 right now, you can simply pay $20, if that’s all that you can afford, or that is all you feel comfortable paying at the moment. Even making a small payment like this can be helpful to your credit score, and it can be an excellent way to preserve your credit while you get back on your feet. As long as you are showing an effort to pay back what you owe, debt collection agencies can’t do anything to you and creditors cannot complain. Best of all, your credit score can remain intact, or at least not plummet as far as it could. One of the biggest causes of bad credit is making late payments. It is always better to pay less than you owe rather than to pay late.

Just be sure that you do pay back all of what you owe at some point. Making small payments again and again can result in added fees or higher overall interest, and that’s going to cost you in the long run. You should only make those emailer payments when that is your best choice.

You Can Ignore Collection Agencies

If you are making an effort to pay your debts back and you just need a little more time, then you may be better off talking to your creditor rather than a debt collection agency. A lot of times, the collection agencies like IC System have no power to make a deal or accept lower payments. They have been given explicit instructions by the creditor, and they have to follow them when it comes to collecting money from you.

If you see a debt collector calling, though, and you recognize the number, you can always ignore them. You can hang up without answering or just answer the call and hang up when you realize it is them. Now, they may continue to keep calling you until you take some sort of action, but you are more likely to get a good deal on your loan or debt if you deal with the creditor directly. Don’t think that you have to even talk to the collection agency. Your debt is not with them, after all. They are simply the middle man.

 


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