Welcome to MoneyMattersLafayette.org! No matter if you were looking for us, directed to us, or just landed here by accident, we know that you’ll find some useful information here. How can we be so sure? Well, chances are good that you don’t have an unlimited supply of money, which means that you have to watch how you spend it.
Moneymatterslafayette.org is an online resource offered by Family Services, Inc., a not-for-profit agency in Lafayette, Indiana. This website is just one way that Family Services empowers our clients and community with money management resources to help them stay on track with their finances.
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To see a bankruptcy judge's list of the Top 20 Mistakes Made by People Who Have Filed for Bankruptcy copy & paste in your browser:
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http://www.careprogram.us/free-care-downloads/handouts/Mistakes%20Handout%20new%20logo.pdf
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Learn From the Mistakes of Others: Volume I
Martin Vanbee tells us, "Learn from the mistakes of others. You can't live long enough to make them all yourself."
Some of the old rules of money management still apply today, such as don’t borrow against future income unless you’ve explored all alternatives, get everything in writing, and don’t agree to anything that you don’t fully understand.
Below are a few more lessons that others have learned. Let me know if you'd like to hear more about one or more of the topics.
ABOUT A REDUCTION IN INCOME
When your work hours are reduced or when you’re laid off, avoid the temptation of credit cards to maintain the same lifestyle that you had while working. The arithmetic involved in preparing a household budget isn’t particularly difficult, but it’s crucial and can be quite an eye-opener. Cut expenses to the bone, make every dollar count, and keep only those "niceties" that are the very highest priority to you and your family.
ABOUT CREDIT CARD DEBT
ABOUT DEBT SETTLEMENT
In recent years the Federal Trade Commission (FTC) has shut down several in wWhen we take on a debt, we’re promising to repay at some time in the future no matter what else is going on in our lives.
In the long run, credit cards benefit neither the consumer nor the producer, and even the new law will not make credit cards safe. Regardless of the promised rewards, discounts on purchases, or the suggestion that a credit card will improve your credit score, the risks outweigh any elusive benefits.
Just say “no” to one of the most widespread and destructive schemes of our time.hat New York Attorney General Andrew Cuomo has termed “a rogue industry.” Preying on desperation and often operated by attorneys, debt settlement companies proliferate for the same reasons as do drug dealers - the profit potential is so great that even when one is shut down, at least one other pops right up to take its place. Sending money to a settlement company instead of to your creditors results in the missed payments being reflected on your credit reports, and you can be sued.
Settlement firms do have what they call success stories, but even if you’re lucky enough to snag
a firm operating legally, and even if one of your debts is successfully negotiated, due to default interest rates and fees that have piled during the negotiation period you may not be much better off, and any negotiated amount may be subject to income tax. For a brief description of various options that people consider, see the FTC’s brochure “Knee Deep In Debt” (link below).
ABOUT CREDIT INSURANCE
Seldom is worth the cost. Read the fine print and decide for yourself.
ABOUT CREDIT REPAIR
There’s nothing that a credit repair service can do – legally, anyhow – that you can’t do yourself.
ABOUT CREDIT SCORES
The way that scores are calculated and the way that they are used are necessarily undergoing change. In the past they seem to have been better measures of a lender’s profit potential than of any individual’s true creditworthiness.
The single best action one can take to improve ones “credit” is to pay all bills on time, every time. Of course for this to be possible, it also means to borrow only sparingly and only when there are no viable alternatives. But this behavior makes good financial sense regardless of the impact on a credit score.
ABOUT CREDIT REPORTING AGENCIES
Experian, Equifax, and Transunion exist primarily for lenders, yet each consumer is allowed to a free copy of each agency’s report one time per year at no cost. There is only one authorized source to obtain the reports, and it’s not the one that has bombarded us on the TV and radio. The source to use is the Annual Credit Report Request Service, and reports may be accessed by mail, online (link below), or by phone at 877-322-8228.
Even a child’s identity can be stolen. It pays to check ones reports regularly, and Indiana residents may put a no-cost freeze on the accounts for increased protection. The Indiana Attorney General’s office offers a step-by-step action plan if a resident suspects ID theft.
If you get a lot of junk mail offering credit, lenders have probably been scanning your credit reports. You may opt out of such pre-screened offers by phoning 888-567-8688; this can also be completed by mail or Internet (link below).
ABOUT DEBT COLLECTION
All debt collectors aren’t necessarily evil, but we do wonder how some sleep at night. Quite a few rely on a consumer’s ignorance of the law and far too many use unconscionable tactics to collect what is owed.
A particular credit card payment may not be the most important thing in your life, no matter what the collection agent tells you. By all means pay your debts if you can, but providing your family with the basic needs of life simply must take priority.
ABOUT BANKRUPTCY
The number of bankruptcies in our nation has steadily risen in recent years, and Indiana’s rates have consistently exceeded the national rates. When someone has accumulated excessive debt there may be no desirable options left, and many people determine that bankruptcy is the least damaging among the alternatives.
Credit card companies worked hard to push through the bankruptcy law that requires pre-file counseling and debtor education. But as a result, more and more people are learning how to manage money better, and effective money management does not include credit card debt. Provided that one learns what is needed from the experience, bankruptcy need not be the end. It can be a new beginning.
ABOUT ROBOCALL SOLICITATIONS
Robocalls have been against Indiana law for years. Usually scams.
ABOUT BUSINESS STARTUPS
On a recent Saturday morning, a 1/2-hour infomercial aired on our local TV station for a company that offers help in starting a business. This particular company has been around since 1994, apparently resurfacing during poor economic times. It offers a free seminar and them wants to sell you a bunch of materials and a membership.
A Del Mar College Small Business Development Center training coordinator commented, "They get people to put together a business plan, then they tell them to make these changes. It goes back and forth. We had one lady who did this for two years before she finally gave up."
Even a great company, given enough customers and enough time, will have complaints to deal with. But the Better Business Bureau gives this particular organization an “F” rating, which represents BBB’s “degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns.”
Preparing a business plan is not a simple process but it is a crucial one. Contact your local Small Business Development Center or SCORE chapter for guidance.
ABOUT GOING LOCAL
Television and online ads promising debt relief may really be offering debt settlement or bankruptcy. Often enough, such ads appear online on the very pages where we find legitimate articles. Recent examples: “New program can cut credit card debt by 50 percent.” It might very well be a new company, but there really is no new program. It’s an ad for a debt settlement firm. Here’s another, “Obama will give you $2,500 a year to go to school.” These people have no interest in helping you to get a $2,500 grant – they’re selling loans.
Always check local resources before falling victim to online scammers. When you’re unsure where to turn, you can contact a live person any day or night at our region’s 211 Call Center, the Lafayette Crisis Center, 765-423-2255 (some counties can just dial “211”).
LOCAL RESOURCES
Hoosier Heartland Small Business Development Center
First Call 211
Phone 765-423-2255 or “211” in some areas
On the Web Information & Referral
OTHER RESOURCES
Association of Independent Consumer Credit Counseling Agencies (AICCCA)
The AICCCA is a member-supported national association representing non-profit credit counseling companies that provide consumer credit counseling, debt management, and financial education services.
Federal Trade Commission
Credit Repair: How to Help Yourself
How to Dispute Credit Report Errors
Knee Deep in Debt
OnGuardOnline.gov
Indiana Attorney General Consumer Protection Division
ID Theft Kit
ID Theft Quiz
Indiana "Robocall" law (IC 24-5-14)
National Foundation For Credit Counseling (NFCC)
NFCC promotes an agenda for financially responsible behavior; links to a budget worksheet, calculators, consumer tips, and videos. Questions to Ask When Considering Debt Settlement (Scroll down on the NFCC page for links to articles)
Security Freeze Information
You can stop the pre-approved credit offers by calling 888-5OPTOUT (888-567-8688), or you can do this online at www.optoutprescreen.com. This will stop most of the offers, the ones that go through the consumer reporting agencies. It’s good for five years or you can make it permanent.