Considering an early retirement withdrawal? CARES Act rules and what you should know.

If you’re out of work and need income, you might be considering withdrawing from your retirement savings. Normally, if you withdraw money from traditional Individual Retirement Accounts (IRA) and employer-provided accounts before reaching age 59 ½, you have to pay a 10 percent early withdrawal penalty.

Furthermore, emergency withdrawals from your current employer-provided plans are limited to an amount needed to meet a limited set of approved hardships, like avoiding foreclosure, home repairs after a disaster, or medical expenses.

If the pandemic has had negative effects on your finances, temporary changes to the rules under the CARES Act may give you more flexibility to make an emergency withdrawal from tax-deferred retirement accounts during 2020.

Among other things, the CARES Act eliminates the 10 percent early withdrawal penalty if you are under the age of 591/2. One third of the money you withdraw will be included as income in your taxes for each of the next three years unless you elect otherwise. The CARES Act also allows you to pay back what you withdrew from your accounts if you’re able to do so.

Please note: that this blog discusses withdrawals from retirement plans – not retirement plan loans. You may want to spend some time weighing the risks and benefits to withdrawing money versus taking a loan. Learn more about taking a loan from your retirement accounts

What tax-deferred accounts are affected by the changes?

• A traditional IRA
• An employer-provided retirement plan such as a 401(k) or 403(b) or other types of defined contribution plans.

Please note: that related distribution option. However, you may qualify for a distribution from your plan through other covered financial hardship categories Money received from these other distributions can be treated as coronavirus-related distributions in your tax return, as long as you can prove that you meet the qualifications stated below.

How do you qualify for the exemption?

Source: CFPB 

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NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).

Did you enjoy this blog? Please review us to help us improve and spread the word. We appreciate your feedback – CLICK HERE ⭐⭐⭐⭐⭐

 

NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).

Online and mobile banking tips for beginners

If you’ve been on the fence about doing your banking online or through a mobile app, now is a good time to get started as financial institutions change their branch hours during the COVID-19 pandemic. Online and mobile banking allow you to handle your finances from the comfort of home.

Begin online banking with a few steps

As long as you have a computer or smartphone with access to the Internet and an account with a bank or credit union account eligible for internet banking, it’s easy to get started.

1. Gather your account numbers

Your account numbers should be on your paper statement. Your account number will also be on the bottom of your checks or deposit slips. They are needed to enroll your account.

2. Find your bank or credit union’s website

Look on one of your paper statements or on the back of your debit or credit card to find the website, rather than googling or clicking on links in an email or text. If you visit your bank’s website from your smartphone, you may be prompted to download the bank or credit union’s mobile app that you can use from your phone.

3. Register for access to your bank or credit union's online banking platform

The first time you visit, you’ll follow the prompts to create an online account. You will answer questions to prove it’s really you, choose a username and password, and set up security features and preferences. Be sure to create strong passwords and do not use the same password for all accounts. Don’t use information such as addresses and birthdays in your passwords. For more tips on how to create strong passwords read more on the Federal Trade Commission’s (FTC) blog

4. Log in and take a tutorial 

If it’s offered by your bank or credit union to learn your way around the platform.

What can you do with online and mobile app banking?

Most transactions can be done online or through your financial institution’s mobile app on your smartphone.

• Check your account balances online at any time. You now can catch errors such as unauthorized activity earlier – without having to wait for your paper statement. You usually can notify your bank or credit union account of errors through the online or mobile banking app or chat functions.
• Often, you can see deposits and charges that are pending, meaning they have not posted to your account yet. Note that for pending debit card transactions, the amounts you see may not be the same as the final amount that posts to your account. Be sure to check your bank’s or credit union’s funds availability policy before assuming that pending deposits are available for making payments or withdrawals.
• Consider whether you would like to continue to receive paper versions of your periodic statements and other documents. Your bank or credit union may prompt you to go paperless while you set up online banking.
• Most banks and credit unions allow you to set up automatic notifications to help you manage your account and alert you when any of the following happen: a direct deposit is received, a large payment is charged, your balance falls below a certain amount, your account is in overdraft, and more. Often, bank and credit union online portals offer you the ability to sign up to get these alerts via text, email, or both. These alerts can help ensure you stay informed without having to log in to your account several times a day.
• Most banks and credit unions will allow you to deposit checks using your smartphone and a mobile app. You might not be able to deposit all types of checks this way, so check with your bank or credit union if you have any questions. The mobile app makes it easy to deposit a check in a few steps:
1. Download your bank or credit union’s app on your smartphone if you haven’t already.
2. Understand any rules your bank or credit union has about mobile check deposit.
3. Follow the directions in the mobile app to deposit the check
4. Hold onto the check for several days after deposit until you are sure it has posted to your account meaning that it is no longer pending and any holds your institution has placed have expired.
5. Destroy the check once it’s cleared by shredding it or tearing or cutting it up.
• If you need to transfer money between accounts, or even between financial institutions, your online banking or mobile app likely offers you options to do that. Make sure you understand the terms and conditions of your transfer and double check that you are using the correct account and routing numbers when making any transfers.
• There’s a good chance your financial institution offers a way to send money person to person, too. Before you use any mobile payment services, check out our best practices guide to make sure your transactions are done safely. You can test it out by transferring a small amount, like a dollar, back and forth. That way you’ll be sure your money goes where you want and you receive money you’re owed.
• Instead of writing checks and mailing them, you can pay most bills online or through the mobile app for your financial institution.
• Banking online or through your mobile device is secure, as long as you follow best practices for keeping the information on your mobile device safe. Your financial institution may offer additional services to help you keep your account safe, including turning off your debit card if you suspect fraud. Check with your bank or credit union to learn more about additional protections they may offer.

How do I get help with online banking?

If you run into any issues, ask for help! If you need specific guidance, contact your bank or credit union directly. Customer service associates are available by phone, online chat, or video in some cases. The financial institution staff will help you set up your account and answer questions. They will also help you figure out what you can and cannot do online or through their app. Please note that during this pandemic crisis, many bank and credit union call centers are experiencing high call volumes and may be delayed in responding to inquiries.

Helping someone else bank!

If you are a financial caregiver, either in a traditional formal role of managing someone else’s money or on an informal basis, speak with the person you’re helping and their financial institution to determine what you can and cannot do. Keep in mind that even during the current national health emergency, you’ll have to follow all of the required steps to have access to another person’s account. That could include having documents prepared, notarized, or other more formal steps – and it could take some time due to the large volume of consumer inquiries financial institutions are receiving. Our Managing Someone Else’s Money guides can be helpful.

Some banks and credit unions offer “view-only” online banking, which lets you see what’s going on without having access to the money. If you are a fiduciary, you may be able to gain online access to accounts and help manage money while observing social distancing or quarantine practices.

If you do need to bank in person, call or visit your bank or credit union’s website to see if your branch is closed, offering special hours for older customers or members, offering services in person by appointment, or serving customers through the drive-thru windows only.

Did you enjoy this blog? Please review us to help us improve and spread the word. We appreciate your feedback – CLICK HERE ⭐⭐⭐⭐⭐

 

NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).

Dealing with debt during the coronavirus pandemic: Tips to help ease the impact

Dealing with debt can be a stressful experience. As you plan for the potential economic impact of coronavirus, there are a number of steps that you can take to help manage debt in these difficult times.

Contact your lenders if you are at risk of missing payments?

If you think you may fall behind on your payments for your mortgage, auto loan, credit card, student loan, or other debt, call your lender and explain your situation. Credit card companies and lenders may be able to offer you hardship programs, also called "accommodations," to help you. In order to receive an accommodation, you must reach out to your lender proactively.

These programs may include allowing you to temporarily delay or adjust some payments. In some cases, you may be allowed to avoid interest charges. You may also be able to avoid negative credit reporting if you enroll before you become late on your payments. Your lender may also offer longer-term programs, such as work-out plans that allow you to pay back debt over a set period of time at a reduced interest rate. We’ve got more information on how to protect your credit from the impacts of the coronavirus pandemic, including new information on the CARES Act.

Many lenders are facing high call volumes because of the pandemic, so the wait time may be long. You can also check your lender’s website to see if they have information that can help you, ways to communicate electronically, or online applications for hardship programs or accommodations.

When contacting your lenders, be prepared to discuss your financial and employment situation, as well as how much you can afford to pay considering your income, expenses, and assets. You may also ask them:

• Do you have hardship programs for people experiencing financial loss due to the coronavirus pandemic?
• What are the financial consequences of enrolling in a hardship program?
  • Will I owe more overall?
  • Will this affect my credit limit?
  • Will this affect my credit reports?
• If I am still having financial trouble at the at the end of the hardship program, what are my options?

Has a debt collector contacted you?

If you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan. We have a number of resources for contacting and negotiating with debt collection companies.

Know your rights. The Fair Debt Collection Practices Act (FDCPA) says that a debt collector is not allowed to use unfair practices in trying to collect a debt.

Learn about some examples of "unfair" practices by a debt collector

If you believe you do not owe the debt or that it's not even your debt, you may dispute all or part of the debt by calling or writing. If you send a written request, the debt collector must stop collection on any amount you dispute until the debt collector sends you information that shows you owe the debt.

Under other legal requirements, you generally cannot have your Social Security or VA benefits, as well as some other benefits, garnished by a lender or a debt collector.

Consider working with a credit counselor

Credit counseling agencies are generally non-profit organizations that can advise you on your money and debts. When working with a credit counselor, you should be prepared to discuss your financial situation, employment status, and your financial goals, as well as your regular income and expenses. When you work with a credit counseling agency, make sure that they can help you assess how to manage all of your debts. If you are also paying a mortgage, many also do housing counseling.

Reputable non-profit credit counselors often offer initial budgeting sessions at no cost. A non-profit credit counselor could help in the following ways.

• Help you identify ways to adjust your expenses so that you can pay your debts more quickly, as part of your initial free budget analysis.
• Assist you in sorting out the types of emergency hardship programs available to consumers by lenders and whether they make sense for your financial situation. This can be helpful if you have a lot of accounts or are having difficulty sorting through your options.
• Suggest that you consider enrolling in a debt management plan. These programs seek to provide a consolidated monthly payment that the credit counseling agency then pays to all lenders over a set period of time. This generally involves closing most of your accounts and setting a fixed repayment plan, usually at a reduced interest rate. Credit counseling agencies often charge fees for these services and there may be initial impacts to your credit worthiness due to closing accounts, so make sure you understand how the program works before you sign up.
• Help you determine if it would make more sense to explore bankruptcy and provide you with resources for next steps.

Be careful when looking into debt relief

When researching debt relief options, make sure that you understand how the program works and potential risks of enrolling in it. There are many companies and organizations that advertise that they can help you find “debt relief” by simplifying or reducing your debt, “consolidating” your debt, or negotiating your debt. However, the actual programs offered can differ quite a lot.

You should make sure you understand whether the company is offering:

• A consolidation loan
• Credit counseling
• Debt settlement
• Or some other offering

Consider all of your options, including refinancing through balance transfers or loans, working with a nonprofit credit counselor, and negotiating directly with the lender or debt collector yourself.

Debt settlement companies, which may advertise themselves more generally as "debt adjusting" or "debt relief” companies, often claim they can negotiate debt reductions and offer to arrange settlements of your debts with lenders or debt collectors for a fee.

If a debt settlement company requires you to save up funds in an account:

• These funds still belong to you
• The account must be administered by an independent third party and be under your control
• You are entitled to withdraw funds held in that account at any time without penalty

Before agreeing to work with a debt settlement company, there are risks that you should consider.

• Many lenders will not negotiate with debt settlement companies. Also, many lenders and debt collectors will not negotiate how much they will settle for. Instead, they will have standard policies about how much loan principal they will forgive when you haven't made payments for a certain period of time. This means debt settlement companies usually can't get better terms than you could get by negotiating with your lenders and collectors yourself.
• Debt settlement companies cannot guarantee the amount of money or percentage of debt that you might save by using their services. They also can't guarantee how long the process will take. Beware of companies that say otherwise.
• Debt relief organizations cannot eliminate all of your debts; beware of programs that promise to make your debts “disappear.”

Beware of debt settlement companies that charge up-front fees in return for promising to settle your debts. Debt settlement companies can’t legally collect a fee before they actually settle or otherwise resolve your debt.

You should also be aware of the risks of stopping payments to your lenders. The risks include:

• You will likely damage your credit
• You may face collection efforts, additional late fees, and penalty interest charges
• These additional fees and charges will cause your debts to grow larger, so that debt settlement may cause your overall total debt-load to grow, even if the debt settlement company settles one or more of your debts
• You might be sued

If you are considering debt settlement, make sure you carefully read your contract before you sign so you know how fees are determined and how the program works.

Read more about debt settlement

Be wary of scams

Scammers seek to take advantage of consumers who are in distress. If the program seems too “good to be true,” it’s likely a scam. Avoid any debt relief or settlement organization that:

• Charges any fees before it settles your debts. Upfront fees are a major red flag for debt relief services, unless it’s a non-profit credit counseling program entering you into a program like a debt management plan
• Claims that it will help you take advantage of “new government programs"
• Makes guarantees that it can make your debt go away
• Doesn’t explain the consequences of entering the program
• Won’t send you free information about services without requiring you to provide personal financial information

Also, be wary of “bait and switch” sales tactics, such as a “loan program” that requires you to enroll in a credit repair or debt settlement program first.

Consider legal representation or bankruptcy

In some situations, you may want to seek legal representation. For example, you may want an attorney if:

• You are sued by a creditor
• You have assets you want to protect
• If you are on Social Security or other income that has certain protections from debt collection

There are a number of ways to find an experienced attorney. Before hiring an attorney, it is a good idea to make sure he or she is in good standing with the state bar association. You can also see if he or she has a disciplinary record. You can find this information by searching the attorney’s name on the state bar website where the attorney is licensed, or by calling the state bar association.

Some attorneys may also offer free services or charge a reduced fee. There may also be legal aid offices or legal clinics in your area that will offer their services for free if you meet certain criteria.

If you simply don't have enough income to pay what you owe, you may also consider filing for bankruptcy. Bankruptcy is designed to give you a fresh start while providing legal protections from most debt collection efforts. There are long term financial and legal consequences for bankruptcy, so you should consult a bankruptcy attorney to learn more.

Source: CFPB

Did you enjoy this blog? Please review us to help us improve and spread the word. We appreciate your feedback – CLICK HERE ⭐⭐⭐⭐⭐

 

NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).

Concerns Mount about Safety of Workplaces as Employees Return

The IG offices of many agencies have reinforced concerns about safety in the workplaces to which more and more federal employees are being recalled, even amid resurgent numbers of infections in some local areas.

Protection of employees was included in many of a series of new special reports by IGs on management challenges facing agencies in relation to the coronavirus.

The topic further is set for a hearing this week in the House subcommittee that oversees the federal workforce, what will be Congress’s most thorough look into the topic following a hearing last week just on DHS.

In the IG reports, “concerns ranged from difficulty procuring adequate personal protective equipment (PPE) and hand sanitizer for employees who work in public-facing jobs, to allowing public access to federal lands, to protecting employees who work in countries with inadequate local health care systems,” said a summary by the central council of IGs which compiled the reports.

The IG of the GSA, for example, revealed that as long ago as early May, nearly 1,000 GSA owned or leased facilities “reported COVID-19 positive or presumed cases.” GSA received additional funding in one of the pandemic relief bills for additional cleaning, but in-person inspections by GSA officials in many cases “would be impossible and imprudent, given the health and safety risks involved.”

Instead, it said, GSA is relying on contractors—but past audits have found issues with the agency’s oversight of cleaning contracts including missing or inadequate quality control and “ineffective” oversight by GSA officials. “This will be of considerable importance as federal employees begin to return from extended telework and buildings reopen to the general public,” it said.

Places where federal employees work that are of especially high concern, the summary added, include federal prisons and detention facilities, VA medical facilities, meat processing plants, and private sector facilities where various types of inspections are performed.

Specific concerns also included that supply chains for needed products such as sanitizer, testing kits and personal protective equipment remain strained; that employees must be trained on how to use the equipment properly for it to be effective; and facilities not designed to accommodate social distancing.

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NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).

Dealing with debt during the coronavirus pandemic: Tips to help ease the impact

Contact your lenders if you are at risk of missing payments

• Do you have hardship programs for people experiencing financial loss due to the coronavirus pandemic?
• What are the financial consequences of enrolling in a hardship program?
• Will I owe more overall?
• Will this affect my credit limit?
• Will this affect my credit reports?
• If I am still having financial trouble at the at the end of the hardship program, what are my options?

Has a debt collector contacted you? Consider working with a credit counselor

• Help you identify ways to adjust your expenses so that you can pay your debts more quickly, as part of your initial free budget analysis.
• Assist you in sorting out the types of emergency hardship programs available to consumers by lenders and whether they make sense for your financial situation. This can be helpful if you have a lot of accounts or are having difficulty sorting through your options.
• Suggest that you consider enrolling in a debt management plan. These programs seek to provide a consolidated monthly payment that the credit counseling agency then pays to all lenders over a set period of time. This generally involves closing most of your accounts and setting a fixed repayment plan, usually at a reduced interest rate. Credit counseling agencies often charge fees for these services and there may be initial impacts to your credit worthiness due to closing accounts, so make sure you understand how the program works before you sign up.
• Help you determine if it would make more sense to explore bankruptcy and provide you with resources for next steps.

Be careful when looking into debt relief

• A consolidation loan
• Credit counseling
• Debt settlement
• Or some other offering
• These funds still belong to you
• The account must be administered by an independent third party and be under your control
• You are entitled to withdraw funds held in that account at any time without penalty
• Many lenders will not negotiate with debt settlement companies. Also, many lenders and debt collectors will not negotiate how much they will settle for. Instead, they will have standard policies about how much loan principal they will forgive when you haven't made payments for a certain period of time. This means debt settlement companies usually can't get better terms than you could get by negotiating with your lenders and collectors yourself.
• Debt settlement companies cannot guarantee the amount of money or percentage of debt that you might save by using their services. They also can't guarantee how long the process will take. Beware of companies that say otherwise.
• Debt relief organizations cannot eliminate all of your debts; beware of programs that promise to make your debts “disappear.”
• You will likely damage your credit
• You may face collection efforts, additional late fees, and penalty interest charges
• These additional fees and charges will cause your debts to grow larger, so that debt settlement may cause your overall total debt-load to grow, even if the debt settlement company settles one or more of your debts
• You might be sued

Be wary of scams

• Charges any fees before it settles your debts. Upfront fees are a major red flag for debt relief services, unless it’s a non-profit credit counseling program entering you into a program like a debt management plan
• Claims that it will help you take advantage of “new government programs"
• Makes guarantees that it can make your debt go away
• Doesn’t explain the consequences of entering the program
• Won’t send you free information about services without requiring you to provide personal financial information
• Consider legal representation or bankruptcy
• You are sued by a creditor
• You have assets you want to protect
• If you are on Social Security or other income that has certain protections from debt collection

Dealing with debt can be a stressful experience. As you plan for the potential economic impact of coronavirus, there are a number of steps that you can take to help manage debt in these difficult times.

If you think you may fall behind on your payments for your mortgage, auto loan, credit card, student loan, or other debt, call your lender and explain your situation. Credit card companies and lenders may be able to offer you hardship programs, also called "accommodations," to help you. In order to receive an accommodation, you must reach out to your lender proactively.

These programs may include allowing you to temporarily delay or adjust some payments. In some cases, you may be allowed to avoid interest charges. You may also be able to avoid negative credit reporting if you enroll before you become late on your payments. Your lender may also offer longer-term programs, such as work-out plans that allow you to pay back debt over a set period of time at a reduced interest rate. We’ve got more information on how to protect your credit from the impacts of the coronavirus pandemic, including new information on the CARES Act.

Many lenders are facing high call volumes because of the pandemic, so the wait time may be long. You can also check your lender’s website to see if they have information that can help you, ways to communicate electronically, or online applications for hardship programs or accommodations.

When contacting your lenders, be prepared to discuss your financial and employment situation, as well as how much you can afford to pay considering your income, expenses, and assets. You may also ask them:

If you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan. We have a number of resources for contacting and negotiating with debt collection companies.

Know your rights. The Fair Debt Collection Practices Act (FDCPA) says that a debt collector is not allowed to use unfair practices in trying to collect a debt.

Learn about some examples of "unfair" practices by a debt collector

If you believe you do not owe the debt or that it's not even your debt, you may dispute all or part of the debt by calling or writing. If you send a written request, the debt collector must stop collection on any amount you dispute until the debt collector sends you information that shows you owe the debt.

Under other legal requirements, you generally cannot have your Social Security or VA benefits, as well as some other benefits, garnished by a lender or a debt collector.

Credit counseling agencies are generally non-profit organizations that can advise you on your money and debts. When working with a credit counselor, you should be prepared to discuss your financial situation, employment status, and your financial goals, as well as your regular income and expenses. When you work with a credit counseling agency, make sure that they can help you assess how to manage all of your debts. If you are also paying a mortgage, many also do housing counseling.

Reputable non-profit credit counselors often offer initial budgeting sessions at no cost. A non-profit credit counselor could help in the following ways.

When researching debt relief options, make sure that you understand how the program works and potential risks of enrolling in it. There are many companies and organizations that advertise that they can help you find “debt relief” by simplifying or reducing your debt, “consolidating” your debt, or negotiating your debt. However, the actual programs offered can differ quite a lot.

You should make sure you understand whether the company is offering:

Consider all of your options, including refinancing through balance transfers or loans, working with a nonprofit credit counselor, and negotiating directly with the lender or debt collector yourself.

Debt settlement companies, which may advertise themselves more generally as "debt adjusting" or "debt relief” companies, often claim they can negotiate debt reductions and offer to arrange settlements of your debts with lenders or debt collectors for a fee.

If a debt settlement company requires you to save up funds in an account:

Before agreeing to work with a debt settlement company, there are risks that you should consider.

Beware of debt settlement companies that charge up-front fees in return for promising to settle your debts. Debt settlement companies can’t legally collect a fee before they actually settle or otherwise resolve your debt.

You should also be aware of the risks of stopping payments to your lenders. The risks include:

If you are considering debt settlement, make sure you carefully read your contract before you sign so you know how fees are determined and how the program works.

Read more about debt settlement

Scammers seek to take advantage of consumers who are in distress. If the program seems too “good to be true,” it’s likely a scam. Avoid any debt relief or settlement organization that:

Also, be wary of “bait and switch” sales tactics, such as a “loan program” that requires you to enroll in a credit repair or debt settlement program first.

In some situations, you may want to seek legal representation. For example, you may want an attorney if:

There are a number of ways to find an experienced attorney. Before hiring an attorney, it is a good idea to make sure he or she is in good standing with the state bar association. You can also see if he or she has a disciplinary record. You can find this information by searching the attorney’s name on the state bar website where the attorney is licensed, or by calling the state bar association.

Some attorneys may also offer free services or charge a reduced fee. There may also be legal aid offices or legal clinics in your area that will offer their services for free if you meet certain criteria.

Source: CFPB 

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NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).

Tools to help when you can’t pay your bills

The pandemic has created uncertainty and anxiety in our country and around the world. This can be especially true for those who are unemployed or furloughed due to the coronavirus pandemic.

The Your Money, Your Goals financial empowerment toolkit has resources to help you evaluate your current finances and make decisions about your budget.

In this blog we highlight a few tools and handouts to help you make these tough decisions.

Paying your bills:

If you are having trouble making payments, contact the companies you owe money to. Discuss your situation and options. Many companies have implemented special payment flexibilities for consumers experiencing hardship at this time.

Find specific steps to take to protect yourself or a loved one from the financial impact of the coronavirus.

Here are a couple tools to help you manage your bills.

Prioritizing bills!

When you can't pay all your bills on time, this tool can help you prioritize which bills to pay first and helps you think through the impact of your choices.

Note: For expenses like utilities, phone and internet, mortgages, or insurance, many providers offer flexibilities to customers facing financial strain, and many are offering additional assistance during the pandemic. Check with your service providers, including utilities, phone and internet providers, mortgage servicers, landlords, and insurance companies. You can dial 211 and 311 to identify resources in your community.

Bill calendar:

This tool can help you keep track of when your bills are due and avoid late fees. For some bills, like credit cards, you may be able to adjust the bill’s due date by contacting your credit card company. For others, like rent, you may be able to split a large monthly payment into two smaller payments.

Managing your spending!

Reducing your spending and expenses may be an effective way to cover daily necessities. Having a clear picture of your spending helps you identify where you can reduce or better manage your money.

Spending tracker?

Get an accurate picture of your finances. In normal circumstances, this includes getting a good sense of where your money is coming from (income) and where it’s going (expenses).While some of your expenses, like childcare or entertainment, may have stopped for the time being, you still need to make sure you can cover your basic necessities – food, housing, utilities, and phone.

Cutting expenses!

This tool may spark ideas about how to cut costs and reduce expenses, so you can cover daily necessities. Some tips are commonly known, while others may be unfamiliar to people suddenly needing assistance.

Dealing with debt?

It is important to understand that debt can represent a very real barrier to achieving goals and can be hard to face. But there are tools you can use to help you take control of your debt. Even small steps toward paying down debt can make a big difference in making it feel more manageable.

Debt log:

This tool can help you to keep track of the debt you owe. After you get a clear picture of your debts, you may want to use the debt action plan to decide which debts to focus on first.

When debt collectors call?

If a debt collector calls you, use this tool to make sure you’re asking the right questions. This tool will help you verify if the claim is valid, know how to dispute the claim if you do not owe the debt, and know what to do next if you do owe the debt.

Get prepared and read about your rights. This will help you avoid scammers who may pose as debt collectors to get you to pay on debts that you don’t owe.

Watch out for scammers!

While you’re working hard to make ends meet, scammers are working overtime to try to steal your money, your identity, or both.

You are the first line of defense when it comes to protecting your financial information from fraud or theft. The Spotting red flags and Protecting your identity handouts can help you be proactive about keeping your information safe.

Checking your credit:

It’s important to make time after you’ve figured out how you will be able to pay your bills and worked out repayment options to check your credit reports. Your credit reports and scores play an important role in your future financial opportunities.

Requesting your free credit reports:

This tool walks you through the steps of requesting your free credit reports. Once you have them, use the Reviewing your credit reports tool to make sure your credit information is correct.

Disputing errors:

This tool can help you find incorrect information in your credit report. Errors can appear due to a mistake in the information provided about you or as the result of fraud or identity theft.

Source: CFPB 

Did you enjoy this blog? Please review us to help us improve and spread the word. We appreciate your feedback – CLICK HERE ⭐⭐⭐⭐⭐

 

NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional. No information available through this communication is intended or should be construed as any advice, recommendation, or endorsement from us as to any legal, tax, investment, or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient.  We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.

Links to third-party websites are provided for your convenience only and you access them solely at your own risk.  We do not endorse or assume any responsibility for any such third-party sites, information, materials, products, or services.  Your access and use of the third-party sites are governed by the terms of use and privacy policies of these third-party sites.  You acknowledge and agree that we shall not be liable or responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or related to the use of or reliance on any content, goods, or services available through any third-party website or resource. 

* ACCESS LOANS™ products are funded and serviced by Safra National Bank of New York (“SNBNY”).