FARUKI

A bad economy spurs more people to invest in series EE bonds. Series EE bonds are US savings bonds that are sold to individual investors in small denominations. Investors seeking safe investments often consider investing in series EE bonds, since they are free from risk of default.

When investing in series EE bonds, you can expect interest payments but the interest rates that series EE bonds pay at are very low. 1.5% is a common interest rate of series EE bonds. Fixed interest rates apply to series EE bonds that are bought in May 2005 and thereafter. Before that, series EE bonds pay interests based on the current market rates.

Buying series EE bonds is easy. The US Treasury Department has made it possible to buy them online through a governmental website. However, you can still buy series EE bonds at your local financial institutions or banks. Many employers also offer the option of buying series EE bonds through payroll deduction programs.

The smallest amount of money you need to invest in series EE bonds at a time is $25. If you buy paper series EE bonds, your $25 will buy a $50 series EE bond. However, if you buy electronic series EE bonds, your $25 will only buy a $25 series EE bond.

The pricing of series EE bonds differs when buying paper series EE bonds or electronic series EE bonds. Paper series EE bonds are sold at discount. You only pay 50% of the face value of the series EE bonds you buy if you don’t buy electronically. For electronic series EE bonds, you pay full price.

Series EE bonds, like other bonds, should be held long term. The shortest time you must hold series EE bonds is one year. After that you can redeem them. Interests on series EE bonds, however, accumulate for 30 years but early redemption is possible.

There is a penalty to redeeming series EE bonds early. The penalty is that you forfeit the latest three months of interest payments if you redeem series EE bonds within the first five years. After five years, you will not pay any penalties.

Although the interest payments on series EE bonds are low, investors still like to invest in series EE bonds because of the safety and ease of investing. The small face values make it possible for new investors to invest a little at a time. But most importantly, becuase of their high level of safety, people purchase series EE bonds for education savings as well as retirement planning.

In order to live a thrifty life, you need to know more than just that you need to save money. It is also essential that you spend your money wisely. Consider the following ideas about what a frugal person can do with the money that they have worked hard to save.

Make a list of your needs, wants and desires when it comes to your finances. Include any estimates that you may have (or use guesstimates if you have nothing tangible to go on). Be sure that you number them in the order of importance. Then start tackling your dreams one at a time.

Paying more than the minimum payment on your mortgage each month or even just making one additional payment each year could mean that your mortgage gets paid off in half the time that it would if you always paid the minimum. Doing so will also save you lots of money in interest. When you make such additional payments, make sure that the money is being deducted from you loan’s principal. Once you have the mortgage paid off, you can use the money you were accustomed to spending on that on whatever else you want.

Money you have been saving can be spent on home repairs and projects that you have long wanted to do. Some such projects might be simple, do-it-yourself jobs while others will require that you hire a professional. Money spent on making your home more beautiful will certainly be well spent.

Buy a newer pre-owned car. Even if your current vehicle is in good condition, you can get a newer pre-owned one. Your old car can be donated to a church, charity, or friend. Remember, though, that a newer car will be charged more in insurance payments.

Go on a dream vacation. If you plan your trip during the off season, you will be able to do more with less money and thus enjoy your vacation even more than you normally would.

Even though been frugal does mean saving money in case of unexpected costs, it also important to enjoy the benefits that come from working hard to save your money. Thrifty people should also save some money with the intention of using it to enjoy themselves in some special way.

Using the money that you have saved to congratulate yourself will be a great boost to keep on saving and living frugally.

An outdoor home improvement project, such as the addition of a backyard deck or professional landscaping out front, can usually be financed quite easily, since it adds to the value of your home. Whether you are looking to sell your home quickly, or just firm up your long-term investments, obtaining financing for your outdoor projects makes sense.

1. Determine the reasons why you want to finance an outdoor home improvement project. If you are looking to increase the value of your home for a quick sale, you might want to think about installing copper plumbing or a new roof. A financial institution may be more likely to improve this type of loan since the investment will be recouped more quickly as the result of as sale.

2. Determine which outdoor projects increase the value of your home, and which ones don’t, before you approach a bank or lending institution to finance any home improvement project. For instance, any project that increases the usable square footage of your house, such as the addition of an enclosed patio or a backyard deck, may be quickly approved by a bank. Swimming pools, landscaping and luxury items such as fountains and ponds may not.

3. Ask the financial institution that holds your mortgage to finance outdoor home improvement projects. Your mortgage company already has information about the value of your home, not to mention your credit. In many cases, your mortgage company may be able to fold the additional loan into your monthly house payment as well.

4. Find out about getting a credit card from a large home improvement chain in order to finance your outdoor projects. While the interest rates may be higher than if you secured a loan from a bank or lending institution, in many cases you may be able to get discounts on the price of materials and services.

5. Avoid trendy or elaborate outdoor home improvement projects when you are trying to secure financing. A bank is less likely to approve a loan for a moat or a waterfall. Stick to traditional, classic improvements that will ultimately increase the value of your home, and not shrink the number of prospective buyers down the road.

Since there are a lot of skilled individuals in developing countries with little chance of employment, outsourcing became one of the best industries considered by a lot of talented and skilled individuals in developing countries. In terms of salary, outsourcing provides cheap labor compared to getting your companies work done in-house. For example, in the United States, you would pay a qualified professional about 100 dollars to get the job done. However, outsourcing the job to other countries will only require you to pay 20 dollars to get the same job done with an equally qualified professional and at the same time, keep them happy.

The minimum salary rate in developing countries is much lower compared in the United States. This is why outsourcing can save your company a lot of money in terms of salary payments.

Outsourcing will answer your businesses financial and production problems. If you are looking for a way to save money and at the same time increase productivity, outsourcing is the right choice for your company. Not only will you save a lot of money because of cheaper labor compared as to the rates in your country, but you will also have the same quality of work that the equally qualified professionals in your country can do at a much lower price.

Advantages of Outsourcing

However, it is the businessman who will be using the outsourcing process; not the layman, and definitely, not the politician. Thus, outsourcing for businessman is a “modern day boon”. Many businessmen are aware that outsourcing provides them the freedom of dumping all of their non-core yet important aspects of their business and delegating the work to an individual or group of individuals who can give justice to the process. Thus, it will leave businessmen free from additional responsibilities and focus instead on the core of their business. On the other hand, the outsourcing firm can also focus on the specific work delegated to them, thus a cost-efficient business operation. That is one of the primary advantages of outsourcing.

Another convincing advantage of outsourcing is saving substantial amount of money in terms of the development of some aspects of your business (such as IT development). Since outsourcing involves reduced expenditures on your part, you will be able to maximize the value of your money to have your IT services developed into the latest and most powerful modern information tool. In addition, you will avoid recruiting new personnel who will handle the development as well as training them, thus reducing the recruitment and training cost for your business. The purchase of necessary technology will now be handled by the outsourcing company, thus saving money in the long run which you can use on other important business aspect.

Business Process Outsourcing

The business process involves a lot of things. It will involve every aspect of your company in order to let your company operate smoothly and efficiently. It will involve business tasks, such as marketing, payrolls, help desks, management, human resources and more.

Business process outsourcing is one of the most popular and the most cost-efficient business solution that you can ever make. By contracting other companies to do a specific business task, you will be taking off extra work involved in your company and focus more on important aspects in running your business.

Today, there are available call center companies that will be able to provide a help desk for you. They will be the one who will answer your calls and generate reports regarding each caller and providing the reports for your company.

Always keep in mind that you should first check the quality of an offshore outsourcing company first before you sign the contract in order to be sure that you will be getting your money’s worth. Remember this and it will pave the way to make your company the best in the industry.

What is a collection company?

There are two possibilities.

Some creditors will actually use a separate company name, address, and phone number for their internal collection departments, in order to give the impression of an “outside” agency, on the theory that debtors will take it more seriously. This strategy is generally only used when the debt is recent (under six months delinquent.)

However, most debt collection activity is performed by a third-party collection company, These are separate from the original creditors, and “work” bad debt on behalf of various lenders and 1st party credit granters. They occasionally purchase bad debts which have been designated as charge-offs or write-off’s by the original creditor.

This FAQ focuses on third-party collection companies.

How does a collection company get paid?

3rd party collection companies often work on a contingency bases, where they receive a percentage of the amount that they collect. Individual collectors are often paid a low base salary plus bonus based on their personal goals.

Some agencies also purchase large groups of charged-off bad debts for a small percentage of the face value (amount owed.) After a debt is sold, the debtor now owes the full amount to the purchaser. Since the chances of recovery decrease substantially with time, an agency might only pay 1% - 5% of face value. The agencies’ profits come from the difference between the purchase price and the amounts that are eventually collected.

How does the collection process work?

The primary tools of a collection company are letters and telephone calls.

What are the letters like?

The letters are computer-generated, and are often in a standardized series which starts with a friendly, “reminder” tone, and may progress to ultimatums. The letters are pre-written and sent to many debtors; they are not personal.

The initial demand letter must state that the recipient has the right to dispute the validity of the debt (in writing), and the agency must send some confirmation after verifying it with the original creditor. Demand letters must also contain the statement that they come from a debt collector, and that any information gathered will be used for the purpose of collecting the debt. Collectors are not legally allowed to print anything on the outside of the envelope which indicates or suggests the nature of the communication. The return address must also be discreet, so many companies will just use their company’s initials, or some other nondescript name.

Depending on how the debtor reacts to the demand will affect what additional notices (if any) the company will select from its library. Voluntary resolution (e.g. making payment arrangements and/or partial payments) may result in letters with a gentler tone. Deceptive or belligerent reactions from the debtor may result in a more threatening tone.

Collectors try to create a sense of urgency, in order to collect within the shortest amount of time, and to encourage the debtor to prioritize that particular obligation. Deadlines may be set, such as, Pay this amount within ten days. There may also be threats, such as, …Or we will proceed to further collection action. But most of the time, if a debtor fails to meet the deadline, all that will happen is that yet another form letter will arrive, making the same basic demand. The & further collection action usually just means more form letters.

Collection letters will always persuade the debtor to call the collection company directly on the telephone. If the debtor doesn’t call within 30 days, then a collector will often call the debtor.

What are the phone calls like?

Individual phone collectors may be assigned a portfolio of accounts, and spend the majority of the workday, every day, collecting them. The collectors motivation is fueled by constant performance evaluations and personal commission payments. The size of a collector’s own paycheck is dependent upon how much money s/he collects from debtors. Between that factor, and the relentless confrontations, this is a very high-stress job, with high employee turnover.

If a collector calls and reaches someone other than the debtor (e.g. a roommate), s/he is legally prohibited from disclosing the reason for the call. Depending on the state, this may or may not include the debtor’s spouse. If the collector reaches an answering machine or voice mail, s/he will often leave a message, but is prohibited from explaining the reason for the call, since someone besides the debtor might hear it. The standard message goes something like, “I am calling for John Smith. It is very important that you call me back. My name is Joe Schmo, and my number is 1-631-776-8109.” S/he will typically sound rather bored and stilted, with other voices chattering in the background. Collection companies might be required to provide a phone number which is free for the debtor to call. They also may attach their (800) numbers to equipment which instantly identifies and logs the phone number which a debtor is calling from, in order to call the debtor at that number later.

When contacting a debtor, many collectors (especially those with very little experience) will use an approved script, which contains a pre-written introduction, demands for payment, and has various branches to follow. Based on how the debtor responds, rebuttals are also provided. If a particular debtor is wasting too much time, without agreeing to pay, the collector will be urged to move on to other accounts.

Any information that the debtor gives about his/her financial situation (e.g. income or current employment, etc.) will be noted on the file’s record and used to estimate the probability of a recovery, the advantage of legal action, and so forth.

But what can they actually DO?

If they are working the debt on commission, they can send some more form letters and make some more scripted phone calls.

They can also mark the item as negative with the credit bureaus. If they are working on contingency, they can recommend filing suit, or if they own the account, they can file suit. However, the actual chances or intentions of this are often significantly less than they try to suggest to the debtor.

Collection companies can not legally seize a debtor’s assets, bank accounts, or garnish wages unless there has already been a successful lawsuit with a judgment awarded in there favor.

Collection companies can not legally make any kind of public announcements or disclosures concerning the debt, except to the credit bureaus.

Collection companies can not legally get a debtor fired from his/her job.

Collection companies can not legally act in any type of physical violence or threats.

Why would a debtor pay?

Often, the reasons include anxiety, guilty conscience, persuasion, and a lack of education of the legal situation. Plus it is the right thing to do.

The debtor may feel guilty and ashamed of being a “deadbeat,” and may perceive a judgment of his/her value as a person.

The debtor may have greatly exaggerated ideas about what collectors are (legally) capable of doing, and may have outdated stereotypes in mind.

The debtor may be in fear by the ferocious, tenacious, demands, from collection companies that may seem so in control. S/he may take it personally, and assume that great individual attention is being given to there case.

Customers being contacted by collection companies are usually in serious financial distress, and under emotional pressure about the general situation, so they may be confused and defenseless.

Many debtors aren’t aware of their legal rights, and feel powerless.

There are two useful tools that a collection company can actually do that a debtor should be worried about. These involve negative information being reported to the credit bureaus, and the unlikely probability of a lawsuit.

What about credit reports?

3rd party collection companies have the ability to report a debt to one or more of the credit bureaus, as a “Collection Account,” including the amount, and whether it was paid or Refused to pay. Paying off a collection account will not result in the item being removed from the consumer’s credit reports - it will simply be marked “Paid in full.” Collection companies can report debts that they have purchased as well as debts that they are working on contingency.

Also, a collection company could request a debtor’s credit information, in order to get an idea of his/her general financial situation, and to get an updated address and phone number.

How long do collection accounts last?

Collection accounts are subject to the normal 7 year time limit for appearing on a credit report. As specified in Section 605 of the FCRA this time limit is based on the date of the original delinquency.

What is the probability that the collection company will file suit?

If the debt still belongs to the original creditor, a third-party collection company cannot file a lawsuit. But if the balance is large, the debtor is being resistant, and if there are indications that the debtor has vulnerable assets, the agency may send the account back to the creditor with a recommendation to sue. Each creditor has its own criteria for the decision; for example, the amount must be substantial (often $1500 or more, at the very least.)

Collection companies want to avoid sending too many accounts back, since it suggests that they aren’t very good at collecting. Letters and telephone calls are much less expensive than going to court.

If a collection company has purchased the debt, then they have the ability to file suit, but by that time, the debt is likely to be rather old, and the agency doesn’t have much invested in it.

Collectors tend to focus on fear and intimidation, since those things can work much more quickly, cheaply, and efficiently than legal action.

Suit is certainly brought against many debtors, but not as often as debtors think. There is a big difference between, “Pay up or we will continue with collection action,” compared to an actual Summons And Complaint.

If the debt is substantial and recent, and the debtor appears to be a good target (e.g. reasonable assets or income), a lawsuit is a real possibility. If you are served with legal documents specifying a particular court, hearing date, etc., you should see a qualified attorney immediately. That area is beyond the scope of this FAQ.

How are collection companies regulated?

The most important law is the Fair Debt Collection Practices Act (FDCPA), which places many restrictions on collection activities. The FDCPA only covers third-party collection companies, not original creditors.

Each state may also have applicable laws regarding such things as telephone harassment.

Who enforces the FDCPA?

The Federal Trade Commission oversees the collections industry, and has the authority to impose fines or other penalties for violations. However, the FTC does not get involved with individual consumers’ cases. They accept a large number of complaints, and look for patterns of violations which could then lead to action against a particular collection company.

What if a collection company has purchased the debt?

The agency then becomes the creditor for most purposes. The debtor will not be able to make any negotiations with the original creditor. The agency might be technically able to file a lawsuit against the debtor, (although this is not likely.)

However, the Federal Trade Commission has issued a Staff Opinion Letter which indicates that, even if a collection company has purchased a debt, it is still covered under the Fair Debt Collection Practices Act as a “third-party debt collector.”

What about the relevant time limits?

The debt does not become some kind of “new” debt just because it was sold. For example, the 7 year credit reporting time limit is still based on the original delinquency date with the original creditor. The statute of limitations for filing lawsuits is also based on that same date. These limits can not be legitimately “reset” by a collection company that has bought the debt.

However, the statute of limitations may possibly be reset if the debtor makes a specific promise to pay, or a partial payment.

Can the collection company do anything after the time limits are up?

Yes. The statute of limitations only covers the filing of lawsuits, and the credit reporting time limit only covers bureau listings. There is no time limit on letters and phone calls.

A collection company that has purchased a bundle of “out-of-statute” debts (where the SOL has already expired, or “run”) is hoping that, either the debtors will feel guilty, or that they won’t be aware of that “out-of-statute” status. But if a particular debtor makes it clear that s/he understands the legal situation, then the collectors are likely to give up and move on to easier targets.

Can collectors call the debtor’s place of employment?

Yes, but there are limitations. For example, they can not legally tell your employer about the debt, or try to have you fired.

Is there any way to make them stop calling?

Yes. According to section 805 of the Fair Debt Collection Practices Act:

“(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except –

(1) to advise the consumer that the debt collector’s further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

If such notice from the consumer is made by mail, notification shall be complete upon receipt.”

So the consumer can just send a 3rd party collection company a written notice (preferably citing the FDCPA), ordering them to stop the collection letters and calls, and the agency is legally obligated to comply. The only permissible contact thereafter is to notify the debtor of specific “remedies,” like legal action, but usually the collectors won’t even bother.

If the creditor hasn’t yet made a decision on whether or not to file a lawsuit, then that decision may be made at this point, rather than being delayed.

After a “cease and desist” notice from the consumer, the debt may then be returned to the original creditor, passed on to another third-party agency, or simply filed away, depending on the circumstances. The agency may still report the account to the credit bureaus.