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How to Manage Your Bills (Collection)

Book Description

Today, people struggling with debt have far fewer options: lenders are stingier, which makes it harder to avert disaster, or to recover from setbacks like foreclosure, short sales, or bankruptcy. (Meanwhile, people with good credit have more options than ever, including some of the lowest interest rates in decades.) Debtors need an up-to-date guide that can help them assess options, find help, discover opportunities, and take action that works. Liz Weston's Deal with Your Debt, Updated and Revised Edition is that guide. In this extensively updated guidebook, Weston shows which debts can actually help build wealth over time, and which are simply toxic. She presents up-to-date, real-world strategies for assessing and paying off debt, including money-saving insights on which debts to tackle first. She also offers practical guidelines for assessing how much debt is safe -- and compassionate, realistic guidance for people who've gone beyond the safety zone.

In There Are No Dumb Questions About Money, nationally-renowned personal finance journalist and best-selling author Liz Weston answers your most pressing questions, helping you navigate today's more-complicated-than-ever financial world. Through real-life reader questions and clear, to-the-point answers, Weston shows how to manage your spending, figure out what you can and can't afford, and choose the smartest ways to pay off your debt. You'll discover why most investment strategies don't work, and identify better ways to save for retirement. But you'll also learn to handle the trickier, emotional side of money: how to avoid fights with your partner, deal with spendthrift children or parents, and spot con artists or lousy advisors before you get robbed. Using humor, keen insight, and time-tested financial planning principles, Weston can help you wrangle your money into shape -- and find your own path to financial freedom.

Table of Contents

  1. About This eBook
  2. Title Page
  3. Copyright Page
  4. Table of Contents
  5. Deal with Your Debt: Free Yourself from What You Owe, Updated and Revised
    1. Copyright Page
    2. Dedication Page
    3. Praise for the First Edition of Deal with Your Debt
    4. Acknowledgments
    5. About the Author
    6. Introduction
    7. 1. Isn’t Debt-Free the Way to Be?
      1. Debt Isn’t the Enemy
      2. When “Good Debt” Isn’t
      3. Which Debts Should You Tackle First?
      4. Why Debt Management Sounds Strange
      5. When Debt Repayment Plans Go Awry
      6. Addressing the Ants as Well as the Grasshoppers
      7. Debt-Free Is the Way to Be—Eventually
      8. Summary
    8. 2. Your Debt Management Plan
      1. Get Intimate with Your Debt
      2. Assess Your Financial Situation
      3. Save or Pay Off Debt First?
      4. Case Studies
      5. Create Your Game Plan
      6. If You’re Already Drowning
      7. Summary
    9. 3. Credit Cards
      1. Our Love Affair with Credit
      2. The True Cost of Carrying a Balance
      3. Gotchas for Those Who Pay Their Balances
      4. The Right Way to Pay Off Credit Card Debt
      5. Getting the Right Reward Card
      6. Summary
    10. 4. Mortgages
      1. Myth #1: It’s a Good (or Lousy) Time to Buy a Home
      2. Myth #2: A House Is a Great Investment
      3. Myth #3: Buying Is Always Better Than Renting
      4. Myth #4: Homeownership Comes with Great Tax Breaks
      5. The Right Reasons to Buy
      6. How Much House Should I Buy?
      7. What Kind of Mortgage Should I Get?
      8. How Do I Get a Good Mortgage Deal?
      9. When and How Should I Refinance?
      10. When Should I Prepay a Mortgage?
      11. Summary
    11. 5. Home Equity Borrowing
      1. The Dangers of Home Equity Lending
      2. Home Equity Loans Versus Lines of Credit
      3. Questions to Ask Before You Borrow
      4. Summary
    12. 6. Student Loans
      1. So What’s the Good News?
      2. How Much Should I Borrow?
      3. Where Should I Get My Loans?
      4. What If It’s Already Too Late?
      5. What About Paying Off My Student Loans with Home Equity Debt—or Credit Cards?
      6. Summary
    13. 7. Auto Loans
      1. How Cars Cost Us
      2. Why It’s Bad to Owe More on Your Car Than It’s Worth
      3. How Often You Buy Cars Matters, Too
      4. The Proper Role of Cars in Our Spending
      5. Ways to Keep Costs Down
      6. Summary
    14. 8. 401(k) and Other Retirement Plan Loans
      1. Types of Plans That Offer Loans
      2. The Real Cost of Retirement Plan Loans
      3. Cracking Your Nest Egg Early
      4. The Hidden Cost of Withdrawals
      5. Summary
    15. 9. Loans You Don’t Want to Get—or Give
      1. Three More Loans to Beware Of
      2. Why You Don’t Want to Cosign a Loan
      3. The Right Way to Make a Personal Loan
      4. Summary
    16. 10. Dealing with a Debt Crisis
      1. Dealing with Your Creditors
      2. Dealing with Collection Agencies
      3. What If Your Creditors Won’t Budge?
      4. Summary
    17. 11. Putting Your Debt Management Plan into Action
      1. Lower Your Interest Rates
      2. Track Your Spending
      3. Trim Your Expenses
      4. Look for Cash
      5. Review Your Priorities
      6. Stay on Track
      7. Some Final Thoughts
    18. Index
    19. FT Press
  6. There Are No Dumb Questions About Money: Answers and Advice to Help You Make the Most of Your Finances
    1. Copyright Page
    2. Dedication Page
    3. About the Author
    4. Introduction
    5. 1. Balanced Budget, Balanced Life: Setting Your Financial Priorities
      1. How to Stick to a Budget
      2. For a Budget That Works, Get Control of Your Debt
      3. What Do Average Families Spend?
      4. Balancing Your Budget in the Big City
      5. Income Dropped? Expenses Have to Drop, Too
      6. How to Beat “Frugal Fatigue”
      7. Fast Ways to Cut Cable, Cell Bills
      8. What to Do with an Extra $5,000 a Month
      9. Planning a Family? How to Prepare Financially
      10. Facing a Layoff? Rule #1: Conserve Cash
      11. Living Paycheck to Paycheck? Knock It Off
      12. Why Your Budget Doesn’t Work
    6. 2. Slay the Debt Dragon
      1. What Comes First?
      2. What Comes First, Savings or Debt Payoff?
      3. Why You Shouldn’t Pay Down Your Mortgage
      4. Don’t Drain Your Retirement to Pay Debts
      5. Use Inheritance to Pay Down Debt, Boost Savings
      6. How to Stop Collection Calls
      7. Garnishments Are Taking Food off This Family’s Table
      8. Massive Debts Mean Gambling Is More Than a “Habit”
      9. Debt Doesn’t Disappear After Lender Write-off
      10. How Long Bad Debt Can Haunt You
      11. What to Do When You Can’t Afford Your Life
      12. Young Widow Struggles with Late Husband’s Debts
      13. Dealing with After-Death Creditors
      14. Fighting an Aggressive Collection Agency
      15. Student Drowning in Debt Needs Professional Help
      16. How to Cope with a Big Medical Bill
      17. When Bankruptcy Is the Best of Bad Options
      18. What to Do When Bankruptcy Won’t Work
    7. 3. Burnish Your Credit Score
      1. Improving Bad Scores Takes Time, Patience
      2. Why “Free” Credit Scores Aren’t
      3. How Credit Card Balances Affect Your Scores
      4. Does a Credit Card Make You a Slave to Lenders?
      5. Why Carrying a Balance Is Stupid
      6. No Credit Cards? You May Not Get the Best Rates
      7. How to Use Credit Cards to Improve Your Scores
      8. Should You Stay in Debt to Help Your Scores?
      9. Don’t Close Accounts If You’re Trying to Improve Your Scores
      10. Close Cards the Smart Way
      11. Debts Rising? It’s Time to Cut Spending
      12. Big Debts Mean You Can’t Afford Your Life
      13. Marriage Doesn’t Combine Your Credit Reports
      14. Unwanted Time Share Can Lead to Credit Score Hit
      15. “Piggybacking” Can Pose a Serious Risk
      16. Skimping on Credit Card Payments Can Damage Scores for Years
      17. Short Sale Causes Credit Scores to Plunge
      18. Finding an Apartment After Foreclosure
      19. Recovering from Bankruptcy Takes Five to Ten Years
      20. Installment Loans Can Boost Credit Scores
      21. Not All Loans Help Your Scores
      22. How to Score 800+
      23. Credit Scores Not Perfect? Don’t Sweat It
      24. Zombie Debt May Still Hurt Credit Scores
      25. Insurance Scores Differ from Credit Scores
      26. “Too Many Credit Cards” Boosts Insurance Premiums
    8. 4. Couples and Money
      1. When Savers Marry Spenders
      2. Credit Concerns or Just Cold Feet?
      3. Fiancé’s Reluctance May Be Just Prudence
      4. His, Hers, or Ours? Setting Up Finances As a Couple
      5. Time Share Causes Financial Woes
      6. Adding Fiancé As “Authorized User” May Help His Scores, but Be Careful
      7. New Wife Could Help His Credit, but She’s Not Obligated
      8. Marriage Didn’t Trash Son’s Credit Score
      9. Spouse’s Debt May Be Yours—or It May Not Be
      10. Separate Your Finances Before Divorce Is Final
      11. Couples’ Big Age Difference Affects Retirement Planning
      12. Choosing Pension Payout? Get Expert Help
      13. How Marriage, Divorce, and Death Affect Your Social Security Check
    9. 5. Family Money: Keeping the Financial Peace
      1. When Grandpa Reneges on Promised Money
      2. When a Sibling Wants a Loan
      3. Supporting the Family Spendthrift
      4. Quit Trying to Change a Deadbeat
      5. Helping Parents Support a Freeloader
      6. Saying No to Handouts for Adult Children
      7. Daughter’s Family Is Bleeding Them Dry
      8. Could Son’s Unpaid Bills Harm Parents’ Credit? Maybe
      9. When It Makes Sense to Let Your Adult Kids Live at Home
      10. How to Buy Stocks for Children
      11. Dealing with Parents’ Financial Crisis
      12. Beware Becoming Trustee of a Sibling’s Money
      13. Are Family Heirlooms Worth the Fight?
      14. Stepdaughter Wants “Everything”: What Does She Deserve?
      15. How Can I Resolve a Spat with My Siblings over an Inherited Home?
    10. 6. How to Stop Working Someday: Saving and Investing for Retirement
      1. With Retirement, There’s No Making Up for Lost Time
      2. $25 Is Enough to Get Started Saving for Retirement
      3. There’s No Such Thing as “Risk-Free” Retirement Investing
      4. Stocks: A Must or a Gamble?
      5. Dependents Can Fund Roths Even If Their Parents Can’t
      6. Don’t Tap Retirement Funds for a Bigger Down Payment
      7. Build Retirement Funds Before Paying Down a Mortgage
      8. Don’t Suspend 401(k) Contributions to Pay Down Loan
      9. Retirement Planning Without a Retirement Plan
      10. Self-employed? You’ve Got More Retirement Savings Options
      11. Roll Your 401(k) into an IRA? Maybe Not
      12. Windfall in Your 50s? Don’t Blow It
      13. Get a Second Opinion Before Buying a Variable Annuity
      14. Don’t Count on an Inheritance to Fund Your Retirement
      15. What’s a “Safe” Withdrawal Rate?
      16. Is a 3% Withdrawal Rate Too Conservative?
      17. Social Security: Grab It Early, or Wait for Bigger Checks?
    11. 7. Protect What You Have
      1. Should a 29-Year-Old Buy Life Insurance?
      2. Don’t Buy Life Insurance If You Don’t Need Life Insurance
      3. Help Your Pet Without Risking Your Finances
      4. Going Bare on Health Insurance Isn’t Smart
      5. “Eating Healthy” Won’t Protect Against Medical Bills
      6. Is Disability Insurance Worth the Cost?
      7. Why You Shouldn’t Buy Cellphone Insurance
      8. Get a Second Opinion Before Buying an Annuity
      9. When You Can Skip Rental Car Insurance
      10. Stick with Insurance Minimums or Buy More Coverage?
      11. Is Disaster Insurance Worth the Cost?
    12. 8. Identity Theft
      1. Don’t Trust Your Tax Papers to the U.S. Mail
      2. Sometimes You Have to Cough Up Your SSN
      3. Credit Account Closure May Be Cause for Alarm
      4. Credit Freezes May Be Your Best Defense Against ID Theft
      5. What Should I Do If My Sister Is an Identity Thief?
      6. What to Do When Your Wallet Is Stolen
      7. Do Dead People Have to Worry About ID Theft?
      8. 101 for Identity Theft Victims
      9. Redact Your Medicare Card to Reduce ID Theft Risk
      10. Are Businesses Protecting Your Social Security Number?
    13. 9. Home Sweet Home: What You Need to Know About Real Estate
      1. How Much House Can I Afford to Buy?
      2. No Down Payment Saved? You’re Not Ready to Buy a Home
      3. Student Loan Debt May Limit Mortgage
      4. Shop Hard Before You Refinance
      5. When to Pay Down Your Mortgage
      6. Should You Refinance a Mortgage That’s Almost Paid Off?
      7. When Shorter Loans Make Sense
      8. Adjustable Mortgage May Not Be Affordable for Long
      9. Should She Walk Away from Her Home?
      10. What Foreclosure Does to Your Credit
      11. Don’t Expect Mortgage Lender to Do the Right Thing
      12. New Rules May Help More Underwater Homeowners
      13. Get Help with a Mortgage Modification
      14. Short Sales Can Trash Your Scores
      15. A Short Sale Isn’t a Bailout
      16. How to Speed Up Foreclosure
      17. Property Loss May Lead to Bankruptcy
      18. Will You Face a Tax Bill after Foreclosure?
      19. Finding an Apartment after Foreclosure
      20. How to Get a House Sold Fast
      21. How to Dump a Time Share
    14. 10. Pay for College Without Going Broke
      1. If You Can Save for College, You Should
      2. 529 College Savings Plans Are a Good Option for Many
      3. Withdrawals from 529s Can Be Tricky
      4. 529s Aren’t Always the Best Way to Save for College
      5. Mom Stole College Fund. What to Do?
      6. Did Grandma Divert the College Fund?
      7. Don’t Overdose on Debt for a Child’s Education
      8. “Free Money” May Not Make School Affordable
      9. It’s Too Late to Borrow for Child’s College Education
      10. Finding a Way to Pay for School
      11. Is It Too Late to Go Back to School?
      12. “Dream School” Can Turn into a Nightmare
      13. Is a “Dream School” Worth Any Price?
      14. Ivy League Tuition Waiver Doesn’t Apply to Our “Dream School” Applicant
      15. Tiny Salary, Big Debt
      16. Degree from For-Profit School Leads to Big Debt
      17. How to Make Headway on Student Loans
      18. Is Graduate School Worth Borrowing For?
      19. Wrestling with Student Loan Debt? Know Your Forgiveness Options
      20. Student Loans in Collections? Here’s Where to Find Help
      21. Settling Student Loan Debt: Tough but Possible
      22. Student Loan Settlement Won’t Be Cheap
    15. 11. Find an Advisor You Can Trust
      1. Variable Annuity for a Dying Woman? I Don’t Think So.
      2. “Unsuitable” Annuity Can Be Undone
      3. Is a Money Manager Worth the Cost?
      4. How to Find an Advisor You Can Trust
      5. Your Broker Is Not a Retirement Expert
      6. How to Invest an Inheritance
      7. Finding Trustworthy Advisors
      8. What to Do Now with Your Extra Cash
    16. 12. At the End: Caring for Elders and Planning Your Estate
      1. Helping an Indigent Parent Navigate “the System”
      2. Son-in-Law Badgers Elderly Couple for Money
      3. Protecting a Parent from Financial Opportunists
      4. Daily Money Managers Can Help Pay the Bills
      5. A Reverse Mortgage Could Keep Mom in Her Home
      6. Asset Transfer Could Delay Medicaid Eligibility
      7. Incapacitated Parent? Tread Carefully
      8. Father’s Living Trust Is Missing
      9. The Documents You Need but Probably Don’t Have
      10. Who Needs an Estate Plan?
      11. Why Estate Plan?
      12. DIY Wills and Trusts Can Backfire
      13. Can the Guardian of Your Kids Change His Mind?
      14. Are Unequal Bequests a Good Idea, or Are They a Disaster in the Making?
      15. Credit Cards Must Be Paid Before Estate Is Distributed
      16. Executor Won’t Have to Pay Mother’s Debts out of Pocket
      17. Dad Died Without a Will. What Now?
      18. A Guide for Executors
      19. What’s the Best Thing to Do with an Inherited IRA?
      20. Social Security Benefits Don’t Last Forever
      21. What Happens to Personal Loans After Lender Dies?
    17. Index