Financial Advice

I Helped My Roommate With Bills and Now He Wants to Kill Me

Question:

Dear Steve,

I had a roommate who lived with me off and on for 10 years during the time he lived with me he asked me to loan him money for his small business. He was abusive at times and I felt like he was on drugs but could not prove it. He asked me to borrow him money to pay for products for his business all the while he made the minimum payments on the cards Eventually the debt racked up to over $45,000.

Finally, the debt became too much and I got with National Debt Relief which at the time about 1 month ago, I thought was a good idea. Now my roommate moved out and left me with all the debt. I have been living on Social security for the last 17 years. My check is 947.60 per month and my National Debt Relief auto draft is $632.00 per month. I found out my X roommate was writing bad checks and using drugs so I will never get his help.

My roommate has threatened to kill me numerous times and he has also told me he would tie me up and burn my apartment down. So I don’t want to try to involve myself with him but I can’t continue to pay $632.00 a month for this debt.

Any advice would be appreciated

Donald

Answer:

Dear Donald,

I have no way of knowing if what people ask me is true but your story is so crazy, it probably is.

Given the facts you gave me I would suggest you call National Debt Relief right now and tell them there is no way you can afford to give them the majority of your income each month. That makes no sense. And if any salesperson at NDR actually sold you on a plan under the situation you describe, a manager needs to have a little chitty-chat with them.

Your roommate sounds like a total drug addicted wack job who needs more help than you can give them. I would not be surprised if his business was turning inventory into drugs to feed his apparent out of control habit. If the ex-roommate continues to threaten you, call 911.

The first thing I would do is change the locks on your door and keep that ex-roommate out.

Next, to deal with the debt you have three real options.

Option 1 – File bankruptcy ASAP and legally close the door on this debt you will never be able to repay. Filing bankruptcy will stop collection calls and for the most part, you will no longer have to deal with this debt again.

You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

Option 2 – Do nothing. This is the lowest cost solution. You can put your head in the sand, change your phone number, never talk to a collector, and if you get sued there is probably little chance of a creditor collecting if your only income and assets are as you describe. This approach will lead to continued collections and potentially scary notices in the mail for years to come. Of course, it will impact your credit but in your situation, that’s not a horrible thing.

Option 3 – This is a bit of an improvement to the previous option of doing nothing. You can contact HELPS, a nonprofit law firm, who can give you assistance in protecting you from the creditors for a very low price. They specialize in representing lower-income seniors.

Stop Being the Victim

I know that is really easy for me to say but seriously you need to take some control over this situation and stop letting National Debt Relief or your ex-roommate make questionable decisions for you. You need to start taking some control and making choices that are best for you, not others.

My gut reaction is bankruptcy is the most comprehensive way for you to close the door on this financial mistake and will give you the fastest peace of mind. Working with HELPS is the least expensive intervention but can continue the annoyance of dealing with this crushing debt.

Please update me in the comments below with what you decide to do.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post I Helped My Roommate With Bills and Now He Wants to Kill Me appeared first on Personal Finance Syndication Network.

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Financial Advice

My Dad is Going to Lose His Military Pension Over My Student Loans

Question:

Dear Steve,

I just contacted a pro-bono legal service in my hometown to try to deal with federal & private defaulted student debt but I wanted to reach out to you as well to get another perspective.

My dad, a veteran, who co-signed, might lose his military pension if I can’t deal with this. I’m also out of work due to downsizing and I’m not particularly smart about money at all! Help!

Holly

Answer:

Dear Holly,

Federal student loans don’t have cosigners anymore. If your dad is involved in these and they are federal student loans then he would have had to take out a Parent PLUS loan. In that case, he is responsible for the debt, not you. It is true that if he did default on a federal student loan that any government money due him could be garnished. But he would not “lose” his pension.

With federal student loans, you do have the option of income-driven repayment plans which can get you a $0 monthly payment and keep the loans out of default. This is not an option for private student loans.

If these are private student loans then it is unlikely they could garnish his pension benefits if the lender sued, won, and went for a judgment.

If these are private student loans and you have not paid in a number of years, then these loans might be beyond the statute of limitations in your state. That is a defense you’d have to raise as a defense if you were sued over the debt. It is certainly an issue to discuss with the free legal service in your town.

Your father may want to contact HELPS for low cost legal protection regarding the debt.

While I don’t have enough information to give you a step-by-step plan, you have given me sufficient information to know there is a solution that may be able to address your debt situation without letting it spiral to wage garnishment.

I’d recommend you keep your appointment with the pro-bono legal service you connected with and talk to them about the legal ramifications of dealing with this debt if it is private student loans. They may be able to also help you get some clarity on exactly what kind of loans you have.

Please come back and post an update in the comments below after your appointment with them. With more details, I can give you more specific advice.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post My Dad is Going to Lose His Military Pension Over My Student Loans appeared first on Personal Finance Syndication Network.

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Financial Advice

Smoking out bogus product claims

uitting smoking and losing weight can be enormously challenging. In the quest to kick the habit or drop the pounds, you might be tempted by products promising miraculous results. But take a breath before you buy or try. Those ads could be exaggerations or outright lies that wind up costing you big.

Case in point: The FTC says Redwood, Inc. guaranteed consumers that its TBX-FREE smoking cessation and Eupepsia Thin weight-loss products worked better than others, and that clinical studies backed this claim. In Eupepsia Thin ads, actors (not actual, unpaid users) said they lost a substantial amount of weight using the product. What’s more, Redwood also allegedly enrolled consumers in an auto-pay program, debiting their cards every month without their knowledge or consent.

Looking past the hype is critical in making sure you’re not falling for false promises that will rob you blind. Whether you’re looking to stop smoking, lose weight, or do anything to improve your health, be skeptical about ads promising miraculous results. Most important, be sure to talk to a healthcare provider before you buy – or take – any product advertised with health claims.

To learn more about evaluating health product claims, visit the FTC’s health page. And if you’ve been taken in by false or misleading product claims, report it to the FTC.

This article by the FTC was distributed by the Personal Finance Syndication Network.

The post Smoking out bogus product claims appeared first on Personal Finance Syndication Network.

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Financial Advice

College test prep scams are happening

Recently, we heard about scams targeting parents of high school students preparing for college. The scammers claim to be from The College Board – the organization responsible for the PSAT and SAT tests. They call or email you, asking for credit card numbers so they can send PSAT prep materials that the student has supposedly requested. Often the scammers have the student’s name, address and phone number – making them seem more believable. Except your student didn’t ask for materials, and it’s not this group calling.

Here are some tips to avoid a test prep scam.

  • The College Board will never ask you to give credit card, bank account or password information over the phone or via email.
  • Make sure the company offering test prep materials is legitimate. How? Before you give up your money or personal information, research the company online. Search for their name plus the word “scam” or “complaint.” See about other people’s experiences. And talk to someone you trust, like another parent or your child’s school counselor, before you pay.
  • Consider how you pay. Credit cards have significant fraud protection built in – meaning that, if you find out you paid a scammer, you may be able to get your money back if you report it quickly. And if anyone asks you to pay by wiring money or by using a reloadable card or gift card, it’s a scam.

Spotted a scam? Whether you lost money or not, let us know at ftc.gov/complaint.

This article by the FTC was distributed by the Personal Finance Syndication Network.

The post College test prep scams are happening appeared first on Personal Finance Syndication Network.

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Financial Advice

Your God Loves Debtors

So many people tell me about how ashamed they feel about their financial problems. They feel like losers, cheats or just bad people for not being able to honor their repayment promises.

It is truly unfortunate that people find themselves in money trouble with debt casting a huge black shadow over their life as far as they can see.

But the tragedy in debt is not that it happens, bad things happen in the lives of many due to no fault of their own. A plane crashes, a rock falls from the sky, a truck slides on ice and loses control. Accidents and unintended events will always happen and each day that we wake up could be our last. Those are all just facts.

In my humble opinion, if you believe in a higher power or God then it is not the fact that you found yourself in trouble that you would be judged on. If you make a mistake and place yourself, intentionally or unintentionally, in harm’s way with finances, the real thing to worry about is not to punish yourself for your past error but instead to learn from that mistake and not repeat it moving forward.

There is no sense wasting a perfectly good mistake. Learn from it.

Stop worrying about how people may judge you for your past mistakes. Instead, let’s focus on making your life from this day forward, better. Be grateful, be happy, be thankful for what you have and the curses that you don’t have. When you think your life is bad, trust me, it could always be worse.

Rather than leaving yourself in a financial bind for years to come by sacrificing your health and safety to make minimum payments, consider that it is also gracious to accept responsibility for your past mistakes, address them and move forward to create a safer future and to be a better steward of the money you are making and will make now and in the future.

I have seen many situations where the most responsible action to take is to file bankruptcy instead of limping along to make marginal payments that will never satisfy the debt. In these situations, people, after making these payments, are unable to live in a safer area, can’t save for the unexpected, can’t afford medical care or properly feed themselves. Does that make them better, more moral, or more responsible people?

Don’t allow your creditors or debt collectors to judge you. Your debt is not a statement of who you are, it is only a part of the life that you live. Collectors give you attitude and cast dispersions on you as a tool to make you feel guilty to collect more money. Let judgment stand between you and your God instead.

Now I’ve got to be honest, some of the stories that I hear from people in debt leaving me shaking my head at times and wondering, “What were they thinking?” but even the stories of the worst financial mess have never left me thinking any less of that person as an individual. Debt happens and bad debt happens to good people. Debt is debt, it is not the sum of your life and it certainly does not define you. Your actions define you. Your kindness and gratitude define you.

But that’s just me and my point of view.

What do you think?

Originally published January 25, 2009.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post Your God Loves Debtors appeared first on Personal Finance Syndication Network.

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Financial Advice

Spread the word about charity fraud

Recently the FTC, the National Association of State Charities Officials (NASCO), and state charity regulators are joining forces with regulators from across the world to participate in the first International Charity Fraud Awareness Week.Make your donations count

It’s extremely important to raise awareness about charity scams to help ensure that donors’ hard-earned money goes to the worthy causes they seek to support, not to fraudsters. Would you help us spread the word? Here are a few things you can do this week:

•    Share this video with your friends and family.

•    Join us on Wednesday, October 24th at 2pm EST for a Facebook Live discussion with questions and answers about charity scams. The livestream will be available on the FTC page at Facebook.com/FederalTradeCommission
•    Follow us at Facebook.com/FederalTradeCommission and on Twitter at #CharityFraudOut to get tips about donating wisely and avoiding charity scams. This week, we’ll be sharing tips on donating after natural disasters, handling telemarketing calls, privacy, online giving, and wise giving.  

And here are a few tips to avoid donating to a sham charity:

•    Look up the organization online and read what others are saying about it. Search the charity’s name with the terms “scam” or “complaint.”
•    Check out the charity’s ratings with groups like the Wise Giving Alliance, Charity Navigator, Charity Watch and Guide Star. Find out how at FTC.gov/Charity.
•    Verify that the organization is registered with your state charity regulator. Most states require charities or their fundraisers to register before they can ask for donations.

Spotted a charity scam? Report it at FTC.gov/Complaint.

This article by the FTC was distributed by the Personal Finance Syndication Network.

The post Spread the word about charity fraud appeared first on Personal Finance Syndication Network.

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Financial Advice

Universal American Mortgage Company LLC (UAMC) Agrees to Pay $13.2 Million to Resolve False Claims Act Allegations Related to Loan Guarantees

Universal American Mortgage Company LLC (UAMC) has agreed to pay the United States $13.2 million to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with Federal Housing Administration (FHA) mortgage insurance requirements in connection with certain loans, the Department of Justice announced today.  UAMC is a mortgage lender headquartered in Miami, Florida.

“Mortgage lenders may not ignore material FHA requirements designed to reduce the risk that borrowers will be unable to afford their homes and federal funds will be wasted,” said Assistant Attorney General Joseph H. Hunt for the Department of Justice’s Civil Division.  “We will hold accountable entities that knowingly fail to follow important federal program requirements.”

“FHA mortgages are vital to first-time homebuyers and to families whose credit and assets were damaged by the 2008 economic crisis,” said U.S. Attorney Joseph H. Harrington for the Eastern District of Washington.  “FHA underwriting and other requirements are critical to safeguarding the integrity of the public money used to operate this important program.  We will continue to work with our law enforcement partners to ensure that mortgage lenders and others who profit from this program, while ignoring its rules, will be held accountable.”  

“In a quest for profits, mortgage companies have ignored important lending standards” said U.S. Attorney Annette L. Hayes for the Western District of Washington.  “Not only does this harm the borrowers leaving them over their heads in debt and underwater on their mortgages, it harms taxpayers because the mortgages are backed by government insurance.  This settlement should serve as a warning to other lenders to diligently follow the rules.”

During the time period covered by the settlement, UAMC participated as a direct endorsement lender (DEL) in the U.S Department of Housing and Urban Development’s (HUD’s) FHA insurance program.  A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance.  If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance.  DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices.

The United States alleged that between January 1, 2006, and December 31, 2011, UAMC knowingly submitted loans for FHA insurance that did not qualify.  The United States further alleged that UAMC improperly incentivized underwriters and knowingly failed to perform quality control reviews, which violated HUD requirements and contributed to UAMC’s submission of defective loans.

“One of our principle responsibilities is to protect and ensure the integrity of federal housing programs for the benefit of all Americans,” said Jeremy M. Kirkland, Acting Deputy Inspector General, U.S. Department of Housing and Urban Development, Office of Inspector General.  “This settlement demonstrates our resolve and should signal to irresponsible lenders that this conduct will not be tolerated.” 

“FHA depends upon the lenders we do business with to apply our standards and to truthfully certify that they’ve done so,” said David Woll, HUD’s Deputy General Counsel for Enforcement.  “Working with our federal partners, HUD will enforce these lending standards so we can protect families from preventable foreclosure and to protect FHA from unnecessary losses.”

The allegations resolved by this settlement include a whistleblower lawsuit filed under the False Claims Act by a former employee of a related UAMC entity, Kat Nguyen-Seligman. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery.  Ms. Nguyen-Seligman will receive $1,980,000 from the settlement.

The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorneys’ Offices for the Eastern and Western Districts of Washington. The lawsuit is captioned United States ex rel. Kat Nguyen-Seligman v. Lennar Corporation, Universal American Mortgage Company, LLC, and Eagle Home Mortgage of California, Inc., 14-cv-1435 (W.D. Wash.). The claims asserted against UAMC are allegations only, and there has been no determination of liability.

This article by the Department of Justice was distributed by the Personal Finance Syndication Network.

The post Universal American Mortgage Company LLC (UAMC) Agrees to Pay $13.2 Million to Resolve False Claims Act Allegations Related to Loan Guarantees appeared first on Personal Finance Syndication Network.

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