5 Tactics You Need to Know to Tackle Medical Debt

Did you know that one in four Americans currently struggles with medical debt? Although 8.8% of Americans—that’s over 28 million citizens—don’t have health insurance, even those with medical insurance often end up paying out of pocket for significant medical expenses. In fact, 63% of insured Americans report using up all or most of their savings to pay their medical debt. This savings drain has caused 7% of Americans who carry medical debt to file for bankruptcy.

One of the most important aspects of the Affordable Care Act (A.C.A.), sometimes called Obamacare, was that it dropped the number of personal bankruptcies in the United States in relation to medical bills. According to Consumer Reports, personal bankruptcy filings decreased by just over 50% after the implementation of the A.C.A.

Sometimes you can receive a costly medical bill even with insurance. Although most medical practices and hospitals will bill the insurer as a courtesy, it is still your responsibility to ensure the bill is received by your insurance company. This may require calling your insurer to make certain they will have everything needed to process the payment.

In addition, bills can seem shockingly high and you may wonder if it’s accurately reflecting the amount you owe. This may require a bit of legwork as sometimes medical billings can have errors, such as when a procedure number is transposed or there’s a duplicate service. It is good practice to always examine the bill itself as well as the Explanation of Benefits an insurer sends to you. Then, if anything looks unfamiliar, reach out to the medical facility as well as the insurance company to ensure accuracy.

The United States spends an average of over $10,000 per person on health care costs each year—in fact, compared to countries around the globe with similar average life expectancy, the U.S. spends more money per citizen than any of them.

And medical debt is hurting 43 million Americans where it hurts—with their credit. When faced with high medical bills, it may seem good to pay them off with a credit card; however, there are smart alternatives that offer better protections. After reviewing the bills and removing any errors, discuss with the practitioner’s office if there’s an opportunity to settle the bill for a lower amount than you owe. Medical bills aren’t set in stone the way a credit card bill can be. Many medical facilities will allow for you to negotiate the final amount owed with no impact to your credit report. By offering to pay with a reasonable amount in a single payment—if you can afford to do so—can provide the most flexibility for a lower final amount. However, if you need a payment plan, then many medical facilities will work with you to find a monthly amount you can afford. Some healthcare providers offer payment options, such as:

  • Low Interest Payments: If you can’t pay the bill off in full, this interest rate will be advantageous in comparison to the interest rate on a credit card.
  • Agreed-To Amounts: Many providers work with patients to find a monthly amount that works within a patient’s budget without creating financial flags on a credit report.

In addition, if anything goes awry and you can’t pay the credit card bill, then late fees will be dings on your credit report. Whereas, paid medical bills don’t appear on your credit report and hospitals don’t report unpaid bills to the credit agencies. However, if medical bills aren’t paid after a certain period of time, they may be turned over to a collection agency. A medical bill can only impact your credit if the bill is sent to collections, which can result in a 50–100 point drop in your credit score.

Finally, if you do max out your credit and have trouble paying the bills, this will impact you long-term as it can damage your credit score. From buying a new car to getting a new cell phone plan, credit is important for everyday needs. Having good, solid credit can ensure you have options when you need them, plus save you money in fees and interest.

Review your options carefully when deciding how to repay your medical debt. Today’s choices will impact your future for years to come.

In summary, keep in mind these 5 tactics for dealing with medical bills:

  • Review bills for accuracy of services and billing codes
  • Review insurance company’s Explanation of Benefits to determine amount you owe
  • Negotiate with medical facility to lower final amount to something you can afford
  • Ask about payment plan options if you can’t immediately pay the final amount in full
  • Avoid using credit cards for payment of medical bills as there’s a greater risk to your credit score if you miss any payments

Finally, if after you apply these tactics and still feel overwhelmed by medical debt, then consider enrolling in a debt relief program like the one offered by Freedom Debt Relief. Such programs can help with debt negotiation and/or debt consolidation, plus offer credit counseling as part of the program. Enrollment can help to reduce financial stress as you know you’ll be on a path toward the solution. And always ensure to select a program with a company who is a member of the American Fair Credit Council (AFCC), as then you will have the help of a professional adviser who can be a partner for getting you on track.

4 Facts That Could Help You Keep Old Debt in the Past

Here’s some good news for people with old, unpaid debt: your debt may have already expired under the statute of limitations! Expired debt, also known as time-barred debt, zombie debt, or out-of-statute debt, could be harder for creditors to collect. That doesn’t mean they won’t try to get you to pay it back, though.

The statute of limitations puts a cap on the amount of time a creditor has to sue you for your unpaid debt. But it could be complicated to find out if you’re responsible for paying your old debt because different statute of limitation rules apply depending on the type of debt, the state you live in, and the contract you signed. These facts could help you defend yourself from zombie debt.

It’s Hard to Tell If Your Debt Has Expired

Determining if your old debt is expired under the statute of limitations can be tricky for the following reasons:

  • Depending on the state, certain debts may have a longer statute of limitations than other types of debt, like a vehicle loan.
  • The time that a creditor has to collect a debt also varies from state to state, generally ranging from 2 to 10 years.
  • The contract you sign with a creditor could include statute of limitations rules from an entirely different state than you or your creditor (This may appear in a “Choice of Laws” clause on your contract).

If a creditor contacts you to collect an old debt, it’s important to look through your contract and know which state’s statute of limitations rules apply to the debt in question. After reviewing your contract and finding out which statute of limitations you agreed to, a quick search on the internet could help you figure out if your old debt has expired.

Expired Debt Isn’t Forgiven Debt

Wouldn’t it be great if old debts just died? Unfortunately, they don’t. Just because the statute of limitations is expired on your debt doesn’t mean that your debt is forgiven or considered to be paid off. Even if you don’t realize you have an expired debt, it could still have an impact on your credit profile. In fact, having an out-of-statute debt could show up on your profile for up to 7 years or more. To be safe and make sure you don’t have an old, unpaid debt, you could always get your yearly free credit report.

Creditors Might Still Try to Collect a Time-Barred Debt

Just because you have an out-of-statute debt doesn’t mean a debt collector won’t try to collect your old debt. Creditors and debt collectors may call you, or even try to take you to court, for a time-barred debt. However, an expired statute of limitations could be a defense against any such lawsuit.

It’s your responsibility to tell the court that your debt is expired if you get a court summons. Otherwise, you may end up having to pay the debt, plus any late fees and interest charges accrued. If you have questions about your legal options on an expired debt, contact a licensed legal professional in your jurisdiction.1

Watch Out: Your Zombie Debt Could Come Back to Life!

Even if a debt collector doesn’t take you to court, they could still contact you to get you to pay your old debt. If you’re ever contacted by a debt collector about your zombie debt, be careful. If you put even 1 cent towards your old debt voluntarily, you could reset the clock on the statute of limitations and you may be on the hook to pay it off again. If you admit to owing the debt in writing, you could reset the statute of limitations, too.

The only way to make sure that a valid debt stays in your past is by paying it off. But that doesn’t mean you have to pay on your creditor’s terms. Freedom Debt Relief offers a debt settlement program that could help you resolve your debt faster and for less than you currently owe. If you qualify, our program could give you peace of mind knowing that your old debt won’t come back to haunt you ever again. Find out how our program works here.

1 We are not lawyers – materials provided in this blog is general information – please consult a licensed legal professional in your jurisdiction for further information or advice.

4 Proven Ways to Get Rid of Money Stress

Worrying about money problems and debt is unfortunately pretty common. Covering your monthly bills could make you anxious enough, but what if you suddenly need to pay for car repairs or some other expenses you hadn’t budgeted for? Stress and money can go hand in hand…which could have serious implications on your mental outlook.

A recent survey found that 25% people who are in debt have symptoms similar to post-traumatic stress disorder (PTSD)—36% if you happen to be a millennial. Symptoms can manifest themselves as:

  • Worry: You have excessive concern about being homeless or other worst-case scenarios around being unable to pay off debt.
  • Nightmares: Sleepless nights can have severe impact on your day-to-day life.
  • Avoidance: If you don’t pay bills on time, you could incur late fees.
  • Denial: You ignore the reality of the situation and don’t take ownership for paying off debt.

If this sounds familiar, then recognize you’re not alone. Nearly 40% of U.S. households have credit card debt. And for those who carry a balance, the average debt is $16,048 on those cards and the interest can cost as much as $1,300 per year.

Understanding your reaction to money problems can help you adjust your approach, take control of your finances, and reduce your stress levels.

  1. Stop Retail-Therapy: Ebates research found that over 60% of women and nearly 40% of men shopped to improve their mood. Before you buy, learn to HALT by questioning if you’re Hungry, Angry, Lonely, or Tired. By taking a moment to assess, you can discover what will satisfy you—eating a snack, addressing an issue with your spouse, calling a friend, or going to bed early. The benefits of HALTing can be long lasting, and leave you with fewer/lower bills to pay at the end of the month. To resist online impulse-buys, delete credit card information stored on your computer and mobile devices.
  2. Curb Anxiety: Money problems can make you anxious and fearful. Be proactive to stay on track for paying down debt:
    • Set Up Automatic Minimum Payments: This can help ensure you don’t receive late fees.
    • Put Credit Cards Out of Reach: Rather than cut them up, simply take them out of your wallet. If it’s still “too easy to spend,” then try freezing the cards in a container of water or take them out of the house and put them in safe deposit box at a bank.
    • Find a Credit Counselor: Consider hiring a professional service that can coach you on how to create better budgeting skills.

  3. Calm Yourself: These proven techniques can help you feel more relaxed so that money stress doesn’t take over your life.
    • Start Exercising: Work with a doctor to create an exercise plan.
    • Learn To Meditate: Attend a class or download a free app.
    • Seek Counseling: Look for a mental health counselor who can help you understand the root causes of your stress.
    • Avoid Splurging: This can be confusing as being happy is good, yet feeling loose (especially if you’ve had alcohol) can quickly lead to financial splurges. Set up situations where you celebrate with friends at home.

  4. Become Empowered: Remember, you’re in control! Listen to how “I choose to live frugally” sounds better than “I should live frugally” because it reinforces your power. By saying “I choose…” to friends, family, and yourself, it states this is your decision. And you can be an inspiration to others by showing how serious and relaxed you are about being careful with your money. Remember that you own this choice knowing it will help you eliminate your debt.

If after you apply these strategies you still feel overwhelmed by debt, then consider enrolling in a debt relief program like the one offered by Freedom Debt Relief. Such programs could help reduce the amount you owe for an affordable, predictable monthly cost. Even the simple act of enrolling in a program could immediately reduce stress, since you know you’re on a path toward the solution!

9 Amazing Ways to Save $300 Every Month

What could you do with an extra $300 a month? You know the saying “every penny counts,” yet how do you make those pennies add up to dollars? A few small changes can help you save money every day and keep more in your pocket.

Imagine how $300 could be put toward a car payment, pay down a medical bill, or help get your kid their dream toy for a birthday present.

These 9 budget tips can help you save money fast to provide some financial “breathing room” or to use toward a special savings goal.

  1. Host a Game Night

    Instead of meeting friends out for dinner, have them come over for dessert and board games. To cut costs, ask them to contribute a bottle of wine or a six-pack toward the festivities.

  2. Cancel Your Gym Membership

    If you’re a gym regular, keep it up and enjoy yourself! But if you don’t go to the gym at least 3 times a week, you may be wasting some money. Check out a local recreation center where there is a fitness room. These gyms can cost as little as $24 a month and might be half that price if you’re 50 or older. 

  3. Empty Your Storage Unit

    The average monthly fee for a 10’x10’ storage unit is $100. Evaluate what you need versus the “maybe we’ll use that … someday” items—and as you hold each item ask yourself if it’s worth $1,200 per year?

  4. Have Coffee In vs. Coffee Out

    Learn to make lattes at home and you can save almost $10 each week.

  5. Search for Coupons

    As internet shopping becomes commonplace, always take a moment to search for an online coupon before Checkout. Often you can save on shipping or receive 10% off all for a few clicks.

  6. Switch Cell Phone Plans

    Ask about different plans to see which best fit your needs and might cost less. Or consider switching to a less pricey providers or get a prepaid plan.

  7. Buy Generic

    At the supermarket, store-brand groceries can cost 10% less than name-brand products. So if you spend $100 a week on name-brand groceries, buying store brands instead is an easy way to save $10 or more.

  8. Call Your Insurance Company

    See if there are discounts available for having multiple policies with the same provider. And if you have enough savings on-hand to cover expenses for filing a claim, then consider raising the deductibles on your policies as this will lower the annual premiums.

  9. Lower Your Energy Usage

    There are multiple ways to save on energy costs by managing air drafts, adjusting hot water heaters, and monitoring the washing/drying of clothes.

    • Air Drafts

      Check for spots where outside air can enter your home—the most common locations are doors and windows, followed by locks, electric outlets, air conditioners, and recessed light fixtures. Install weather stripping and door sweeps, plus cover outside vents, including air conditioning units.

    • Water Heater

      Adjust the water heater temperature to 120 degrees or, if you have only a knob, turn it down a level. You can save up to 10 percent on energy costs, yet still have all the hot water you need.

    • Washing/Drying of Clothes

      Using the cold cycle in the washer can save up to 90 percent of the energy costs. While a clothes dryer is one of the highest energy vampires, use a clothesline (inside or outside) to hang dry as many items as possible.

6 Ways to Plan for a Debt-Free Holiday

The holiday season is fast approaching and with it come the feasting, festivities, and financial obligations many of us have come to dread. According to Gallup, Americans will spend an average of $830 this year on gift giving. This figure will increase if you’re a parent: playing Santa can cost between $400 to $500 per kid. So, unless you happen to have a significant amount socked away for just this purpose, your holiday shopping sprees could garner you holiday debt come January.

But by following these six tips, you may still be able to enjoy the season, while ensuring your credit card debt doesn’t get out of hand.

  1. Make a spending plan
  2. Take a hard look at your finances and figure out realistically how much you’ll be able to set aside for holiday shopping. Then, draw up your list and figure out your budget. The key is to stick with the plan. If you don’t start out with a firm idea of how much you’re able to spend on each person, it’s easy to get sucked into impulse buying.

  3. Set money aside
  4. With the multitude of savings apps now available, there’s never been an easier time to put money away. These apps encourage and track your savings and range from simple piggybank-like features that allow you to put small amounts away regularly to more sophisticated versions that let you trade stocks as well.

  5. Start early
  6. The benefits to getting a jump on your holiday shopping are many. You can spread out the total expense and effort over multiple months, and chances are, if you’re more relaxed about the whole endeavor, you’ll make better choices and stay within your budget more easily. (Remember that budget)?

  7. Shop online
  8. Shopping online offers many advantages, but the top perk is being able to compare prices to make sure you get the best deal. If you fail to complete your holiday shopping early, there’s always Cyber Monday. You’ll be in good company as, according to Netmarketer, online sales will increase by 16.6% this year.

  9. Use caution with cards
  10. If you do go the credit card route, charge only what you know you can pay off the following
    month to avoid interest fees. For example, a holiday bill of $1,000 becomes $1,190 when you
    factor in an interest rate of 19%. This could take you months to pay off. Wouldn’t you
    rather put that money toward a summer vacation than still be paying off holidays come July?

  11. Take cash only
  12. If you prefer shopping in the real world, consider leaving your cards at home to avoid the urge to overspend. To score some serious bargains, wait for Black Friday. The 2016 average price reduction on goods over the four-day day period following Thanksgiving was a whopping 44%.

If you’re already concerned about your credit card debt situation right now and worried the holidays will only make it worse, you may want to consider taking more proactive measures to begin tackling your debt. Learn more about how the Freedom Debt Relief program works and whether it could be the right solution for you. Even if you enroll in our program today, you won’t be able to get rid of all your debt by the time the holidays hit, but at least you can know you are doing something to make your debt situation better.

5 Brilliant Ways for Couples to Get Out of Debt Together

Once you’ve found the person you want to spend your life with, you’ll do anything to keep your relationship strong. And sometimes, money problems and debt stress can make that tricky.

Even though talking about your finances can be scary, bringing it up now could help you avoid future relationship or marriage issues and create a deeper and more supportive connection with your partner. Here are some simple ways you and your partner can overcome debt and build a better life together.

  1. Be Honest
  2. When you’re in a serious relationship, honesty is always the best policy—especially when it comes to money issues. Letting your partner know about your money problems is important if you want a relationship based on honesty and trust. Plus, being truthful about your debt could lead to more open communication in all areas of your relationship.

    If you keep your debt a secret, you could be creating tension in the relationship without even realizing it. Talking openly about student loans, credit cards, personal loans, and other forms of debt with your partner could help bring you two closer. And chances are, they may have some debt of their own to talk about.

    These discussion don’t have to be too serious, either. Why not make a date of it? Each of gets a free copy of their credit report at www.annualcreditreport.com, and then you can go over them together.

  3. Identify wants and needs
  4. After you two have talked about your debt situations, sit down with all of your bank and credit card statements and identify unnecessary expenses together. This is a problem both of you can solve!

    • Look through your statements and highlight “Needs” like your mortgage, car payments, and insurance in one color.
    • Highlight “Nice-to-Haves”, like gym memberships, cable, or high-speed internet, in another color.
    • Finally, highlight “Wants”, like entertainment or expensive restaurants in a third color.

    Once you create these three categories, discuss and debate which expenses you can afford to cut as a couple. Then, plan out how much you’ll each put against the debt each month.

  5. Support each other
  6. Budgeting, cutting back, and paying off debt isn’t always easy. But knowing that you have someone on your side who supports you and wants the best for you could give you the extra motivation you need to get out of debt. By encouraging each other and committing to a common goal, you won’t just improve your financial wellbeing—you could also strengthen your bond as a couple.

  7. Set goals and reward yourselves
  8. Getting out of debt could take a long time, so it’s important to break your ultimate goal into smaller, more manageable ones—like staying on track with your monthly budget, paying off a credit card, or reaching other milestones in your debt repayment plan. After achieving each of your goals, reward yourselves with a night out, a bottle of wine, or a special home-cooked meal. Just remember to stay within your budget.

    You could even make a game out of the weekly goals you set for yourselves. For example, one week you could have a contest to see who can save the most money. Whoever wins could get to choose the next movie you watch, get a neck massage, or have a pass from doing their least favorite chore for a few days. Celebrating your victories together could keep you and your partner motivated throughout the process of solving your money problems.

  9. Know when to seek help
  10. Why do couples fight about their finances? Because money problems put pressure on each person in the relationship, creating feelings of guilt, fear, and anxiety that can make them lash out or act irrationally. If you’re worried that debt is starting to negatively affect your relationship, it may be time to get professional help.

    Some people try financial counseling for couples, where you and your partner talk to financial expert or a representative from a credit counseling agency about how to deal with your debt. Using this method, a credit counselor may be able to reduce the interest rate on your credit card debt if you enroll in a Debt Management Plan.

    However, if you and your significant other are experiencing a financial or life hardship, or struggling to make minimum payments on your high-interest debt, a better plan may be to enroll in a debt settlement program together. And since you can enroll as a couple into our program, Freedom Debt Relief could be the perfect option for you.

    After enrolling in our program, our expert debt negotiators will work on your behalf to reduce the total amount of debt you owe your creditors. That way, you and your partner could save more and get out of debt faster than making minimum payments. Learn more about how our program works here.

How to Improve Your Financial Well-Being

Whether you’re a financial expert or just starting to learn about personal finance, managing your money can be hard. How is your credit score calculated? How important is it? These tips could help answer those questions and help you improve your financial well-being.*

1. Make a Budget

Evaluating your financial situation is the best way to make sure you are practicing good habits. But you don’t need an expert to review your personal finances and make sure you’re on track. All you have to do is create a budget.

Budgeting is a lot easier than you might think. First, make a list of all of your monthly expenditures, including housing, transportation, food, insurance, childcare, and any other expenses you may have. Then, look at your monthly income after taxes. If you still have money in your budget after all your expenses, you’re on the right track with your personal finances.

On the other hand, if you find that you are overspending, making less than your monthly expenses, or relying on credit cards to fill the gap between your income and your expenses, you may need to balance your finances. Depending on how much you’re spending, you might be able to monitor your budget and correct the issue. But if you are in heavy debt or you’re making a lot less than you’re spending, you may want to seek professional help.

2. Know How Credit Scores Work

Another indicator of financial health is your credit profile. Most people know that a higher credit score means that they will qualify for loans, credit cards, and mortgages more easily and at a lower rate. But most people are never told how credit scores are calculated.

The Fair Isaac Corporation, or FICO, developed credit scores to determine a borrower’s likelihood to pay back a lender. All three credit bureaus—Experian, Equifax, and TransUnion—use this data to determine a score. So, whenever you hear “FICO score,” “credit score,” and “credit rating,” they all refer to the same thing.

Credit scores can range from 300 to 850, based on credit history and habits. Here is the breakdown of how credit scores are calculated:

Once each year, you can request a copy of your credit report from all three bureaus at annualcreditreport.com, or by calling 877-322-8228. After accessing your free credit reports, you can review the information on the reports, make sure it’s correct, and dispute any false information.

If you see inaccuracies on any of your credit reports such as a wrong address, missed payment, or incorrect outstanding balance, use the information on their website to contact the credit bureau and ask them to review the mistake. Under the Fair Credit Reporting Act, credit bureaus must investigate any disputed items and remove them if they are incorrect.

Spending just a few minutes reviewing your credit reports could protect you from identity theft and keep you on the track to good financial health.

3. Stop Paying Just the Minimum

Also known as revolving your debt, making minimum payments might seem like a perfectly normal habit. The truth is, it could seriously harm your financial wellbeing in the long run. If you only pay the minimum on your debt and keep using your available credit, your credit utilization will rise. If your debt gets too high, your minimum payments could be hard to keep up with, leading to missed payments that cause even more financial stress. Paying as much over the minimum as possible could help you avoid all of these problems, get out of debt faster, and start saving more money.

4. Start Your Emergency Fund

Having money in savings for an emergency can make a bad financial situation easier to deal with. Saving even 10% of your paycheck each month could save you from a financial disaster. But you won’t be able to save money if you’re paying off unsecured debt like credit card or loan debt.

Think of unsecured debt as negative money in your account. If you owe $1,000 and you only have $250 saved, you’re $750 in the hole. And since unsecured debt usually has high interest rates, the amount you owe could go up every month.

That’s why it’s so important to get out of debt as quickly as possible. The faster you’re out of debt, the faster you can build up your savings so you won’t end up in the same situation again.

If your debt situation is so bad that you aren’t able to save up, the first and most important step to improving your financial situation is getting your debt under control. You can do this in many ways, including the debt settlement program offered by Freedom Debt Relief. So if you’re ready to stop making minimum payments and deal with debt head-on, learn about how our program works and see if we could help you clear your debt away faster.

*We are not financial planners and cannot give advice as such – materials provided in this blog is general information – please consult a professional for further information or advice.

5 Smart Steps to a Debt-Free Retirement

What are your retirement plans? You might dream of spending more time with your family, relaxing, taking up new hobbies, or going on the vacation of a lifetime. But if your retirement is approaching and you’re still struggling with debt, those dreams could be harder to achieve.

Retirement is expensive, but being in debt could make it downright impossible. The good news is that you could still plan for the retirement you’ve always wanted—even if you’re struggling with debt today. Here’s how you could plan for a debt-free retirement.*

  1. Create a Retirement Budget

If you want to know how much you need to retire, creating a retirement budget is a good place to start. There are several online budgeting tools that could help you figure out how much you’ll need to save for the perfect retirement, but you could just as easily make a budget the old fashioned way.

To calculate your retirement budget, make a list of the expenses you have each month. This could include:

  • Mortgages, property taxes, homeowners insurance, and utilities
  • Food, clothing, and personal expenses
  • Health care, insurance, and ongoing medical expenses
  • Alimony and childcare costs
  • Credit card debt, loan payments, and student loan debt
  • Money you plan to spend on vacations, hobbies, entertainment, and any other miscellaneous expenses

Add all of these expenses up, and you’ll have a monthly retirement budget. According to The Motley Fool, average American retirees spend about $3,700 per month, totaling approximately $44,600 per year.

If this number seems overwhelming, it might ease your mind to know that the retirees received an average of $1,366 in Social Security benefits in April 2017—offsetting the amount they needed to save. Nevertheless, saving as much as you can before you retire is crucial.

  1. Track Your Savings

Once you know how much you’ll need for retirement, you can make sure your retirement savings fits your budget. If you’ve invested in a 401(k), IRA, or another type of retirement asset, it’s important to keep track of how much you’ve saved.

If it turns out that you need to save more before retiring, you may need come up with a plan to accelerate your savings before you retire.

  1. Eliminate Your High-Interest Debt

Making payments on high-interest debt can seriously eat away at your ability to save for retirement. So if you have debt from credit cards or loans, paying it off as quickly as possible could make saving for your retirement much easier.

It’s shocking to think of how many people retire with debt. The average credit card debt of people over 65 is a whopping $6,351. Imagine having to pay that much debt off on a fixed income.

Worse yet, credit card debt may actually push back your date of retirement if you want to save a certain amount before leaving the workforce. But working for longer could be a better option than struggling with high-interest debt when you’re retired.

If you’re struggling to make minimum payments on high-interest debt, it could take years to pay it off. If you’re wondering how to get out of debt faster, there are several options that could help, such as a debt settlement program like Freedom Debt Relief, which could be a good option if you’re experiencing a financial hardship and you want to pay off your debt faster and for less than you owe. After overcoming your debt, you could free up extra money and save for the retirement you’ve always wanted.

  1. Protect Your Retirement Funds

You might be considering using your retirement funds to pay off your debt before you retire. That could be a huge mistake for two reasons. First, you could have to pay taxes for any money that you pull out of your 401(k) or IRA before retiring. And second, any money you pull out is money you’ll have to pay back in before you retire. So taking money out of your retirement to pay debt is a short-term solution that could hurt your long-term financial wellbeing.

  1. Save Money Whenever You Can

Between medical bills, unexpected emergencies, and other expenses, retirement isn’t cheap. And since the amount of money you have available after you retire is limited, it’s important to have as many additional funds at your disposal as possible.

That’s why building up an emergency fund is crucial before you retire. One common mistake retirees make is not having enough money saved to cover an emergency. Then, they end up in debt all over again because they have to use credit cards or loans when an emergency happens. So the more money you can save before you retire, the better—even if you already have enough saved to have the retirement you’ve always wanted.

The best thing you can do before you retire is to make sure that you are completely debt-free. Any money you owe when you retire is money that you’ll have to pay on a fixed income, so it just doesn’t make sense to retire in debt. And the sooner you’re out of debt, the more you can save for your emergency fund.

If you want to learn more about getting out of debt, our Certified Debt Consultants could help. Give them a call, and they’ll explain debt relief options and help you decide which one is right for you—even if it isn’t the Freedom Debt Relief program.

*We are not financial or retirement planners – materials provided in this blog is general information – please consult a professional for further information or advice.

6 Ways to Save Your Sanity When Debt Collectors Call

If debt collection calls are causing you stress, these tips could help you deal with them better.

No matter how many times you’ve been contacted by a debt collection agency, the calls are never easy. The stress of being in debt can be too much to bear all by itself. But getting multiple collection calls every day could put you in an all-out panic.

Debt collectors can be unpleasant or downright rude when they call you. And you may feel like you have little control over the situation when they call. But stressing over these calls or getting angry over the phone won’t make them go away. In fact, debt collectors might purposefully push you over the edge to get you to pay. So how can you keep your cool the next time a debt collector calls you?


  • Stay Positive


It can be hard to remain optimistic when you’re getting collection calls, but having a positive attitude could change the way you deal with debt stress.

If you let a collection call ruin your day, you’re playing into the hand of the debt collector. But if you’re able to think of the situation as temporary, you may be able to handle the call better. Remind yourself that you will get through this rough patch, and you may be able to handle the stress a little more easily.


  • Prepare Yourself


Being ready ahead of time can help reduce your stress when a debt collector calls. One practical way to prepare for the call is to save the debt collector’s number into your phone so that you know who is calling.

It’s also important to think about what a debt collector has said to you in the past, and how you would have responded to it if you were cool, calm, and collected. A lot of the time, debt collectors try to catch you off guard. Preparing your responses in advance could counter their aggressive tactics and put you back in control.

Explain that you are unable pay them right now but will make sure they are paid. Don’t offer too many details on why you can’t pay them right now. It’s none of their business, and they could use those details to try to get you to commit to a payment.


  • Slow Down


When you’re on the phone with a debt collector, don’t forget to breathe. If they ask you a question you don’t know how to respond to, pause and collect your thoughts before answering. Try to control of the pace of the conversation by responding when you’re ready so you don’t feel overwhelmed. Sometimes they purposefully create awkward silence to trick you into filling the silence and give them details they can use against you.


  • Know When to Walk Away


If a debt collector is making you frustrated, angry, or stressed out—hang up. Tell them they can call you later, once you’ve had time to think. Take some time to decompress, gather your thoughts, and prepare.

Until you are ready to talk to them again, ignore the calls. Don’t pick up the phone from a number you don’t recognize. Remember that when a debt collector calls, you don’t have to answer. In fact, if you are angry or stressed, answering the call could be worse than ignoring it. After walking away from the situation and clearing your mind, you may be able to handle the call more easily.


  • Take Care of Yourself


You may underestimate how important it is to take care of yourself when you’re stressed out—but it could make a huge difference in the way you approach a stressful situation.

If you’re dealing with debt stress and you don’t take time to relax, you could end up suffering from anxiety, depression, or a feeling of helplessness. Stress could affect your sleep, your outlook on life, and your relationships with the people you love.

Taking time to do something for yourself could reduce your stress. Whether it’s exercising, spending time with loved ones, reading a book, or watching TV, taking your mind off of the calls could help you handle your stress better.


  • Get Help


The stress of constant collection calls and the feeling that you are stuck in a never-ending cycle of debt can push you over the edge—especially if you don’t see any way of putting your debt behind you. So if you’re struggling with debt that you can’t pay off and the collection calls are too much to bear, it might be time to get professional help.

Freedom Debt Relief could help you relieve debt-related stress by providing you with a plan to get out of debt in as little as 24-48 months.* With the tools and resources available to all our clients, our program is designed help with the stress of collection calls. Learn more about how our program works here and start relieving your debt stress today.

*Clients who make all their monthly program deposits pay approximately 50% of their enrolled balance before fees, or 68% to 75% including fees, over 24 to 48 months. Not all clients are able to complete our program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific circumstances. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time.</p style=”font-size:20px”>

5 Facts About Debt Collection Calls You Need to Know

It’s hard enough to be in heavy debt. But if you’ve fallen behind and creditors or debt collection agencies are calling you at home or work, your stress levels could be at an all-time high.

You might feel confused, angry, or even guilty about these calls. But have you ever considered that your creditors might be using unfair debt collection practices? Most people don’t realize that there are limits to what a debt collector can do and say when they’re trying to collect a debt. That’s why it’s so important to know the facts about unfair debt collection practices, so that you can protect yourself against them.

1. Not All Calls Are Legitimate

When a creditor or collection agency calls, have them identify themselves and give you the specifics on the debt they are trying to collect. Knowing the name of the person contacting you, their company’s name, and debt amount can help you determine if the call is legitimate. If they contact the wrong person or misrepresent the amount you owe, they could be using unfair debt collection practices.

2. There’s a Difference Between a Creditor and a Collection Agency

If you don’t recognize the name of the company contacting you, it doesn’t necessarily mean they are calling the wrong person. Once an account has been delinquent for a certain amount of time, most creditors will either send your debt to a collection agency or sell it to them for a fraction of what you owe. This process is called a charge off.

Once your debt has been charged off, collection agencies try to make a profit from your debt by getting you to pay the same amount as before. To do this, they may use more aggressive debt collection tactics on the phone to pressure you into paying. Even though it’s not illegal for debt collectors to call you, there are certain things they cannot do when they call.

3. Debt Collectors Aren’t Allowed to Use Unfair Collection Tactics

Under the Fair Debt Collections Practices Act (FDCPA), it’s illegal for debt collectors to:

Contact you at unreasonable hours
Debt collectors can call, text, or send you letters—but they can’t contact you at unreasonable times, like before 8AM or after 9PM, unless you agree to it.

Harass or threaten you
Debt collector cannot threaten to harm you, use obscene or profane language, or repeatedly use the phone to annoy you.

Make false statements or misrepresent themselves in any way
It’s illegal for a debt collector to make false claims about you or themselves when they are trying to collect a debt. For example, a debt collector may not claim that they are an attorney or government representative, claim that you committed a crime, or misrepresent the amount you owe.

Threaten to seize, garnish, or sell your property or wages if you don’t pay
A debt collector cannot threaten to seize or garnish your wages unless they take you to court and get a court order to garnish your wages, or intend to take you to court in order to do so.

To learn more about what a debt collector can and cannot do, the Federal Trade Commission has more information about the Fair Debt Collections Practices Act here.

4. Debt Collectors Who Don’t Follow the Law Could Be Held Responsible

If you think a debt collector could be violating the Fair Debt Collections Practices Act, contact an attorney to see if you have any legal recourse. You have rights as a debtor, and there are legal consequences for creditors and collection agencies who violate those rights.

5. Many Debt Collectors Will Settle Your Debt

Debt collection calls are stressful—even if the debt collector is just doing their job. And the truth is that debt collectors won’t stop contacting you until you pay them.

But did you know that there are ways to get debt collectors to settle for less than you owe? If you simply cannot afford to pay your debt, you may be able to negotiate with creditors to lower your interest rate, change the terms of your payments, or even settle the debt for less.

After calling a debt collector, explaining your situation to them, negotiating new terms, and getting them to sign a contract accepting the new terms, debt collectors could stop calling—as long as you pay the new amount on time each month.

Getting a debt collector to agree to new terms and accept less money than you owe can be difficult. And even if you do, you could be missing out on savings that could help you overcome debt faster. That’s why people in heavy debt turn to professional debt settlement companies like Freedom Debt Relief. After enrolling in our program, our Debt Negotiation Experts work with creditors on your behalf to get them to accept less than you owe so you can be debt-free. In fact, our clients could tackle their debt in as little as 24-48 months.*

Learn more about how our debt settlement program helps people get out of debt faster and for less here.

*Clients who make all their monthly program deposits pay approximately 50% of their enrolled balance before fees, or 68% to 75% including fees, over 24 to 48 months. Not all clients are able to complete our program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific circumstances. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time.