Financial Well-Being





Protecting yourself from deceptive debt collection practices

8.23.13

Nearly 15% of all Americans show at least one item in collection on their credit report, and the average amount of debt in collection is $1,400. Debt collection is a $12.2 billion industry in the United States. Banks and other creditors may collect their own debt, and they can also sell off debt to third parties, which can also choose to collect the debt or sell it off. As a result, it is not surprising that debt collectors sometimes engage in practices that intimidate and harm consumers.

Many debt collection companies play by the rules and treat consumers fairly, but those that don’t can wreak havoc on your finances. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, all covered persons or service providers are legally required to refrain from committing unfair, deceptive or abusive acts or practices. Any entity that is not the original creditor is subject to the Fair Debt Collection Practices Act and is also legally required to refrain from committing unfair, deceptive or abusive acts or practices in the attempted collection of a consumer debt.

But what kinds of debt-collection practices should you be wary of? The following practices are typically deemed to be illegal.

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Why you need to shop around for a mortgage

4.1.13

Interest rates are at a record low, but many borrowers are still reluctant to shop for the best mortgage loan – a decision that could cost them money.

Looking at data from the November 2012 National Housing Survey, Fannie Mae researchers found that close to half of lower-income mortgage borrowers said they did not obtain more than one quote when signing up for their current mortgage.

Couple buying a mortgageComparatively, three out of four higher-income respondents explored competitive offers and said better deals would definitely have an influence on their decisions.

“Although a home purchase is the largest financial obligation most people will ever make, many borrowers do not fully understand their mortgage products and costs,” said Fannie Mae chief economist Doug Duncan. “As a result, some homeowners in this position may find themselves with unsustainable payments down the road.”

Fannie Mae reported that failing to shop around for a mortgage can end up costing borrowers $1,000 or more in closing costs.

As a housing counselor, it’s my job to educate people on the importance of comparative shopping. I encourage clients to attend first-time homebuyers’ workshops as well as one-on-one pre-purchase and…


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How to get the most out of your tax refund

3.22.13

Use your tax refund wisely

A recent survey by TD Ameritrade finds nearly half of people expecting a tax refund said they plan to save the money, while 44% intend to pay debt. However, researchers found people tend to spend more of their refund than they anticipate, which means they don’t save as much as they want to, or don’t pay off as much debt as they need to.

Here are some smart ways to use your tax refund to boost your financial health.

Pay off high-interest rate debt, like credit cards

The average credit card interest rate is 15%, and for those with bad credit, it’s close to 24%. The average American household carries $15,000 in credit card debt. Pay down your credit card debt now to save yourself money in interest payments in the future.

Establish or rebuild your emergency fund

It is recommended that you have at least three to six months’ worth of living expenses in savings should you lose your job, get sick or face another challenge that makes it hard or impossible for you to work. Use your tax refund as a starter for this emergency…


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Free tax preparation services for families who need them

2.26.13

As we’ve done in the past, Avesta is spreading the word about free tax preparation services available for households who need them. Families are fortunate that there are so many ways to get free tax help instead of paying someone to file your taxes, or, worse, getting a refund anticipation loan that carries excessive fees and ridiculous interest.money jar

We’re partnering with Gorham Savings Bank and the United Way to sponsor a week of free tax preparation events beginning today. IRS-certified tax preparers will be on hand to help you prepare and file your taxes, check your credit report, and apply for Maine’s property tax and rent refund programs. The events are February 26-28 from 5-8 p.m. and Saturday, March 2, from 9 a.m.-2 p.m., happening at United Way’s office at 1 Canal Plaza, third floor. They’re available to people who made less than $51,000 in 2012.

If you can’t make it to an event, you can stop by our new HomeOwnership Center any time during tax season. Contact me to find out more or make an appointment. The United Way is also open to help, so give them a…


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