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Debt Management & Workouts
|The Basics CU Guide to Money: Getting a Good Start||Consumer Education|
|Budget Blueprint||Study Shows Credit Counseling Works||It’s Your Identity: Who Should Protect It?|
|Five Steps to an Early Retirement||Tips to Stretch Your Budget and Benefits After a Job Loss||Carelessness Can Cost You|
|Check Your Credit||Workout Loans Can Save You From Bankruptcy||Laws & Regulations|
Five Steps to an Early Retirement
Early retirement may not be the easiest goal to achieve, but it is possible. These steps can help lead you in the right direction.
- Find a financial adviser you’re comfortable working with (ask friends for referrals or contact your credit union) and set up an appointment. Gather your paperwork, including account statements, tax returns, and a list of retirement goals.
- Make a list of your assets–everything from savings bonds to your 401(k) plan–and calculate how much of your total portfolio is invested in cash, stocks, and bonds. Adjust your allocation to maintain the right proportion of each for your age, risk tolerance, and goals. A financial professional can advise you on the most tax-efficient way to reallocate.
- Find out exactly what retirement benefits your employer offers and figure out where they fit into your early retirement plan. If the company offers a tax-deferred savings plan, sign up. Contribute at least enough to get the maximum matching dollars.
- If you haven’t bought a home yet, start saving up for the down payment and contact the credit union or the HUD Housing Counseling Clearinghouse 800-569-4287 to learn how to make homeownership a reality. If you do own a home, be careful about tapping into the equity before retirement.
- Start preparing for a retirement career. It can be an extension of what you’ve done during your working life, like substitute teaching or consulting, or it can be something entirely different. Find out what will be required for your new vocation and start developing your skills.
Study Shows Credit Counseling Works
Credit counseling positively affects consumer credit use and payment behavior, according to a three-year study released by The National Foundation for Credit Counseling (NFCC), Silver Spring, Md. The study compares borrowers who received financial counseling using the NFCC method with a control group of similar borrowers who did not receive counseling. Results show that those who received financial counseling using the NFCC method reduced their debt and improved their credit profile over the three years. According to the study, the value attributable to counseling is demonstrated through significant improvements in credit scores, fewer late payments, lower credit card balances, and less frequent use of credit lines. To find a credit counselor near you, contact us or the NFCC at 800-388-2227 or www.nfcc.org.
Tips to Stretch Your Budget and Benefits after a Job Loss
Whether you’re downsized, laid off, or just plain fired, losing your job is a traumatic event. The following tips can help you stretch your budget and your benefits to cover family needs until you find another job.
- Cut costs wherever possible: Try not to incur additional debt. Work with your credit union to gain access to an emergency line of credit, or to restructure current debts.
- Ask if the company allows severance pay: It varies depending on years of service and type of job held. You may budget better with salary payments than with a lump sum payment.
- Negotiate the severance package: If your spouse can purchase health coverage, consider dropping health benefits in exchange for additional severance pay.
- Weigh COBRA benefits: The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a federal law that allows you to retain health care coverage at group rates for up to 18 months, but you must pay the full cost.
- File for unemployment immediately.
- Ask for outplacement services: They help you find potential new jobs, create a professional resume, register with employment agencies, and prepare for interviews.
- Check on vacation and sick pay: Employers must pay any vacation time owed when the job is terminated.
- Roll over retirement funds: Ask us at us about investment services that assist you to roll these funds into tax-sheltered retirement accounts to avoid significant tax penalties.
Workout Loans Can Save You from Bankruptcy
More than one million people in the U.S. have filed for bankruptcy every year since 1990. If you’re experiencing financial difficulties–can’t make a loan payment, creditors are calling about late or missed payments–we may be able to help you get back on the road to financial well-being without filing for bankruptcy. Progressions may give you a second chance to get your financial situation on the right track with workout loans. Workout loans can get you off of a delinquency list and give you the opportunity to pay a manageable monthly payment, as opposed to the payment that’s automatically computed based on the amount of the loan or debt.
By working with you on an individual basis, we’ll help you assess your finances, figure out how much you can qualify for, comfortably pay, and set up a payment plan you can afford. The interest rate and length of a workout loan depends on your situation. Offering alternatives to bankruptcy, such as workout loans, allows you to avoid the emotional and credit scars caused by bankruptcy. For 10 years bankruptcy remains on your credit report and affects your qualifications for future credit and possibly future jobs.
Flexibility is important to us. Any way we can help you help yourself benefits the entire credit union. A credit union’s loss affects all members because credit unions are member-owned cooperatives. Don’t wait until your financial troubles are out of control; start by talking to someone at Progressions now. We can set up a workout loan for you or refer you to someone who can help you get out of financial trouble.
Carelessness Can Cost You
Americans are concerned about someone stealing their credit card, check, or debit card numbers, but 28% are careless with receipts, according to a recent survey from Paymentech (a processor and acquirer of credit card transactions and provider of fraud-prevention software).
Disregarding receipts that have valuable information greatly increases the risk of credit and debit card fraud. Nearly 13% of those surveyed throw the receipt away without tearing or shredding it. Another 13% leave the receipt in the bag they got with the purchase.
Thieves easily can find receipts with valid account numbers in trash cans. Some easy steps you can take to prevent thieves from stealing your financial information:
- Shred all preapproved credit offers, credit and debit card receipts, insurance forms, financial statements, and other paperwork containing personal and financial information;
- Check credit union statements and other financial statements monthly for discrepancies and order a credit report once a year to make sure no one else is using your personal information to obtain credit cards or services;
- Don’t print your Social Security number on your checks and don’t carry your Social Security card in your wallet; and
- Be hesitant about giving personal or financial information over the telephone–make sure you know the caller and know how the information will be used.