5 Financial tips for the last week of January 2013

Check out the 5 financial tips for the last week of January 2013.

Tip no 1: A Cease & Desist letter is only applicable for third party collectors, not the original creditors themselves.

Cease and Desist letter is only applicable for the third party debt collection agencies. You can send a Cease and Desist letter to a third party debt collection agency to stop all forms of communication with them. However, you can't send a Cease and Desist to a creditor.

Your creditor can call you or send a letter. In fact, your creditor can communicate with you regarding payments several times. You can't do anything about it.

If you have any doubt about the debt, then all you can do is send a debt verification letter to your creditor.

Tip no 2: Revoking ACH authorization for CSOs will automatically force your account into collections.

There is no problem when you revoke ACH authorization with an illegal payday loan lender. The problem arises only when you cancel ACH authorization while dealing with a CSO. Once you terminate the ACH authorization, the CSO won't be able to debit money from your checking account. The CSO won’t receive any payments and you'll default on the loan. In such a situation, your account will go into collections.

If you decide to revoke Ach authorization by any chance, then inform the CSO about this. Find out some alternative way to send payments to the CSO.

Tip no 3: You are not likely to receive a refund from illegal offshore lenders.

It is indeed very difficult to get a refund from illegal offshore payday loan lenders. These companies don’t reveal their contact information on their website. These companies don't care about the federal laws either. They have no qualms about breaking the federal laws and doing illegal financial transactions.

If you have taken out a payday loan from an illegal offshore lender and paid more than the principal amount, then don't expect to receive a refund. Most offshore lenders hardly bother to give a refund. You can send several letters to the offshore lenders but don't expect to get any positive feedback.

Tip no 4: Rehabilitating your student loan requires you to make 9 out of 10 successful consecutive timely payments.

The student loan debt will be rehabilitated after the borrower has made 9 out of 10 successful consecutive timely payments on a delinquent loan. Once the borrower has made the required payments, the loan is likely to be rehabilitated and delinquent status may be erased from his/her credit report.

It has to be kept in mind that student loan rehabilitation is only a single opportunity to remove the delinquency on a defaulted student loan and qualify for a federal student aid again.

In case, the borrower defaults on the federal student loan for the second time, then he/she won’t be able to rehabilitate it again.

Tip no 5: The IRS requires taxpayers to report reinvested income earned as interest using Form 1099-INT.

Form 1099-INT is used to reveal your interest income in the current financial year. In this form, you can state the total interest income earned from checking account, savings account and saving bonds. Other than that, you can report other tax related items such as early withdrawal penalties. The IRS will review this information to determine your taxable income. You've to submit this form only if you get taxable interest over $1500.

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