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What is a Debt Collection?

It goes without saying that financial lenders expect to get their money back. The borrower (i.e. the individual in debt), however, may not always be able to pay back funds which were loaned to them. After a certain amount of time passes, financial lenders may decide to contact a debt collection agency, also referred to as debt collectors.

An Overview

Debt collectors are simply members of companies who are tasked with the responsibility of collecting unpaid debts. Collectors must also adhere to certain rules and guidelines as they work to make borrowers pay up. First and foremost, collectors cannot contact people before 8AM or after 9PM. They are also prohibited from making back-to-back calls and, in certain cases, debt collectors cannot call borrowers at their places of employment. However, members of debt collection agencies are allowed to send texts, emails, letters, and, of course, make calls, so long as they remain in accordance with the aforementioned stipulations.

How to Handle Debt Collectors

There are a variety of ways people can go about managing debt collectors. Indebted individuals can either pay off the debt or ignore the debt collectors altogether. Obviously, the former option is more advisable than the latter, however, there are many people who simply don’t respond to collectors in the hopes of them eventually going away.

More often than not, setting up a payment plan with the collections agency is the best route to go. Ignoring debt collectors is extremely risky, seeing as they can initiate lawsuits which can subsequently lead to wage garnishments. Most collectors are more interested in getting individuals to pay up than they are in going through legal battles. Even so, those who willfully ignore debt collectors are doing so at their own risk.

Do Debt Collections Impact Credit?

It goes without saying that debt collections are absolutely terrible for any person’s credit. Collections can prompt extreme declines in one’s credit score; the individual may also be subsequently denied for loans or credit cards in the future. Some people may believe that they can counteract the damage with certain practices, but this is more difficult than most realize. A debt collections account can remain on an individual’s credit report for as long as seven years. The only true way to reduce the damage is by paying off the debt. With time, and other wise financial habits, the damage will eventually subside.

How to Avoid Debt Collections

The surest and most effective way to avoid debt collections is by not going into debt. This is quite simple, yet still remains a feat that countless people struggle with. Having a budget, saving money, and living within one’s own means are some of the best ways to steer clear of debt. People are furthermore advised to stay away from loans, if at all possible, and not swipe their credit card unless they know they’ll be able to pay off the balance when the time comes.


Authored by Gabrielle Renee Seunagal

How to Reduce Taxes

As working people ascend to higher levels of success, they will inevitably wish to maintain their financial earnings. This can be particularly challenging when tax season comes around. For this reason, many hardworking individuals are constantly seeking out various means of reducing their taxes and holding onto the money which they have rightfully earned.

Thankfully, there are a host of legal means which people can employ as they work to decrease their tax bills. The following options and tools may not have been readily available to them in the past. However, this knowledge and information will certainly prove to be beneficial in current and future times.

Look into Write-Offs and Deductibles

One of the easiest and most simplistic ways for people to reduce their taxes is by writing off expenses which qualify as deductibles, explains Entrepreneur. The majority of expenses which qualify as deductibles are generally professional expenses or closely related fees. Transportation, royalties, payroll fees, and other costs can be written off during tax season. However, applicable deductibles will vary from person to person, seeing as no two individuals have the exact same situation.

Not all expenses are deductible and, as a matter of fact, attempting to write off certain fees can actually garner legal trouble, affirms Cleveland 19. There are different ways to write off certain expenses and various situations which qualify. For the average individual who lacks familiarity with tax laws, this can be quite nuanced and complicated. Therefore, many people contract the services of accountants and tax specialists.

Delay Certain Payments

Another clever (and legal) way of lessening your taxes is by simply “deferring” certain payments, as stated by Kiplinger. Waiting until the new year to cash certain checks, billing clients towards the end of December, and delaying certain dividends can come in handy.

Individuals who are unsure of how to delay certain payments can consult financial advisors for advice which specifically tailors to their present situations.

Save Money for Retirement

Time affirms that individuals who put funds aside towards their retirement are able to qualify for what is known as a 401K “pre-tax.” In essence, putting aside money for this form of retirement allows people to withdraw the number of saved funds from what is considered as taxable income. Moreover, taxpayers are permitted to subtract a maximum of $5000 worth of funds within a traditional IRA.

To make a long story short, saving money for retirement really pays off when tax season rolls around.

A Final Word

Taking advantage of all legal means to reduce owed taxes is absolutely paramount. Many individuals may be shocked to learn just how many deductibles they can write off. Delaying certain payments and putting aside money into 401K and IRA accounts also wields significant payoffs. In some of the best case scenarios, hard-working people have been able to save so many funds in taxes that the government ultimately wound up owing them money!


Authored by Gabrielle Seunagal