Steps for Reporting Identity Theft

steps after identity theftYour wallet contains some of your most important personal items, from hard-earned money to credit cards and driver’s license. For an identity thief, your wallet offers a treasure trove of personal information. If your wallet is lost or stolen: If you suspect or become a victim of identity theft, follow these steps:

  • Report it to your financial institution. Call the phone number on your account statement or on the back of your credit or debit card.
  • Report the fraud to your local police immediately. Keep a copy of the police report, which will make it easier to prove your case to creditors and retailers.
  • Contact the credit-reporting bureaus and ask them to flag your account with a fraud alert, which asks merchants not to grant new credit without your approval.

If your identity has been stolen, you can use an ID Theft affidavit to report the theft to most of the parties involved. All three credit bureaus and many major creditors have agreed to accept the affidavit. You can download the ID theft affidavit or request a copy by calling toll-free 1-877-ID-THEFT (438-4338). You can also use this website to file a complaint with the FTC.

Use this helpful infographic (PDF file) to help you remember the steps to take if your wallet or identity have been stolen.

11 Tips for Preventing Identity Theft

Identity thieves steal your personal information to commit fraud. They can damage your credit status and cost you time and money restoring your good name. To reduce your risk of becoming a victim, follow the tips below:

  1. Don’t carry your Social Security card in your wallet or write it on your checks. Only give out your SSN when absolutely necessary.
  2. Protect your PIN. Never write a PIN on a credit/debit card or on a slip of paper kept in your wallet.
  3. Watch out for “shoulder surfers”. Use your free hand to shield the keypad when using pay phones and ATMs.
  4. Collect mail promptly. Ask the post office to put your mail on hold when you are away from home for more than a day or two.
  5. Pay attention to your billing cycles. If bills or financial statements are late, contact the sender.
  6. Keep your receipts. Ask for carbons and incorrect charge slips as well. Promptly compare receipts with account statements. Watch for unauthorized transactions.
  7. Tear up or shred unwanted receipts, credit offers, account statements, expired cards, etc., to prevent dumpster divers getting your personal information.
  8. Store personal information in a safe place at home and at work. Don’t leave it lying around.
  9. Don’t respond to unsolicited requests for personal information in the mail, over the phone or online.
  10. Install firewalls and virus-detection software on your home computer.
  11. Check your credit report once a year. Check it more frequently if you suspect someone has gotten access to your account information.

7 points to consider before you buy any insurance policy

insurance tipsWhen buying insurance, whether its home, life, auto, rental or other:

  1. Find out whether your state insurance department offers any information concerning insurance companies and rates. This is a good way to get a feeling for the range of prices and the lowest-cost providers in your area.
  2. Check several sources for the best deal. Try getting quotes from an insurance focused website, but be aware that many online services may provide prices for just a few companies. An independent insurance agent that works with several insurers in your local area might be able to get you a better deal.
  3. Make sure the insurance company is licensed and covered by the state’s guaranty fund. The fund pays claims in case the company defaults. Your state insurance department can provide this information.
  4. Check the financial stability and soundness of the insurance company. Ratings from A.M. BestStandard and Poor’s, and Moody’s Investors Services are available online and at most public libraries.
  5. Research the complaint record of the company. Contact your state insurance department or visit the website of the National Association of Insurance Commissioners, which has a database of complaints filed with state regulators.
  6. Find out what others think about the company’s customer service. Consumers can rate homeowner insurance companies at J.D. Power’s website.
  7. Once you pay your first insurance premium, make sure you receive a written policy. This tells you the agent forwarded your premium to the insurance company. If you don’t receive a policy within 60 days, contact your agent and the insurance company.

If you suspect fraud, call the National Insurance Crime Bureau’s hotline at 1-800-835-6422. Or for more information, check out the Coalition Against Insurance Fraud website

Some Fun Facts About Money

  • The Bureau of Engraving and Printing produces 26 million notes a day, with a face value of approximately $907 million.
  • Over 90 percent of U.S. currency is Federal Reserve notes.
  • A stack of currency one-mile high would contain more than 14.5 million notes.
  • Currency is actually fabric composed of 25 percent linen and 75 percent cotton.  Currency paper has tiny red and blue synthetic fibers of various lengths evenly distributed through out the paper.
  • The $2 bill first originated on June 25, 1776, when the Continental Congress authorized issuance of the $2 denominations in “bills of credit for the defense of America.”
  • The first dollar coin was issued in 1782.
  • The dollar was officially adopted as our nation’s unit of currency in 1785.
  • The largest bill ever printed by the Bureau of Engraving and Printing was the $100,000 gold certificate.
  • The U.S. Secret Service was created during the Civil War to fight counterfeiting.
  • The motto “In God We Trust” did not appear on paper currency until 1963.
  • The Bureau of Engraving and Printing has two facilities, one in Washington, D.C. and the other in Fort Worth, Texas.  Together they use approximately 9.7 tons of ink per day.
  • The approximate weight of a bill is one gram.  Since there are 454 grams in one pound, there are 454 notes in one pound.
  • The largest note produced today is the $100 bill.
  • It costs approximately 6.4 cents per note to produce U.S. currency.
  • About 45 percent of the notes printed each year are $1, and 95 percent are used as replacement notes.
  • About 4,000 double folds (forward and backward) are required before a note will tear.
  • The average life of a Federal Reserve note depends upon its denomination:
    $1 bill – 21 months
    $5 bill – 16 months
    $10 bill – 18 months
    $20 bill – 2 years
    $50 bill – 4.5 years
    $100 bill – 7.5 years

Tips for Choosing an Insurance Policy

tips for choosing insurance policyGeneral sources of insurance information include the American Council of Life Insurers, the Insurance Information Institute , the National Association of Insurance Commissioners, and your state insurance department. You can also visit insure.com

When buying insurance, whether its home, life, auto, rental or other:

  • Find out whether your state insurance department offers any information concerning insurance companies and rates. This is a good way to get a feeling for the range of prices and the lowest-cost providers in your area.
  • Check several sources for the best deal. Try getting quotes from an insurance focused website, but be aware that many online services may provide prices for just a few companies. An independent insurance agent that works with several insurers in your local area might be able to get you a better deal.
  • Make sure the insurance company is licensed and covered by the state’s guaranty fund. The fund pays claims in case the company defaults. Your state insurance department can provide this information.
  • Check the financial stability and soundness of the insurance company. Ratings from A.M. Best,Standard and Poor’s, and Moody’s Investors Services are available online and at most public libraries.
  • Research the complaint record of the company. Contact your state insurance department or visit the website of the National Association of Insurance Commissioners, which has a database of complaints filed with state regulators.
  • Find out what others think about the company’s customer service. Consumers can rate homeowner insurance companies at J.D. Power’s website.
  • Once you pay your first insurance premium, make sure you receive a written policy. This tells you the agent forwarded your premium to the insurance company. If you don’t receive a policy within 60 days, contact your agent and the insurance company.

If you suspect fraud, call the National Insurance Crime Bureau’s hotline at 1-800-835-6422. Or for more information, check out the Coalition Against Insurance Fraud website

6 tips for first-time life insurance buyers

insurance for first time buyerLooking to buy life insurance for the first time? If so, you’re probably asking yourself questions such as “How much do I need?”, “What kind of policy is best?” and “Which company should I buy from?” There’s no question buying life insurance for the first time, like any other new experience, can be more than a bit daunting. Below are six important tips that we hope will make the process smoother, eliminating frustrating false starts and unnecessary bumps in the road.

Understand why you need it

While most people may need life insurance at some point in their life, don’t buy a policy just because you heard it was a good idea.

Determine the amount of coverage you need

The amount of money your family or heirs will receive after your death is called a death benefit. To determine the proper amount of life insurance an online calculator, like the one available at this site, can be helpful. You can also get a ballpark figure using any number of formulas. The easiest way is to simply take your annual salary and multiply by 8.

Find the right type of policy

Once you figure out how much coverage you’ll need, you can think about the best kind of policy to meet your needs.

Look at the quality of the provider

An insurance policy is only as good as the company that backs it.

Consult a financial professional

A financial professional can help you factor in financial considerations, your needs, and your family’s needs.

Increase your vocabulary

Life insurance can be confusing, with terms like “premium,” “dividend,” “beneficiary,” and many more.

Source: New York Life Insurance

U.S. sticks to limits on health insurance charges for older people

insuranceThe Department of Health and Human Services rejected an industry request to phase in a reform prohibiting insurers from charging older beneficiaries premiums more than three times higher than those available to younger adults.

The so-called 3:1 ratio, due to take effect in 2014 in the individual and small-group markets, is a cornerstone of consumer safeguards enshrined in the 2010 Patient Protection and Affordable Care Act. The law also bars insurers from policies that discriminate on the basis of gender and pre-existing conditions.

Health insurers, which often charge adults over age 50 far higher rates, had asked HHS to start out with a 5:1 ratio in 2014 and move gradually to the tighter 3:1 ratio over a number of years, saying too abrupt a change would cause rates for younger beneficiaries to skyrocket.

“The new restrictions on age rating will result in an overnight increase in health care costs for people in their 20s, 30s, and early 40s,” said Karen Ignagni, president of America’s Health Insurance Plans, an insurance trade association.

She and other industry executives have warned that higher costs could encourage young adults to forego coverage and thus deny the industry the younger, healthier customers that were supposed to keep costs down as the health insurance market implements President Barack Obama’s reform law.

The law imposes a financial penalty on most adults who fail to obtain coverage by January 1, 2014. But industry officials have complained that the fine may be too small to alter behavior, particularly if costs rise sharply.

“This increases the likelihood that younger, healthier people forgo purchasing insurance until they are sick or injured. When this happens, costs go up for everyone, young and old,” Ignagni said.

AHIP said people in their 20s and 30s could see insurance premiums jump 29 percent and 19 percent, respectively, while adults aged 50 to 64 receive reductions of between 5 percent and 8 percent.

The administration said in the 145-page regulation that its hands were tied by the healthcare law.

“We do not have the legal authority to permit any rating factors in the final rule other than those explicitly permitted (by the law),” HHS said. “Further, we do not have the legal authority to provide for a phase-in.”

U.S. officials contend that any pressure for higher rates would be mitigated by greater competition and federal subsidies that will be available for working families in the form of premium tax credits.

Consumer groups including AARP, the powerful lobbying group for older Americans, welcomed the decision.

“Implementing a limited use of age rating immediately thwarts what would have been a negative and disproportionate effect on Americans aged 50 To 64,” said AARP Executive Vice President Nancy LeaMond.

The Affordable Care Act, nicknamed “Obamacare,” is expected to provide health coverage for an estimated 38 million people after 2014. Most are expected to obtain subsidized private insurance via new online state healthcare marketplaces that are scheduled to start enrolling beneficiaries on October 1.

The administration is also working with half of the 50 U.S. states to extend the Medicaid program for the poor to cover adults living near the federal poverty level.

Aside from age, the law still allows insurers to vary premiums based on tobacco use, family size and geography. Other forms of discrimination based on gender, past insurance claims, occupation or the size of a small employer will not be permitted from 2014.

(Additional reporting by Caroline Humer; Editing by Ros Krasny and Dan Grebler)

Source: Reuters

How Do I Calculate Finance Charges?

Having some knowledge of how to calculate finance charges is always a good thing. Most lenders, as you know, will do this for you, but it can helpful to be able to check the math yourself. It is important, however, to understand that what is presented here is a basic procedure for calculating finance charges and your lender may be using a more complicated method. There may also be other issues attached with your loan which may affect the charges.

The first thing to understand is that there are two basic parts to a loan. The first issue is called the principal. This is the amount of money that is borrowed. The lender wants to make a profit for his services (lending you the money) and this is called interest. There are many types of interest from simple to variable. This article will examine simple interest calculations.

In simple interest deals, the amount of the interest (expressed as a percentage) does not change over the life of the loan. This is often called flat rate or fixed interest.

The simple interest formula is as follows:

Interest = Principal × Rate × Time

Interest is the total amount of interest paid.

Principal is the amount lent or borrowed.

Rate is the percentage of the principal charged as interest each year.

To do your math, the rate must be expressed as a decimal, so percentages must be divided by 100. For example, if the rate is 18%, then use 18/100 or 0.18 in the formula.

Time is the time in years of the loan.

The simple interest formula is often abbreviated:

I = P R T

Simple interest math problems can be used for borrowing or for lending. The same formulas are used in both cases.

When money is borrowed, the total amount to be paid back equals the principal borrowed plus the interest charge:

Total repayments = principal + interest

Usually the money is paid back in regular installments, either monthly or weekly. To calculate the regular payment amount, you divide the total amount to be repaid by the number of months (or weeks) of the loan.

To convert the loan period, ‘T’, from years to months, you multiply it by 12. To convert ‘T’ to weeks, you multiply by 52, since there are 52 weeks in a year.

Here is an example problem to illustrate how this works.

Example:

A single mother purchases a used car by obtaining a simple interest loan. The car costs $1500, and the interest rate that she is being charged on the loan is 12%. The car loan is to be paid back in weekly installments over a period of 2 years. Here is how you answer these questions:

1. What is the amount of interest paid over the 2 years?

2. What is the total amount to be paid back?

3. What is the weekly payment amount?

You were given: principal: ‘P’ = $1500, interest rate: ‘R’ = 12% = 0.12, repayment time: ‘T’ = 2 years.

Step 1: Find the amount of interest paid.

Interest: ‘I’ = PRT

= 1500 × 0.12 × 2

= $360

Step 2: Find the total amount to be paid back.

Total repayments = principal + interest

= $1500 + $360

= $1860

Step 3: Calculate the weekly payment amount.

Weekly payment amount = total repayments divided by loan period, T, in weeks. In this case, $1860 divided by 104 weeks equals $17.88 per week.

Calculating simple finance charges is easy once you have done some practice with the formulas.

Source: http://www.articlesbase.com/finance-articles/how-do-i-calculate-finance-charges-218237.html

Author

Peter Kenny is a writer for The Thrifty Scot, please visit us at Unsecured Loans and Bank Charges

Bankruptcy Basics | Process

bankruptcyArticle I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.” Under this grant of authority, Congress enacted the “Bankruptcy Code” in 1978. The Bankruptcy Code, which is codified as title 11 of the United States Code, has been amended several times since its enactment. It is the uniform federal law that governs all bankruptcy cases.

The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and local rules of each bankruptcy court. The Bankruptcy Rules contain a set of official forms for use in bankruptcy cases. The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth the formal legal procedures for dealing with the debt problems of individuals and businesses.

There is a bankruptcy court for each judicial district in the country. Each state has one or more districts. There are 90 bankruptcy districts across the country. The bankruptcy courts generally have their own clerk’s offices.

The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge, a judicial officer of the United States district court. The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts. Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. In cases under chapters 7, 12, or 13, and sometimes in chapter 11 cases, this administrative process is carried out by a trustee who is appointed to oversee the case.

A debtor’s involvement with the bankruptcy judge is usually very limited. A typical chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case. A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, which is usually held at the offices of the U.S. trustee. This meeting is informally called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.

A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:

[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This goal is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts. This publication describes the bankruptcy discharge in a question and answer format, discussing the timing of the discharge, the scope of the discharge (what debts are discharged and what debts are not discharged), objections to discharge, and revocation of the discharge. It also describes what a debtor can do if a creditor attempts to collect a discharged debt after the bankruptcy case is concluded.

Six basic types of bankruptcy cases are provided for under the Bankruptcy Code, each of which is discussed in this publication. The cases are traditionally given the names of the chapters that describe them.

Chapter 7, entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require the application of a “means test” to determine whether individual consumer debtors qualify for relief under chapter 7. If such a debtor’s income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.

Chapter 9, entitled Adjustment of Debts of a Municipality, provides essentially for reorganization, much like a reorganization under chapter 11. Only a “municipality” may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.

Chapter 11, entitled Reorganization, ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization. The chapter 11 debtor usually has the exclusive right to file a plan of reorganization for the first 120 days after it files the case and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves (confirms) or disapproves the plan of reorganization. Under the confirmed plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others. The debtor can also terminate burdensome contracts and leases, recover assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.

Chapter 12, entitled Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income, provides debt relief to family farmers and fishermen with regular income. The process under chapter 12 is very similar to that of chapter 13, under which the debtor proposes a plan to repay debts over a period of time – no more than three years unless the court approves a longer period, not exceeding five years. There is also a trustee in every chapter 12 case whose duties are very similar to those of a chapter 13 trustee. The chapter 12 trustee’s disbursement of payments to creditors under a confirmed plan parallels the procedure under chapter 13. Chapter 12 allows a family farmer or fisherman to continue to operate the business while the plan is being carried out.

Chapter 13, entitled Adjustment of Debts of an Individual With Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a “plan” to repay creditors over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test. At a confirmation hearing, the court either approves or disapproves the debtor’s repayment plan, depending on whether it meets the Bankruptcy Code’s requirements for confirmation. Chapter 13 is very different from chapter 7 since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

The purpose of Chapter 15, entitled Ancillary and Other Cross-Border Cases, is to provide an effective mechanism for dealing with cases of cross-border insolvency. This publication discusses the applicability of Chapter 15 where a debtor or its property is subject to the laws of the United States and one or more foreign countries.

In addition to the basic types of bankruptcy cases, Bankruptcy Basics provides an overview of the Servicemembers’ Civil Relief Act, which, among other things, provides protection to members of the military against the entry of default judgments and gives the court the ability to stay proceedings against military debtors.

This publication also contains a description of liquidation proceedings under the Securities Investor Protection Act (“SIPA”). Although the Bankruptcy Code provides for a stockbroker liquidation proceeding, it is far more likely that a failing brokerage firm will find itself involved in a SIPA proceeding. The purpose of SIPA is to return to investors securities and cash left with failed brokerages. Since being established by Congress in 1970, the Securities Investor Protection Corporation has protected investors who deposit stocks and bonds with brokerage firms by ensuring that every customer’s property is protected, up to $500,000 per customer.

The bankruptcy process is complex and relies on legal concepts like the “automatic stay,” “discharge,” “exemptions,” and “assume.” Therefore, the final chapter of this publication is a glossary of Bankruptcy Terminology which explains, in layman’s terms, most of the legal concepts that apply in cases filed under the Bankruptcy Code.

Compare Investment Vehicles

compareNot all investment vehicles are created equal or work for your personal financial goals. Some provide steady income and are low risk, but yield small returns on investment; others may provide significant returns, but require a long term investment commitment. There is a wide assortment of investment vehicles available. Some of the most popular include: mutual funds, traditional IRAs, Roth IRAs, savings bonds or bond funds, stocks, and certificates of deposit.

Some investments pay out earnings on a regular (quarterly, monthly, or annual) basis, while others pay out earnings at the end of the investment period or may have age requirements for when you can withdraw your money without a penalty. Make sure your investment income stream matches your investment timeline.

You should also consider the tax ramifications. If you are saving for retirement or for education, consider investments that offer incentives for saving for a particular purpose. Your contributions for some investments are tax deductible, but the earnings are not taxed (e.g. Roth IRA); your contributions to other investments may not be taxed, but the earnings are taxed (e.g. traditional IRA).

You don’t have to put all of your money in one investment. Consider diversifying your investment portfolio by placing your money in several investment vehicles. This can protect you from risk; while one of your investments may be performing poorly, another one of your investments can make up for those losses.

Type of Investment What is it? Risk level
Traditional IRA Traditional IRA is a personal savings plan that gives tax advantages for savings for retirement. Investments may include variety of securities. Contributions may be tax-deductible; earnings are not taxed until distributed. Risk levels vary according to the holdings in the IRA
Roth IRA A personal savings plan where earnings that remain in the account are not taxed. Investments may include a variety of securities. Contributions are not tax-deductible. Risk levels vary according to the holding in the IRA
Money Market Funds Mutual funds that invest in short-term bonds. Usually pays better interest rates than a savings account but not as much as a certificate of deposit (CD). Low risk.
Bonds and Bond Funds Also known as fixed-income securities because the income they pay is fixed when the bond is sold. Bonds and bond funds invest in corporate or government debt obligations. Low risk.
Index Funds Invest in a particular market index. An index fund is passively managed and simply mirrors the performance of the designated stock or bond index. Risk level depends on which index the fund uses. A bond index fund involves a lower risk level than an index fund of emerging markets overseas.
Stocks Stocks represent a share of a company As the company’s value rises or falls, so does the value of the stock. Medium to high risk.
Mutual funds Invest in a variety of securities, which may include stocks, bonds, and/or money market securities. Costs and objectives vary. Risk levels vary according to the holdings in the mutual fund.