Debt Archives - Parachute

Beware of Student Loan Scams!!

Latest News: July 2024 Financial Update

Parachute Credit Counseling Offers FREE Student Loan Counseling

Parachute Credit Counseling, formerly known as Consumer Credit Counseling Service of Buffalo (CCCS), is Western New York region’s premier organization providing our community with the best strategies to master their credit.

Today we issue an alert about new scams that are unfortunately gaining popularity in the student loan world.

Last week, the Federal Trade Commission (FTC) announced that they shut down another bogus company. Prosperity Benefit Services, which offered “complete” student loan forgiveness…for a fee, of course. Prosperity claimed that they had an affiliation with the U.S. Department of Education and that they would help clients receive quick loan forgiveness. Neither of their assertions were true.

The FTC has seen several other fraudulent student loan debt relief companies. They delivered an official warning last week. Here are red flags to watch out for:

Scammers use official-looking names, seals, and logos to make them seem more legit. Make sure you’re working with a federal student loan servicer that’s listed on the Department of Education’s website. (And use the contact information listed there too — scammers can spoof the numbers and names of legit servicers.)
Scammers charge an upfront fee. It’s illegal for companies to charge you before they help reduce or get rid of your student loan debt.
Scammers say they need your FSA ID login information. Never give out this information. If a scammer gets your FSA ID, they could cut you off from your loan servicer — or even steal your identity.

The Good News

New York residents are eligible for Free Student Loan Counseling at Parachute Credit Counseling.

Parachute Credit Counseling recommends that borrowers contact their office to enroll in the free Student Loan Counseling program, available to all residents of New York. Parachute’s Certified Financial Counselors help NY residents consolidate their student loans and review other potential relief options and assistance with existing programs available to help borrowers reduce or eliminate their debt as well as help them in making payment plan arrangements. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information on our Student Loan Counseling Program.

Parachute also provides many other financial counseling services, from budgeting help to credit repair to buying a home. Nationally Certified Parachute counselors offer expert strategies for attaining financial stability, working with their clients every step of the way. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for information on financial counseling services.

Budget, Credit, Debt, Parachute Services

Top 20 Inspirational Quotes That Relate to Money

We all need a little inspiration sometimes! Here are some great quotes to give inspriation around your finances:

“The only reason for time is so we can experience change. The only reason for money is so we can experience life.” – Tony Robbins
“Investing in yourself is the best investment you can ever make. It will pay the best interest.” – Warren Buffett
Financial freedom is the ability to live the life you want, when you want, on your own terms.” – Robert Kiyosaki
“If you’re saving, you’re succeeding.” – Steve Burkholder
“The key to making money is to save money.” – Horace Greeley
“Owning a home is a keystone of wealth… both financial and emotional.” – Suze Orman
“The only time to buy something is when you can afford it.” – Thomas Jefferson
“Financial peace isn’t the absence of money; it’s the absence of worry.” – Dave Ramsey
“Budgeting is telling your money where to go, instead of wondering where it went.” – John Barnes
“The more you learn, the more you earn.” – W. Clement Stone
“Don’t tell me what your priorities are. Show me where you spend your money, and I’ll tell you what they are.” – James W. Frick
“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffett
“Formal education will make you a living; self-education will make you a fortune.” – Jim Rohn
“Start where you are. Use what you have. Do what you can.” – Arthur Ashe
“Don’t be afraid to give up the good to go for the great.” – John D. Rockefeller
“The journey of a thousand miles begins with a single step.” – Lao Tzu
“The best way to predict the future is to create it.” – Peter Drucker
“You miss 100% of the shots you don’t take.” – Wayne Gretzky
“The mind is everything. What you think you become.” – Buddha
“Believe you can and you’re halfway there.” – Theodore Roosevelt

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching or call 716-712-2060.

Debt, Parachute Services

How to Tackle That Debt

Feeling buried in debt? You’re not alone! This post explores practical strategies to tackle your debt, from budgeting tips to repayment methods, and help you achieve financial freedom.

Assess the Situation:

List your debts: Make a comprehensive list of all your debts, including the type of debt (credit card, student loan, car loan, etc.), the outstanding balance, and the interest rate. This will give you a clear picture of what you owe.

Track your expenses: Understanding where your money goes is crucial. Track your expenses for a month to identify areas where you can cut back and free up extra cash for debt payments.

Choose a Repayment Strategy:

There are two main strategies for paying off debt:

Debt avalanche: This method focuses on paying off the debt with the highest interest rate first. By eliminating high-interest debt quickly, you save money on interest charges in the long run.

Debt snowball: This method prioritizes paying off the smallest debt first, regardless of interest rate. Seeing debts disappear quickly can be a motivation to keep going and help you stay on track.

Create a Budget and Allocate Funds:

Budgeting: Create a realistic budget that allocates enough money to cover your essential expenses (housing, food, utilities), minimum debt payments, and ideally, extra money towards debt. Many budgeting apps and tools can help you with this.

Debt allocation: Assign the extra money you freed up to your chosen debt repayment strategy. Whether it’s the debt with the highest interest rate (avalanche) or the smallest balance (snowball).

Reduce Expenses and Increase Income:

Cut back: Identify areas where you can cut back on spending, like eating out less or canceling unused subscriptions. Every dollar saved can go directly towards your debt. Many people find meal planning at home helps them save a significant amount of money.

Boost income: Consider a side hustle or explore ways to increase your income at your current job. This extra money can significantly accelerate your debt payoff.

Additional Tips:

Pay more than the minimum: Make more than the minimum payment required whenever possible. This reduces the principal faster and saves you money on interest.

Explore debt consolidation: Consider consolidating high-interest debt into a single loan with a lower interest rate. This can simplify your payments and potentially save money.

Stay motivated: Paying off debt takes time and discipline. Celebrate your milestones and track your progress to stay motivated.

Consider a Debt Management Plan: Find a reputable not-for-profit agency that offers a debt management plan to help you reduce your monthly payments and overall interest while paying down debt sooner.

Remember, there’s no one-size-fits-all approach. Choose the strategy that works best for you and your financial situation. Don’t hesitate to seek help from a credit counselor (such as at Parachute).

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

**NEW** We are now able to assist residents in the state of Texas! We are excited to extend our services to the Lone Star State!

Credit, Debt, Parachute Services

Using Credit Wisely

Credit cards can be a powerful financial tool when used responsibly. They offer a convenient way to make purchases, build credit history, and earn rewards. However, they can also lead to significant debt problems if not used carefully. Here are some credit card essentials to help you use your cards wisely:

Understand your credit limit: Your credit limit is the maximum amount you can borrow on your credit card. It’s important to stay within your credit limit to avoid paying high-interest fees. In fact, creditors want you to use no more than 30% of your available credit. This is known as credit utilization. Doing this helps you raise your credit score, which helps you get better terms (e.g., lower interest rates) for future borrowing.

Make timely payments: Pay your credit card bill on time every month to avoid late fees and damage to your credit score. Aim to pay off your balance in full to avoid accruing interest charges whenever possible.

Pay more than the minimum payment: If you can’t pay off your balance in full each month, be sure to make more than the minimum payment. Double it, if possible. This will help you pay off your debt faster and save you money on interest.

Beware of fees: Credit cards often have fees associated with them, such as annual fees, late fees, and foreign transaction fees. Read your credit card agreement carefully to understand all the fees involved before applying for it.

Utilize rewards programs: Many credit cards offer rewards programs, such as cash back, points, or travel miles. Choose a card that offers rewards that align with your spending habits. Some people focus more on the rewards over their responsible usage of their cards. Be careful to not get too preoccupied with the rewards over your reasonable usage of your card.

Secure your card: Protect your credit card from theft or fraud by keeping your PIN and CVV number confidential. Shred old paper statements and keep your card in a secure place when not in use.

Monitor your credit report: Regularly review your credit report for any errors or fraudulent activity. Dispute any inaccuracies promptly. Remember, the only government authorized website is annualcreditreport.com. You can now check your credit reports weekly for free.

Budget your spending: Create a realistic budget to track your income and expenses. Use your credit card only for purchases you can afford to pay off in full each month. You don’t want to treat credit like it is an added source of income.

Avoid overspending: Don’t use your credit card to finance wants instead of needs. Stick to your budget and avoid impulse purchases that you cannot afford. Walk or look away from the item you want for at least 15 minutes and think about longer term, bigger financial goals you may have like a vacation, car or a house.

Consider a secured credit card: If you have a limited credit history or poor credit, consider a secured credit card. You’ll deposit a security deposit, which acts as your credit limit. Use the card responsibly to build your credit score.

Seek financial advice: If you have questions about credit cards or managing your finances, consult a credit counseling agency like Parachute for personalized guidance.

Remember, credit cards are a tool, not a source of income. Use them responsibly to maintain your financial well-being over time and to gain long term financial stability and avoid debt traps.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Budget, Credit, Debt, Parachute Services, Student Loans

Latest News: January 2024 Financial Update

Governor Hochul introduces legislation to protect New Yorkers from “bad actors” and medical debt;

New report highlights significant issues with student loan repayment after an unprecedented 3 year period

Parachute Credit Counseling Offers FREE Assistance and Counseling

Parachute Credit Counseling, formerly known as Consumer Credit Counseling Service of Buffalo (CCCS), is the Western New York region’s premier organization providing our community with the best strategies to master their credit. Today they announce a number of notable financial news items emerging this month. Along with these new items, Parachute reminds residents that beginning the new year with a financial “check up” is an invaluable service to their families and themselves.

Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information.

The State of Student Loans

On October 1st, Americans resumed paying their student loans, after a 3 and a half year break in payments. Financial experts predicted issues with payments after such a long period, stating that about 20% of student loan borrowers had risk factors that indicated they could struggle when payments resume. These issues have been worse than predicted, confirmed when the Department of Education announced in December that nearly 9 million borrowers–roughly 40% of the 22 million borrowers who had bills due in October–missed their first student loan payment.

Outstanding student loan debt presently exceeds outstanding auto loan debt and credit card debt.

Earlier this month, the Consumer Financial Protection Bureau (CFPB)—the federal government agency that ensures that consumers are treated fairly by banks, lenders, and other financial companies—issued a report on the agency’s monitoring activities of federal student loan servicers since the restart of required payments. Per the CFPB, many borrowers are making their first payment ever on their student loan, and many are also navigating their loan repayment options, including options that allow borrowers to make lower payments based on a percentage of their income. The report discusses challenges faced by borrowers with respect to contacting their servicer, enrolling in alternative repayment options, and billing statement errors. According to borrowers, there have been many problems navigating loan repayment since restarting on October 1^st.

The CFPB pledges to work on this situation and to continue to carefully watch loan servicers and work with federal and state agencies to hold accountable those that violate laws protecting borrowers. The CFPB also has resources for student loan borrowers needing more information. Borrowers can also visit the Department of Education’s Federal Student Aid website for more information on restarting student loan payments. In addition, consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Parachute Credit Counseling recommends that borrowers contact their office to enroll in their free Student Loan Counseling program, available to all residents of the eight counties of Western New York. Parachute’s Certified Financial Counselors will help WNY residents consolidate their student loans and review other potential relief options and changes to existing programs available to help borrowers reduce or eliminate their debt as well as assist them in making payment plans. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information on our Student Loan Counseling Program and other financial counseling services we provide.

Proposed Consumer Protection Legislation

Governor Hochul has proposed a few pieces of new legislation designed to protect New York residents from unfair and negative business practices and from the all too common issue of medical debt.

Governor Hochul introduces consumer protection legislation

“Buy Now Pay Later” loans have become popular as a low-cost alternative to traditional credit products to pay for everyday and big-ticket purchases, but they remain unregulated and can charge hefty fees. Legislation proposed will require “Buy Now Pay Later” providers to get a license to operate in the state, and to authorize the New York State Department of Financial Services to propose and issue regulations for this rapidly growing industry.

The Governor has additionally called for increased protection measures that strengthen the state’s ability to enforce consumer protections and to penalize “bad actors”.

Governor Hochul introduces legislation to protect New Yorkers from medical debt

Medical debt is a critical issue for many, including over 700,000 New York residents who currently have medical debt in collections. Those with medical debt often forego necessary medical care and historically minimize important social determinants of health, including food, heat, and rent. Overall, this threatens the health and financial stability of New Yorkers. The proposed legislation will limit hospitals’ ability to sue patients earning less than 400 percent of the Federal Poverty Level ($120,000 for a family of four), helping to eliminate medical debt lawsuits filed against low-income New Yorkers. Per the Governor’s office, the legislation would also “expand hospital financial assistance programs for low-income New Yorkers, limit the size of monthly payments and interest charged for medical debt and implement other protections to improve access to financial assistance and mitigate the deleterious effects of medical debt on New Yorkers.”

Regional Bankruptcy Update

Bankruptcy rates up by 2.7%: first year-over-year increase for Buffalo since 2018

The Buffalo News recently reported a rise in bankruptcy filings, based on data from the federal bankruptcy court. According to financial experts at Parachute Credit Counseling, they have been seeing people with higher levels of debt which, coupled with higher interest rates, stagnant wages, and inflation can cause financial stress and instability. Bankruptcy can be attributed to some of these issues.

Parachute Financial Counselors assure the WNY community that, despite some environmental concerns, there are simple, proven techniques to facilitate economic security. Now is the time for borrowers to seek unbiased counseling. Parachute counselors will provide expert strategies for attaining financial stability including any financial assistance needed, from budgeting help to credit education, to buying a home. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for information on financial counseling services.

Credit, Debt, Parachute Services

Ways to Reduce Debt

Reducing debt can be a challenging task, but it is definitely achievable with the right mindset and strategies. Here are some effective ways to reduce debt:

Create a budget and track your spending: The first step to reducing debt is to understand your spending habits. Create a detailed budget that includes all of your income and expenses. Track your spending for a month or two to see where your money is going. This will help you identify areas where you have budget leaks and can cut back, if even on a temporary basis.

Pay more than the minimum payment: Paying more than the minimum payment on your credit cards can significantly reduce the amount of interest you pay over time. Even an extra $25 or $50 per month consistently can make a big difference, especially on high interest credit cards.

Prioritize high-interest debts: When paying off multiple debts, it’s important to prioritize those with the highest interest rates. This is because you’ll pay more in interest on these debts over time. There are two main strategies for paying off high-interest debt: the debt avalanche method and the debt snowball method. The debt avalanche method involves concentrating on paying off your highest-interest debt first, followed by the debt with the next highest interest rate and so on. This method may help you reduce the high interest charges. The debt snowball method is where you gradually pay off your debts, smallest to largest and gain momentum while doing so. As one debt is paid off, you add those funds to your payment of the next highest debt and so on. It snowballs!

Increase your income: One of the most effective ways to reduce debt is to increase your income. This could involve getting a second job, taking on freelance work, or starting a side hustle.

Reduce your expenses: There are many ways to reduce your expenses, such as cooking at home instead of eating out, canceling unnecessary or unused subscriptions, finding cheaper ways for entertainment, and reducing habitual habits like coffee/snacks and personal care practices like getting your nails done. Even changing these habits in the short term (6-9 months) can help.

Avoid taking on new debt: The best way to reduce debt is to avoid taking on new debt in the first place. This means using your credit cards responsibly and only making purchases that you can afford to pay off in full each month.

Negotiate with your creditors: If you’re having trouble making your debt payments, don’t be afraid to contact your creditors and try to negotiate a lower interest rate or monthly payment.

Consolidate your debt: If you have multiple debts with different interest rates, you may be able to consolidate them into a single loan with a lower interest rate. This can simplify your debt repayment and save you money on interest.

Seek professional help: If you’re struggling to manage your debt on your own, consider seeking professional help from a credit counselor at an agency like Parachute. We can help you create a debt management plan and provide you with additional guidance on how to reduce your debt. A debt management plan is a structured payment plan to repay your debts in full in five years or less, by lowering interest rates, minimum payments and stopping fees.

Stay motivated: Reducing debt takes time and effort, so it’s important to stay motivated. Set realistic goals and celebrate your progress along the way. Keep your eyes on your future goals and think about how good you will feel when your debt is reduced or gone!

Remember, reducing debt is definitely a journey, not a race. Be patient with yourself and the process and work to keep your focus on your end goal.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/