Stay safe when debt collectors call

Most of us want to pay our debts, but sometimes it’s harder than it should be. When debt collectors call, the situation can become a nightmare—especially when they lie. Be smart, consult an attorney, and don’t fall for these common deceptions:

• “We’ll keep calling until you pay up.” Harassing tactics are illegal, so bill collectors can’t keep your phone ringing morning, noon, and night.
• “We’ll garnish your wages.” Bill collectors can’t just take a chunk out of your paycheck without some effort. It requires a structured legal process that usually calls for a court date and gives you the opportunity to talk directly to a judge.
• “We’ll call you at work.” You can legally stop debt collectors from phoning you at work if your employer has a policy concerning personal phone calls on the job.
• “We’ll talk to your family and friends.” Without permission, bill collectors can’t contact anyone but the person they claim owes money.
• “Just send us a postdated check.” They may attempt to cash the check early. And they’ll have all your banking information.

Home renovations need to be planned with care.

You don’t want to spend so much money improving your home that it becomes significantly more expensive than other homes in the neighborhood.

Here are some strategies for planning a remodel­ing project that makes financial sense:

• Decide what your primary objective is. If resale is your biggest concern, a minor kitchen update may enhance resale opportunities more than adding a home office.
• Decide how to finance the renovation. There are three basic options: refinancing, home-equity loans and home-improvement loans. If you have little or no equity in your home, lenders are more apt to approve a home-improvement loan, which usually costs an extra point (percentage of the loan). Refinancing is taking out a larger mortgage than you had before, but the loan is based on the projected increase in value of the home after renovations. Home equity loans are similar but usually carry lower closing costs offset by paying a half a point at closing. To see which financing option works best for you, have your bank calculate and compare the price of the loan, closing costs, and future interest costs.