Monthly Archives: July 2015

What To Avoid During Debt Settlements

Some businesses offers a debt settlement as an option, if they assumed that they can never recuperate what you are indebted to pay, or whether the ongoing collections becomes inefficient; or if they think that a debtor can make progress, by settling the debt with the collection agency.

If you decide to take a debt settlement as a solution to your payment, get all the written terms established, and read it carefully before sending money. You need to be on your guard if you have been offered a settlement. You are negotiating with people who knows everything about settlement, and whatever mistakes you make, will be to their advantage – and what you owe will still be collected. Learn more about the Do’s & Don’ts for collection agencies here: After sending the money you will have no power with the debt collector and anything that is not written in the agreement, in all likelihood, will not be honored.

If you are caught under a mound of debt, you may want to work with creditors (or debt collectors) to make things more simpler and manageable; this is usually called a debt negotiation or debt settlement. For example, you may be want to settle a debt by getting a creditor to take a lower amount of pay, than the amount that was originally owed. Or maybe you can negotiate to get lower payments, permanently or temporarily.

Negotiating with the creditors is a good way to decrease your debt load. To find out how to get some relief from the irritating calls from creditors, go to Make sure you avoid the common pitfalls. Knowing what NOT to do, can dramatically increase the chance of a successful negotiation.

Here are some common mistakes that people usually make in dealing with their creditors during their debt settlement agreements:

1) Not knowing if your debt is secured or unsecured. Two types of debt are secured and unsecured:

  • Unsecured Creditors – These types allows the debtor to acquire goods on credit (without the debtor providing any collateral or security). If the debtors cannot pay the debt, the creditor can’t go to the debtor’s house and take back the products.
  • Secured creditors – These kinds of creditor’s do have interest in some assets. If you do not pay your debt, this creditor is allowed to take back the properties.

2) Not knowing the strength of the creditors – secured creditors have a strong position, because they can reclaim valued properties, while unsecured creditors have other points of strength:

  • They can call or send you a letter. Even during the time of the negotiation procedure, the creditor may continue to call & demand payment; so the borrower must stay resilient until all discussions are settled.
  • They can sue. The creditors can charge the debtors for a breach of contract. Some will begin proceedings even when the consultations are pending.
  • Garnish wages. if a creditor wins a complaint against you. They will garnish your wages. To learn how to reverse this, go to
  • Levy bank accounts – if the creditors wins any lawsuit against you, they can get all the money in your bank accounts. Make your balances in your bank account as low as possible, and discontinue making direct deposits to protect your funds.

3) Not knowing the weak point of your creditor:

  • It is costly for the creditors to sue. Litigation is the creditor’s last option, because of the money and time needed for it. A lawsuit does not give assurance that a creditor can recover money.
  • Unsecured creditors can only repossess a property, in very rare situations.
  • Unsecured creditors have much to lose. If the debtor can’t pay for the debts, instead of filing for a bankruptcy protection, creditors will get nothing in return.

4) Use of the wrong money:

  • Money is king, as far as debt negotiations are concerned. If a debtor can transfer capital immediately, the creditors can quickly settle for a lower amount; however, this should be your last resort.

5) Use equally valued asset(s) you already have, to pay an unsecured debt.

  • For example, one can use their retirement funds to pay a debt. The debtor may pay the withdrawal tax of the funds or pay back the funds, if it is taken as loan.

6) Take notes at the time of negotiations

  • Most of the creditors gives very conflicting information. The debtor needs to take down the very details regarding the amount of the debt, the people whom they negotiated with, as well as, other important details.

7) Debt consolidation company.

  • These kinds of businesses offer a substantial monthly fee, there are no assurance that the debts will be settled.

8) Don’t overlook the “big picture”.

  • Debtors should look and examine all their debts, and the real possibility of being able to pay the debt. A lot of the debtors end up filing for bankruptcy protection, even when they already paid thousands in settled debts!

A debtor who fully understands these concepts, before making a call to a creditor for a debt negotiation, stand to have a better financial outcome, should they engage in negotiations to relieve debt problems.

What Is Property Tax Abatement?

Basically, abating something means reducing or even eliminating it. So, property tax abatement is a long term or short term arrangement wherein your property taxes will be lowered; regardless, if you are making improvements to your home. Under normal circumstances, when you are increasing the value of your home, you will also be raising the taxable value. With the abatement, the tax increase will not occur or at least not by much. A waiver is usually issued as an incentive, in order to encourage the town’s revitalization. And those who were wrongfully charged with a tax lien on their credit report, can use the waiver to have the tax lien removed; to learn more, go to

Property tax abatement is being offered to the owners of commercial buildings, apartment buildings, multiplexes, duplexes, condos and homes – to be converted into residential homes. In order to qualify, your home’s value needs to be at least 115 percent of the value preceding the remodeling. The abatement is not something that you are going to receive automatically. In order to earn it, you need to apply for it. The first step will be contacting your court house, town hall or municipality, and then ask them about it. They are going to have the information available and the form you will need to fill out. They can also arrange for an appraiser to come and evaluate the value of your home before and after the upgrade.

How does it Work

Property tax abatement is, oftentimes, granted by the local governments; most of the money that is paid to them, is through property taxes. This abatement is usually discretionary subsidies, as being granted of it, is done on a case-by-case basis, to investors & specific companies. There are also times that they are being offered to be entitlement subsidies, like in many enterprise zones. Property tax abatement may be structured in many different ways. A company can receive an abatement for a particular percentage, for a certain period time. For example, if a company would receive a 50% property tax abatement for 25 years, they will only need to pay for half of the property taxes that they normally owe, for the next 2.5 decades; for an individual investor, the process is the same; if an investor fails to receive these kind of subsidies, the can get an appeal, and a good example of how a letter is written to gain an organization’s favor, can be seen at

The property taxes of a company may be slowly phased-in throughout a period of time. An example of this may be a deal wherein a company will be paying 20% of the property tax in the first year; 40% in the second year, and so on; until after 5 years, they are going to pay the normal tax rate. The property tax abatement can also be given as a property tax rate that is “frozen” at a particular level; namely, frozen at the time when the contract has been signed; so that even when the company constructs new buildings and improve land, their tax rate won’t be going up, until the abatement ends!

In some of the cases, the companies would agree into a Payment In Lieu Of Taxes or the PILOT. It is sometimes called a FILOT, which indicates Fee In Lieu Of Taxes. On this system, the company will make some of the fixed yearly contribution to the school system or to the city, often at a lower rate than what they would normally be paying, when taxed.

Outcomes and Accountability

Local government will justify the tax abatement, should one argue that the abated taxes are lost revenue – saying that the money would be in the city coffers, if the developments would have not occurred. While this can be true in various cases, it’s all too common for tax abatement to have been given to the companies that do not really need them, thus, depriving the city of the income they could have had, without granting subsidies. This will be the money that could have, otherwise, gone to funding city services. Using the test of “but for” is significant when granting a lengthy abatement, because the city will be gambling away – for up to thirty years – tax revenue, on that assumption that, without the subsidy, there will be no company located there.

Property tax abatements are detrimental especially to school districts (which will be receiving a big portion of their subsidy from the local property taxes) and to the local services, like police and fire departments. This abatement may be held under more scrutiny, with a number of simple reforms, specifically, the usage of job quality standards (and claw backs) in development agreements; and the increase of citizen participation, in the process of subsidy approval, is warranted, as misuse of subsidies can directly impact the quality of a community – to such a degree, that it may include violations committed by creditors; go to for a list of examples.

Property tax abatements information is commonly contained in the development agreement that is signed between the granting government authority and a project developer. The agreement contained information, like the length and rate of the abatement, and any conditions that the company would agree to meet, in exchange for the subsidy. If the company agrees to paying a PILOT, that information can be in the development agreement or it can be in a separate document. Property tax abatement will be a great way of saving money when upgrading your residential building or your home.