This site developed and maintained by LUNA 901-488-5954

This site contains information on:

• Budgeting
• Bankruptcy
• Cash Crunch Tips
• Establishing Credit
• Obtaining Credit Reports
• Collection Agency Practices
• Consumer Credit Counseling Service

Wondering if you could benefit from this information?

Take a moment to review these Danger Signs:

1. Using charge card because you're short on cash.
2. Charging items you might not buy if you were paying cash.
3. Charging inexpensive items.
4. Charging liquor or food items.
5. Shopping only at stores where you can "charge-it".
6. Reluctance to open the "bills" from creditors.
7. Charging more each month than you pay off.
8. Letting payments "slide" to the next paycheck.
9. Paying for last year's Christmas when the next one comes around.
10. Arguments with spouse about monthly bills.
11. Writing checks today on funds to be deposited tomorrow or the next day.
12. Skipping payments on one account to pay another.
13. Charging items on impulse without considering effect on monthly budget.
14. Not having a budget.
15. Assuming your income entitles you to a particular standard of living.
16. Applying for new credit cards to increase borrowing.
17. Telling yourself you have "a right to it" because of your income or because you "work so hard".
18. Receiving late and over limit credit card charges.
19. Renting furniture or appliances because you can't afford to buy them.
20. No savings account.

The creation of a budget is the first step in gaining control of your finances and saving for your financial goals. A budget is simply a calculation of you income and expenditures over the course of a month. It helps to allocate money for your needs while preventing overspending and waste.

1. Calculate your monthly income (after taxes).
2. Allot money for your priorities (housing, utilities, medical, food, and savings). Note: if you do not have adequate medical coverage, start a special savings account to cover medical costs.
3. If possible, try to stretch your bills out evenly over the month so that you are paying out approximately the same amount and that there is no week when all of your money is needed for bills. You may request a change of you due date to spread bills out more evenly.
4. Next, allot money for necessary bills, such as insurance, loans, credit cards, child care, etc.
5. For large, non-monthly expenditures (insurance bills, car repairs, Christmas, etc.) place an amount of money aside each week so you have money to pay the bills when they are due.
6. Next, allot money for other expenses, such as gas, cosmetics, non-food groceries, recreation, etc. Only allot the minimum amount of money you need for these things (it is very easy to overspend in this category).
7. If any money is leftover, add it to your savings. A few dollars here and there will add up. Note: Your figures may not add up correctly the first time you try it. Revise your plans until a working budget is reached.

Here are some guidelines on how much of your monthly income should go to various expenses:

• Housing (rent/mortgage) 20 - 35%
• Utilities (gas, electric, water, trash, & phone) 4 - 7 %
• Food (at home & away) 15 - 30%
• Family Necessities (laundry, toiletries, hair care) 2 - 4%
• Medical (insurance, prescriptions, bills) 2 - 8%
• Clothing 3 - 10%
• Transportation (car payment, gas, insurance, repairs, or bus fare) 6 - 30%
• Entertainment 2 - 6%

There are no suggested limits since these expenses vary from person to person.

An important step in reviewing your financial plan is to keep track of your spending. There is no way to compare projected spending with actual spending unless accurate records are kept. Spending plans require recording and checking.

1. Keep a daily log of where and how much money is spent.
2. Compare that list to your proposed monthly budget.
3. How close are you? How much of that spending was unnecessary?

Now that you have tracked your expenses, ask yourself: "Where can I reduce my spending?" Budgeting often requires cutting expenses. This is where they get cut.

Give yourself the third degree. Ask yourself these questions:

• Do I really need it today?
• What would happen if I don't buy it now?
• Can I buy a cheaper substitute?

Review the Cash Crunch Tips.

A budget must be reevaluated often to meet the needs of your changing family. As your family changes, so will your needs and expenses. When your proposed budget isn't working, reevaluate and try to gauge expenses more accurately. No budget is perfect. Keep on trying. If you consistently have problems with this, give the Consumer Credit Counseling Service a call for free budget counseling.

Bankruptcy is an option many people know about, but don't know how it affects them and details associated with it. Bankruptcy is "being legally declared unable to pay your debts". Contrary to popular belief, bankruptcy does not wipe out all debts. Student Loans, Alimony, Support Payments, and other legally imposed debts are not affected by bankruptcy, and you must still pay these debts if you go bankrupt. Most consumers filing bankruptcy could have probably taken other steps to liquidate their debts, and some are undoubtedly regretting their decision. Bankruptcy is not easy and has severe long-term effects on your financial well-being.

There are two main types of bankruptcy for consumers. These are Chapter 13 (Personal Reorganization) and Chapter 7 (Straight) bankruptcy.

Chapter 13

This is called Personal Reorganization because you reorganize your financial situation and propose a repayment plan to pay as much of your debts as you can in 3-5 years. Debts not paid within this period of time are discharged by the court.

Chapter 7

The court forces you to sell certain ownings to pay back debts. If debts are still not paid for after you sell your ownings, they are discharged by the court. You do get to keep a certain percentage from property sold.

Bankruptcy's effect on your future

1. Stays on your record for 10 years.
2. Can inhibit your credit worthiness.
3. May interfere with potential employment.
4. Landlords may consider it when renting.

Alternatives to Bankruptcy

1. Contact your creditors, and try to work out some sort of repayment plan
2. Financial counseling (such as your local Consumer Credit Counseling Service) may be able to work something out with your creditors and help you organize your budget so you can pay debts.

• Use credit cards only if you can pay the bill each month.
• Keep track item by item, of where your money goes daily, weekly, and monthly.
• Do not carry more money than you can afford.
• Analyze your insurance coverage to make sure you are adequately insured at the lowest price.
• Cut your recreation cost by taking advantage of community services such as parks, fairs and public tennis courts.
• Read magazines and books from the library. Cancel book club memberships and magazine subscriptions.

• Supplement your income. Work over-time. Do odd jobs at home (baby-sitting, lawn maintenance, etc.) or have spouse and/or children contribute to income.
• Barter talents and resources.
• Teach children ways to live on less by caring for their clothing and toys to minimize repairs and losses.
• Make gifts or give a gift of your own personal services.
• Buy gifts and holiday decorations for the next season after a holiday has passed.
• Write more letters and make fewer long long-distance calls.
• Quit smoking.
• Buy your cosmetics at the discount drug store.
• Have everyone in the family use the same brand of toothpaste, shampoo, deodorant, razors, etc.
  

• Maintain your home. Make minor repairs before they become major.
• Have a yard sale to raise money by getting rid of unwanted items.
• Learn to make draperies, curtains, spreads and table covers.
• Wash walls instead of painting.
• Rent out a room for additional income.
• Learn how to refinish furniture.
• Eliminate unnecessary or frivolous cable TV channels.
• Switch phone service. Eliminate such luxury items such as call waiting (and cut down on long distance calls.)
• Set your thermostat at 68 degrees and put on a sweater.
  

Thirty minutes a week planning your purchases will help you to save money. Shopping should meet your needs, suit your taste, and fit your budget. Isn't it worth the effort? The first area a person wants to cut back on when finances get tight is the food bill. If you do cut back it usually doesn't last more than a week or two before you go back to your usual spending. Or you may start making two trips a week to the store instead of one. So how can you control this area of your budget? Easy, MAKE A LIST !!!

1. Plan the main meal for each day of the upcoming week.
2. Make your grocery store list from the meal list. Include all items that go with each meal.
3. Example: Monday is hamburgers, you will need hamburger, buns, French fries, cheese, tomatoes, lettuce, ketchup, mustard, etc.
4. Add two snack items (ice cream, cookies, etc.)
5. Estimate how much all the items will cost. If you are not sure about the cost of the items then take a closer look at their prices when you go to the store.

• Know your family's likes and dislikes to avoid wasting food.
• A good diet depends on the kind of food you buy, not the amount.
• Begin shopping at home-read newspaper ads, flyers, and brochures to find bargains. Look for mark downs and reduced items. Don't forget to clip coupons!
• Know what foods you have on hand to prevent over-buying.
• Use unit pricing to find the economical size.
• Know the cost of your favorite brands to help find specials. Try store and "off brands."
• Compare prices of fresh, frozen, canned, and dried foods to find the best buy.
• Studies indicate you will spend 17% more for food if you are hungry when shopping.
• Fresh fruits and vegetables, bought in season, taste better, and usually cost less.
• Buy the Grade of product you can use - cheaper grades are good in casseroles.
• The cost per serving rather than the cost per pound is a better guide to use for meats. For example, boneless meats, 1/4 - 1/3 lb. serving (ground meat) some bone 1/2 lb. serving (pork chops) and with much bone - 3/4 lb. (spare ribs).
• Marinating cheaper cuts of meat improves the flavor. Also try variety meats.
• Consider using meat alternatives-dried peas, beans, nuts, etc.
• When there is an eight cent or more difference between medium size and large eggs, the medium size will be your better buy.
• Individually sliced and wrapped cheese is more expensive than if bought as one piece.
• The more packaging and preparation to a food product - the more you pay.
• Shop alone - additional family members add to the grocery cart.
• Consider purchasing some foods in quantity and splitting the cost with others.
• Check your cash register slip for errors before leaving the store.
• Buy generic brands when suitable.
• Avoid trips to "convenience" stores and Mini-marts.
• Plan meatless meals.
• Try to leave children at home.
• Don't pick up any item that is not on your list. Your chance of buying that item will increase by 85% just by touching it.

Above all STICK TO YOUR LIST. Everything you need is on it so you don't need to add anything else. Try to total the items as you go. If you think you are going to go over your budget then put one of the snack items back. It will be hard at first to stick with your list and budget the right amount of money. It will take time and practice. Just because you don't stay within you r budget the first time doesn't mean you failed, it means you need to reevaluate your budgeted amount, consider if there are items under different brand name that are cheaper. It will take some planning but it will be worth it.

• Do not make impulsive clothing purchases.
• Make use of factory outlet stores.
• Swap out grown children clothing with friends and relatives.
• Read and follow care instructions to make clothes last longer.
• Spot clean clothes promptly and save dry cleaning.

• Car pool or take public transportation (if available).
• Shop for the best price on gas and fill the tank.
• Higher octane fuel does not give better gas mileage.
• Maintain proper air pressure on your tires.
• Check your oil level.
• Minimize costly repairs - follow the maintenance schedule in the owner's manual.
• Have your brakes inspected at the first signs of troubles.
• Rotating the tires will increase their life.
• Change your own oil.
• Keep a clean car now, it will trade in higher later.

What can you do? * What do creditors consider? * Why would you be denied?

• Always pay your bills on time.
• Open a checking account.
• Open a savings account.
• Apply for a store card.
• Take out a small loan.
• Get a gas card.
• Consider a secured loan or card.
• It turned down, find a co-signer.

• Amount of money you make.
• Length of time on the job.
• Length of time at same address.
• Other credit you have.
• Your bills are paid on time.
• You own real property (house, car).
• Check bouncing history.
• You save money every month.
• You have used credit before.

These questions are considered when an institution decides whether or not to gie you credit. The importance of your answers will be different based on wht the lender is looking for. A creditor's overall concerns are in the ares:

1. Do you have the ability to repay? Your income and other credit commitments are taken into consideration.
2. What are your assets? - In other words, what do you own? Remember, a savings account is a very important asset.
3. What is your attitude? When you have used credit before, have you always paid it back as agreed?
   

• Incomplete application submitted.
• No credit history or short history.
• Low income.
• Short job history.
• Short time at residence.
• Too much credit.
• Slow payment history/late pays.
• History of bounced checks.
• Judgements, repossessions, and/or bankruptcy.

• Call the person or company that you owe. Don't wait for them to call you. Explain the situation. Perhaps there has been a job loss, sickness, or family emergency that has made it difficult to keep up with payments.
• Have your plan for repaying the debt ready to discuss with the creditor when you call.
• Make the plan realistic. If the plan is realistic but the person won't accept it, ask to talk to the supervisor. If the supervisor won't accept your plan, call your local Consumer Credit Counseling Service.
• When your plan is accepted, do your best to follow through. If something happens and you can't do what you agreed, call the creditor immediately.
• Keep a record of the names and telephone numbers of people with whom you have discussed your problem and solution. Also keep a record of the dates.
• Follow up your phone conversation with a letter briefly stating what was worked out. Keep copies!
• Keep in contact with your creditors until the problems have been solved.

To get your credit report, you must provide the following information to TRW, TRANSUNION, or EQUIFAX:

• Full name, including any maiden name
• Spouse's name (if appropriate)
• Current address
• Previous address (if needed for 5 year history)
• Social Security number
• Date of birth
• Signature

If you have been denied credit because of derogatory information in your file, you may ask what credit bureau supplied your credit history and obtain your credit report free within 60 days.

TRW will provide one free report yearly; call 800-392-1122 for further information.

EQUIFAX charges $8.00; except for residents of some states; call 800-685-1111

TRANSUNION charges $8.00; call 215-690-4904, or write PO Box 7000, North Olmsted, OH 44070

• Pay any balances so that creditors can update file.
• Wait the required length of time to lapse for negative information to be taken off.
• Write an explanatory statement (100 words or less) to be included in future reports. While the law limits this statement to disputes, most credit bureaus will include explanations, such as unemployment.

Credit bureaus must automatically delete derogatory information which is more than seven years old, with the exception that bankruptcy declarations are deleted only after ten years.

• Fill out a dispute form if one is provided or write you own request for an investigation of any inaccurate information.
• If the information is verified to be inaccurate, within 30 days, the credit bureau must correct or delete this information.
• If consumer thinks creditor is wrong, he or she should contact to discuss, and if not resolved, consumer can include 100 word statement in credit report.

If any deletion or notation is made regarding the information, you may request that the information be sent to any employer who has received a credit report during the past two years and in addition, anyone else who has requested credit information in the previous six months.

There are many rules governing what collection agencies and their employees can and can't do. The Fair Debt Collection Practices Act of 1978 was designed to eliminate abusive and deceptive debt collection practices. If you feel that your rights are being infringed upon, either call the Consumer Credit Counseling Service (901-323-4909) for information or file a complaint to:

Collection agencies are required to provide you with the following information: Amount of money you owe, name of lender you owe it to, that the agency will assume the debt is valid unless its disputed within 30 days, and what to do if you believe you don't owe the money. Other restrictions may apply, such as the ones that follow . . .

What they can do:

• Call or visit between 8 a.m. and 9 p.m. on a daily basis.
• Take legal action to collect the debt.
• Call family members, employers, and neighbors to locate you.
• Garnish wages if it concerns Personal Taxes, Child Support, PHEAA loans, I.R.S., etc.
• Can hold sheriff sales or enter judgments (under certain conditions).
• Request a post dated check for up to 5 days.

What they cannot do:

• Make repetitive harassing calls.
• Use offensive, profane language.
• Falsely represent themselves as attorneys.
• Advertise your debt.
• Threaten you with jail or persecution.
• Threaten to seize property or wages unless it is legal for them to do so and they actually intend to do so.
• Make false statements.
• Send a post card.

There are other rights that you have when dealing with collectors, and if you are unsure if they are telling the truth, do not be afraid to double check their statements. They make money by collecting the debts, so their motivation is to get the money from you any way they can. If they do this in an illegal manner, you may be eligible to take legal recourse against them. For more information, contact the state Attorney Generals Office.

Many Mid-South families are burdened by the weight that money problems bring. Financial problems often lead to stress in relationships, personal and work-related problems, and can cause families, businesses and even countries to collapse.

The root of the problem is the lack of a strong financial foundation and a realistically constructed budget. Consumer Credit Counseling Service (CCCS) can help you design a blueprint for your family's financial health. CCCS has professionals on staff to help you learn how this can be accomplished.

Consumers who are experiencing, or are at risk of developing, financial or money management difficulties are the target population of this service. These problems are addressed through budget counseling, a debt management program, and consumer education.

Budget counseling assists persons in developing a realistic budget, improving money management skills, and solving financial problems. This service is offered free of charge to the general public.

The Debt Management Program, an alternative to Chapter 13 bankruptcy, provides consumers the opportunity to participate in a plan for the orderly liquidation of their debt. It is designed for persons who need the agency's assistance in developing and administering a repayment plan. The basic requirement for participation is that clients have sufficient income to repay their debts according to the plan that is agreed upon with their creditors. Usually, the plan will involve a lower monthly payment to grantors of unsecured credit (such as credit cards), with the balance being paid off over an extended period of time.

The Consumer Credit Counseling Service acts on behalf of the client/customer in negotiating a repayment plan with creditors. The creditor voluntarily decides to accept an adjusted payment, just as the client freely chooses to participate in the Debt Management Program.

Clients in the Debt Management Program are charged a fee of 3% of their monthly deposit, up to a maximum of $20.00 per month, as set by Tennessee State Law. The only exception is that clients seen at an office in Mississippi are not assessed a fee, per state law. Creditors are requested to contribute 15% of the funds returned to them by the program.

Educational programs are available for presentation to agencies, churches, employee groups, etc. Topics include: cash crunch tips, spending attitudes and patterns, an alternative to Chapter 13 bankruptcy, managing your cash flow more effectively.

Office Locations

Offices are located at:

2400 Poplar Ave.
Suite 510
Memphis, TN 38112
(901) 323-4909

Jackson, TN 38305
(901) 668-7355

Southhaven, MS 38617
(601) 342-4084

Bartlett, TN 38134
(901) 383-2193

Hicklory Hill 38115 (901) 362-0490

Call toll free in TN or MS
1-800-710-8902

Funding to support the service is received from the United Way, client fees and creditor contributions.

This site developed and maintained by LUNA 901-488-5954