Higher-rate tax payers have been hit hard as a result of the National Savings and Investment’s withdrawing its tax-free index-linked certificates, as it was previously offering the equivalent taxable gross return of 10% providing that the current Retail Prices Index (RPI) rate stayed at 5%, giving savers more than double the returns that any standard savings accounts can offer.

An NS&I spokesman recently made an appearance on BBC Radio 4′s Money Box programme, and he said it was unlikely that another issue of index-linked certificate would be launched this year. However he denied that NS&I had any plans for future issues to track the generally lower Consumer Prices Index (CPI) instead of the RPI.

The Bank of England base rate has remained at its record low of 0.5% for more than 16 months now – and one economic forecasting group said it expects the rate to stay at this level until 2014 – which means most savings accounts are now actually losing money in real terms based on RPI inflation.

Some shares offer high dividend yields and those looking to invest small amounts can protect their returns from income tax by making use of their stocks and shares ISA allowance. However, there is no guarantee that you will earn any returns from shares, so there are risks involved, as we all know that share prices can increase and decrease depending on business performance.

If you have a savings account, check that you are getting a competitive rate. You may have initially opened it with an attractive rate, but most savings accounts offer introductory bonus rates that are valid for 12 months. After this period the rate paid on your funds can be significantly lower, so it’s important to keep an eye on your account and keep it competitive.

Also, rates tend to fluctuate based on the Bank of England rate, so once this begins to rise you should keep a close eye on the savings market. If you find you could be earning more, switch account – it’s much easier than you may think and banks are set up to welcome new customers so it is in their best interest to make the switch-over as smooth as possible.

If you’re looking for the best interest rates around and you don’t mind the thought of locking your savings away, you might wish to consider fixed rate bonds. These savings accounts allow you to fix a rate for an extended period of time (usually between 1 and 5 years) while fixing the period of time you effectively lose access funds. Leaving your funds untouched not only allows you to earn some great returns, but also gives give you more of an incentive to leave your savings to grow, while protecting them from being eroded by inflation.

If you require access to your funds due to unforeseen circumstances you can withdraw funds, however you will lose some or all of the interest.

The highest paying bond in our tables is currently the ICICI fixed rate bond, currently offering 4.75% on all funds from £1000 with no maximum. However this account requires you to leave your funds untouched for a 5 year period, so if this sounds like a long time to you, you can opt for a shorter term with a lower rate.

Although the UK banking crisis has settled down now, you should still spread your savings around to ensure they are 100% protected – never invest more than £50,000 (the limit covered by the Financial Services Compensation Scheme) with a single provider or financial institution, and be sure to check multiple banks do not fall under the same financial umbrella, as you may find that your group chosen banks only offer a single protection allowance between them.

If you really want to be clever about it you would be better to work to a limit of around £48,000 as this will allow any interest you earn to also be covered if your bank were to fail.

Unfortunately, this is not the case, and most people need to borrow money to make these large purchases. In order to qualify for the best interest rates the market has to offer, lenders reward people with the best credit history offering them access to these products. It doesn’t stop there, as you may be surprised to learn that some employers and landlords check your credit history before offering jobs and rented property. In today’s society, there are few ways of escaping the need for credit.

How your score is generated

Whether you’re looking to take out a loan, mortgage, overdraft, credit card, contract mobile phone, utility bills or even monthly car insurance, every type of lender ‘scores’ you to predict your likely behaviour, in order to build up a profile to indicate how financially attractive you are.

In many cases if you miss a periodic bill or make a payment after the agreed date, it will have a negative affect on your score.

Banks use a number of pieces of information when coming to a decision as to whether they will lend to you, including data held by three companies known as ‘credit reference agencies’: Experian, Equifax and Callcredit.

If you have no experience with credit, you are unlikely to have a credit history, which can work against you when looking to borrow. This is because lenders want to know that you can be trusted when giving you credit, which is usually done by using your previous track record.

Building a good score

There are several ways to both improve and repair your credit score, so if you suffer from poor credit history then help is at hand.

Opening a bank account and/or savings account is your first step.

Begin using a credit card. While this is sometimes dangerous advice, using a credit card and paying the balance in full each month for at least six months gives you a head start in your credit history.

First-time credit card holders are unlikely to qualify for the best credit card deals, so you may find it easier to be accepted if you apply for cards with higher than average rates, such as the Vanquis card. Don’t be put off by these high rates, as you won’t have to pay them if you stick to the plan, and several rejected credit card applications can have a bad effect on your credit score, so keep it simple.

The most important factor when building a good credit card is to always pay your bills on time. Start using your card to pay for some of the things you would have paid for using cash or a bank card, while putting the money aside to cover the bill at the end of the month. If your credit card balance is cleared each month without fail, you won’t have to pay a penny for using the card, and you will be building up a valuable score.

If you are unable to pay off the balance in full every month, always pay at least the minimum repayment. Even if you’re struggling, don’t default or miss payments, as doing this once or twice can cause problems that haunt you for years. The same applies to your mortgage payments.
If you are have difficulties with your payment plan, the best thing you can do is speak to your lender. You may be able to change your repayment schedule rather than defaulting and could help you to avoid a County Court Judgement (CCJ) being filed against you.

The easiest and most effective method for ensuring your credit cards are paid on time, set up a monthly Direct Debit.

Keep an eye on your score

Check your credit reports periodically. If possible, it’s worth checking all three agencies, as there’s no harm in doing so and will only cost you the price of the report. checking your file doesn’t add a ‘credit search’ that a lender can see, so it won’t have an impact on your score. Make sure you check each entry in your report as there could be an error that might be causing problems. It’s a good idea to repeat your check-up every year to 18 months, and always do one in good time before making any important applications.

If you don’t like the idea of paying to see your credit report, you can get access to a simplified version for free by signing up to a monthly trials. This does require you to set up a Direct Debit or regular credit card payment, but you have the option to close your account before this period expires.

If you find an entry on your file that you disagree with, you can request it to be changed by writing to the agency. These amendments can be refused, but you are entitled to add your own comments as a ‘notice of correction’. This is likely to make future credit applications take longer, but can help in your quest for being accepted for the better deals.

If you do feel something doesn’t look right, make sure you’re concise, explanatory and factual when detailing the error, and avoid writing something too wordy.

While there is no an exact science to improving your credit score, there are a number of things you can do to sway lenders’ attitudes towards you.

Sign up to the electoral roll.

If you’re not on the roll, you’re unlikely to obtain any credit, so this is a must. You needn’t wait for the annual reminder, you can sign up at any time using the About my vote website.

For anyone that is not eligible to vote (foreign nationals, etc), it is worth sending each of the credit reference agencies proof of residency and request that a note is added to verify this.

Space out your applications.

Making too many applications in a short space of time can have a bad effect on your score, as each time you apply, credit searches are triggered. You should therefore space out applications, not only for credit but also for things like car insurance, mobile phones and other similar contracts.

Moving house will also disrupt your score, so make any important applications before you move. Your score will also be better when you’re earning a salary, so if you’re planning to take time off, go on maternity leave or suspect potential redundancy, make any applications beforehand.

Joint finances can effect your score

If you marrying or are living with someone that has a bad credit score it shouldn’t impact your finances, providing the third-party data doesn’t appear on your file.

However, if you’re ‘financially linked’ to someone on any product who has a bad score, such as a mortgage or a joint bank account, it can have an impact. Simply opening a joint bills account for flat sharers can mean you’re co-scored.

If one partner has a bad credit history, keep your finances separate where possible and the other should maintain their good score.

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Anyone with a Lloyds TSB mortgage that is willing to open a Lloyd TSB current account will now be offered a reduction on their mortgage rates, it has been revealed.

This new offer is available to anyone that banks with Lloyds and holds a Lloyds TSB mortgage, on the condition that they deposit £1,000 or more into their account each month.

The reduction of 0.2% is offered to eligible customers, meaning a 3.99% fixed-rate mortgage will be reduced to 3.79%.

Stephen Noakes, Head of Mortgages at the firm, said: “Rewarding our current account customers by helping to reduce the costs of their mortgage payments is just one of the ways Lloyds TSB will continue to deliver the best value mortgages.”

He recognised that consumers seek flexibility from their financial products, which Lloyds TSB is striving to provide.

The company released its business barometer this month, which indicated that firms remain cautious, but UK confidence is on the up on the whole.

The figure also reflected a 3% rise compared to March 2009, when the market reached its nadir in the wake of the credit crunch.

The CML said that despite this rise in activity, the property market was still relatively subdued, pointing out that total mortgage lending in the first quarter of 2010 was still significantly lower than in the last quarter of 2009.

“Despite the increase in activity late last year and a subsequent fall early this year – due to the end of the stamp duty holiday – the underlying position looks to have barely changed,” said CML economist Paul Samter.

“But with the gradually improving economic backdrop and interest rates still low, we continue to expect a gentle improvement in market conditions later in the year,” he added.

The CML added that from next year, lenders would need to find around £300bn in order to repay money borrowed from the government through emergency support schemes.

As a result, it said, the mortgage market would continue to be restricted.

The scare surfaced after Lehman Brothers – a global financial services firm, declared itself bankrupt in 2008 marking the largest bankruptcy in U.S. History.

Concerns were again raised after Icesave – an online savings brand owned and operated by Landsbanki, collapsed affecting hundreds of thousands of customers and businesses. In the UK, Icesave’s marketing slogan was “clear difference”, offering its customers three types of savings accounts: an instant access savings account, a cash ISA, and a range of fixed rate bonds, paying interest rates of more than 6%. This was enough to attract over 300,000 accounts in the UK alone.The realisation that savers’ funds were at risk brought panic among many, which caused the Finanial Services Authority (FSA) to re-assess the amount of money the Financial Services Compensation (FSCS) would guarantee to those with UK bank accounts, increasing the limit to £50,000 of cover per person per financial institution operating in the UK.

However, trying to determine which banks belong to which institution has proven to be a difficult task, especially after a series of mergers and takeovers between financial institutions – particularly building societies, which took place as a result of the stress of the credit crunch.

According to the government, the current scheme covers 98% of accounts, and previous actions during the banking crisis suggested it would probably guarantee all savings, after Chancellor Alistair Darling assured all individuals holding funds with the failed Icelandic bank that they would be compensated in full, regardless of any limits.

Some savers with substantial funds have previously spread their money between different institutions to ensure its safety, with a few banks offering 100% protection, while paying low interest rates in exchange for this guarantee.

For example, if you have a barclays bank account containing £50,000 and an HSBC bank account with another £50,000, all of this would be protected as the rules stipulate cover for deposits per customer and per institution.

However, if you have £50,000 in an HSBC account and £50,000 in a First Direct account, only £50,000 of your savings are covered.

Northern Rock, which effectively collapsed in the autumn of 2007, offered a 100% guarantee on all accounts in order to attract new custom and restore confidence in the bank, but this cover is set to end on 24 May 2010, following the split of the nationalised bank.

But the mergers between banks and building societies have in some cases left it unclear as to how the compensation scheme lies, with some offering extended limits, while others obtain a single membership therefore offering a single limit among all providers that fall under the institutions umbrella.

As a result, savers can end up with two accounts which they understand to be provided by separate banks, but which actually now fall under the same authorisation of the Financial Services Authority (FSA) and therefore only cover up to £50,000 between them.

For this reason it is important to be aware of which banks are joined to others, and which count as individual. Which4u.co.uk has summarised this using 2 tables allowing you to quickly identify which banks are counted as separate in terms of compensation –See Money saving tips

David Black, banking analyst at Defaqto, said that savers could benefit by having a “spring-clean” and checking all accounts to ensure 100% are safe.

“You should keep just below £50,000 because of interest, and it’s also worth checking for peace of mind and to make sure you are getting a good deal,” he said.

●Step 1: decide on the level of risk you’re willing to take

If the current financial, economic and political climates has left you feeling uncertain, cautious, or nauseous (or all together), then attend to your symptoms with a Cautious Managed fund. This can help to offer relief from the pain of volatility – or at least, that’s what it says on the tin. M&G’s Cautious Multi Asset Fund claim to be able to help you “participate in rising asset markets while preserving capital as much as possible” – and since it was launched 3 years ago it has delivered 14.5%, outstripping the IMA Cautious Managed sector by 16.6%. The secret ingredient, known as an “active fund manager”, can “respond to the actual correlation of assets” and, in a 3-year clinical trial, minor discomfort to a 16.5% fall, peak to trough, while other leading brands lost 23%.

Disclaimer: Not every Cautious Managed funds is necessarily cautious, or well managed for that matter. May contain 60% highly correlated equities. In terms of the M&G fund, performance was gained from high-risk calls on emerging market equities, speculation on the state of the euro, dollar and other emerging market currencies, and movement away from overseas government bonds towards corporate bonds.

The side effects of out-performance may include increased underlying levels of volatility, according to the latest JP Morgan Asset Management Cautious Managed study. Investors may experience  a more unpleasant feeling of loss – 45% of investors taking IMA Cautious Managed funds between September 2008 and March 2009 lost more than 20%, with some of the more unlucky losing more than 40%.

Always read the label – but remain cautious of those that read “Cautious Managed”.

●Step 2: decide how much money you are willing to lose.

Those aged 50 and above holding concerns that losses could have a negative effect on health in retirement should consider Absolute Return funds. The key ingredients in this type of fund can position them in all directions to enable positive results to be had within stressful market conditions. Regulatory approval is currently pending on HSBC’s new European Alpha Equity fund, the offshore version which achieved growth of 13.1% in 2008.

Disclaimer: The majority of absolute return funds are untested for periods exceeding two years. For details, see www.absolutehedge.com. Note: These funds are only available over the counter following annual charges and performance fees.

Always read the label –  and hope it makes sense!

●Step 3: Think about an alternative option – investing for income instead.

If the possibility of equity price volatility and dividend cuts is making you anxious, why not consider trying out new improved bond funds. Test carried out last year showed that 9 out of 12 months saw more money being invested into bond funds than in any other sector.

Disclaimer: funds in the Sterling Strategic Bond fund sector are not guaranteed to match the prescription. Although the Artemis Strategic Bond fund invests 100% into UK corporate bonds, Henderson’s Sterling Strategic Bond fund invests 8.2% into money market instruments, and Investec’s Sterling Bond fund invests 64.1% into non-UK bonds.

Bonds in the Sterling Corporate sector may contain traces of dollar, euro and UK government bonds. Fidelity’s MoneyBuilder Income is 43% invested in non-sterling issues, while M&G Corporate Bond has 7% in gilts.

Always read the label – but don’t always believe that ‘sterling’ necessarily means it was manufactured in the UK.

●Step 4: reduce stress related anxiety by giving up trying to find the perfect active fund manager.

Anyone left dizzy, suffering from headaches and/or premature baldness are advised to skip steps 1-3  and search for cheaper alternatives.

I you’re a higher-rate taxpayer and you have no previous experience of capital gains, get some advice from an index tracker fund manager, such as Vanguard, who will help you to see that putting £10,000 into an actively managed fund via with an Isa wrapper will save just £45 a year in income tax, assuming a 2% dividend, while costing £160 a year in charges, based on the average total expense ratio of UK All Companies funds.

Incurring lower tracker fund charges may provide savings of around £1,300 over a 10 year period. Fully diversified multi-asset tracker funds, including the eight-asset MAP fund offered by Frontier Capital Management, can lower standard deviation to 5-7%, as part of a volatility controlled diet. Chief investment officer’s advice: it does what it says on the tin.

Lenders fix specific limits for particular types of loans. The most affordable terms and conditions are usually available with traditional mortgages. Fannie Mae fixes the lending limits for these loans. Though these restrictions can be modified, they suggest the costs of buying an affordable home in the US. Regions with higher livelihood expenses have higher restrictions.

Though you can exceed these restrictions and get into the domain of jumbo mortgages, if you wish to stay within the borrowing restrictions of traditional loans, you can’t surpass the limit set by Fannie Mae. To determine the most recent borrowing limits, you need to talk to your loan advisor and ask “mortgage how much can I borrow”.

Your trustworthiness

The amount that a lender would lend you is considerably dependent on your individual financial condition. Usually, it is simpler for you to qualify for a home loan if:

• You have a good credit score
• You make a hefty down payment
• You have a low debt to income ratio
• You have a stable job

All these elements are taken into consideration when the lenders decide how much they should lend you. If you ask “mortgage how much can I borrow”, you should also think about ways to better your finances so that you can qualify for the amount you need.

The house you want to buy

How much mortgage you can borrow is also dependent on the house you want to buy. Lenders hesitate to offer any amount that is more than the appraised value of the home. At a time when the number of foreclosures is at a record high, lenders are asking for bigger down payments rather than permitting borrowers to take out a loan that is more than the value of their homes.

Two useful techniques to find out how much mortgage you can borrow

For finding out how much mortgage you can borrow, you can follow two simple techniques that are given below:

• Become prequalified with a lender
• Use an online home affordability calculator

However, a calculator would only provide you with a ballpark figure. For getting the precise figure, you have to talk to a lender.

When you know how much mortgage you can borrow, then you wouldn’t have any problems to buy the home that fits your budget and pay off the loan.

At the end of 2009 the average branch based instant access savings account paid a measly 0.17%, which a notice account wasn’t paying much more than 0.33%.

However, if you look at the top 10 savings accounts in the Which4U comparison tables, you will notice that the best rates are offered on fixed rate bonds, so if you’re willing to lock your money away for a fixed period of time, you could be earning up to 4.75%.

How do they work?

A fixed rate savings bond is a bank account that allows you to earn high interest rates in return for agreeing to leave your money without making any withdrawals until the agreed term is reached.

Returns on the investment are limited to the interest paid on the account, which can be calculated before the bond is opened, providing a predictable income.

Fixed bonds differ from standard deposit accounts as the interest rate is guaranteed to remain the same throughout the fixed period. The terms differ, with rates to reflect the term, but they usually last from between 6 months and anything up to around five years.

The interest accumulated every year is added onto the balance and paid on maturity.

It is generally possible to access your funds in an emergency, but doing so would result in the account being charged with a loss of interest.

Banks and building societies offer more attractive rates of interest on this type of investment because it gives them the ability to gain access to secure long term deposits.

Currently, the best five year fixed rate bond pays a rate of 4.75% (Nationwide bond) per annum compared to the best instant access accounts offering 2.80% (Halifax).

You could argue that rates will change over the next 5 years, so you need to consider this when making a decision on the term, as you could find that you are earning less than the current instant access accounts are paying.

Should you consider them?

Savers should consider a number of factors before deciding whether they should invest into a bond and the term they choose.

When will you need the money?

Avoid being drawn in by an attractive rate without fist making sure that you can do without the money until the bond matures.

The cost of borrowing money is usually greater than the return you will get from the bond, so this is a no no.

Are interest rates likely to go up during the term?

This can be a difficult call. The answer is simple, people can make predictions to the direction of interest rates, but no one knows for sure.

But considering how long the Bank of England base rate has stayed at 0.5% (since March 2009) and the fact that some economists believe it will remain this low for another 12 months, savers can be more comfortable with getting good rates for just one or two years, giving them the flexibility to reinvest again in a few years time.

What do you give up to qualify for a better interest rate?

For the better return, savers do give something up – the access to their savings for a set period and access now to the interest earned.

So for savers who need an income now these products may not be suitable.

There is also the possibility of losing the chance to use the money more profitably, perhaps by investing in other assets such as equities, or paying off a mortgage.

Investment bonds

Investment bonds are fundamentally different and involve investment not saving.

The policies are typically sold by life assurance companies which allow you to invest in a variety of funds (either investment trusts or unit trusts) managed by professional investment managers.

Bonds are usually used for long term capital growth but can also be used as a means to generate income.

Investment bonds tend to invest in a wider range of assets than savings bonds, including UK and overseas equities, commercial property, fixed interest securities, and cash- like investments.

In most investment bonds, investors can choose the amount in which they wish to invest into and can change the weighting of their investments several times a year.

Taxation

For tax purposes, investment bonds act as life assurance policies, therefore subjecting them to tax on the returns gained.

So here we go: the young couple chooses the house of their dreams and agrees to opt for a loan.

The compromise is as easy as a pie: if payments are not made in time, or not made at all, the company making the loan can take away both the loan and the property.

Obviously the new home owners have other things on their mind, than simply staying in their house. Youth reserves endless opportunities for people, in this spirit the young couple takes time to enjoy other things in life. Unfortunately here comes the catch, those who apply for loan are not among the wealthiest people, and there is always something to spend money on. It is never too late to save some money on your mortgage and use it in other directions.

Here are some ideas to pay less and enjoy more:

Use a simple interest mortgage rather than a standard mortgage.

The reason is very “simple”: the interest is calculated daily instead of being calculated monthly. Suppose the yearly interest rate is 6%, then the daily in a typical year is 0.016 %.

For example, a daily payment  deal based on a £100.000 loan would work out at £16.44 per day and even if you are late with the payment, the advantages outweigh the disadvantages.

Take care of your mortgage loan problems with a bi-weekly mortgage.

It is not brand new, it has a black tradition as it was first introduced as a method of saving money on mortgages by nobody else than the bank itself. So what is so extraordinarily revolutionary about it? It is the fact, that you can administer it yourself, without costing anything. The secret lies behind the average mentality of ordinary people. Gradually changing the way in which you pay is the answer.

Why bi-weekly and not another formula? Fortnight payments are the most simple and revolutionary methods. Americans especially and few other countries receive their paycheck in correspondence with this formula, thus you pay when you actually have most of the money. The mathematical advantage is relevant, because making 26 (there are 52 weeks altogether in a typical year) half payments would mean making 13 full mortgage payments. Splitting the payment, gives one additional payment!

Skepticism would force you to say that this is the work of a guy with a flourishing imagination, as banks do not agree to take such transactions. Correct, but don’t forget that you are the one administering your own budget. Easier said than done, wrong! Create a savings account and deposit the sum, then when the payment is due, open the account and let the money flow.

Accept my apologies if the article is based on pure numeric artifices.

The ones, who will adopt this method, will notice a change within 24 years suppose the mortgage was set for 30 years. By saving time, customers can save money, no wonder people say that “time is money”.

A mortgage calculator can serve as a saving method.

Calculators can efficiently educate one, in how to take decisions in case he plans buying a new home. Mortgage calculators are excellent tools when somebody wants to know how much a loan will cost him\her. At the same time, these tools evaluate the possibility of reducing debt gradually, by the help of accurate monthly figures.

So how do mortgage calculators help people save money, if actually all that they do is to propose a future plan of payment? The answer is simple: they prevent people jumping into uncalculated expenditures well before the moment of the investment.

Human factor is the most essential element in a mortgage saving plan.

Additional expenditures will definitely not be saved in this case but at least you know that besides luxury, a professional bank representative will take care of your mortgage. By doing this, you will save a lot of time and headaches caused by complex terminology (let’s face it, it is still a privileged business) and by bureaucracy. Another advantage is represented by the fact that lenders work more easily with a broker, after all they share the same background and language.

Coming to a conclusion, a saving plan no matter where it is implemented has to be done from the first moment, the sooner the better. The same applies for the mortgage business.

First of all, try to make yourself aware of the collecting agents’ behavior which suggests that the more pressuring they are, the most success will come out. Collectors believe that what they are doing (such as harassing calls and threats) actually helps in their bids to collect people’s debts on behalf of their clients, or from our point of view, the lenders. Such collection agencies would do anything, from very frequent calls to taking the borrower to courts. They also make use of psychology among the many strategies they use, which can be an explanation why they put focus on harassing people.

So in order to be efficient against debt collectors, people should learn the techniques referring to dealing successfully with such agencies, otherwise they have a few chance to handle the pressures. Keep in mind that the most important rule is the following: do not panic! Debtors should get the chance to contest the claim with the help of a written verification. This should contain the name of the debt collector who urged for payment, the owed amount, and everything that seems to be disputable in the account-statement. Debtors are also recommended to find a reliable credit counselor, who can implement an appropriate settlement that seems to be acceptable both for you and for the collector.

Nevertheless, do not take anything to be personal, meaning that collectors do not have problems especially with you. They do their jobs. It is their obligation to remind people of their dues through frequent collection calls. For some people these calls are so annoying, embarrassing or disturbing that they panic, and do not know what to do. But there are a plenty of options.

First, people can try to stop the collection calls by writing them a letter with such instructions. One is advised to save a copy of that letter and get evidence somehow that the other party received the letter. If they still keep calling you, this means they violate legal rules by using harassing and unfair debt-collection practices. But if one manages to stop the letters, this means that collectors can only communicate with them via letters. These letters have to state the debt’s amount and nature. When answering to such a letter people are advised to be very careful not to write any inappropriate information as these might be used against them. Moreover, people can check whether the information provided by collectors is true.

Second, people should know their rights, such as the term of years for instance within which collectors can file a lawsuit against them. If this period is over, debt collectors lose this right, so practically they cannot make any legal action against you. Such debts are referred to as time-barred debts, and if one finds out he or she has such a debt (so the time period during which collectors can file a suit is over), there is no much to do. Even if they get sued, they cannot be forced to pay, as they may use the time-barred nature of their debts as a defense. People however have to be very careful no to admit that they owe something; otherwise the contract can be extended.

Finally, in order to handle abusive debt collectors efficiently, people are recommended to keep records of everything possible, so of all contacts with one’s collectors. One should save seemingly useless letters for instance, such as letter asking for payment. Moreover, any kind of communication coming from one’s debt collectors should also be preserved. It is also a good idea to keep a note on all the calls, their date, duration, the phone number and the name of the caller. Retain copies of agreements and sent letters as well. These actions are important, as it happens very often that one resolves a problem, but the problem reappears without collectors admitting they have agreed to the solution. So it is always good to track all your accounts, know your rights as well as the history with your debt collectors.

All in all, people who are in debt are not in a good position. But by having a clear debt-elimination plan, and by knowing one’s rights, people can finally succeed. Do not forget that debt collectors are not allowed to call you before 8 am and after 9 pm, which refers to local time, so it is not an excuse that collectors are somewhere else, within another time-zone. Also, do not hesitate to inform collectors if your employer does not agree with their calls at your employment place. Remember, that debt collectors cannot misrepresent their identity as a collector, nor they are allowed to publish your name and address. Moreover, collectors cannot get information from third parties except from your current address or phone number. Similarly, they cannot threaten you with reporting false credit-report information.

Be aware of the fact that if a collector breaks these rules and is abusive, one has legal rights to ask for their supervisors. Make sure to save all kinds of communication (such as voice mails or letters) with detailed descriptions, such as who called, at what time, the duration of the call, the frequency, as well as the topic of the discussion. Many people actually manage to win lawsuits against debt collectors, but only if they have an accurate register of abusive tactics of the collectors.