Young people, money and debts

Adolescents and young adults are often portrayed as “consumer idiots” in public, media and sometimes even professional discourse. If one believes these descriptions, youth debt is a widespread and alarming phenomenon, the causes of which can be quickly identified: The “wrong” handling of money, the lack of knowledge about finance, poor planning skills and the uncontrolled fulfillment of consumer wishes are the common explanations for financial difficulties towards over-indebtedness among young people. In the media, for example, photos of young people with shopping bags on shopping streets, with cell phones or expensive branded clothing, and when pulling out their golden credit cards dominate.

This attitude is also the basis of many surveys on the subject.

money problem

According to the indebtedness report of the Institute for Financial Services (iff), a “lack of general financial education”, “uneconomical housekeeping” and “consumer behavior” are relevant triggers for over-indebtedness. Even more impressive are the frequently quoted results of the survey by the Federation of German Debt Collection Companies (BDIU), which explicitly refer to the group of young adults: “Excessive consumption expenditure”, “Bad example of the parental home”, “Too little personal responsibility “and” too little knowledge of the economic context “are listed here as the main reasons for debt among young adults. 

From a scientific point of view, however, this data is not very reliable. The results of the iff over-indebtedness report are based on surveys of debt advice centers, whereby “uneconomical housekeeping” or “lack of financial literacy” are defined as possible explanations in advance in the form of predefined answer categories. The BDIU study is creditor-oriented and based on assessments by employees of the debt collection companies involved. In this respect, the data from these studies essentially reflect the opinions of employees of the relevant organizations about debt relationships.

Conversely, from this perspective, the prevention and handling of financial difficulties or debt in young people is relatively clear: financial literacy must be promoted. It is now the focus of many (educational) programs. In view of the assumed “wrong” handling of money as the cause of financial difficulties and overindebtedness, these want to enable “correct” use of the available money and convey “sensible” consumption. This “sensible” action with regard to their own finances is intended to help young people, for example, by drawing up financial plans for their own households, permanently monitoring income and expenditure, constantly comparing prices and imparting knowledge in dealing with financial services or information about financial traps be taught.

 

Debt among young people

Debt among young people

I n the context of the concept of financial literacy, debt among young people is thus identified as a personal and growing problem, which essentially arises from problematic or missing individual skills and abilities and which should be counteracted accordingly by the promotion of these skills. The term “competence”, anchored in cognitive psychology or educational psychology, indicates the individual-related focus. According to the definition of psychologist Francis Hartz, competency means “the cognitive skills and abilities available to or learnable from individuals to solve certain problems, as well as the associated motivational, volitional and social readiness and skills to make problem solving successful in variable situations and to use responsibly “.

In the following, we will discuss these assumptions and take a look at the financial difficulties of young people, which incorporate debt in real-life contexts and which reveals them from the importance of money and debt for young people.

Youth debt – an alarming problem?

Youth debt - an alarming problem?

The Federal Statistical Office provides economically independent data on the extent of the debt of young adults. According to this, 0.2 percent of the clients of the debt advice centers belong to the age group of 18 to 19 years old, and 6.5 percent of those seeking advice are between 20 and 25 years old.  As this data is based on information provided by the debt advice centers, however, it is also limited in several respects: First, the information provided by the debt advice centers is voluntary and the disclosure of anonymized data requires the consent of the advised persons; on the other hand, employees of debt advice centers can only provide information about those young people who seek advice; in addition to the “number of unreported” adolescents in debt,

A study from German-speaking Switzerland is revealing with regard to the extent of debt among 18- to 24-year-olds.  It comprises 537 young people from four different types of school or education: participants in a job-market-related bridging offer (SEMO), apprentices, graduate students and high school students. The results show that around 62 percent of 18 to 24 year olds have no debt. Of the 38 percent of young people in debt, around a quarter each have debts of up to $100, between $100 and $1,000, between $1,000 and $2,400 and $2,500 and more.

 

Informal debt

Informal debt

Overall, the authors come to the conclusion that, on the one hand, informal debt, ie the borrowing of money mainly from parents, with generally small amounts and a fairly short-term repayment (usually within a few days), “becomes a ‘ normal ‘organization the everyday life of minors (heard), with which many get along well “. On the other hand, they identify a small group of young people who are indebted to several thousand dollars and have little prospect of being repaid on time. These are young adults, most of whom come from socially disadvantaged families, have no further education and are often faced with critical life events such as early departure from their parents, unemployment or early school or apprenticeship, including (significant) financial costs.These young people also receive little support from their social environment – neither in the approaching crisis situations nor in coping with them. Other studies confirm this result.The authors conclude: “A problematic debt situation with several thousand or ten thousand dollars is usually at the end of a chain of social and health problems.” 

Can You Apply For Signature Loans Without Credit?

Many people are asking if they can apply for signature loans without credit. The answer is yes, you can apply for signature loans without credit.

What makes these types of loans popular is that, they do not require a credit check. This allows the borrower to be able to borrow money without having to offer any type of collateral or security. What’s good about this is that, it gives the lender with complete peace of mind because they are assured that the amount they receive from the borrower will be returned on time.

 

A lender offering a lower interest rate

A lender offering a lower interest rate

Because they don’t run a credit check to see if you are a good risk. When applying for these types of loans, you may have to fax in some documents that will prove your income and your ability to pay the loan back on time.

After all, it is important to many lenders that you can show proof of your income and ability to pay back the loan on time. They are still interested in signing up borrowers, but they have no problem asking for a credit check.

Some people are disappointed to find out that they can’t get a traditional loan with a credit check. These traditional loans include home loans, car loans, and other types of loans. So, they don’t want to chance that they won’t be approved for the loan.

Although, they have options like they can apply for online loans or cash advances that don’t require a credit check. They will probably still be approved, but they don’t get their money until after a certain number of days.

 

Traditional loans work, but with the signature loans

Traditional loans work, but with the signature loans

You do not have to submit any documents. You just have to send a letter requesting a specific amount of money. The lender will then request a verification of the amount that you want.

The only document that you will need to submit is the three-digit security code that you provided to the lender. It will be sent through the mail. This will contain your security number and will provide a deadline for when you will need to return the money.

If you are approved for signature loans without credit, you should be aware that it will only last for a limited time. Once the date has come and gone, you will have to start searching for another lender to use for your loan.

 

Applying for signature loans with credit

signature loans with credit

One thing that you should do before applying for signature loans without credit is to have some cash in your checking account. You can always use the money that you receive for a down payment on the new car or house that you want.

Once you receive your check, make sure that you pay it off as quickly as possible because you will not have to submit a credit check again. Just be sure to keep a little extra money so that you can apply for your next signature loan no credit check in case you need to get one.

In most cases, it is best to have some cash in your checking account before applying for signature loans without credit. The reason for this is that you will have some security in the event that you don’t get approved for the loan.

How to Apply For Debt Consolidation Payday Loans

Debt consolidation payday loans can be a great solution for many people. The payback of a payday loan can sometimes be a long, drawn out process. Consolidating a debt is less stressful and can lower your monthly payments significantly.

You probably don’t want to lose your job, or end up on the street without the money to make that regular payment. In addition, paying a loan back on time reduces your overall credit score. By lowering your payments each month, you will increase your credit score.

Payday loans are short-term loans. They are meant to cover short-term needs. If you aren’t sure you can pay back the loan within a set amount of time, it may be best to keep it in place.

 

Reverse mortgage

mortgage loans

A loan that has the right terms is sometimes called a reverse mortgage. This is because the lender (the lender is typically the same entity as the borrower) invests the profits from the loan in the home. This is one of the more common ways to consolidate debt.

Debt consolidation can be a great option for many people. By working with an individual to lower the interest rate and make a budget, you can get the most affordable payment. While the monthly payments do decrease, you may be able to afford some extra.

 

You can also qualify for a debt consolidation payday loan

You can also qualify for a debt consolidation payday loan

It is usually a good idea to have a separate checkbook and your payday loan receipts so you can follow up if you make a mistake. Since the payday loan is set up with a very high interest rate, it would be wise to ensure you can afford the payment and the fee before taking out the loan.

 

Take a look at the payment options. There may be a fee for the right to use the account. In addition, some paydays may be higher than others.

If you don’t have a bank account, a cash advance company may be able to assist you. It is important to research this type of loan carefully. This is a great way to consolidate your debt, but you will need to realize the fees and other costs associated with it.

You will need to spend some time comparing the right debt consolidation loan for you. Depending on your current situation, you may qualify for a low interest loan. However, this type of loan may not be available.

 

Basic requirement to qualify for a debt consolidation payday loan

debt consolidation payday loan

The basic requirement is that you need proof of employment. Once you have that information, you can work with a lending institution. Be aware that it can take up to six weeks to receive approval for a loan.

It is important to put together your own budget. This will help you keep track of the cost of each monthly payment. You should also make sure you are following your budget closely.

Make sure you are taking care of any additional costs. Depending on the amount of the payday loan and the rates of interest, the payments could be high. Consolidation of debt is one way to lower your monthly payments.

Live debt free – Have finances under control

Debt is easy. Your budget is quickly overdrawn: when the next vacation is coming up or new furniture for the first apartment is purchased. Exceeding the budget in the short term is usually not a problem. However, if debt becomes permanent or gets out of control, it has negative consequences. If you want to live free of debt, you need a precise overview of your own finances and an idea of ​​which expenses fit into the budget and which do not.

 

Analyze your own situation

debt loans

You can get a good overview of your own finances by comparing your regular accounts with your accounts. Regular inputs are, for example, salary, maintenance, pocket money from parents or student loan. If you add up this income and subtract your regular expenses such as rent, electricity or radio fees from it, you know how high the budget you have at your disposal each month. You can easily keep an eye on your account movements via the app on your smartphone or with the online finance manager on your PC. Here, graphics also give you a quick overview of your financial situation.

 

Keep a clear head on high debts

debt loans

With high levels of debt, it is important not to stick your head in the sand. Even if the mountain of debt seems huge, it is not advisable to become rigid. The best way to deal with the flood of letters, claims and reminders is to sort the documents and check your own financial situation. You can use a cost statement to decide where you can save money. Because you can use the amount that is left monthly to save, pay off debts or for other expenses.

 

Debt counseling centers – if the insight is missing

Anyone who has lost sight of the situation and does not know whether there is something left every month or what amount of debt to pay off is best to contact a debt advice center nearby. Many non-profit associations, associations and municipal contact points offer advice to those seeking advice free of charge. On behalf of the Federal Ministry for Family, Seniors, Women and Youth, the Debt Counseling Forum maintains the official directory of all debt counseling centers in Germany. Here you can find out all about the topic and find a contact point near you.

 

Debt restructuring as an alternative

Debt restructuring as an alternative

If you are annoyed by many different small loans or who have been using your overdraft facility for a long time, you can inquire at your bank about cheaper alternatives. The first step towards clarification and possible debt restructuring is competent advice, which you can get from your Best Bank.

Out-of-court debt collection, without the establishment of a cause

The extrajudicial activity consists in carrying out actions that have the purpose of recovering a credit without the introduction of a court case.

To find out if you should start an out-of-court action, simply request our free CREDIT service.

cash

Once we have examined the preliminary recovery conditions, we will be able to suggest the best strategy for your case, indicating if it is better for you to start a civil dispute or if on the contrary, you should take extrajudicial action.

We have created a very streamlined and incisive extrajudicial debt recovery process, which is divided into 3 phases:

the contact;

negotiation;

the closing.

STEP 1

THE CONTACT

cash

The first decisive step is to establish contact with the debtor. During our experience, we have found that trying to start a negotiation with the debtor through a telephone approach can often be ineffective. During a working day, a person can receive many calls from commercial call centers that try to acquire new customers.

Over time, the erroneous belief has developed in the mind of the average citizen that even debt collection professionals use the vendor approach techniques through call centers. When the first contact is via a phone call, it is easy for a debtor to associate the activity of commercial call centers with that of debt collection consultants.

The debtor immediately becomes more suspicious and shows aggression very difficult to unhinge. In addition, the number of people answering the phone decreases more and more; individuals use their smartphones to browse social networks or to converse with already known users. In this context, it can be very complex to attract the attention of a debtor through simple telephone contact.

That is why we firmly believe that the first contact with the debtor must take place by sending a letter of formal notice. The warning has far greater persuasive efficacy than a simple phone call and also allows to give a more solemn and formal character to the recovery activity.

In the event of an out-of-court recovery, our team of lawyers will take care of sending a warning to the debtor who intimates him to pay the sum due, and who invites him to settle the dispute as soon as possible.

This contact tool is what allowed us to achieve the best results; we have ascertained that when the formal notice is sent by a law firm, the persuasive effect towards the debtor is far greater.

PHASE 2

THE NEGOTIATION

The negotiation is the most delicate phase of extrajudicial debt recovery and often hides many pitfalls and difficulties. To be able to obtain results in this phase it is important to know our interlocutor well; discovering the weak points of the counterparty can provide advantages during the comparison.

A debt collection professional must be perfectly familiar with both the legal instruments that protect the creditor’s interests and the guarantees that the law reserves for debtors.

Thanks to these tools it is possible to dismantle the disputes raised by the counterpart with great skill and to conduct negotiations towards the planned result. In this way, the debt collection professional guides the debtor towards the resolution of the conflict, transforming the quarrel into a constructive confrontation.

In such a delicate phase it is essential to have the right skills to reach the creditor’s interest. It has happened to us many times to transform complex negotiations into very advantageous transactions for our customers; just as we have noticed that if the negotiation is not managed by competent people, the disputes increase and the credit recovery goes away.

Before starting the negotiation, our lawyers spend a lot of time analyzing the debtor, evaluating his past behavior and the reasons that caused the insolvency. Thanks to a special system of “social media analysis” Legal Recovery studies the behavior of the debtor to find the best contact strategy.

Thanks to the experience of our senior consultants, Legal Recovery has devised an innovative dispute management system; our lawyers can count on a rich digital database that offers suggestions and “case studies” for analyzing and profiling the most frequent behaviors and exceptions. Thanks to these tools it is possible to manage the negotiations in a more profitable way and reach an agreement quickly.

STEP 3

THE CLOSING

The third and final phase of the extrajudicial debt recovery process is the closing or the definition of the negotiation. Once the negotiation phase is closed, our legal advisors will prepare a transaction deed which will be signed by the customer and the debtor.

During our professional experience, we have verified that defining a transaction by signing an act greatly increases the percentage of credit recovery.

In the absence of a written document, the debtor very often changes his mind and does not respect the obligations assumed during the negotiation phase; on the contrary, if the debtor formally undertakes to sign an agreement, his behavior will tend to be consistent with what was promised during the negotiation phase.

To settle the dispute with the debtor it is not enough to agree on the payment methods, but it is necessary to build an agreement that allows obtaining some advantage even in the event that the debtor does not meet the commitments.

To achieve this we will insert special clauses in the transaction deed that will allow you to further protect your credit. Thanks to these clauses we will be able to put more pressure on the debtor, using the legal instruments that the law offers to support creditors.

Otherwise, in the event that the negotiation ends with a negative outcome, and if there is no possibility of recovering your credit with legal action, we will close the extrajudicial phase by sending you a free final report in which we will declare that your credit it’s beyond reclaimed.

This document could be very useful to you; you can use the irrecoverability declaration to ” de-tax your credit” And get tax benefits that will allow you to pay less tax.

In fact, according to the provisions of the Consolidated Income Tax Act (TUIR – art. 101, paragraph 5), and as confirmed by the Inland Revenue (Circular no. 26 / E of 01.08.2016) it is possible to obtain the “deductibility of credit losses ”, whenever the taxpayer proves that the recovery activity has been unsuccessful.

WHO WILL CARRY OUT THE EXTRAJUDICIAL RECOVERY ACTIVITY?

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The extrajudicial recovery activity is carried out only by lawyers registered in the register. We strongly believe that the recovery activity should be carried out exclusively by specialized lawyers in this sector.

Out-of-court negotiations hide many pitfalls; all the tools that can be used with the counterpart must be thoroughly understood.

Before starting any type of negotiation, Legal Recovery will study your case thoroughly to identify the debtor’s weaknesses. Our lawyers can count on numerous technological tools with which they manage litigation quickly and intuitively.

Furthermore, if the negotiation does not end with the planned result, it will be much faster to start legal action. The extrajudicial recovery activity is carried out by the same professional who will take care of initiating the court case; in this way the times for the study of the controversy are drastically reduced, speeding up the recovery activity.

Credit with residual debt insurance.

The credit with residual debt insurance offers the best possible protection against life risks. Nevertheless, the residual debt insurance (RSV) is not without controversy. The article provides factually compiled facts and background information on the topic of “Credit and RSV”. The focus of the review is the question of who is worth the protection and what is particularly important.

Credit with residual debt insurance – the bank’s perspective.

Credit with residual debt insurance - the bank

The loan with residual debt insurance has existed in Germany since 1957. The main beneficiaries of this credit protection option are the lenders. In modern insurance companies, almost all life risks for loans can be excluded. This is how the specter of unemployment or illness of the borrower loses its effect. This covers the most common reasons for problems with repaying a loan. Even the death of the borrower is insured and there is no longer any risk of default.

This safeguarding of a credit agreement for the banks is additionally sweetened. You get lavish commissions when arranging an RSV. The RSV only has to be included in the annual percentage rate if it is part of the lending requirements. With the optional conclusion, there is no detailed information requirement about the interest rate. For borrowers who of course do not deal with loans on a daily basis, this strategy is not always immediately apparent.

A borrower quickly pays much more than the security would be worth in his special case. The “voluntary” RSV is particularly problematic with regard to insurance premiums. The differences between the provider prices can lead to a doubling of the contribution rate.

The worry-free loan – the borrower’s perspective.

The worry-free loan - the borrower

The loan with residual debt insurance has great advantages not only for the lender. Families in particular can quickly get into trouble due to the change in the income of the main earner. Unemployment and sick working conditions have long ceased to be a problem for marginalized groups. It can affect everyone from academics to simple henchmen on the building site. Anyone who is only in such a situation cannot hope for help from the state. The reforms of the “Schröder period” know only one goal for people who have stumbled. Social Welfare, – so that state support is reduced to a minimum.

A look beyond our borders clearly shows where the journey in Europe is going. It is not without reason that people take to the streets everywhere and demonstrate. Most barely manage to provide for their families for loan repayments, there is no more room in the budget. The solidarity protection of one’s own credit obligations can mitigate the consequences for the individual. The loan with residual debt insurance offers this protection.

If you want to act responsibly for your family, you cannot avoid an RSV. Nevertheless, the prices should be compared exactly. There is no point in paying twice for the same risk coverage. The fact that the insurance contribution is included in the total loan amount makes repayment easier. But it is clearly reflected in the lower removal.

The conclusion summarized in one sentence:

The conclusion summarized in one sentence:

Acting responsibly is possible with a loan with residual debt insurance, but nobody should forego the price comparison.