- 1 Using Paymer checks for loan repayment
- 2 Can I Repay Debts That Were Discharged in Bankruptcy?
- 3 Which Debt Repayment Strategy Would be Best for You?
Using Paymer checks for loan repayment
In debt service when repaying a loan by using the "Replace with the check" function the Creditor is issued the number and code of Paymer check of Obligation type. This type of check is not secured by WebMoney Title units and its Owner cannot pay the check, i.e. transfer to his/her purses via Paymer service the amount of the debt in title units. The check of Obligation type is the debt commitment corresponding to the simple hand receipt of the Debtor that he/she undertakes to pay to the bearer of the check the total sum of debts resultant from using Debt service.
This check and documents issued by it at Paymer web-site, give the Owner of the check a chance to begin process of debt collection, including outside WebMoney system (for example, through judicial authorities).
The check of Obligation type has a face value and can circulate according to the rules and possibilities of Paymer service. It can be verified, exchanged, transferred, sold and its number and a code can be changed as well. It is only possible to carry out these operations only before the reception of documents stating check details after that the check stops its circulation.
The procedure for collecting funds under Debtor's obligations can consist of several stages:
The Owner of the Check (not necessarily the creditor) must contact the Debtor, state the claims for the return of funds under debt obligations and present the Check number or the documents issued by Paymer service. During the negotiations both parties must reach an agreement on the following questions:
- by what means the Debtor will repay the loan (WebMoney title units, other property or property rights of the Debtor);
- the order of debt repayment;
- terms of debt repayment.
To verify the validity of the check the Debtor must use the corresponding function at Paymer web-site, and to validate the authenticity of documents use SighChecker (download).
If it is necessary to secure agreements in written form the Parties can conclude a contract via WebMoney Transfer Arbitration service.
In case when negotiations between the Debtor and the Owner of obligations have been successful, the procedure for exchanging Check's details (or documents) into title units (other property, or property rights of the debtor) begins. If negotiations have not led to any agreed position of both Parties or have become impossible, the Owner of the Check can initiate legal proceedings for debt collection.
Debt repayment without reception of the documents¶
If the Owner of the Check did not receive the documents on the obligations at Paymer web-site, then the procedure of debt repayment is the following: the Owner transfers details of the Check to the Debtor, and the Debtor transfers the corresponding sum in WebMoney title units.
To transfer a Check you must use one of the ways of check delivery. When the Debtor transfers WM funds he/she has to specify in the comment to the payment the following: "In exchange for the check № <check number>". So, the funds must be transferred to the WM-purse of the Owner of the Check.
When redeeming the debt outside WebMoney system it is advised to take a receipt from the Owner of the Check that he/she doesn't have any complaints about any specific obligations.
Having received the Check, the Debtor can redeem it. To do this, go to Paymer web-site, authorize, go to Redeem page enter check requisites, and then press the "Redeem" button.
To get documents on the obligations of the Debtor, go to the Paymer service, enter Check number and code, then press the "Get documents" button, and then use the links for downloading the following documents in xml and html formats:
- Obligation of the Issuer - the document signed by the Debtor when receiving loan via Debt service;
- Obligation by the presented check - the document, showing what share of the general obligation of the Debtor belongs to the Owner of a certain check. It is signed with WMID of Paymer service.
HTML-format is used for viewing and printing text documents. XML-format, besides the text of obligations, includes an analog of Debtor's handwritten signature, Debtor's WMID and WMID of Paymer service.
These documents certify that their bearer has the right to get security under the obligation of the Issuer (i.e. the debtor).
After receiving the documents the check is canceled, but you must store its details to be able to download the documents again if necessary.
To verify the authenticity of the handwritten signature use SighChecker (download). The program is certified, doesn't require installation and must run from local computer.
SighChecker has functions for downloading documents in xml format, viewing document text and verifying the authenticity of the handwritten signature (Internet access is required).
Repayment of the debt after receiving the documents¶
After receiving the documents at Paymer web-site under the obligations, the Owner of the check can transfer either check details or documents themselves to the Debtor. The Debtor in his/her turn transfers the funds under the presented obligations.
If the debt is repaid by WebMoney title units then it is necessary to specify in the comment to the payment: "In exchange for the documents under the obligation № <obligation number>, code <an obligation code>".
To secure in written form the fact of repayment of the obligations it is reasonable for the Parties to generate and sign via Arbitration service a contract in the form of common receipt about absence of mutual claims on the given debt obligations. It is necessary to specify in the receipt the obligation number and code, date and the repayment sum and a phrase on absence of claims.
Preparation of documents for collecting the debt through court¶
If it is impossible to agree with the Debtor about repayment of obligations, the Owner of the check can apply to judicial authorities. In this case he/she must get documents under the Check and attach to the statement of claim:
- printouts of the Obligations of the Issuer and the Obligations under the presented check;
- electronic copies of the Obligations in xml format;
- SighChecker for verifying the authenticity of analog of the Debtor's handwritten signature and WMID and WMID of Paymer service in the specified documents.
Can I Repay Debts That Were Discharged in Bankruptcy?
If you file for Chapter 7 or Chapter 13 bankruptcy and the bankruptcy discharges (wipes out) a particular debt, that means you no longer have to pay it. But bankruptcy laws do not prohibit you from voluntarily paying debts after the discharge. There are reasons that you might consider repaying a debt, even though you are no longer responsible for it. (To learn more about the bankruptcy discharge, including which debts you can discharge in bankruptcy and which you cannot, see Which Debts Are Discharged in Chapter 7 Bankruptcy?)
Here are some circumstances in which you might consider repaying a debt that was discharged.
Perhaps someone cosigned or guaranteed a loan or credit account for you, for example a car loan, store credit card, or a personal loan. Even though you no longer have to pay the debt, your cosigner is still liable for the debt (unless the cosigner also filed for bankruptcy). There's one exception: If your cosigner is your spouse and you live in a community property state, your spouse may be protected by your discharge. (Learn more about what happens to cosigned loans in bankruptcy.)
If you incurred the debt and the creditor is seeking payment from your cosigner, you might feel like you should pay it. Once your bankruptcy case is over, you are free to pay the cosigned debt.
You Borrowed Money From a Relative
If you borrowed money from a relative, the bankruptcy laws treat it as any other debt. Your relative cannot pressure you to repay the debt -- that would be a violation of bankruptcy laws. But if you feel obligated to pay up, you can do so.
The Creditor Is a Medical Provider
Medical debt is unsecured debt that is almost always discharged in a bankruptcy case. If your debt to a medical provider was discharged, the medical provider cannot violate the discharge by forcing you to pay the debt after the bankruptcy case. But the provider can refuse to provide further services to you.
Many people who file bankruptcy feel particularly regretful about discharging medical debt, especially to doctors or hospitals with whom they intend to continue a relationship. If this is your situation, you can voluntarily repay the debt.
If your employer provides you with a credit card to use for employment related expenses like travel or purchasing supplies, you may have to list the card in your bankruptcy and depending on the type of card, your liability to your employer for charges might be discharged.
Many employees feel obligated to repay their employers for unreimbursed charges, especially if those charges were for personal expenses, and not business expenses.
Creditors May Treat Your Payments on a Discharged Debt Differently
Keep in mind that most creditors expect to close accounts and charge off balances when they receive notice of your bankruptcy filing. If you want to continue paying on an account that you had before you filed, the creditor may treat your account differently than before you filed. For instance, some creditors will do the following:
- Not send monthly statements. This is because the creditor fears that a statement might be considered an unlawful attempt to demand payment on an account that was discharged in the bankruptcy.
- Restrict your payment options. Some creditors won't allow you to use online payment options or might make you pay through their collection departments.
- Refuse your payment. A creditor is especially likely to do this if its records show that the account is closed.
- Not report to the credit reporting agencies. Some creditors will not report your on-time payments to the credit reporting agencies if the debt was discharged in bankruptcy, unless you have signed a reaffirmation agreement. This means that making payments on those debts won't help to rehabilitate your credit score.
Which Debt Repayment Strategy Would be Best for You?
Carrying a big load of debt can have serious consequences. I will not only take a toll on you emotionally it can actually harm you physically. Research has shown that the stress related to debt can cause stomach problems, arthritis, high blood pressure, a spastic colon, bladder infections, fibromyalgia, asthma, headaches, and even heart disease. Fortunately, there are two proven methods for repaying debt. Choose one of the two and you could quickly be on your way to not only becoming debt-free but also getting rid of all that the physical and emotional stress caused by your debts.
The avalanche method of debt repayment
If you choose the avalanche method for repaying your debts you will need to make a list of all of them – credit card debts, loans, student loans, everything – and then put them in order with the one that has the highest interest rate down to the one with the lowest. You then focus your efforts on paying off your debts in that order. This means first focusing all of your attention on the debt with the highest interest rate. Of course, you will need to continue making at least the minimum payments on your other debts. Why do some experts like the avalanche method? It’s because if you get rid of your most costly debts first you will save the most money.
The snowball method of debt repayment
This method of debt repayment was pioneered by the financial expert Dave Ramsey. It requires you to list all of your debts with the one that has the lowest balance at the top down to the one with the highest balance. You then focus all of your efforts on paying off that debt with the lowest balance – while continuing to make the minimum payments on your other debts.
Here’s an example of how this works. Let’s suppose you have the following debts:
- Credit card debt A: $500, minimum payment $25
- Credit card debt B: $1200, minimum payment $35
- Department store credit card: $1800, minimum payment $42
- Student debt: $5100, minimum payment $105
If you first pay off credit card debt A you will have an extra $25 plus the $35 minimum payment on credit card B to pay on that debt. Once you have it paid off you will have the $25 from credit card debt A, the $35 from credit card debt B and the $42 minimum payment on the department store credit card – for a total of $102 to pay on that department store debt. This means you should have it totally paid off in about 14 months and can then go to work on that student loan debt.
Why it’s called the snowball method
This is called the snowball method of debt repayment because the philosophy behind it is that every time you pay off one of your debts you’ll develop increased momentum to begin paying off the next one just as a snowball picks up speed as it rolls downhill.
Which would be best for you?
Both of these methods can help you get your debts under control and paid off. So, should you choose the avalanche or snowball method? To pick one of the two you need to first understand your own personality. The bottom line is the one that you choose has to be a good fit. For example, the debt snowball method takes into account the behavioral and emotional aspects of personal finances. As you knock out that debt with the lowest balance it may be easier for you to stay on track because you got to a quick “win”. It does take hard work to pay off a large amount of debt and the debt snowball method could help you stick to your plan so you don’t get frustrated and overwhelmed by the process as you see you’re actually making progress
The debt avalanche method is better strictly from a mathematical point of view because it requires you to focus on the debt with the highest interest rate and pay no attention to its balance. Where the mathematics come in is that the debt avalanche method will save you the most money over the long term. However, if your debt with the highest interest rate comes with a bigger balance than some of your other debts keep in mind it will take you much longer to repay that debt. In other words, the debt avalanche method would not be a good choice if you’re the kind of person that requires fast results. On the other hand, if you’re high on self-discipline and don’t have a big need for instant gratification then the avalanche method of debt payment might be a better choice.
If you feel utterly swamped by your debt, then a better alternative might be to get a debt consolidation loan. If most of your debt is high interest credit card debt you might be able to transfer those balances to a 0% interest balance transfer card. There are cards available now that will give you as many as 22 months’ interest free. That might be enough time for you to actually pay off your balance before the interest charge kicks in.
If you have different types of debts like those listed earlier in this article a better option might be to get a debt consolidation loan. If you have equity in your home, you can get a home equity loan or homeowner equity line of credit. In mid January of this year the national average interest rate was about 5% for a $30,000 fixed-interest home equity loan. And in February you could get a 30,000 HELOC at an average interest rate of 5.2%. Add up the interest rates on your debts, divide this by the number of your debts and the odds are you’ll find your average interest rate is much higher than even the 5.2%. If you don’t own your own home but have good credit you should be able to get a personal loan and maybe for 10% APR. And that, too, should be much better than the average interest rate you’re paying on your debts now.
A debt consolidation loan can be a good solution but it’s important to understand you would be trading money for time. In other words, you will have much lower monthly payments but the odds are your loan will have a much longer term, so you will actually end up paying more interest over the long-term.