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Six-month stamp duty holiday extension could be a boon for potential homebuyers

Data Analysis

An online petition to extend the current stamp duty holiday for the first £500,000 of any property transaction has reached the threshold to enforce MPs to debate the issue in Westminster. Over 110,000 signatures have been secured in support of Chancellor of the Exchequer, Rishi Sunak, extending his stamp duty tax break which is currently due to cease on 31st March 2021.

The initiative was implemented by the Chancellor last summer, in a bid to kickstart the UK’s housing market after a dismal first half of 2020. The removal of stamp duty tax up to £500,000 has saved buyers up to £15,000 each thus far. The commencement of the country’s third nationwide lockdown has led to calls for the holiday to be extended.

The goalposts have changed since government rejected calls for stamp duty holiday extension late last year

The UK government has already made a written response to the petition online. Advising that the holiday was always “designed to be a temporary relief” and that it “does not plan” to extend it into this summer. Dominic Agace, chief executive of Winkworth estate agency, insisted that the government must change tac given that “no-one envisaged” the likelihood of a second and even a third nationwide lockdown last summer.

The initial stamp duty holiday did plenty to galvanise the British property market, with house prices continuing to soar throughout the latter half of 2020. With the ability to buy a property in England or Northern Ireland of up to £500,000 without paying a single penny in stamp duty, it’s been an ideal opportunity for those looking to upsize and scale-up their living. Using Trussle’s online stamp duty calculator tool, it’s easy to see how much buyers would have to fork out after the 31st March deadline. The tool also pinpoints those lenders that are approving property completions quickest. This is vital for those looking to sneak in before the holiday ends. It also details how approval rates differ around the country.

Could stamp duty land tax be replaced altogether soon?

London

The UK’s next Budget is scheduled for 3rd March 2021 and reports are already coming out that the Chancellor is weighing up proposals to scrap stamp duty tax, along with council tax, and amalgamate the two into one tax known as a ‘national property levy’. In many ways, it’s a thankless task for fiscal enforcers at present, given the tumultuous economic circumstances that all countries are facing right now.

In terms of first-stage tax hikes that the UK is likely to experience in the next couple of months, Whitehall is said to be recommending an increase in corporation tax. The thinking is that this would take money out of the pockets of profitable businesses. This would avoid hitting households even harder when personal finances are at their lowest for many.

If a stamp duty tax holiday extension is not forthcoming and the 31st March deadline remains, property sellers are being warned to brace themselves for potential “gazundering” if their transactions do not legally complete before the holiday ceases. Home moving portal Reallymoving has warned that thousands of property buyers will have made offers on properties in the last six months based on the potential savings on stamp duty. Therefore, those unable to complete on time will either need to find a sizeable sum of money to fill the gap or renegotiate the sale price. It’s very much a race against time for many.

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How Web Filtering is Right for Your Business?

Web Filtering for business

Monitoring access to sites on the grounds of network security is justifiable. The intentions to control the watch time on social networking sites would cause a divide. There is a line between restricting access and managing time during work hours.

Businesses may shoot themselves in the foot by allowing unsophisticated web filtering. Is web filtering right for my business? How does one maintain the balance without encroaching upon employee freewill? The benefits are immense, but the backlash in the event of undemocratic behavior may cause a stir.

The intertwined fate of web filtering and limited access needs collective contribution. A workplace would enjoy enhanced productivity and employee happiness by managing web filtering. Which type of content to filter and which sites to keep running would meet the end goals. Cybersecurity problems and solutions maintain a close relation.

The system put forth should seek a technological harmony between man and the machine.

Web Filtering

1. Web Filtering and Workplace Productivity

Productivity is an outcome of several proven and creative forces at work. It’s right that online distractions could divert our attention. We could lose minutes first. They turn into hours by the end of the week. On month-wise, we have got days lost tracking cheap entertainment news or topics.

Businesses have got a legitimate issue at hand. They don’t shy from proposing web filtering. They know the truth is there for everyone to see. It’s human nature to take micro-breaks and justify them. The excuse for nurturing the creative veins is good enough to relieve oneself of moral guilt.

Web filtering works. It does enhance productivity and instills moral responsibility. It’s up to the organizations to extend it to what limits. The idea is to nurture a spirit of self-regulation than outside norms. Employees share a sense of ownership, accountability. They realize the benefits of restricting access to a particular set of sites. They agree, but they expect the management to trust them too. The execution would help create a conducive environment to enjoy work and have fun.

2. Employee Role, Cybersecurity Sessions and Network Security

Hackers are restless individuals. They take it as a personal challenge to bring the organizations down. Businesses have a real opportunity by working as a team. The cybersecurity sessions are one way of raising the awareness level. Employee participation, combined with web filtering, could secure internal networks.

Employee RoleOrganizations should act as a single unit. Every single team member remains accountable for protecting, adhering to guidelines. Hackers prey on ignorance and then go for the kill.

The exploit kits thrive on software inconsistencies. Employees are not the target this time. These kits could corrupt the machines and turn them against the internal network. What about anti-virus software? They play the catching game, and before they could act, the damage cripples everything. Web filtering is one go-to approach to strengthen a network security design.

3. Phishing Attacks Leave Information Standards Exposed

Hackers pose as a business to extract information is an example of phishing attacks. Everybody knows that. What makes it tick even after hundreds of hours of session on it? The issue runs deeper. The failure to manage webmail services bypasses the first layer of security. They drop the guard, and things take a U-turn from there. Web filtering allows access to manage webmail services. The system scans the mails and blocks malicious content.

4. Web Filtering Protects Brand Reputation

Employees are at the center of the action. There is a window for something unimaginable to happen. That’s how the Internet works. What if employees stumble upon a corrupt link or clicks on the download option? It’s not always the hackers who damage the brand’s reputation. A copyrighted dispute could prove all the work undone. Web filtering cancels out any such incidents from taking place.

Cybersecurity problems and solutions offer a contradicting view of web filtering. Businesses invest in enterprise-grade security software to protect the network. At the same time, they put trust in their people. The trust factor and the use of web filtering are two different prospects. Both shed light on roles and responsibilities.

Winning the fight against hackers calls for a dedicated approach. Employees should support techniques like web filtering. Employers should work on keeping the atmosphere lively. They should look for measures to enhance productivity rather than controlling every movement.

Web filtering encourages responsible behavior while accessing online content. Businesses need the right mix of ownership and self-monitoring to keep hackers away. A single incident of security breach could take your organization back by years. You would have to start everything from scratch. The loss of intellectual data casts doubt over the brand for a lifetime. Web filtering enables a positive vibe at workplaces.

The fight against cybercrime begins with controlling the urge to spend precious time browsing no-good sites for entertainment purposes.

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About the Author

Andrew Starr Andrew Starr is a Cyber Security Professional with over 25 years in the Industry. As a CISSP he is passionate about helping business secure their systems and networks. Over the years he has a privileged to worked with clients from all around the world, including household names like Barbour and Unilever to the Metropolitan Police.

Currently he is working with Just cyber security and working with leading cyber security solutions across the globe.

How Can Governments Respond To Surging Bankruptcies?

Across most countries in the world, private and corporate bankruptcies are skyrocketing. CBS report that in the USA alone there has been a 26% jump in bankruptcy filings from the same period in the previous year, with this figure only expected to rise further. Bankruptcy offers necessary financial protection to prevent destitution for individuals, yet when taken en masse, they create an economic problem for the authorities of the host country. Tackling this problem is going to be an important step in economic recovery, and there are a few plans in place to address it already.

Credit leniency

2020/21 has been an exceptional time financially and so governments are looking to exceptional measures. One such scheme is early recovery of bankruptcy from credit records, allowing consumers to once again start building their credit score and, crucially, start spending. Typically, bankruptcy will rest on the credit score of the indebted person from between 3 and 10 years depending on the type of bankruptcy taken, according to CNBC. Credit relief and forgiveness programs are one promising way in which governments can take on some of this burden, accept the exceptional nature of the circumstances, and start getting money moving again.

Fiscal impetus

Bankruptcy may look unavoidable due to the conditions currently facing the country. As noted by CNBC, 60% of retailers had filed for some form of bankruptcy, or bankruptcy through 2020; how can these sorts of businesses be supported? While measures like stimulus packages and such are inherently non-conservative in view, yet there is reason to back them. According to Bloomberg, Goldman Sachs have estimated GDP growth to sit at 6.6% as a result of the $1.9tn stimulus package coming in early in 2021. This stimulus puts more money into the economy and more than pays itself back when it comes to increased spending over time. This may help to provide greater protection to a wide range of retailers by increasing consumer spend.

A good thing?

An interesting tilt to the recent series of bankruptcies is that they are arguably hitting out-of-favor industries. Perhaps most indicative of this is the gas and oil industry, which Reuters finds has lost $53bn over the past 12 months. With technological and financial standards shifting to a pro-green, mostly digital economy, it could be that these bankruptcies are the natural next step for businesses that cannot, or will not, become up-to-date with the modern consumer and industry standards. While certainly not the nicest way for industries to decline, they will nevertheless be eased by the large-scale quantitative easing favored by world governments in the face of continuing decline globally.

Natural progression or a situation in need of rescuing? Bankruptcies are going to continued unabated around the world for a few months at least. With government impetus and careful management of the situation, this can be an outlook with some hope; however, it might also be the logical conclusion to the winding down of certain industries. Time will tell.

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Top 7 Benefits Of Professional Roof Replacement Services

Roof Replacement

In a world of DIYs and self-help videos, many seem to believe that roofing issues and other home improvement matters can be done the same way. However, this is certainly not so. New View Roofing – The Colony Roofing Contractor agrees that professional roofing replacement and cast iron guttering are how you can ensure that the job will get done the right way. 

7 Roof Replacement Benefits

1. Home Safety 

The first benefit of roof replacing is to increase the safety of those who reside beneath it. The safety of you and your family. The roof of your home is a stronghold, not in the way its foundations support the entire residence. It is a stronghold in how it shields you from weather elements, whether that be the sun and its harmful rays, torrential rains, freezing winds and snow, and more. 

A newly replaced roof also protects your home the sd it is. From its exterior frameworks to its interiors. 

2. Comfortable Living 

Very much in connection to number 1 is how a good Sydney roofing company can replace your roof to provide you with comfortable living. Besides being a canopy against climate and weather changes, an upgraded roof safeguards against the likelihood of mildew and mould growth. It can aid in providing you with excellent ventilation and screening polluted air. 

Another is that it may prevent the formation of ice dams which carry potential threats of cave-ins.

3. Energy-Saving 

Did you know that a dilapidated and unupgraded roof contributes immensely to higher electric bills? Such roofs have little capacity if at all, to regulate temperature coming from the outside. As a result, extreme weather will have you utilising HVACs and fans for much longer hours and in higher levels of operations than average. Hence, skyrocketing energy consumption.

A professional roof repair or replacement service provided by an authorized Plainfield roofing contractor can aid you in avoiding this entirely.

4. Home Appearance Improvement 

An obvious and practical benefit of having your roof replaced is how it can instantly improve the appearance of your home. New shingles, gables, and pitches give off a pristine look. At the same time, repaired or replaced eaves, ridges, and overhangs tighten (and secure, might we add) the roofing framework to make it appear more put-together.

5. Excellent ROI 

There are several sections of home renovations that, sadly, when done wrong, become bad investments. They don’t do much for the long-term. This isn’t so with roofing. New roofs are considered as one of the most advantageous home project investments. 

Statistics prove that its Return On Investment reaches at least over 60%. Hence, it’s a definite must when thinking within the lines of long-term benefits.

6. Curb Appeal And Property Value Increase 

Real estate estimators have said that by revamping the look of your home, roof replacement included, it can increase your residence’s curb appeal by at least 40%! That’s an amazingly staggering number, especially if you are looking to move yourself and your family in a different neighbourhood in the future. 

Having your roofing professionally done is a step towards the possibility of securing a faster future sale for your house.

7. Contractor’s And/Or Manufacturer’s Warranty

Finally, seeking the aid of a roofing professional to change your home’s roof is a wise choice because you will be able to receive a form of contractor’s or manufacturer’s warranty. New roofing materials have at least a 25-year warranty. Others, up to as much as 50 years. 

Plus, you can always contact your contractor to inspect and/or repair any damage that may appear on your new roof later on. 

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Biden’s ‘American Rescue Plan’ & Its Opponents

Biden

By Dr. Jack Rasmus

This past Thursday, January 14, 2021 Biden announced his ‘American Rescue Plan’ (ARP), a list of programs and proposals purported to generate a robust economic recovery in 2021, just as the US economy continues to deteriorate as a growing list of recent economic data now indicate.

US Economy Faltering Fast 

New filings for unemployment benefits have been rising rapidly. From a ‘low’ of about 1 million/week in December last week’s initial claims for benefits topped 1.4 million—when  both benefit programs, State administered and the Federal PUA, are counted .  Another red flag indicator is consumer spending (70% of the US economy) and retail sales, its largest component. The latter fell -1.4%% in November and another -0.7% in December, according to just released US Commerce data. These are typical months during which they rise the fastest.  Another indicator of consumer spending in growing trouble, credit card spending fell an even larger -2.7% in December, according to Chase Bank’s database of 30 million credit and debit card holders. Still another red flag is trade. The US trade deficit based on recent months is now running $85 billion a month and close to $1 trillion a year. Deficits mean US exports, and thus US production for exports, is trailing imports to the US badly—and thus contributing to US GDP contraction in 2021 still further.

The severe weakening in the private sector of the US economy now underway can only be offset by increased government spending and stimulus.  The much vaunted recovery of manufacturing activity represents only 11% of the US economy and, furthermore, has already increased most of its potential growth. It cannot continue at past rates or carry the general recovery from here.  Only massive government spending at this point can do that.

The $900 Billion December 2020 Non-Stimulus 

As the economy has weakened in the latter months of 2020, the US government injected a paltry stimulus in last December’s $900B (actually $866B per the Congressional Budget Office). But that will have minimal stimulus effect the current sagging real US economy. Here’s why:

Last December’s $900 billion emergency stimulus passed just after Christmas continued levels of $300/week in unemployment benefits for 12 million jobless.

First, it just continues the level of unemployment benefits of $300 per week. That’s not a net new stimulus.  The economy was already slowing fast in November-December despite that $300 level of benefits. Discontinuing the $300 in 2021 would have made the economy worse but continuing it is not make it a further net stimulus. Moreover, that $300 extension in benefits is good for only 11 weeks. It will run out by mid-March 2021.

Then there’s the $600 checks part of the December $866B/$900B. That’s a net stimulus but a minimal one at best. It injects only $166 billion into the real economy which is miniscule relative to the more than $20 trillion size US economy. Not even 0.01% of the $20 trillion US GDP. And even that assumes the entire $166 billion will actually be spent and not hoarded for future emergencies or used to pay down debt.

The $284 billion for direct small business grants is the largest part of the $900/$866 billion. It will have some net stimulus effect but won’t start hitting the economy for weeks and maybe months—first it must be applied for, then distributed, and then actually spent. And we all saw how that process dragged on with the Cares Act small business PPP program last March 2020—and how larger businesses scammed off a good deal of it and then sat on the scammed dollars.

In short, as an economic stimulus funding of the sagging US economy, the $900/$866 billion is a DOA effort to stimulate the economy this first quarter 2021 in particular. It might keep the slowdown now underway from being even worse than otherwise a little. In that sense it’s a ‘mitigation’ package, not a stimulus.

Biden’s $1.9 Trillion ‘American Rescue Plan’ Stimulus 

Overlaid on the futile December mitigation package now is Biden’s government $1.9 Trillion stimulus proposals announced this past week.  But that’s still just a proposal—not an actual stimulus spending Act passed by Congress. Moreover, for it have any appreciable effect stimulating the economy, there are three reasons why the $1.9 trillion will almost certainly end up much less.

First, the problem remains how much of the $1.9T will get cut as Republicans, and corporate Democrats, in Congress attack it. Already political forces are organizing to slash billions from the $1.9 trillion, including Democrats.  A second reason why the stimulus will not amount to $1.9T net new actual stimulus to the economy is that a large part of it just continues prior spending levels. And that spending level that hasn’t been able to prevent the current US economy’s slowdown.  Third, there’s the question of how soon some of the actual stimulus spending will actually be spent and thus actually get into the US economy. Certain programs and their spending will be delayed until well after the current January-March critical period.

So let’s describe in detail what’s in Biden’s ‘American Rescue Plan’ (ARP) and consider those programs that are likely candidates for cutting by Republican and corporate Democrats in Congress; that constitute just continuation of prior spending; and that will likely experience significant delay before the spending actually hits the economy.

Larry Summers: Corporate Shill Takes the Lead 

Forces in and out of government and within both parties are coalescing to roll back the $1.9T Biden ARP proposals. Once again in the lead for corporate Democrats, is former adviser to Barack Obama in 2009, Larry Summers—now also advisor to Biden. Summers is appearing everywhere on corporate and mainstream media outlets declaring that the $1.9T is too much. He’s especially attacking the $2000 checks for families earning less than $75K per year in income, saying it’s too much.  Summer’s message is even the $1400 in checks will expand government deficits and will overheat the economy causing inflation.

But there’s been no inflation for the past two decades despite adding $15 trillion to deficits and the national debt. The claim that deficits cause inflation in real goods and services is empirical nonsense, not because of some worn out neoliberal economic theory but because the facts don’t support it. But that old fake economic bogeyman of ‘excess spending leads to deficits that cause inflation’ is being peddled once again by Summers in the lead, on behalf of his corporate Democrat buddies, and of course most of the Republicans. They’ll seek to cut at least $500 billion from the $1.9 trillion.

For Summers this isn’t the first time he’s given fake and dangerous advice to presidents in time of economic crisis. It was Larry Summers who, back in early 2009, as key advisor to Barack Obama on how much to spend on Obama’s January 2009 economic recovery plan at the time, convinced Obama to reduce his 2009 stimulus by $120 billion that the US House of Representatives was prepared to spend.  As a result the US recovery lagged badly in 2009-10. Congress had to make up the loss in spending by passing emergency measures like ‘First Time Homebuyers’ and ‘Cash for Clunkers (autos)’ subsidies for households. But by then it was too late. During Obama’s recovery package—amounting to way too little too late now acknowledged by most economists—it took more than six years to recover jobs lost in 2008-09. And then those recovered were at pay levels much less than those that were lost.  Meanwhile as well, 14 million of the 48 million mortgages were foreclosed. And tens of millions more were added to the list of those workers without health insurance between 2009-15.

The Biden proposals are numerous and detailed. The ARP is a very detailed set of proposals. But if readers think they understand it by reading the Washington Post, New York Times, or other mainstream media summaries of it they are wrong. What that media has provided thus far is just bits and pieces of information, packaged up with very little analysis as to how much of the spending will actually get into the economy, how soon might it get there, and whether the $1.9 trillion will yet be gutted and reduced—as the ARP ‘wish list’ hits the Republican buzz saw in Congress.

What follows is a breakdown of the spending elements in Biden’s $1.9T ARP proposals, as well as where and how it will likely be attacked and rolled back by Senate Republicans, Corporate Democrats, and Business Interest lobbying friends of Larry Summers.

Part 1: $400 Billion Covid Relief, School Reopening, & Emergency Paid Leave

To begin with, there’s 4 Categories of spending in Biden’s proposed $1.9 trillion ARP. The first is $400 billion for Covid measures, Vaccine distribution, and for reopening the schools. In this group corporate forces and their political allies will likely attack measures for spending $170 billion to reopen the schools as well as the roughly $70 billion more to provide for 14 weeks paid emergency leave for workers who have to leave their jobs due to schools or child care center closings, to care for family members sick or to quarantine themselves. The measure also extends such paid leave for the first time to the 2 million federal employees and to reimburse state and local governments for the cost of the leave.  The paid leave maxes out at $1,400/week and for workers earning $73K per year in annual income. In other words, it covers roughly 75% of all US workers.

Opponents like Summers and Senate Republicans will argue the $170 billion is too much and should be reduced. It’s really money not needed for schools costs of reopening. It’s really money Democrats want to push to local government—a source for which Republicans and Mitch McConnell have vowed not to allow funds since last June 2020. Anything appearing to help fund state and local governments will be opposed in their push back, and there’s a lot of that money in the $1.9T in various forms of funding.

The other big target in this $400 billion is the above $70B for emergency leave pay for anyone earning less than $73K per year. Even though the money will be paid to employers to offset the costs of the paid leave, it will be attacked by conservatives and corporate Democrats, like Senator Mnuchin, in West Virginia and other corporate interests in Congress. Again, a main reason is its extension to federal and state-local government workers. They also don’t like the fact Biden’s ARP expands paid leave well beyond the minimal provision in the March 2020 Cares Act. That Act exempted big corporations with more than 500 workers from providing paid leave, as well as very small businesses with fewer than 50 workers. Now the measure covers all workers impacted by Covid who have to care for sick family members, or fill in for child care closings, or leave their jobs to provide schooling at home for their K-6 children, or have to quarantine themselves. Equally important, business interests fear the long term effect of providing such leave. They fear it will legitimize more permanent paid leave in future legislation. Better not to allow the precedent now, rather than fight it later.

Other proposals in the $400 Billion will be more difficult for corporate interests to roll back. The remainder of the roughly $160 billion (after $170B for school reopening and $70B for emergency paid leave) goes to a national vaccination program ($20B), testing ($50B), the Disaster Relief fund to replenish stocks of Personal Protective Equipment (PPE), pandemic supplies like developing more therapies.  A further amount, not specified, is allocated to International Health Groups (presumably WHO) which conservatives will fight to remove. There’s also calls for OSHA to issue Covid protection standards and grants to organizations that implement them that Congressional Republicans will likely also oppose.

A second major category of ARP spending  is called Direct Family Relief. It allocates $1 trillion more in spending in addition to the $400 billion for Covid, Schools, and Paid Leave. Here the opposition will be intense, centered around the $1400 checks per person to help working households cover back rents, mortgages, keep the utilities on, and, most important for tens of millions now to provide food for their families.  Biden’s ARP also extends the checks to adult dependents of households who were left out of the Cares Act 2020 $1200 check disbursement.  The checks are a large cost item, amounting to $464 billion (for $2,000 which includes the $600 recently authorized this past December).  Here the Republicans will argue it’s ‘deficit busting’.

Yet these are the same Republicans and corporate Democrats who quickly approved $650 billion in deficit busting tax cuts for businesses and investors in the March 2020 Cares Act. Then approved another $100 billion more in the December 2020 Defense Bill. Not to mention their approval of $429 bill in tax loopholes in 2019 for investors and corporations, which followed Trump’s notorious $4 trillion January 2018 business-investor tax cuts. In other words, they had no problem passing more than $5 trillion in tax cuts the past two years but now they’re crying wolf over spending for working families, students, renters, and local governments approaching bankruptcy.

Part 2: $1 Trillion Direct Family Relief Proposals 

Another major element of the $1 trillion proposed for Direct Family Relief is the restoration of unemployment benefits. This is the $300/week supplemental unemployment benefits just passed in December in the $900B emergency ‘mitigation’ Act. Biden’s ARP raises it a modest $100, to $400.  The December 2020 bill, however, provided the extra benefits only until March, a mere 11 weeks after its authorization in December. Biden’s ARP extends that to December 31, 2021. It’s important to remember, however, this is not a net new stimulus but a continuation of prior spending. It may help prevent a further slowing of consumer spending and its effect on the economy, but it will not constitute a ‘stimulus’, or net new spending.  Nevertheless, Corporate interests in Congress will argue it should not be extended through next December. They may agree to a few more months this spring, past March, instead. They’ll argue that will save hundreds of billions of $ as deficits to the US budget this year.

Other proposals within the $1 trillion for Direct Family Relief are subject to reduction in amount of spending most likely. That includes the additional $35 billion for rent and mortgage relief; the $13 billion more for SNAP and food assistance; and the $40B for assistance to child care providers and for assistance to families of essential workers, caregivers, unemployed, and women who had to leave the labor force to care for children schooling.  Like creating a precedent for paid leave, Republicans and others will fight to reduce the ARP Child Care funding out of concern it will legitimize more permanent spending in these areas later.

One area that opponents won’t likely try to reduce is the further $20 billion allocated in this category to Veterans Health needs. Nor probably the provisions that subsidize COBRA health insurance payments for 3 million workers forced to leave their jobs due to Covid. These payments will ultimately get into the hands of the employers and their health insurance companies, so that’ll be ok with the Republicans and friends no doubt.

The remainder of the $1 trillion takes the form of small funding increases for cash assistance for women on welfare ($1B for TANF program), for substance abuse ($4B), and for programs to address domestic violence due to Covid family stress. While the amounts are small, the idea of providing more funds for such programs will be viewed as adding non-Covid crisis related ‘wish list’ Democrat spending to the total ARP.

The $1 trillion also includes four tax cutting measures that impact working family households in particular: funds to help essential workers, caregivers, and jobless to pay for child care expenses; funds to expand for one year the child care tax credit for households that would allow a tax credit up to half the cost of child care expenses for each child under 13 years old, up to $4k per child (max $8K); an increase in the general child tax credit up to $3.6k per child including now children up to 17 yrs old; and increases in the Earned Income Tax Credit (EITC) for child-less adults, from $530 to $1,500 for those with incomes up to $21k per year. While the total cost of these 4 consumer focused tax cuts is not exactly known, the idea of raising tax credits for families will be viewed by conservatives as threatening their business and investor tax credits. They will oppose these four measures or, in exchange, demand a further increase in their business-investor existing tax credits.

Finally, there is another element in the call to spend $1 trillion that opponents will fight against tooth and nail. It’s the proposal to raise the federal minimum wage to $15 an hour. And the call to pay essential workers retroactive hazard pay. Neither of these proposals contribute to the cost of the $1.9 trillion, their actual costs unknown at this point. Nor are they probably serious proposals for passage by Biden and the Democrats. They will almost certainly be withdrawn. At best they may constitute ‘markers’ for where future legislation may go. It will be important for opposing politicians to get Biden and the Democrats to drop these ideas from negotiations quickly, which most likely they will.

Part 3: $440 Billion Struggling Communities Support Proposals

The third major category of Biden’s $1.9T ARP is for ‘Struggling Communities Support’. It calls for another $440 billion in spending—in addition to the $1 trillion and $400 billion noted.

Just as in the case of the $1,400 Checks, Unemployment Benefits extension, Schools Reopening and Emergency Paid Leave costs, the $440B in part 3 of Biden’s ARP targeting communities will be among the main targets attacked by conservative, Republican, and corporate lobbying interests. The big target for rollback will be the $350 billion of the $440 billion allocated for an emergency fund to state and local governments to pay for more 1st responders and essential workers needed immediately to attack the spread of Covid and accelerate the vaccination of millions before much feared new and more infectious strains of the virus accelerate among the population.  These funds are targeted to ensure faster vaccine distribution, more serious testing, help school reopenings, and to provide EDA grants to local governments, higher education institutions, churches and non-profits.  In addition to the $350 billion, additional $20B each is earmarked for local public transport needed to keep essential workers in big cities are able to get to work and for pandemic response costs by tribal governments.

Opponents will see this as just another way to get money to state and local governments. They’ll argue there’s already funds in the $400 billion for Covid response and the $350B is duplicative. The same argument will be levied for the $20B for local transportation support.

Ever since Mitch McConnell made funds for state and local government the ‘bete noir’ of stimulus spending proposals, Republicans in particular have been adamantly against any aid whatsoever to such local governments. They’ve preferred that States and big cities go to the municipal bond market and borrow more if they need it instead. In other words, let the blue states and big cities get more in debt than they already are. Let them lay off public workers more. The McConnell strategy was to let those states and cities suffer and make them turn on their Democrat politicians. This political bias and prejudice is not gone in the US Senate.  It is led by McConnell, with the Senator Paul Rand ‘deficit hawks’ faction of around 20.  That critical mass is likely to succeed in rolling back most, if not all, the provisions in the $1.9T ARP proposals associated with providing aid to states, cities, local agencies, and tribal governments.

The amounts related to state-local government assistance in the $1.9T are probably around $500 billion of the $1.9T.  So the fight over them in Congress once Biden’s proposals hit the floor will be intense. And likely drawn out. And that is bad for getting government spending and stimulus into the economy promptly in order to offset the likely decline continuing in consumer spending, especially in the first quarter of 2021 when it is desperately needed.

The fight in Congress over the $1.9T stimulus could actually be a long, drawn out affair—unless the Democrats and Biden want to retreat quickly on key provisions to get some kind of an agreement. That is quite possible, especially if the economy continues to deteriorate noticeably in the first quarter. If Biden and friends do not reduce their $1.9T, the actual economic stimulus effect will be delayed and with it the economic stimulus effect. And if the $1.9T is significantly reduced, that too will reduce the economic stimulus effect.

Some commentary is already arguing that the Democrats in the Senate can bypass the Republican opposition and quickly pass the $1.9T by reverting to what’s called the ‘Budget Reconciliation’ rule. This allows the passage of legislation by a simple majority instead of the Senate’s otherwise archaic 60 votes rule for passage. But Democrats have a 50-50, with the Vice President voting for a 51-50 outcome.  That assumes, however, that all 50 Democrat Senators will vote in support. There are a number of them, however, who are closer to Republicans in their corporate affinities than to their Democrat colleagues. It is no guarantee that a budget reconciliation strategy will succeed.

Part 4: Modernize US Government Technology & CyberSecurity

A final part 4 of Biden’s $1.9T ‘American Rescue Plan’ addresses spending to upgrade and improve federal government use of technology, especially where cybersecurity is involved. Amounting to a couple tens of billions of dollars and the remainder of the $1.9T it is clearly an ‘add on’ unrelated to the Covid, Family, and Community Relief proposals. It is more a matter of infrastructure spending which Biden promises will come in a subsequent set of proposals for government spending and investment later this spring. Republicans and opponents of the ARP will no doubt argue such and move to have it considered in that later legislation.

Based on the preceding possibilities it’s reasonable to assume as much as $500 billion could be cut by Congress once conservatives, Republicans, and Corporate Democrats in the Senate get their claws into the $1.9 trillion package. What remains moreover will almost certainly be delayed well beyond February. In short, very little of the ARP will come in time to slow the US economy’s current first quarter trajectory.

Addendum: What’s Actually Net Stimulus in the $1.9T 

Apart from the Congressional cuts likely coming, there are still other reasons why the $1.9T impact will not be the full $1.9T.

A good part of the $1.9T is not really net new or additional economic stimulus in the first place. A significant part of the $1.9T represents just a continuation of prior spending levels. At best it can serve to help mitigate an even more serious economic slowdown.

For example, the unemployment benefits in the ARP don’t kick in until after March and just represent a continuation of the benefit spending levels. The extension continues until the end of 2021. That’s probably around $300 billion of the $1.9 trillion. Then there’s the four consumer tax credits. That effect won’t be felt until households filing their 2020 taxes start to get tax refunds. Those refunds will be late this year. Households will wait until the passage of the ARP before they file tax returns in order to see if in fact they can claim the tax credits and get the refunds reflecting them. Refunds will not flow into households until later this year as a result, especially if the passage of the ARP Act is delayed in Congress. That could amount to another $100B or more.

So the actual stimulus effect of the ARP might be as little as half the $1.9T. $500 billion cut by Congress. Another $300B that’s just continuation of benefits. $166B that will have already entered the economy as the initial $600 checks. And $100-$150B in consumer tax credits.

In short, the actual stimulus to the economy could amount to barely $1 Trillion, not to Biden’s announced $1.9T.

Will that be sufficient to generate a sustained economic recovery in 2021. Not even close!

Biden and the Democrats are thus confronted with making the same error that the Obama administration did in early 2009—not providing a sufficient fiscal stimulus to generate a sustained recovery.  Having failed in that objective in 2009-10, Obama turned to even more tax cuts for business. That did little to reverse the recession for tens of millions of working families and small businesses in the US. The direct consequence of that was the Democrats severe loss of members in the US House of Representatives in the mid-term election in November 2010. And then the loss of the US Senate. And that led to policies that fueled the discontent and rise of opposition throughout the US to Democrat government—paving the way for Donald Trump.

Biden and the Democrats don’t even have the same time in which to prevent the repeat of the last decade. They must turn the economy around quickly. They must put the Covid threat to bed by this summer 2021. They must somehow neutralize Trump, Trumpism and the proto-fascist radical right that is not going away the next four years. They must address the growing discontent with institutional racism. And they better hope that all this doesn’t eventually lead to a recurrence of a financial crisis—as debt loads accelerate in the private sector in 2021 due to a slow recovery and in turn lead to defaults and bankruptcies that precipitate a new financial instability event!

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About the Author

Dr. Rasmus

Dr. Jack Rasmus is author of the 2020 published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press. His website is http://kyklosproductions.com, twitter handle @drjackrasmus, and he blogs athttp://jackrasmus.com. He hosts the Alternative Visions radio show every Friday at 2pm eastern time.

How Do I Create a Live Streaming Website (Platform)?

Live Streaming

We are living in an era of the boom in video streaming technologies. It has never been easier to create a feed and stream straight to the consumers in real-time. Just pick your smartphone, open Facebook, Instagram, YouTube, Twitch, and stream seamlessly to your followers in real-time, free of cost.

However, this trend is gradually taking another course, which is not-so-friendly to the content creators. You might have heard the saying- if a business is offering you something free of cost, then you are their product. Like every other business model that uses consumers like a product, social media platforms with free live streaming services have grown affinitive to the advertisers. After all, the advertisers pay to these platforms, so the advertisers are served.

On popular, free live streaming platforms-

  • Advertisers have taken over, and they may directly and indirectly influence the content, too.
  • These third-party platforms also control the visibility of your content.
  • The revenue sharing with content creators is also diminishing day after day.

If you want to have-

  • creative freedom,
  • freedom from platform’s influence on your content,
  • a secure place in the upcoming boom in the live streaming industry, and
  • a stable long-term business model with uncapped possibilities and revenue,

Now is the time to move ahead and build your live streaming website.

Please note that I am not against using social media and live streaming platforms like YouTube, Twitch, Facebook, and others. In fact, these platforms are great for connecting you to billions of target consumers. I even recommend using social media live streaming for marketing and boosted visibility, but only as a tool; rather than the platforms using you.

Social media platforms should just be marketing tools that help you to reach out to your target consumers, whom you may drive off-site for boosted prospects. They shouldn’t represent your entire business model.

That’s why, if you are streaming to achieve big goals in the future, creating your live streaming website is the first step to reach that next level. So, how to create live streaming website? Let’s find out your options in detail.

How to create a live streaming website from scratch?

In this section, we are going to discuss how to create a live streaming website, and how to prepare your strategies for the same. We will also compare two major ways to achieve your goals, and which one would suit your requirements and budget the most. Let’s start with the pre-development strategies first.

A. Choose your business model

As a live streaming business, your real-time feeds are your products. Hence, your business model should focus on delivering your product to the target consumers and devising a monetization strategy to generate revenue from it.

1. Content strategy

Like every other business, you need strategies to procure your products, so you can sell them to your customers. Before you go any further, just ask these questions to yourself about your products:

  • What type of live content will you be streaming?
  • Who is it for?
  • Why are you streaming- for monetizing, or marketing?
  • How do you plan on generating revenue from your streams?
  • What sort of revenue model suits your content?

Answers to these questions will set a course of action for the next phase in your endeavor. Everything from content procurement to revenue channels, design of the website, features you need, and budget of streaming solutions depends on what’s your content about.

For example, if you are planning to start a live streaming website for marketing and communicating with your target audience of the primary products and services of your business, you wouldn’t need a revenue channel. However, if you are starting a live streaming business, where you would be offering content like products, you need apt revenue channels to generate income.

Let’s understand some major revenue strategies in detail.

2. Monetization strategy

You can rely on three major monetization channels to generate revenue with your live streams as products:

  • Transactional model: Users pay to access individual streams.
  • Subscription model: Users pay a monthly subscription fee to access all streams in the billing period.
  • Ad-based model: Users can access content free of cost, but they will also see ads from your advertising partners. You can experiment with in-roll, pre-roll, and post-roll Ads.

My recommendations would be to choose your revenue strategies based on the type of content you would be streaming. For example, if you are streaming live sports events, you can use the transactional model as a way to sell tickets to individual matches, while you can also show Ads in between the breaks. However, if you are streaming a live music concert, you might not get enough slots to show Ads. Hence, using the transactional model would work just fine.

If you ask me, my inclinations rest on using a hybrid of the three models for the following reasons:

  • Many people just hate Ads. They can pay a subscription fee for an Ad-free experience.
  • Those who are not bothered by Ads can watch your streams free of cost.
  • You can use the transaction model while streaming extremely popular events.

A hybrid of the three models can offer the most value to all categories of consumers while also giving you ample opportunities to stabilize your income, and scale your business to accommodate all sorts of content.

B. Choose a video streaming and hosting platform

Once you have figured out your content and monetization strategies, it’s time to find a tech solution that can cater to your needs. Any encrypted video streaming platform is built on two main components:

1. Streaming and hosting platform

A set of solutions to handle streaming requirements, storing your media files, and delivering them to the streaming devices. The set of solutions may include:

  • Encoder: To encode live streams into data-packets that can be transmitted from the streamer’s device to the consumers through a network. You can choose from both software and hardware encoders, depending on your requirements. Software encoders are suitable for small-to-medium scale requirements, and they are comparatively affordable.
  • Media server: To transmit encoded data-packets via a content delivery network (CDN) from streamer’s device to consumer’s device. Please note: media servers are different from web hosting servers.
  • Decoder: A hardware or software component that decodes the encoded data-packets into media formats that can be played on the user’s device.
  • Player: A software component that plays the decoded files and controls the user’s experience with options such as play/pause/stop a video stream, fast forward, mute, etc.

2. User interface

A set of solutions to present respective user experiences to the consumers, streamers, and admin of a streaming website. The solutions may include:

  • Admin Panel: To control the website interface, users, monetization aspects, and streams, etc.
  • Front-panel: For the end-users (both streamers and consumers) to control their respective aspects such as starting a stream, terminating a stream, browsing a stream, purchase access to a stream, manage user profile, etc.

C. Build a website and embed live streaming into it

A complete live streaming website for a business can be summed up as a combination of all the above components that function in coordination with each other. To build such a website from scratch, you need to take care of the following crucial modules:

1. Admin Features:

  • User Management: Track user data, manage subscribers, manage streamers, etc.
  • Broadcast Management: Track live streams and data of previous streams.
  • Monetization Management: Manage revenue channels on the website.
  • Revenue Management: Track and manage revenue data and pay-outs.
  • Analytics and Reports: Track and represent all kinds of data into tables, graphs, and other formats.
  • Settings: Manage entire website settings such as name, logo, APIs, web pages, etc.

2. Front-End Features:

  • Authentication: Access control and authentication of front-end users.
  • Profile Management: Add, update, remove personal information.
  • Broadcast Management: Create, Manage, Browse live streams.
  • Real-time chat: users can send live text messages to streamers.
  • Search box: Users can search for live streams or streamers on the website.
  • Follow users: Users can follow other users and streamers.

D. Cost to build a live streaming website from scratch

The above mentioned are minimum viable modules that a live streaming website must possess. As seen in the quotations presented by development firms across the planet, the final cost of such an MVP could be estimated as follows:

  • Southern Asia: Approximately $50,000 (taking development cost as $30/hour)
  • Europe: Approximately $80,000 (taking development cost as $50/hour)
  • USA: Approximately $150,000 (taking development cost as $100/hour)

Please note that actual costs might increase/decrease based on your unique requirements and the complexity of the features. I have estimated these budgets based on the quotations given by reputed development companies for around 1000-1500 hours, and a team of at least the following resources:

  • Project Manager
  • Technical Lead
  • iOS developer
  • Android developer
  • Backend developer
  • Graphic Designer
  • Web Designer/UI Engineer
  • QA and Testing Engineer

Choose the Smarter way –save all your time, money, and efforts

There are turnkey scripts that allow you to set up live streaming websites upfront using a graphical user interface. These are ready-made scripts with a collection of all the components mentioned in this article. You can either build a website from scratch and integrate these components, or you can use a turnkey live streaming script to save all your time, money, and efforts.

Based on your requirements, a turnkey script can get you a ready-made website, admin panel, integrated components, mobile apps, and all essential APIs out of the box. All you have to do is install the source code of the script on your web server, where you can personalize and take your website live on the go.

You can get a decent MVP for as low as $400-500 (website only), and $800-$1000 with ready-made mobile apps. Just Google the term – turnkey live streaming software, you will find many results.

However, I suggest going for turnkey scripts that provide open source-code access. Having the source code gives you an edge, as you can customize your website and choose component providers according to your requirements and budget.

SaaS live streaming scripts are also a good option, but the lack of source-code access can limit your prospects and customizability. For example, you cannot choose your hosting provider, encrypted video player, media server, etc. However, SaaS solutions don’t charge upfront but small monthly recurring fees. So, they might be useful if you can’t spare an upfront investment. Choose wisely.

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How Your Home Can Help You Consolidate Debt

Home loan

The past year has been difficult for Canadians. With unemployment rates during the first months of the coronavirus pandemic higher than at any point since the Great Depression, many have struggled simply to keep up with their mortgage payments and put food on the table.

While the end of the pandemic may now be in sight, the economic crisis it has caused may last significantly longer. So perhaps it is unsurprising that many families are looking for ways to consolidate their debt and secure lower monthly payments.

One of the best ways to do this is through a home equity loan, which allows you to borrow against the value of your home to manage your debt more effectively.

What is a Home Equity Loan?

A home equity loan is a financial tool that allows you to access cash based on the value of your home.

When you purchase a house, you start to slowly accumulate equity over time by paying down the principle on your mortgage or by the value of your property increasing. Long before you own your home outright, you will have generated a significant amount of equity through your monthly mortgage payments, and a home equity loan allows you to use this as collateral.  

couple

How Can a Home Equity Loan Be Used to Consolidate Debt?

The average American is carrying debt $38,000 of personal debt, excluding mortgages, and as much as 25% of this is high-interest credit card debt. When you’re juggling car payments, credit cards, student loans, and payday loans, it can be hard to stay on top of all of them — especially if you’re temporarily out of work or receiving welfare.

By replacing all these smaller monthly payments with a single payment streamlines the process, making it easier for you to meet your commitments and helping to ensure that your credit rating isn’t torpedoed by months of missed payments.   

A home equity loan gives you a chance to leverage the value of your house — in some cases, up to 80% of it — to free up the money you need to get the bill collectors off your back and pull out of the debt spiral.

Who Can Apply for a Home Equity Loan?

Home equity loans are available to any homeowner, but the particular type of home equity loan you will want to apply for depends on your particular financial circumstances.

If you’re struggling with high debt levels and have little to no regular income, a brokerage specializing in alternative residential mortgages like Burke Financial will be able to provide you with the greatest range of options.

When working with a brokerage, you can secure a home equity loan even if you’ve been rejected by the banks, have a credit score below 650, and don’t have a regular source of income. The approval process is streamlined, and you could receive the funds you need within a week of applying.

As the new year begins, millions of families are suffering through no fault of their own. With debt levels already at historic highs before the pandemic began, the economic crisis has left many in a spiral of debt it can seem possible to escape from.

The good news is that if you are looking for ways to get your debt in hand, an alternative sub-prime mortgage brokerage may be able to help you find a solution that can help you find debt relief today.  

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An easy way to become an EU citizen: Golden Visa programs

Portugal

Interest in Golden Visa programs increases day by day. A total of 9254 investors obtained residency in Portugal between October 2012 and October 2020. The Portuguese Immigration and Borders Service (SEF) has provided this data. A similar interest from investors is also apparent in Greece’s Golden Visa program as well. Enterprise Greece states that a total of 7903 investors obtained residency in Greece between 2013 and September 2020.

Many investors choose these programs because they offer an easy way to become an EU citizen. In addition, they offer benefits such as some tax exemptions and tax reductions. In the case of citizenship, they offer visa-free travel to over 150 countries in the world.

So, how does the process go? Let’s look at the details.

Benefits of the Portugal Golden Visa

Portugal Golden Visa is among the top popular residency by investment programs in the world. First, you choose one from several investment options. Following your investment, you can apply for your Golden Visa. Getting EU citizenship with the Golden Visa in Portugal is one of the smoothest processes out there right now. The immediate rights you will gain are temporary residency in the country, visa-free travel within Schengen countries as well as family reunification. The program imposes only a seven-day requirement per year. So, this allows you the flexibility of mobility. If you fulfill this requirement at the end of five years, you can apply for citizenship and permanent residency as well. Portugal citizenship by investment brings with it EU citizenship and visa-free travel to 186 countries. Because you become an EU citizen, you will have the right to live, work, and travel in any European country.

Tax benefits

Another important factor of the Portugal Golden Visa is the tax regulations for foreign investors. The Non-Habitual Residency (NHR) program is one of them. It allows tax exemptions on most of your foreign income. In addition, if you have a Portuguese income, you will be taxed at a flat rate which is less than half of the normal income rate for normal Portuguese citizens.

Foreign pensioners are also advantageous in terms of taxation. Under the NHR program, investors’ foreign pension will be subject to taxation at a fixed rate of 10%. All of these are valid for a duration of ten years. To benefit from the pension tax regulation, there are two basic criteria. One is that you need to have the right to residency in Portugal. The other is that you must not be a tax resident in Portugal for the last five years.

You should also note that the lowest investment amount for Portugal Golden Visa starts from as low as €280,000. The minimum investment amount depens on the type of investment and is €350,000 for Portugal Golden Visa Investment Fund as an example.

Greece Golden Visa

Greece also offers similar rights as Portugal. The most important part of this Golden Visa is that the minimum investment amount is only €250,000. The lowest investment amount for real estate to get residency in Europe. Another good part of it is that you don’t have to stay in the country at all. Also, you can renew your residency indefinitely every five years.

You should also note that there is no record of obtaining citizenship through golden visa Greece yet. Still, it is a good opportunity to benefit in many other aspects. For example, you can include your extended family as well. This means that besides your spouse and children, you can also include your parents and parents in law.

Tax benefits for foreign pensioners

As a foreign pensioner, you can benefit from a flat rate of 7% taxation on all of your foreign incomes. They can be pensions, business activities, investments, or other incomes. You may ask how. You need to shift your tax residency to Greece. So, this means you need to stay in Greece for at least half of the year. Furthermore, the regulation is valid for ten years.

Normally, the country stated that they will not accept all the applicants. The applicants must come from a respectable country. If your country is no one of them, you still have a chance. Thanks to your Golden Visa, you can still benefit from this if you already obtain residency in Greece.

What other benefits do Portugal and Greece offer?

A common feature of both countries is the low cost of living. Compared to other European countries, you can live on a less budget and enjoy a high standard of life in Portugal and Greece.

Furthermore, Forbes considers Portugal and Greece as the top European countries to live in after the pandemic. It explained that it is because of their strong healthcare system and because fewer people have been affected by the virus compared to other European countries.

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Loan Prepayment Calculator: How Does It Work?

loan

Have you taken a personal loan to fund your new purchases? Is it a car, medical expense, home renovation, or education? The loan term may vary, but the fact stands still: the total interest rate you pay is growing each year. The larger your loan and the longer the repayment period, the bigger the price that falls on your shoulders.  

A good question to ask is: how can I save on interest and pay off the loan as soon as possible? The loan prepayment calculator can help you find an answer at Payday Depot. 

What Is a Loan Prepayment Calculator?

A loan prepayment calculator is an online tool designed to help the current or potential borrowers to identify how much of total interest they can cut by making extra installments and shortening the total loan term. The information you will have to provide is the current loan balance, interest rate, loan term, current monthly payment, and an additional monthly payment that you are willing to consider.

By entering this data, you can analyze other things as well. For instance, how profitable making an extra payment on a monthly basis could be, how much more you should pay and, how it will affect the total borrowing term. 

How Does It Work?

To get a better understanding of how the loan prepayment calculator works, take a look at this case. Brad is considering the idea of making extra payments each month to cover his personal loan, save on interest, and take a mortgage for his dream house. 

His amount of loan equals $40,000. Interest rate: 4 percent. Loan term: 10 years and monthly payments of $500. Additional monthly installments that he could make amount to $200.

The results show the impact and changes that can occur from making these extra payments. For Brad, the total interest will drop from $6,600 to $4,449. The total payments will decrease from $46,600 to $44,449. The change in total payment will amount to 5 percent or $2,151. He will also be able to repay his loan 30 months earlier than expected initially.

Advantages and Disadvantages

If your loan is flexible and allows for a certain degree of amortization, the calculator will help to optimize the finances and develop the best strategy to minimize the costs. On top of that, making extra installments will affect the debt-to-income ratio, which is directly linked to high chances of getting another loan on best conditions without high-interest rates often associated with the bad credit score.

The public records, missed payments, high credit utilization, and a large number of loans can grow into an obstacle to your financial freedom and create an impression that you are living beyond the means. The loan prepayment calculator is a great tool to see where you stand. 

The cons of loan prepayment are mostly centered around an additional pressure on your monthly budget from making the regular extra installments. Even though they may bring you closer to future opportunities, your current emergency fund will have to receive fewer transactions for some time.

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What can debt collectors do in the UK vs the US?

Debt Collectors in UK and US

If you’re being contacted by debt collectors, the first thing to know is, you’re not alone and there are lots of ways to deal with them. In this article, we’ll cover exactly what debt collectors can do in the UK vs the US, so that you’re fully informed of your rights against debt collectors, and know how to defend yourself against any court action they may take.

When a debt collection agency first contacts you about unpaid debts, you may not even recognise the name of their company, which can add to your feelings of stress and intimidation. It is likely that the original person or business you owe money to (your creditor) has hired this company to chase you for the debt, or even sold the debt to them. For example, you may have owed money to T-Mobile or Vodafone, but suddenly find yourself being chased by companies like Robinson Way in the UK or Encore Capital Group in the US, because these companies bought your debts from T-Mobile or Vodafone at a fraction of their original amount, and are pushing you to pay them in full.

Unfortunately, the debt collection business is booming in the UK and the US, and debt collectors often unfairly (and illegally) spread fear and misinformation about what they can do, in the hopes of pressuring you to pay up. However, once you are fully informed of your rights, you’ll see that there is a lot that debt collectors have to prove before they can take you to court (it is unlikely to even come to this if you start proper debt management solutions). Even if debt collectors win a case against you, there are still things you can do to avoid being liable for a debt you just can’t afford.

Let’s take a deep dive into what debt collectors can do in the UK vs the US.

What can debt collectors do in the UK vs the US?

In the UK, debt collectors can contact you asking for payments and eventually take you to court if you ignore them, but they cannot harass you, enter or take items from your home, contact you at work, send you to prison, or get you to pay a debt without evidence of your original credit agreement.

In the US, debt collectors can contact you asking you to make payments and eventually file a lawsuit against you if you ignore them, but they cannot abuse or intimidate you, take items from your home, tell your employer about your debt, send you to prison, or get you to pay a debt without proof that you owe it.

Let’s look at what steps debt collectors can take in the UK and US to recover money that is owed, and how you can best defend against their tactics.

What steps can debt collectors take in the US?

Struggling with debt that you can’t pay, and receiving threatening letters from debt collectors (even though they often don’t have as much power as they make out), can be a really upsetting experience. Take a breath – there are lots of things you can do, and you won’t be put in jail for being unable to pay your debts (except for child support, if you had the finances but chose not to pay). For starters, when you get a call from a collection agency, do not keep ignoring them. In some cases, if you try negotiating with the debt collection agency, chances are that they might even settle for a lower amount than what you owe.

Here, we’re going to go through exactly what steps debt collectors can take against you in the US, and what you can do to protect yourself from a lawsuit.

If you have debts that you haven’t paid (including old debts from years ago that you thought had been forgotten about), a debt collector may contact you with a lawsuit. You are likely to have been contacted several times with letters or phone calls before notice of a lawsuit, though. If you don’t recognise the name of the company contacting you with a lawsuit, this may be because they bought your unpaid debt off your former creditor, and are now chasing you for it. Debt collectors may even try to chase for ‘zombie debts’, which refer to debts which are cleared off your credit report or which you don’t need to pay because the statue of limitations has passed. It goes without saying that you shouldn’t pay a cent of these debts, as the debt collector won’t have a strong case in court.

Once a debt collection company has filed a lawsuit, the matter comes before a court and the judge will consider the case. If the debt collector can prove that you owe the debt, the judge may impose something called garnishment. This is when either a portion of your wages is taken to pay off the debt, or money is taken directly from your bank account.

However, the debt collection company has a lot to prove in court before this can happen. The good news is, the scales are tipped in your favour, because getting enough proof that you owe a debt can be difficult. Use this to your advantage and don’t ignore the lawsuit – this is a surefire way to lose it, and have to pay a debt you might not have to pay.

How do I respond to a debt lawsuit?

LawsuitLet’s look at how to respond to a debt lawsuit, and how you can protect yourself against a debt collection company in court.

Respond to the lawsuit with an ‘Answer’

  • You must make sure you respond to a debt lawsuit. It can be scary to receive a lawsuit, especially if you know you can’t pay the amount, but if you don’t answer it, the collection agency suing you will get a default judgement against you. This means that they can garnish your wages, and potentially take money from your bank account. They are likely to add court costs, lawyers fees and other charges too. Whereas, if you respond to the lawsuit and demand the collection agency prove your debt, they may have a much harder time getting a judgement against you. Don’t admit liability for the alleged debt, because the burden of proof is on the debt collection company to show that you actually owe the money you do.
  • To reply to a debt collection lawsuit, you need to respond through legal briefs called an Answer. You need to file the Answer with the Clerk of Court, and asked for a stamped copy of the Answer. You should send the stamped copy to the debt collection agency (called the ‘plaintiff’ in court, because they’re filing a case against you). In most debt collection lawsuits, you’ll have between 20 and 30 days to file your Answer.
  • There will be a section in the Answer where you can assert your affirmative defence. An affirmative defence is basically a reason that you don’t have to pay the debt (even if you owe it!). This could be the statute of Limitations, because if the time frame in which a debt collection agency is permitted to file a lawsuit has passed, the case will be dismissed. This could also include Failure to Name an Essential Party, as if the debt collection agency have failed to name the right party, or failed to include them in the lawsuit, they won’t have a case. Here is some useful advice on how to draft an answer to a debt collection lawsuit.

How you can challenge the lawsuit

Not only can you get out of a debt lawsuit, but you can even counter-sue the debt collection company! The lawsuit against you all depends on proof, and whether the debt collection agency can prove you owe the debt. Luckily for you, debt collection agencies may often find it hard to get hold of all the necessary paper work – particularly if your debt has been bought and sold several times.

Demand documentation of the debt

You have the right, according to federal and state laws, to demand what is called a debt verification (information about the debt). If the debt collector can’t produce this information, they are much less likely to win the lawsuit. In your request for debt verification, you should demand:

  • a description of the amount owed
  • details of the original creditor, including name and address
  • documentation of all paperwork, to show how a debt which may have changed hands many times – has been purchased from the original creditor.

If the debt collection agency can’t provide this documentation, the lawsuit may well be dismissed, so it’s definitely worth demanding a debt verification.

In fact, if your debt collection agency fails to provide a debt verification, they’re in violation of federal policies. You can bring this up as a strong defence in court, even if the judge doesn’t dismiss the case. If a debt collector doesn’t verify the debt, you can also counter-sue, and get up to $1,000 per lawsuit, plus attorney’s fees and court costs.

What steps can debt collectors can take in the UK?

We understand that struggling with debt is a uniquely painful experience, and that debt collection companies often make us feel intimidated and small. In this section of the blog, we’re going to show you how debt collectors often don’t have as much power as we think, and how, in some circumstances, you won’t end up having to pay the debt (yes, even if you owe it!)

If you continue to ignore people you owe money to (creditors or debt collection companies who have bought the debt off them), they won’t just go away. They may end up taking you to court and getting a County Court Judgement (CCJ) order against you, which demands that you repay the debt. This will arrive in the form of a letter, and will detail:

  • how much you owe
  • how to pay (in full or in instalments)
  • the deadline for paying
  • who you have to pay

A CCJ stays on your credit profile for six years, even if you pay it off within six years, so it will affect your ability to get credit and important loans such as mortgages. You should note that a CCJ is not a criminal judgement, and won’t go on a criminal record. You also can’t go to prison in the UK for being unable to pay your debts (with the exception of debts like council tax and child maintenance arrears, in certain circumstances).

After you receive a CCJ, your creditor can apply for you to pay your debts off in three different ways:

  • Attachment of Earnings
  • Charging Order
  • Bailiff action.

An Attachment of Earnings is an order which tells your employer to deduct money straight from your salary to pay off your debt. This money goes straight to the court. A Charging Order is an order which allows your creditor to secure your debts against, for example, your home. If you don’t keep up with the debt repayments, you could lose your home. When your creditor gets a charging order, they can often apply to the court to force you to sell your home to pay off your debts (‘order for sale’). A CCJ can also allow for bailiff action, where bailiffs may come and remove some of your valuable assets. However, bailiffs are not allowed to remove children’s belongings, household goods or tools or vehicles (usually under £1,500) that you need for work.

This is all a worst case scenario, however, and there are many, many steps and actions you can take to avoid a CCJ, or overturn one in motion.

How to defend against a CCJ

Before creditors and debt collectors can take you to court, they must follow certain protocols. Before any court action, you should get a Letter Before Claim with a Reply Form. If you don’t get these documents, your creditor can’t take you to court, so make sure you check this!

Financial notice

If you debt is covered by the Credit Consumer Act (CCA), you can ask to be sent a copy of your original credit agreement and a statement for your loans. If you creditor can’t produce a CCA, you can’t get a CCJ for the debt and you can even decide to stop paying the debt after a couple of months, as it is no longer enforceable.

However, it is important to know that the CCA doesn’t apply to all debts, and asking for a CCA generally only works if your debt has been sold to a debt collection company (debt purchaser). If your debt is still with the original creditor, you probably won’t be able to stop a CCJ this way.

If you receive a Letter Before Claim, the Reply Form that should come with it, will ask if you owe the money. There are four boxes:

  • Box A – I agree I owe the debt
  • Box B – I owe some of the debt, but not all of it
  • Box C – I don’t know whether I owe the debt
  • Box D – I dispute the debt

Although you may owe money, your creditor may not be able to win a legal defence against you, so it’s important that you don’t rush into ticking anything. Tick Box C if you’re not sure whether you owe the debt and may have a defence against it (see our section on defences below), ‘possible defences’. For example, if the debt collection company taking you to court cant produce the original credit agreement, they won’t have a case against you. Ticking Box C gives you time to request further information, and get together defences against a CCJ.

Potential defences against a CCJ

  • You never owed the money in the first place. Sometimes, debt collection agencies will chase people for debts just because they have a similar name or some family connection to the actual debtor. It goes without saying that you do not have to pay these debts.
  • The debt is already paid. Obviously, if you’ve already paid the debt, then the debt collector is mistaken in chasing you for it, and won’t have a case against you. Still respond using the Reply Form though, as you’ll need to provide proof that you’ve already paid the debt off.
  • The creditor doesn’t have the original credit agreement. As we mentioned above, if your debt is covered by the Credit Consumer Act (CCA) and your creditor can’t provide a copy of the original credit agreement, you can’t get a CCJ.
  • You couldn’t afford the original credit. This is a defence particularly relevant to Payday Loans. If you’ve taken out a loan and the creditor didn’t do proper checks to see if you could afford it, you can send an affordability complaint to the original lender, and if they ignore you, to the Financial Ombudsman. You can even ask for a payday loan refund.
  • The debt is old, and the creditor delayed court action for too long. If your debt is older than six years and your creditor hasn’t taken action before now, you may not have to pay it. This is called a ‘statute barred debt’. The debt will technically still exist, but you it can’t be legally recovered through court action.

Overturning a CCJ

There are official solutions in the UK to help people deal with unaffordable debt. These include:

  • Individual Voluntary Solutions (IVAs), which allow you to pay off a small percentage of the debt that you can afford and write off the rest after five years.
  • Debt Relief Orders (DROs), which are available if you have very few assets and less than £50 spare income, and write off your debt after 12 months
  • Bankruptcy, which is a legal status that lasts for a year and is a way of clearing debts you can’ afford. Your assets and excess income will be used to pay off your creditors, and at the end of the bankruptcy, your debts are written off.

IVAs will usually overturn a CCJ, unless you have a Charging Order against your valuable assets. With DROs and bankruptcy, the CCJ will still technically go ahead, but the CCJ can be included in your DRO or bankruptcy, meaning you won’t have to pay it, or face legal action.

What are debt collectors not allowed to do in the UK

Although debt collectors can come across as very intimidating, there is a long list of things they are barred from doing in the UK. All debt collection companies are regulated by the Financial Conduct Authority (FCA), and if they break any of these rules, you can report them to the FCA.

If you’re being harassed by an illegal money lender (possibly known as a ‘loan shark’), you can report them confidentially via the following contact details:

  • Telephone: 0300 555 2222 (24-hour service)
  • Text a report to 07860 022 116
  • [email protected]
  • Report loan sharks via Stoploansharks.co.uk

Debt collectors in the UK are not allowed to:

1. Call you at work

Calling you at your place of employment, or contacting anyone at your workplace to tell them about your debts, is strictly against Office of Fair Trading (OFT) laws. The debt collectors who use this tactic want to embarrass you into paying up, and you should report them immediately.

2. Contact you on any social media platform

If debt collection companies contact you via any of your social media accounts (Facebook, Twitter, Instagram etc.), you should report them and keep proof of the communication.

3. Contact you outside of 8am-9pm on working days, or at all on weekends and holidays

Debt collectors can only contact you within specific hours, and are not allowed to harass you repeatedly. If any of them contact you outside of these hours,

4. Reveal the details of your debt to family members or friends

Debt collectors are not allowed to reveal details of your debts to your family or friends. They may do this to put psychological pressure on you to pay. This is illegal and any debt collector who does this is in breach of both the laws established by the OFT, and privacy laws.

5. Add additional costs onto the debt that were not specified on the debt repayment contract.

Under UK debt collection regulations, debt collection agencies can only add 8% interest to an account. If any debt collector tries to add more than this to account, refuse to pay it.

6. Give false allegations or information, for example, pretending that they have legal powers which they do not possess.

Debt collectors may try to lie to you, although this is totally against FCA and OFT laws. Debt collection agencies have even falsified documents in the past to look like official court documents, or have told the debt collectors that they’ve already received a CCJ. Scrutinise any letters or contact you receive about court action for false information. In our section ‘How to defend against a CCJ’, we’ve detailed the proper documents you should receive before court action on your debt, so you’ll be able to tell when a debt collector might simply be lying about court action to make you pay now.

7. Operate in a way that is considered threatening or abusive

If a debt collector of bailiff physically or psychologically abuses or harasses you, they’re in breach of the law and you can call the police. Visit the Citizens Advice Bureau’s ‘harassment by creditors’ page for further support.

8. Send or threaten to send bailiffs to your house.

Debt collectors may threaten to send bailiffs to take away your possessions, in order to pressure you into paying up. They know that if they have to take you to court it is a lot more hassle for them, and some of them will (wrongly and illegally) take any measures to get you to pay now. However, debt collection companies cannot send, or threaten to send bailiffs to your house. Only the courts can do this if you get a CCJ, but there are many steps you can take to avoid and even overturn a CCJ when you’ve received one. Regardless, bailiffs are not allowed to take essential household goods, tools you need for work and children’s toys and belongings.

9. Enter your home without permission

Debt collectors are allowed to come to your door, but they don’t have the right to come in unless you give that permission. Even if they say they have the right to enter, this is not true.

What are debt collectors not allowed to do in the US?

If you’re feeling anxious because of debt collectors calling or writing you letters, you should remember that there is a long list of things that debt collectors are not allowed to do in the US. Debt collectors almost never have as much power as they make out, and there are steps you can take to deal with your debt and stop them contacting you for good. Debt collectors in the US are regulated by a federal law called the The Fair Debt Collection Practices Act (FDCPA), and are not allowed to:

1. Contact you before 8am and after 9pm, or at an unusual place

If debt collectors try to contact you at unsociable hours or at places they know are inconvenient to you, it’s because they want to pressure you into paying the debt. However FDCPA law forbids them from contacting you before 8am and after 9pm, and in unusual places. If they do this, you can report them to the Consumer Financial Protection Bureau (CFPB)

2. Tell your employer about your debt

While debt collectors are allowed to contact your employer to ask for your address or telephone number, they are not allowed to tell your employer that you owe a debt. If you’re not allowed to receive personal calls at work, tell the debt collector that. If they have this information, they are not allowed to call you at work.

3. Tell people, other than certain people, about your debt

A debt collector is only allowed to discuss debt with your spouse, your parents (if you’re a minor), your guardian, executor or administrator and your attorney, if you’re being represented about a debt. A debt collector is not allowed to tell anyone else about your debt, and you should report them to the CFPB if they do.

4. Contact you about your debt, if you’re being represented by an attorney.

If you’re being represented by an attorney about your debt, debt collectors are not allowed to contact you, and must usually contact your attorney.

5. Contact you, after you’ve told them in writing to stop contacting you

When you tell a debt collector in writing to stop contacting you, they are not allowed to contact you again except to notify you that they may take specific legal action, such as a lawsuit, against you. Telling a debt collector to stop contacting you won’t stop them from trying to extract the money from you in other legal ways.

6. Threaten, harass or intimidate you

If a debt collector verbally, physically or psychologically abuses you, they are in breach of the law. Report them to the CFPB immediately, and keep any evidence you can of harassment.

7. Deceive you or mislead you while trying to collect a debt

Although debt collectors may lie in order to try and intimate you into paying a debt (for example, threatening jail time when they have no power to do so), it is strictly against FDCPA to do so.

8. If they win a debt lawsuit against you, garnish your unemployment benefits, disability payments, and pension income

If a debt collection company does win a lawsuit against you, they are not allowed to garnish (take money from) federal benefits such as unemployment and socials security benefits, disability benefits and pension income. This doesn’t apply to child support and government debts, though.

9. Enter your home without your permission, and take property

Technically, debt collectors can come to your door and ring and knock, but they have no right to enter. They certainly don’t have the right to take property. If they claim any of these rights, they are lying and in breach of federal law.

What are debt collectors allowed to do in the UK?

While there are many things that it is illegal for debt collectors to do in the UK, they are still allowed to pursue you for late debt repayments, so it is important that seek free debt advice, with a charity such as StepChange or Christians Against Poverty. In the UK, debt collectors can:

  • Contact you about debt repayments, either by phone calls, letters or knocking on your door.
  • Sell your debt to other debt collection agencies, who will then pursue you for the debt
  • Take you to court, and get a CCJ against you

What are debt collectors allowed to do in the US?

While there is a long list of what debt collectors are not allowed to do in the US, they are still allowed to chase up on late debt payments and potentially sue you for a debt. Let’s look at what debt collectors can do in the US, so you are fully informed. Debt collectors can:

  • Contact you about debt repayments, either by phone calls, letters or knocking on your door.
  • Report unpaid debts to credit bureaus (this does significant damage to your credit score, and your ability to take out loans)
  • Sell your debt to other debt collection agencies, who will then pursue you for the debt
  • Sue you for payment on a debt.

You don’t have to deal with debt alone, however. If you’re being chased by creditors or debt management companies, make sure you get free debt advice from nonprofit agencies such as the National Foundation for Credit Counselling (NFCC).

How can you deal with debt collectors in the UK?

You can best deal with debt collectors in the UK by dealing with your debt. There are lots of methods for doing this, even if you cannot afford to repay the full debt. Once a debt collector knows you’ve taken action on your debt through various methods, they are less likely (or may be prohibited from) taking you to court over your debt. Even if you have already been taken to court, there are ways to reverse the effects of this. Let’s look at how you can deal with your debt in the UK

Individual Voluntary Arrangement (IVA)

An IVA s a government approved debt help scheme, which helps you if you’re struggling to repay your debts. An IVA is a legal agreement made between you and the people who you owe money to, and it is managed by an Insolvency Practitioner. An IVA allows you to pay back a small percentage of your total debt, and get the rest of it cleared. At the end of the IVA (which runs for 5-6 years), no matter how much money you have left to pay back, the debt is written off. You will make small, monthly payments towards your debt, based on what you can afford. IVA Advice offers free, online advice for dealing with your debt. If you already have a CCJ, entering into an IVA will overturn this.

Debt Management Plan (DMP)

A Debt Management Plan, either through a charity or a debt management company, allows you make reduced payments to creditors based on what you can afford, and usually freezes the interest on your debts. This means that you can focus on repaying your debts and seeing the figure go down, rather than dealing with spiking interest. Debt collectors are unlikely to keep chasing you if they know you have a repayment plan in place. You can also protect your valuable assets, such as your home or car, whereas if your debt goes to court, you may have to put these up as collateral to pay your debts.

Debt Relief Order (DRO)

A Debt Relief Order tops your creditors from contacting you by giving you legal protection against them, and writes off your debt after around 12 months. If you have a CCJ, it can be included in a DRO.

Bankruptcy

Going bankrupt is another way to deal with debt, but it has a very serious affect on your life and credit rating, and you should only consider doing it after you’ve taken free debt advice. Bankruptcy will clear your debt after around 12 months, although any assets you have may be sold off to pay your creditors.

How can you deal with debt collectors in the US?

Debt management plan with a nonprofit organisation

A Debt Management Plan allows you make reduced payments to creditors based on what you can afford, and usually freezes the interest on your debts. This means that you can focus on repaying your debts and seeing the figure go down, rather than dealing with spiking interest. You should be careful about seeking help from debt management firms though, as they may charge fees and will want to make a profit. You are better off seeking debt management help from a nonprofit debt charity like the NFCC.

Negotiating for a smaller payment

Debt collectors may well be open to negotiating for smaller payment, rather than going through the hassle of taking you to court. If they’ve already bought your defaulted debt at a less money from a creditor than it was originally worth, it won’t take much for them to make a profit. Start by offering them 10% of the original amount. Just make sure you don’t back down.

Be aware that you may have to pay taxes on whatever part of the debt is cancelled during the debt collection. This process is officially called a Cancellation of Debt, and you may have to fill in what’s called a Form 1099-C at the end of the year. You’ll have to report the cancelled amount as gross income in most situations.

If you accept a lawsuit, hiring a lawyer

If you end up accepting a lawsuit, your best bet is to hire an experienced debt lawyer to help argue your case. Most attorneys offer free initial consultations, and you may be able to get law help and legal aid from your state. Just make sure you evaluate whether the potential cost of hiring a lawyer is financially worth it (if your debt is very serious, you may be better off going bankrupt). A free legal consultation can help you decide this.

Fire a countersuit if the debt collector was in breach of FDCPA regulations

If a debt collection agency violated any of the FDCPA rules we highlighted above in our “what are debt collectors not allowed to do in the US” section, you may well have a case for a countersuit, and get paid for any damages they’ve incurred. Get free legal advice on this.

Bankruptcy

Going bankrupt is another way to deal with debt, but it has a very serious affect on your life and credit rating, and you should only consider doing it after you’ve taken free debt advice. Bankruptcy will clear your debt after around 12 months, although any assets you have may be sold off to pay your creditors.

There you have it. Our full rundown of debt collectors and what they can and cannot do in the UK and the US. We hope you’ve found it a helpful read and that, armed with full knowledge of your rights against debt collectors, you can start your journey into the debt-free life you deserve.

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