December 2002 ~ Credit And Debt Management

Tuesday, December 31, 2002

Where to Get Help to Pay the Bills

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Whenever the economy is in turmoil and unemployment is high, it's hard for everyday people to pay their bills. But there are positive steps that can be taken to ease the worry of payments due.

To find employment, start with your local job center (aka "unemployment office"), where you can also find placement services and assistance with resumes. Also, apply with temporary employment offices, check daily newspapers and network with employed friends to find job openings in their places of business.

Not only does employment bring income that will allow you to pay off debts but, as you seek assistance, agencies are more apt to help if they see you are actively working and trying to help yourself and your family.

In speaking honestly and openly with whomever you owe money, such as a landlord, you may be allowed extra time to pay the outstanding debt.

If you owe on a utility bill, talk with the company's customer service representative. He may be able to work out a payment plan that you can afford.

Get the payment deferment or plan in writing if possible. This serves as proof and binds both parties to the agreement.

When given an extension on debt repayment or a payment plan, be sure to make the payments promptly and in the full amount you've agreed upon.

Agencies in nearly every city can either help you with part of your utility or rental debt or act as negotiator on your behalf. Although you'll most likely need to make an appointment to avoid standing in long lines, contact them for urgent assistance.

Find out if you qualify for a housing benefit. This is usually made available to single parents, the disabled or those with long-term illnesses. These normally pay arrearages but can also help out in other cases

If you are in urgent need and none of these can fully help you, phone or visit your family with a request for their help. Ask for a loan and not a handout. If you have proof that you are working, they are more likely to help you.

If you receive assistance from a family member, remember that it is a loan and begin paying it back faithfully in small and steady increments. This not only repays the family member but strengthens the bond between you and your family.

Is it Legal to Garnish Wages From a Spouse of an Employee?

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According to U.S. law, the only person who can be held legally responsible for a debt is the person who incurred it. This means that a person cannot be sued or otherwise pressed by creditors to pay a debt that they did not themselves guarantee. This holds true even for debts incurred by spouse. A creditor cannot pursue payment of a debt from a spouse who did not incur it and cannot garnish his wages.

When a loan is taken out or a debt is otherwise incurred, the two parties -- the creditor and the borrower -- generally specify the details of the transaction in the contract. This contract makes clear the party who is responsible for repaying the debt. Unless a borrower has co-signed the contract with his spouse, the spouse is not responsible for the debt the borrower took out.

Under the Fair Debt Collection Practices Act, creditors are not allowed to pursue a debtor's spouse for money that the debtor owes. This means that the creditors cannot contact the spouse or attempt to take money from the spouse by force to make good on the debtor's debt. This also means that creditors cannot garnish the wages of the debtor's spouse if the spouse does not owe them money.

When wages are garnished, it means that the debtor's employer takes a portion of his wages out of his paycheck and hands it off to the creditor to whom the debtor owes money. Wage garnishments can only occur if approved by a judge. A judge will only grant the garnishment of a person's wages if the worker himself owes the money. The judge will never grant a garnishment for a spouse of the debtor.

If the spouse of a debtor is working but the debtor is not, a creditor is not allowed to garnish the wages of the employed person. This is true even if the money that the employed person is making is being used to support the debtor. However, this money may be considered income and it may, under some circumstances, be seized from the debtor's bank account.

Am I Responsible for My Husband's Credit Card Debt After a Separation in Florida?

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Florida law does not recognize spouses as legally separated until they actually divorce. Additionally, the state does not follow community property laws. This means a wife has no responsibility for a husband's debts if they have separate accounts. It is a good idea to discuss the division of your debts before writing out a settlement for divorce so that both parties agree.

In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington, married couples' finances are "community property," meaning both parties have responsibility for each other's finances. Wisconsin also follows community property rules, calling it the Uniform Marital Property Act. Since Florida is not a community property state, you have no legal responsibility for your husband's debt whether you are married, separated or divorced.

Florida does not recognize documentation of separation; the state only recognizes divorce. You are, therefore, responsible for your joint finances until the divorce. Separate accounts are the individual responsibility of each party.

If you and your husband have joint accounts, you are both equally responsible for the debts on those accounts. You are also equally responsible for any loans you may have co-signed for your spouse, or that your spouse may have co-signed for you. Debt collectors have the right to come to both of you if your husband defaults on payments to a credit card of which you are joint owner.

It is important to discuss finances during a separation so that both you and your husband are clear on the division of debt if you decide to follow through with a divorce. Even if you are not responsible for your husband's debt, if he defaults on payments, his actions may affect the eventual outcome of your settlement.

Does Leasing a Car Count in Your Debt to Income Ratio?

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Calculating your debt-to-income ratio can be sobering because it forces you to account for your monthly expenses and determine if you're too deep in debt. Some living expenses generally aren't included in the ratio, but it's important to include auto lease payments. Vehicle and housing expenses are often the largest debts people have, so excluding those costs creates an inaccurate debt-to-income ratio.

The main purpose for calculating a debt-to-income ratio is to determine whether the total amount of your debts exceeds or nearly exceeds your income. The ratio ultimately shows you how much of your pre-tax or gross income goes to paying your debts each month. Therefore, your car lease payments need to be included. Lenders and creditors also look at peoples' debt-to-income ratios when they determine whether to approve loan and credit applications. According to Bankrate, it's best to keep your debt-to-income ratio below 36 percent to avoid accumulating more debt than you can afford to repay.

You calculate your debt-to-income ratio by dividing your total monthly recurring debt by your gross monthly income and multiplying the resulting number by 100. Bankrate defines recurring debt as fixed payments you make each month for rent, a mortgage, a car payment, loans and the required minimum monthly payment on credit cards. Living expenses for groceries, gasoline, utilities and entertainment aren't included in the calculation. Someone who has monthly recurring debts that total $1,500 and a gross monthly income of $3,200 has a debt-to-income ratio of 47 percent, which is generally too high. Excluding a car lease payment from the calculation would lower a debt-to-income ratio, but it also wouldn't give a realistic picture of a person's debt situation.

Look for ways to reduce your debts if your debt-to-income ration exceeds 36 percent. That may include leasing a less expensive vehicle after your current auto lease expires. You can recalculate your ratio to determine how much you need to reduce your debt so that the ratio doesn't exceed 36 percent of your gross income. For example, a person whose gross annual income is $50,000 should multiply that amount by 0.36. The resulting amount shows that $18,000 is 36 percent of $50,000. By dividing $18,000 by 12, this person would find he shouldn't pay out more than $1,500 per month to cover recurring debts to keep his debt-to-income ratio at 36 percent.

A high debt-to-income ratio affects more than your monthly expenses. A high ratio can prevent you from getting credit cards, loans and leases. For example, an auto leasing company may reject a lease application from a person who has a large amount of debt. The company may be concerned that the applicant won't be able to handle lease payments along with the debts he already has to pay even if he pays his other bills on time.

What Does Student Loan Forbearance Mean?

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If you are having difficulty making your student loan payments, contact your lender. You may be able to suspend your payments for a period while you get your finances in order.

Forbearance is permission from your student loan servicer or lender to postpone payments or, in some cases, to make smaller payments on your loan. Lenders grant forbearances for many reasons, including temporary financial hardship, and a forbearance can be granted on student loans that are in default status. Interest continues to accrue while a loan is in forbearance, which can greatly increase your total loan balance.

Forbearances are issued for a specific period that cannot be greater than a year, though you can reapply for another forbearance once it has expired. The maximum length of time that a loan can be placed in forbearance is anywhere from three to five years, depending on the type of forbearance that you qualify for.

Before requesting forbearance, check to see if you are eligible for a deferment or a different payment plan. Interest stops accruing on your subsidized loans during a deferment, reducing the amount you will eventually have to pay on your loan. Deferments are issued for a number of reasons, including severe economic hardship, unemployment, military service, and returning to school. You may also have the option of changing to a repayment plan that reduces your minimum monthly payment to something that you can afford.

How to Find Out How Much Debt I Owe for College

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Going to college can be a rewarding experience. The knowledge you gain and the friendships you make could last you a lifetime. A college education, however, can be one of the most costly undertakings you pursue, costing tens of thousands of dollars to cover tuition, room and board. Although the United States Department of Education, the entity that backs most student loans, gives you a six- to nine-month grace period to begin loan repayment after graduation, you can find out how much student loan debt you owe and work the payments into your budget before the grace period ends.

Instructions

Order free copies of your credit reports from annualcreditreport.com, the only federal government-endorsed free credit report provider. Student loan lenders, whether DOE-backed or private, report your loans to the credit bureaus. The Federal Trade Commission says that you have a right to receive free copies of your credit reports from the three credit bureaus -- Transunion, Equifax and Experian -- on an annual basis. Read through each of your credit reports, line by line, to calculate your student loan debt.

Open an account on the National Student Loan Data System (NSLDS) website to find out how much you owe. The database contains a list of your DOE student loans from freshman year through graduation and beyond, even if you transferred colleges. Enter your date of birth, social security number and DOE PIN to access the system. You can apply for a PIN on the DOE PIN website to replace a lost one, or to obtain a new one if you did not use a PIN to apply for your student loans.

Locate your student loan promissory note, the document you signed -- paper or electronic -- when you borrowed your student loans. Promissory notes contain detailed information about the amount you borrow, interest rates and often include an estimated repayment schedule. Search for paper promissory notes among your important personal documents. You can also search your email box for electronic promissory notes if you applied for your student loans online.

Call or email your lender's customer service department directly if you borrowed nongovernment affiliated, private student loans. You can find the lender's contact information on paper bills you receive in the mail and on the lender's website. Ask the customer service representative to tell you how much you owe or ask to be placed in contact with the department that keeps track of such information.

How to Calculate How Much of a Credit Card Payment Goes to a Transfer Balance & a Purchase Balance

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When debt is transferred from one credit card to another, that balance is known as a transfer balance. If you have a balance from purchases, the two become separate balances that need to be paid off. Each payment you make counts toward each balance you have on the card.

Instructions

Make a note of what your current transfer and purchase balances are. Remember that they are two separate balances and are typically not joined together.

Make a payment on the credit card. You may elect to do this online, though a phone, or in-person at someplace that accepts credit card payments.

Check the two balances once the credit card payment has been posted. Notice the amount that each balance has been debited. From there, determine the percentage of the credit card payment that was used. For instance, if you made a payment of $1,000, and $350 went to the purchase balance, and $650 went to the transfer balance, you can assume that 35% of any payment goes to the purchase balance, and 65% goes to the transfer balance.

The Problems of Debt

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Even though most Americans live saddled with at least some debt, being in debt is not advantageous in general. Debt carries with it multiple problems, some of which may linger with you for years. Eliminating these problems usually means eliminating the debt, which is not always easy, depending on your situation. It usually takes time to make the problems associated with your debt go away.

Lenders are highly concerned with your ability to pay back a debt. This is simply a matter of profit and revenue--they want to know whether you are going to be a liability and cost them money. To test the risk they're taking on by lending to you, creditors assess your debt-to-income ratio. The more debt you have, the less likely it is that you can take on additional loans because a higher percentage of your income will go toward repayments. Additionally, because debts may last for years, your credit can be tied up for long periods. It's therefore better to have as little debt as possible because lenders will offer you more in terms of credit due to the lower debt-to-income ratio, and because you can apply for the additional loans you truly need sooner.

Each payment you make on debts every month ideally should be included as an expenditure within your budget. Increases in debt do not always happen in conjunction with increases in income--in fact the opposite is more often true, with people taking on debt because their incomes are not sufficient to meet all needs. With more debt, your discretionary income decreases, making it much harder to save money or pursue the interests that make you happy. Taking on debt also means that your budget will be more complex and that you likely will have to spend more time dealing with your finances.

Debts come at a literal price. Creditors almost always tack on some kind of fees when they loan you funds. The most common fee is interest. Others include late charges, over-the-limit fees and charges for early termination, transferring balances and refinancing. You may have fees associated with disputing what you owe or correcting information on your credit score. There also are fees for defending yourself in court against creditors. These fees simply decrease your available revenue, making your financial situation even more dire.

In America, there are community property and separate property states. In a community property state, your spouse may be held liable for some or all of the debt you have because the government sees you and your spouse as one economic unit. Each person is responsible for his own debt in separate property states in most cases, but there are some exceptions, such as if you co-signed on a loan. In other words, by taking on debt, you may cause financial hardship for others, depending on your situation and your jurisdiction.

When you have debt, if you pass away, creditors have a right to make a claim against your estate, although there sometimes isn't enough worth in the estate to pay all creditors. This means that there may be less assets available for your heirs, which makes it more difficult to offer loved ones financial help for the future.

Debt creates stress. Creditors may call or write to you to demand payment, and you may worry about how you are going to make your payments. This stress can carry over into other areas of your life as well, affecting things like personal relationships and work productivity. You often can find some relief from stress through the Fair Credit Collection Practices Act, which prohibits harassment from creditors.

Because debt renders so many issues, debt counseling can be beneficial. Debt counseling shows you the best route to debt repayment and often reveals budget techniques that will work for your situation. You also may write to your creditors to ask for lower interest rates or forgiveness on a portion of the debt. Consolidating debt sometimes helps by lowering interest or reducing the amount of time you will owe. Tracking expenses, however, is by far the best key to removing debt. Tracking expenses shows you where funds are leaking out of accounts and provides clues as to what you have prioritized financially. This, in turn, indicates how you can reduce spending and make better purchase choices.

Can Credit Card Companies Garnish Military Retirement Pay?

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Retired service members of the U.S. Armed Forces will be happy to know that their retiree pay cannot be garnished to satisfy credit card debts, according to the Defense Finance and Accounting Service. However, federal law does allow military retiree pay to be garnished in order to satisfy child and/or spousal support obligations.

A court must order a garnishment in which a portion of an individual's salary is used to pay a creditor, according to the Department of Labor.

The Defense Finance and Accounting Service (DFAS), headquartered in Cleveland, Ohio, is the agency responsible for implementing all court-ordered child support, alimony and commercial debt garnishments for all active duty service members and civilian employees of the federal government that the agency pays.
The DFAS also processes court-ordered garnishments of the pay of retired service members under provisions of the Uniformed Services Former Spouses' Protection Act. The DFAS garnishment operations center can be reached by calling (888) 332-7411 between the hours of 7:30 a.m. to 6:00 p.m. Eastern Standard Time.

Under provisions of the Uniformed Services Former Spouse Protection Act, the former spouse of a retired military service member may receive up to half of the service member's disposable retiree pay, according to the DFAS. The Uniformed Services Former Spouse Act was enacted on September 28, 1982. The legislation allows state courts to consider the pay of military retirees as divisible property in divorce settlements occurring after June 25, 1981.

According to the DFAS, retired military pay can also be garnished to satisfy IRS tax levies and other debts like student loans, post exchange/base exchange deferred payment obligations and noncommissioned officer and officer club.

The DFAS must receive a court order that directs the federal government to withhold money from the active duty or retired service member's pay and send it to the creditor to satisfy the service member's debt. Court orders directing the garnishment of a service member's pay should be sent to

Defense Finance and Service
Cleveland DFAS-DGG/CL
P.O. Box 99802
Cleveland, OH 44199-8002

What Happens to My Credit If I Foreclose?

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Many Americans face foreclosure on their homes every year. Over 13 percent of home loans were at least one payment past due or already in the foreclosure process in the third quarter of 2010, according to a Mortgage Banks Association survey of 44 million loans. Foreclosure means that you lose your home, and it also devastates your credit bureau files.

Your credit rating takes a severe blow when your home goes through foreclosure. The incident is placed on your credit reports by the Experian, Equifax and TransUnion credit bureaus, where it is visible to anyone who views the information for credit, insurance or employment purposes. CNN Money website writer Les Christie advises that foreclosure drops your credit score by 85 to 160 points. Those with a previously high score experience the biggest drop. The score impact can put you into sub-prime territory, keeping you from getting new loans and other credit.

A foreclosure gets reported on your credit reports for seven years, according to the Federal Trade Commission (FTC) website. Lenders and others see it on your credit reports for that entire time frame, but its impact drops as the years pass. Jessica Bennet, a community mentor on the MortgageFit website, explains that its worst effect is during the first two years. You can restore your credit to a post-foreclosure level within two to four years by making on-time bill payments, keeping owed balances low and avoiding new defaults.

You have two alternatives to foreclosure if your bank agrees, although both alternatives have the same effect on your credit. Christie explains that you can do a short sale, in which you sell your home for less than the owed amount, if the bank agrees to waive the additional balance. The other option is a deed-in-lieu, in which you voluntarily give your bank the home in return for not being held responsible for any outstanding amount.

Scammers prey on those who are desperate to avoid foreclosure with a variety of schemes, the FTC website warns. Ads on television, online, in newspapers and even on street medians promise to stop the foreclosure process. In reality, the company might offer worthless advice, a bad rent-to-own deal, bankruptcy or even theft of your home title. Fraudsters usually want money up front, according to the FTC. They keep it without performing any services or give useless, or even harmful, "help." Report foreclosure fraud to the FTC, the Better Business Bureau and the Attorney General in your state.

How to Write a Letter to Request That Creditor Remove Bad Credit Reporting

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If you have information on your credit report you believe is erroneous, you have a right to write to the credit reporting agencies and request an investigation. The credit reporting agencies, in turn, must either verify that the information is correct or remove the information from your report. They do not have to remove information that is accurate. You cannot force them to remove accurate negative credit reporting, but they are required by federal law to remove anything that is inaccurate or which they cannot verify.

Instructions

Request a copy of your credit report from each of the three major credit reporting agencies: Experian, Equifax and TransUnion. You can do so at the free Annual Credit Report website.

Review each report for accuracy. Note the account number, creditor and transaction dates and numbers of any item you believe is in error or even questionable.

Write a letter to each agency. Include the following items: your name, the creditor, transaction dates on each credit item you are disputing and precisely what it is you are disputing. Include proof of your identity, such as a copy of a driver's license.

Dispute anything that is not accurate or is questionable, including bankruptcies, delinquencies, open accounts, amounts and even inquiries, since excessive inquiries can damage your credit score and make it more difficult for you to obtain credit. Your own inquiry to verify the accuracy of your credit report does not damage your credit score.

Include any accounts that have been inactive for over 7 years. The bureaus are required by law to remove information on accounts that have been inactive for seven years. Be sure to specifically request the bureaus remove these items.

Make a copy of your letters so you can document exactly what was in them.

Mail the letters certified mail or registered mail so you have a record of delivery. Use these mailing addresses:

Experian

P. O. Box 9595

Allen, TX 75013-9595

Equifax

P. O. Box 740241

Atlanta, GA 30374-0241

TransUnion

P. O. Box 1000

Chester, PA 19022

Wait at least 45 days. This is how long the bureaus have, under the Fair Credit Reporting Act, to verify and resolve any credit disputes. You should receive a written notification of how your claim was resolved within five days of the day the bureau reached a conclusion on your account.

Consumer Debt Questions

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As of 2010, the total amount of consumer debt in the U.S. was $2.4 trillion, or roughly $7,800 for every U.S. citizen, according to the Money-Zine website. Debt problems can prohibit you from buying a house or car, getting a job and it might even impact your personal relationships. Not everyone struggles with debt, but those who do need to ask some serious questions to help resolve the issue.

It is important to understand your debt-to-income ratio. This ratio compares your monthly debt expenses to your total monthly income. This gives you a snapshot of your current debt situation. Your debt load is typically considered healthy if your debt-to-income ratio is 36 percent or less. Anything above 50 percent means you are, or soon will be, in serious financial trouble. To calculate your debt-to-income ratio, divide your total monthly debt payments, including car, house and credit card payments, by your total monthly gross income. Or, use an online debt to income ratio calculator (see Resources).

Your credit-to-debt ratio is another statistic you should understand and calculate to evaluate your debt situation. This number compares your total debt load to the total available credit. You should aim to keep this number at 50 percent or less; though many lenders favor a 30 percent or lower credit-to-debt ratio, according to MSN. To calculate this number, divide your current balance by your available credit. For example, if you owe $1,500 on a credit card with a $6,000 limit, your credit-to-debt ratio is 25 percent. Improve this number by paying down debt or by increasing your available credit without increasing your debt. For example, if you increase your available credit from $6,000 to $10,000 and keep the $1,500 balance, your credit to debt ratio improves to 15 percent.

Deciding which debt to pay off first depends on your personal situation. According to MSN, the best debt to pay off first is the debt with the highest interest rate. Another approach is to pay off the debt that causes the most stress in your life first. This might be your largest debt, the debt that generates the most annoying phone calls and letters or a debt to a family member or friend that is causing a strain on your relationship. A third method is the debt snowball, which involves paying the minimum payment on all debts except the smallest debt, and paying off that debt as quickly as possible. When it is paid, you apply the amount you were paying each month towards your next smallest debt, plus the minimum payment you were already making. Continue this until you've paid off all the debts.

Some people choose to consolidate debt to make payments less expensive and more convenient. The debt consolidation company will negotiate lower interest rates and try to waive fees from creditors. In exchange, you pay the company a set amount each month that goes towards paying down your debt. The main advantage is that you make just one consistent payment, as opposed to several different payments. Another consolidation option is to open a credit card with a zero percent introductory interest rate. Transfer all your debt to that card, and pay it off aggressively while saving money on interest.

Credit Repair Industry

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If you are looking for a loan but your credit score is too low for you to qualify for the best rate, or for a loan at all, given tightening credit markets, you may look for some outside help. The credit repair industry is ready to help fix your bad credit, and let you qualify for a loan. However, the Better Business Bureau warns that some of these companies are dishonest.

The way that most credit repair services increase credit scores is by getting negative entries removed from your credit report. They commonly file disputes with credit reporting agencies. By law, if the credit agency receives a letter from a consumer disputing an item in his credit file, the agency must attempt to verify the accuracy of the information with the creditor. If the creditor fails to respond in a timely manner, the agency must remove the negative entry. Many credit repair services will repeatedly file disputes, hoping to catch creditors or agencies off guard so that they will not verify the information on time and be forced to remove the entry.

If you are looking for a mortgage loan, the 60 days or more that conventional credit repair takes is not acceptable. Rapid Re-score works if you have proof that a negative credit entry is incorrect, and can submit that proof to the credit agencies. This is an expensive service at $20 to $30 per change per bureau. You can also find services that review your specific situation, and recommend actions that you can take to significantly increase a credit score, sometimes within weeks. These increases in score can be enough to allow you to significantly reduce your interest rate on a mortgage or other loan.

While not officially part of the credit repair industry, credit counselors work by helping debtors work out acceptable payment plans with their creditors that move them towards paying off their bills. Counseling takes time to work through the problems, and it may not fit the needs of many people who are looking for the instantaneous results of credit repair. Still, you might learn more long-term financial management skills that will help you continue to become more financially sound using a counselor. Ultimately, helping you pay off debt will repair your credit naturally, over time.

While many credit repair companies pride themselves on running clean operations, there are some unscrupulous people in the business. If you are thinking of using a credit repair service, stay away from any that require you to make up-front payments before they perform any services. Do not work with a company that encourages you to get a new Social Security number or federal tax ID number, as this is fraudulent. Be careful if the company does not advise you of your rights and tells you not to contact a credit agency directly.

Can Collection Centers be Authorized to Run a Credit Check on You?

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When you fail to pay a debt as agreed, your creditor may refer your delinquent account to a collection agency, a business that seeks to convince individuals to pay back past-due debts. A collection agency can use myriad tactics to convince you to pay up, including sending numerous phone calls and letters, tacking on fees and even suing you in a court of law. Additionally, collection agencies can check your credit report. While checking the report won't affect your score, what else an agency will do to the report surely will affect it.

The Fair Credit Reporting Act, or FCRA, allows collection agencies to run a credit check on you, according to an article from SpendOnLife, a consumer finance informational resource. These companies can view the information on your credit file, including your name, address, employer, current credit accounts and any existing delinquent items, such as collection accounts, late payments or maxed-out credit cards.

When a collection agency checks your credit report, it performs what is known as a "soft inquiry." Unlike the "hard inquiries" that credit card companies and lenders use to check your credit report, soft inquiries do not affect your credit score, which is the three-digit figure that determines whether or not you qualify for loans. However, a collection agency will amend your credit report to add information on the past-due debt you owe. This will adversely impact your credit score.

In addition to the impact on your credit rating, a collection agency getting hold of your credit report can lead to more misery. Because your employer shows up on your credit report, a collection agency can find your company's number and contact you at work -- unless your employer informs the agency that it cannot. Also, a collection agency can continue to check your credit report every month, updating your delinquent account's information.

The negative information collection agencies post to your account will not go away in a short period of time. In fact, collection account information will stay on your credit file for seven years. In addition to holding down your credit score, collection information may prevent you from gaining access to credit cards or other types of consumer credit.

What Happens if You Inherit Money After Being Foreclosed?

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A foreclosure can have a devastating impact on your personal life, as well as your finances. Foreclosure also appears on your credit report, and can severely impact your ability to obtain loans and credit cards in the future. If you receive an inheritance after a foreclosure, the amount you inherit may also be at risk.

In a foreclosure, the mortgage lender sells your home, usually at a public auction or through a real estate agent. However, the sale price of the home may not be enough to pay off the balance of your mortgage, or to pay for costs incurred by the lender such as auction fees, court costs, appraisals and attorney fees. Even though you no longer own the home, most states allow the lender to hold you responsible for paying the deficiency, which is the difference between the sale price and the mortgage balance and foreclosure costs.

In states that permit collection of a deficiency after foreclosure, the mortgage lender can typically sue you for the deficiency amount. Unless you can prove that you already paid the deficiency or raise another valid defense to the lawsuit, the court will issue a judgment against you for the deficiency. This permits the mortgage lender to seek recovery of the deficiency by using several strategies, including seizure of your personal assets. These assets could include an inheritance you receive after foreclosure.

After obtaining a foreclosure judgment against you for a deficiency balance, the lender may require you to disclose your income and assets -- this allows the lender to identify money and property it can use to satisfy your debt. If the creditor petitions the court for a debtor's examination hearing or written interrogatories after you receive an inheritance, you must disclose the amount you received. The creditor can then petition the court for a writ of execution, which permits the seizure of your inheritance to pay against the deficiency.

Although a mortgage lender may try to take an inheritance to satisfy a deficiency, state exemptions may protect some or all of the money you inherit. For example, Indiana permits an exemption of $4,000 in personal property, which may include money or assets received by inheritance. If the creditor seeks payment of your debt through seizure of your inheritance, you must typically claim any eligible exemptions through the court to prevent losing the money.

How to Get Help with My Debts

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Debt surmounts and becomes uncontrollable for various reasons such as unemployment, illness, divorce and mismanagement of finances. According to financial expert, Suze Orman, excessive credit card debt is at epic proportions in the United States among the rich and poor. Help is available to get your financial situation under control and alleviate the stress associated with excessive debt.

Instructions

Contact a debt relief agency or attorney to set up a debt management plan. Consumer Credit Counseling is a not for profit agency that provides counseling services, educational services and debt management services. They negotiate with creditors to reduce interest, late fees and penalties. One monthly payment is typically paid to the agency and individual payments are dispersed to your creditors on your behalf. There is a fee for agency services.

Negotiate with creditors directly. Credit card companies, banks, medical facilities and loan holders tend to adjust your payment terms. Often, creditors reduce interest rates or offer a settlement amount less than what you owe. Call your creditors; explain your financial situation and ask about house debt relief assistance.

Contact your local or state government regarding financial assistance programs. Energy assistance, housing assistance, child care assistance or food assistance programs may be available. If you are eligible to receive assistance in these areas, this frees up funds in your budget to be used towards payment of existing debt.

Follow a plan. Suze Orman's "9 Steps to Financial Freedom" outlines necessary steps to be taken to get out of debt. She advises cutting up credit cards, paying more than the minimum payments every month and paying off the credit card with the highest interest rate first. Other ideas include negotiating for the best interest rate with your credit card holders, understanding loan terms like late fees and over limit charges, honoring all of your debt equally and seeking help from a debt relief organization.

Request a copy of your credit report. Review your credit report for inquiries from lenders and any negative entries from your creditors. Dispute any information that you think is fraudulent or inaccurate. Know your credit score. Interest rates and the ability to obtain loans are based on this score. Credit reports also contain contact information to help you settle any amounts that you owe.

Join a support group such as Debtors Anonymous. Share your experiences and frustrations with others in the same situation. Members share solutions and resources for getting out of debt and staying out of debt. A support group offers advice on changing spending habits, providing a plan and encouragement to get financial situations under control.

How to Update an Incorrect Death on a Credit Bureau Report

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Because credit bureaus handle the credit reports of millions of people in the United States, they sometimes make mistakes. Unfortunately, one of these mistakes is reporting an incorrect death on someone's credit report. Fortunately, there are legal procedures you can take to have the information corrected, thanks to the Federal Trade Commission's Fair Credit Reporting Act. When making updates, check with all three credit bureaus (Experian, TransUnion and Equifax) to make sure they are all reporting the right information.

Instructions

Request a copy of your credit report from the credit bureaus. You can obtain one free credit report from each of them per year and an additional report if you are declined credit for any reason. Obtain your credit reports by going directly to the credit bureau websites or from the annualcreditreport.com website. When you order your credit report, either by mail or online, you will be given a credit report file number. The file number is necessary if you plan on contacting the credit bureaus to discuss your credit report.

Write a letter to all three credit bureaus including copies of your credit report. Highlight the error that needs to be updated along with any proof validating your claim. Mail the information to the credit bureaus via certified mail. Certified mail insures your letter gets to your destination and someone physically has to sign for the letter. The green signature card is then mailed back to you to keep for your records.

Mark your calendar, allowing the credit bureaus 45 days to fix the error. After 45 days, the credit bureaus will either mail you an updated copy of your credit report or you may request another copy of your credit report reflecting the changes you requested.

California Debt Relief Programs

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Debt relief programs can range from bankruptcy assistance to credit counseling services, notes the California Department of Justice. Before filing bankruptcy or signing up for a debt management plan, Golden State residents should carefully evaluate all possible financial and emotional implications. Some types of debt relief, including bankruptcy, can damage credit ratings for seven to 10 years.

Be careful before signing up for a debt management plan through a credit counseling agency, advises the California Department of Justice. Debt management plans typically enable consumers to repay their credit card debts at reduced interest rates, but some credit counseling agencies allegedly mishandle payments. Before working with any credit counselor, you should check their standing with the state's Office of the Attorney General.

Before filing bankruptcy, consider the fate of your assets. If you have lived in California for at least two years, you can keep some of your property under state asset exemption laws. As of 2011, the Golden State has two sets of asset exemption laws, notes Bankruptcy Action. Under the first system, you can retain up to $75,000 in personal property if you are single; the figure is $100,000 if you are married, elderly or disabled. The second system enables you to keep up to $20,275 of real estate equity and personal injury awards up to $20,275.

Chapter 7 bankruptcy enables income-eligible Californians to permanently discharge their obligations to repay most pre-existing debts. As of 2011, single residents earning less than $48,009 automatically qualified to file Chapter 7, according to the U.S. Trustee Program. Two-member households could earn up to $62,970, while families of four could bring in up to $78,869. Families earning more money can only file Chapter 7 if they prove through a federally derived means testing formula that partially repaying creditors is an undue financial hardship.

People who earned too much money to file Chapter 7 or simply wanted to partially repay their debts can file Chapter 13 bankruptcy. It takes three to five years to finish repaying a Chapter 13 plan. Debts such as child support, alimony, recent taxes, court fines and most federal student loans are ineligible for any type of bankruptcy relief. During a Chapter 13 plan, a California resident must ask a bankruptcy judge for permission before getting any new credit accounts.

Can a Credit Card Company Garnish Your Wages in Tennessee?

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If you live in Tennessee and fall behind on paying off a debt, your creditor may be able to garnish your wages. While you can often prevent wage garnishment by working out a payment arrangement with your creditor, in some cases, you may need to go to court in order to protect your funds.

In a wage garnishment, your creditor sends legal papers to your employer that require it to deduct a portion of your wages and then send it to your creditor. This process continues until your debt is paid off. In most cases, your creditor needs to successfully sue you before it can garnish your wages. However, if your debt is for back taxes, or money you owe for child support, the creditor may not have to go to court but can simply send you a written notice of its intention to begin garnishment.

Tennessee's garnishment limitations are the same as allowed under federal law: In most cases, your creditor can only garnish 25 percent of your weekly wages. If your debt is for child support, the amount of money that can be garnished can be as much as 60 percent of your wages if you are not supporting another family. If you are supporting another family, your creditor can take 50 percent of your wages in garnishment.

The consequences of wage garnishment can be grim. Your employer now knows about your financial problems and you lose a considerable amount of your income. Federal employment law does prohibit your employer for firing you over one wage garnishment. But if another creditor succeeds in garnishing your wages, the law no longer protects you and you could lose your job.

There are several ways to stop a garnishment in Tennessee. If you can pay the debt in full, do so. If you were sued in the General Sessions Court, you have ten days after the judge issues a judgment against you to pay your judgment to the court clerk before a wage garnishment can begin, according to "How to Keep Your Paycheck from Being Garnished", a booklet published by Tennessee Legal Aid. Try negotiating a voluntary payment plan with your creditor. You can also go to court and ask the judge to grant you a "Slow-Pay Motion." This is a payment plan approved by the court that lets you avoid wage garnishment. Finally, you can file for bankruptcy. This is a serious step, but can be the only way to stop the multiple wage garnishments that can cost you your job.

Grants for Going Back to a University for a Master's Degree

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Many college students know that they want to pursue a master's degree right after receiving their bachelor's degree even before completing their undergraduate education. Some individuals test the real world for a while before deciding to come back. Either way, many organizations and foundations offer grants to students pursuing a master's degree of study. Most grant-funding organizations limit their applicants to certain fields of study.

The American Association of University Women offers various grant and scholarship programs to women who want to pursue a master's degree in a wide range of collegiate disciplines. As of July 2011, the AAUW plans to grant more than $3.6 million in financial aid in 230 different grant and fellowship programs. AAUW offers five different grant programs to collegiate women, including the Selected Professions fellowship program. This program, which seeks to aid women pursuing a master's degree in a field typically underrepresented by women, awarded 21 fellowships totaling about $350,000 to women studying in various engineering fields.

The U.S. Department of Education offers Pell Grants as part of a student's federal financial aid package for secondary education. Pell Grants are typically only available to undergraduate students pursuing a bachelor's degree, but graduate and postsecondary students can be eligible for these grants by filing the Free Application for Federal Student Aid. To qualify for a master's degree Pell Grant, a student must be enrolled in a course of study leading towards a teaching license or certification. As of July 2011, the maximum Pell Grant award was $5,550 per student.

The National GEM Consortium is an industrial organization in science and engineering which offers fellowship programs to support underrepresented ethnic minorities pursuing graduate studies in related fields. Minority students attending a GEM member university toward a master's degree in a science or engineering field can apply for GEM's Portable Fellowship program. This program covers tuition costs for a student who is expected to complete his master's degree coursework within four semesters. Students must apply to at least three different GEM member schools to be eligible for Portable Fellowship grant funding.

College juniors who are interested in pursuing a master's degree in preparation for a career in public service may be eligible to receive grant funding through the Harry S. Truman Scholarship Foundation. This scholarship opportunity awards a graduate student up to $30,000 to pursue studies leading up to a master's degree. Fields of study which have qualified for the Harry S. Truman Scholarship in the past include agriculture, engineering, environmental management, economics, education and government. Eligible candidates must be nominated by a Truman Scholarship faculty representative currently working at the student's college or university.

The Educational Foundation for Women in Accounting offers seven different grant and scholarship opportunities for women who are pursuing an education in a field of study related to accounting. Women returning to a university to pursue a master's degree in accounting may be eligible for the EFWA's Master's Scholarship program. This scholarship offers $1,000 to a woman enrolled in a master's degree program and who demonstrates both an aptitude for business as well as financial need.

How to Negotiate a Delinquent Student Loan Debt

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When you fail to pay a student loan on time, the surcharges and interest start to mount. What you owe on a student loan can double in only a couple of years, and if you ignore it, it just gets worse. It can be paralyzing to think about the debt you've amassed. Fortunately, there are ways out. You can negotiate a lower payment on your delinquent student loans, and even negotiate to reduce or eliminate the fees and surcharges. The Federal Student Loan Direct Loan Servicing Agency also has easy-to-meet payment plans for low-income debtors.

Instructions

Assess your financial situation. Try to determine approximately how much you can afford to pay on your student loan per month right now. Use a student loan calculator to determine approximately how much your full payments would be. If possible, save up a month's full payment before negotiating your loan repayment, but do not delay negotiation more than a month.

Determine your student loan status. A delinquent student loan follows different rehabilitation rules than a more serious defaulted student loan. Most loans are in default by 270 days after the due date of your last missed payment. Do not let a delinquent loan become a defaulted loan.

Call 1-800-557-7392 if you need to consolidate several loans, and speak to an agent with the Federal Direct Consolidation Loans Information Center. You may have to rehabilitate some or all of your loans prior to consolidation.

Phone the Direct Loan Servicing Agency at 1-800-848-0979. Explain your situation to the agent. Let her know you also want to negotiate to get a delinquent student loan rehabilitated.

Negotiate. If the agent on the phone does not offer, ask for a waiver of collection fees and a partial forgiveness of interest charges or reduction in the total amount owed. Explain any special situations, such as illness, parental responsibilities, unemployment, underemployment or disability.

Arrange a payment plan, and get it in writing. Do not send any payments in until you have your payment plan in front of you. If you choose to go paperless, print out the online or emailed payment plan and keep it safe.

Pay on time. If you fall into delinquency or default again, it will be harder to negotiate reduced payments again.

How to Locate Judgment Holders

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If you've recently been denied credit or simply wish to clean up any bad credit that you know appears on your credit report, you need to pay off any judgments that have been entered against you. If you're unsure what judgments have been entered against you or who the original creditor is, you need to locate the necessary information and begin to clear up your judgments.

Instructions

Request your credit reports from the three major credit bureaus: Experian, Equifax and TransUnion. If you haven't requested one within the past year, you're entitled to a free one through annualcreditreport.com each year. You're also entitled to a free report by the agency that provided the report if you've been denied credit.

Review the "Public Records" section of the reports once you have them. Judgments are public record and are required to be reported under the "Public Records" section of your credit report.

Write down the court name and case number of the judgment. Locate the court clerk's telephone number or website.

Request a copy of the entry of judgment. Certain courts allow you to obtain a copy online, while others require you to request the copy in writing. A small fee usually applies.

Locate the name of the judgment holder, or plaintiff after you have the entry of judgment. The contact information for the judgment holder is typically located on the entry of judgment. If it isn't, request the docket sheet as well or contact the court directly and ask for contact information for the plaintiff.

Debt Relief Secrets

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Taking control of your financial life is incredibly empowering, especially if you've resolved to pay down that expensive, worrisome habit commonly known as debt. When bills are piled up high and you're not sure where to begin, don't hide; grab your statements, a calculator and your phone. You may be able to do the heavy lifting yourself. If not, there are plenty of resources available to help. Just don't give up.

Perhaps the biggest secret about debt elimination is that you can do it yourself, especially if you're current on your bills. Begin by making a list of all your debts, including car and home loans. Prioritize them by putting the highest-interest unsecured loan at the top.

Pick up your phone and call each lender's customer service department and ask for a rate reduction. Customers who have good payment histories will be more likely to receive a rate reduction. If your minimum payment is lowered as a result, continue making the higher payment anyway.

Debt "snowballs" and "avalanches" are commonly used techniques that eliminate debt. The snowball tackles the smallest balance first; the avalanche tackles highest interest first. The avalanche could save more money long-term, but borrowers may find the snowball more satisfying. The key to both is adding the payment from an eliminated debt to the next debt on your list.

If you are delinquent---or about to become so---consider a debt management plan. The National Foundation for Credit Counseling---the nation's oldest debt education nonprofit---can enroll you in a DMP, in addition to providing a free budget counseling session. In a DMP, the NFCC will negotiate with your lenders on your behalf to lower or eliminate interest and minimum payments. The accounts will be brought current, but will be closed. The debts you include in the DMP will be paid in full within 5 years.

The NFCC provides DMP services for unsecured debts, like credit cards. They also offer housing counseling services, but secured debts (for cars and homes) aren't eligible for DMP participation.

Lenders are loath to advertise it, but delinquent borrowers may settle their credit card debts for pennies on the dollar. There are several caveats: you must be seriously delinquent (at least 3 months), you must be willing to accept a significant hit to your credit score (although it's bad already if you have recent missed payments) and you may need to pay a debt negotiator, which can cost thousands of dollars.

Ideally, you'll be able to pay the settlement---sometimes as low as 30 or 40 percent of the original balance---in full to get the best deal. It's also possible to spread payments out over a short term, such as 6 months.

If you decide to hire a negotiator, contact the NFCC and refer to the Better Business Bureau's business ratings website. Desperate borrowers are prime scam targets. Don't pay negotiation fees upfront.

The notion that a borrower can never improve a bad credit score is false; in fact, the opposite is true. According to Fair Isaac Corporation, the company that tracks consumer debt payment information, the FICO score is simply a "snapshot" of current risk. Even with debt settlement and bankruptcy, it is possible to recover.

Timely payments and low credit-to-debt ratios make up almost 2/3 of your score, so beginning a new, debt-averse regimen helps within a few short months. Don't "max out" your cards; keep your balances to less than half of your available credit. Don't close paid-off accounts, because "$0" balances keep your debt ratio low. Time heals all wounds. Stick with it, and you'll be on the path to debt freedom.

Are Paid Accounts Good on Your Credit Report?

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The information in your credit report helps lenders evaluate your creditworthiness by preparing them for what to expect when doing business with you. A history of paid accounts demonstrates that you manage your debts responsibly and are likely to pay your debts on time -- making paid accounts a positive feature on your credit report.

Lenders closely evaluate your history of payments to current and past creditors when you apply for new debt. Even if you have yet to pay off your accounts in full, the fact that you paid the debts on time in the past serves as a positive feature on your credit report and boosts your credit score. According to the Fair Isaac Corporation's MyFICO.com website, your payment history is responsible for 35 percent of your total credit score. Thus, timely payments are the most positive feature your credit file can reflect -- regardless of whether the account itself is still open.

Although a good credit rating helps you qualify for new debt, it is not the only feature that lenders look at when reviewing your credit history. A lender wants to ascertain that, should it approve your application, your income will allow you to make monthly payments comfortably. Thus, the more debt you carry, the harder it is to obtain new debt.

Accounts on your credit report that not only reflect a history of timely payments, but that have been paid in full and closed, boost your credit scores without being a debt liability. Paying off the debt frees up the amount that would have otherwise gone to your previous creditor -- making a new lender more likely to approve your application.

While paid accounts have an immediate positive impact on your credit rating, derogatory entries lessen the positive effect paid debts have on your credit scores. A paid-off auto loan, for example, helps you less if your credit history also reflects a defaulted credit card account or past bankruptcy.

In addition, the impact paid and closed accounts have on your credit score decreases over time as the account ages. The FICO credit scoring formula places the greatest degree of importance on the most recent information. The credit bureaus typically remove all evidence of your closed accounts -- positive or negative -- after seven years.

While paying off current debts benefits your credit score, paying bad debts, such as credit card charge-offs or collection accounts, does not positively influence your score. Just because your credit score remains unaffected, however, that does not mean that paying your defaulted accounts does not affect your credit report as a whole. Once you pay off bad debts, your creditors must notify the credit bureaus of that fact, and the derogatory account updates as "paid" within your credit file. Paid accounts always look better to lenders than unpaid ones.

Settling your debts, however, is not the same as paying them in full. Settled accounts do not update as "paid" with the credit bureaus, and communicate to lenders that, because you negotiated for a lower balance in the past, you are more likely to do so in the future -- making you a higher risk for the lender.

What Is the Time Limit on Garnishment in Nevada?

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Wage garnishment is the legal process by which creditors can collect on debt by having money automatically withheld from the debtor's paycheck. In the event the court decides to grant a writ of garnishment, the employer, called the garnishee, is required to hold a certain percentage back -- normally no more than 25 percent -- and send it to the court for distribution to the creditor. There is a statute of limitations for this type of legal action in Nevada, which varies depending upon what type of debt it is.

The most common type of debt in this category is credit card debt, which also has the shortest statute of limitations, at four years. What this means is that a writ of garnishment will not be enforced on debt that is older than four years. Therefore, if a creditor plans to pursue this process in court, he should pay attention to the time table and submit a claim well before the statute runs out. Missing the deadline means, unless there is a voluntary payment from the debtor, that nothing can be collected through garnishment.

In Nevada, a debt based on a written contract can be enforced through wage garnishment for a period of six years. After that, the creditor is out of luck. Though he might file a claim for garnishment, all the debtor has to do is show that the debt is more than six years old and the court will not consider it valid. This particular statute of limitations applies only to valid contracts deemed legal and enforceable.

There are different types of domestic debt, with child support and alimony being the most common. As with written contracts, Nevada places a statute of limitations on domestic creditors at six years. An ex-spouse or custodial parent should take legal action well before that period has elapsed in order to procure a writ of garnishment.

According to federal law, wage garnishment is not allowed for Social Security or pension payments when it comes to consumer debt, but domestic debt is a different story. In Nevada, child support or alimony that is in arrears is given top priority and the percentage of garnishment can be as much as 50 percent. The debtor must be notified of the writ of garnishment and be given a 10-day grace period to request a hearing.

Consumer Credit Card Debt Help

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Make debt elimination a priority and quickly erase your outstanding balances. Debt is a vicious cycle, and if you are unable to control spending, you could spend the greater portion of your life paying down high credit card balances. Once you've paid down debt, you'll be free of that cycle and your credit score will likely improve.

Automated payments set up with your personal bank and creditor takes the hassle out of paying bills each month. Signing up for this service is usually free, and once enrolled, monthly payments for your creditors are automatically drafted from your bank account on a specific day of each month. You won't have to write a check or mail in a payment. This alleviates lateness and helps keep your payment history good with the creditor. Additionally, some creditors offer lower interest rates to individuals who enroll in automated monthly payments. A lower rate on your credit card or other loans equals fewer interest payments and balances that go down quicker. Talk with your creditors to see if you can get a reduced rate with automated payments.

Whether you're enrolled in automated payments or you choose to manually submit your payments each month, get into a habit of paying more than the required minimum. You're not locked into paying only the minimum each month; creditors and lenders gladly accept higher payments. By paying more than the minimum, you're able to get rid of your balance faster. Check your finances to see what you can afford. This might call for reducing the amount you spend on entertainment or recreation.

Debt consolidation works if you have several creditors and higher interest rates. Juggling numerous creditors each month can become confusing and complicated. Simplifying your monthly bills and acquiring a better interest rate on outstanding debts helps you manage your debts and pay off balances sooner. There are different methods of consolidation. Go through a bank and use your home's equity or car as collateral, or consolidate through a debt management company. Banks issue a loan to pay off your balances, whereas debt management companies simply merge your debts into a single bill. Discuss eligibility with your bank. If you don't qualify, research nonprofit debt management companies and ask about consolidation options.

Some people use credit cards while trying to pay off their consumer debt. Sadly, this method rarely works, and if you're serious about debt elimination, it's time to stop credit card use and rely on cash. Carrying credit cards in your wallet or purse increases the temptation to spend impulsively. By leaving cards at home, or by cutting up your credit cards, you remove this temptation and become more likely to wait until you have cash to buy merchandise.

Help With a Debt Crisis

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When debt has reached the point of being a crisis, it helps to have someone with expertise help you devise a plan for getting out of the crisis. Agencies such as those connected with the Association of Independent Consumer Credit Counseling Agencies and the National Federation for Credit Counseling offer free counseling services and low-cost or free assistance with debt consolidation and bill paying. Sometimes, they advise bankruptcy.

The best credit counseling agencies such as those affiliated with AICCCA and NFCC are used to dealing with people in debt crisis. They do interviews over the phone, in person or via the Internet to find out about your situation: your income, expenses, debts, spending habits and anything else that can help them help you. The counseling is free, and counselors with these agencies are accredited and charged with giving you a comprehensive picture of your financial situation and options for dealing with it. After one session, many consumers can manage their debt on their own.

In a debt management plan, these agencies take over payment of your unsecured debt, such as credit cards. You and the agent work out a budget and a monthly amount needed to pay down debt. You give that amount, and sometimes a small administrative fee of up to $50, to the agent who pays your debts and negotiates down interest rates and fees. The agent usually requires that you cut up your credit cards and don't apply for any new ones until the debts are paid off.

The debt management plan serves as a form of debt consolidation. Other consolidation options may be home equity loans, 401k loans or installment loans that pay off multiple credit card or other unsecured debts. All of these come with some risk, such as the risk that you will lose your job, then have to return the 401k loan immediately. Many debt consolidation companies not under AICCCA or NFCC are scams that take their cut before they start paying your bills, further damaging your credit.

In some cases, the best option may be debt settlement or bankruptcy. Credit counseling agencies, which have a lot of experience, can help you make this determination. If your debts are high but so is your income, you may want to choose debt settlement, which means paying a fraction of your debts to creditors. Often, this is done at some expense with the help of a debt settlement company, but you can do it on your own. Another choice is Chapter 7 bankruptcy, which must be handled by a lawyer. With this, all your debts are discharged. Both of these choices seriously damage your credit rating.

How to Respond to a Credit Line Reduction

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It has been happening to numerous cardholders, because of the financial crisis and in recession credit companies are reducing consumers line of credit, but to reduce without notifying the cardholders is an outraged.
Most companies are not notifying the cardholders of any modifications toward their reductions pay close attention to your monthly statements.

Cardholders are more likely at risk if they have use their cards close to their credit limit or to the max. Even though you pay on time or you've been with the company for years you may receive a reduction on your credit line or your account maybe close.

I have a few tips that you can follow it's not set in stones, but give it a try.

Instructions

Ask to speak to your banks supervisor or someone in charge this will probably increase the chances of resolving the issue by stating if they can review your account and reconsider their decision.

If your credit limit has been reduced leaving you less than your current balance with over the limit fees and your terms of agreement were modify. New over the limit fees should not be apply towards your new line of credit. You can dispute it with the bank and to Federal Reserve Consumer.

I don't really suggest this solution, but if you have no other choice try to transfer from one card to another, if you have more than one card.

Use no more than half or below your availabe credit lines.

Review your credit report for resolved accounts, which are still there or for any invalid information.

Check your credit score. If your credit score has been effected by the above situation, try to fix your credit scroe; once you noticed its stable or up to your standards; request another review to your credit card company.

Can Your Wages Be Garnished for Repossession in Florida?

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Garnishment is one of the tools creditors use to get money when you can't pay. Rather than wait for you to write the check, your employer diverts a share of your wages to your creditor each payday until the account is closed. It's possible someone who's repossessed your car could also garnish your wages, but Florida law protects your wages better than many states.

In Florida, your auto lender can seize your car the moment you default on the loan. She can send someone to your property to repossess a vehicle without giving you any notification, but she cannot use violence or threats. She can choose to keep the car to settle your debt, or to sell it. If she sells it and the sale price doesn't pay off your loan, she can sue you for a deficiency judgment requiring you to pay whatever's left.

Your auto lender, like any other creditor, can use the deficiency judgment to garnish your wages or attach your bank account. As a first step, it can require you to attend a court hearing where his attorney grills you about your income, assets, accounts and other information. Once your creditor knows how much you earn, and from whom, it can have the county sheriff give your employer a writ to garnish your wages. Your employer has no power to refuse, though federal law forbids firing you because of garnishment.

Under federal law, the most that can be garnished from one paycheck---except in special cases such as child-support payments---is 25 percent of your income or 30 times the minimum wage, whichever is less; as of 2011, the latter amount would be roughly $210. If you're providing at least half the financial support to one or more dependents, Florida law protects the first $500 per week of your pay from creditors. If you make more, your creditors still can't garnish it unless you agree in writing.

If your lender wants to keep the car, Florida law says you can overrule him and require a sale. If it sells for more than the debt, you receive the excess, so this is often a smart move if your car is valuable. The lender can dispose of the car by auction or private sale, but it must be "commercially reasonable." If it sells for below market value, you may be able to defend against a deficiency judgment by showing the judge the sale price was unreasonable.

What Is Debt That Raises Capital?

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Sometimes, a company may wish to raise capital to finance an expansion or to pay for certain expenses. There are a number of ways in which a company may go about doing this, including opening the company to investors or securing a loan. However, some companies choose to issue debt. This means that the company provides debt obligations to investors in exchange for an agreement to pay them later, usually with interest.

Even a successful company may not have enough cash on hand to finance an expansion. Occasionally, the company will choose to raise this capital by selling debt to investors. For the investors, the debt takes the form of an investment, as the company is promising to pay the debts back, plus interest. For the company, the capital raised from the sale of this debt functions as a business loan.

Debt used to raise capital can take many forms, the most common of which is a bond. A bond is a debt obligation issued by a business or another group, such as a municipal government. Investors agree to purchase these debts in exchange for receiving repayment at a later date. The value of these bonds may fluctuate based on the market's expectation of whether a company will pay back the money it borrows.

The amount of interest that a company will be required to pay investors to buy the bonds will correlate directly with the company's credit rating. The higher the company's credit rating, the safer an investment the investors will consider the purchase of its bonds. Therefore, these investors will be willing to buy the bonds even if the company offers a relatively low rate of interest. Conversely, less creditworthy entities much pay higher interest rates.

Issuing debt to raise capital carries many of the same risks for a business that taking out a personal loan does for an individual. When a business takes out a loan, it is essentially wagering that it will have enough capital to pay back the debt when it comes due. If the capital is not used wisely, the company mat find that it cannot meet its debt obligations, which may lead to a lowering of its credit rating.

Should I Use My Savings to Pay Credit Cards Off?

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If you have debt, you are almost certainly paying regularly accrued interest on it. If you have money in savings, hopefully you are earning interest on it. However, depending on your interest rates, you are most likely paying more in interest to the credit card companies than you are earning on your savings.

While paying off your credit card debt with savings can be mentally and financially freeing, it can also get you into hot water if you have an emergency and are left with no savings. In fact, you might end up right back where you started--deep in debt, but this time with no savings to cushion the blow.

Save $1,000 as your emergency fund, says nationally known financial author and radio and TV personality Dave Ramsey. "This beginning emergency fund will keep life's little Murphies from turning into new debt while you work off the old debt. If a real emergency happens, you can handle it with your emergency fund." Then use the rest of your savings to cut down on your debt.

Tips for Correcting a FICO Score

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Developed by the Fair Isaac Corp., a FICO score is a number from 300-850 that you're given based on your credit and payment history. Having a higher number is desirable and will make it easier to access credit when you need it.

By using credit wisely, you can correct your FICO score, and when you're short on cash, you'll still be able to purchase the things you need.

According to the Federal Trade Commission, you can request a free copy of your credit report annually from each of the three major credit bureaus, Equifax, Experian, and TransUnion.

Your credit report provides information about your payment history, your address and any lawsuits that have been filed against you. If you've been arrested or have filed for bankruptcy, that information will also be listed.

Mistakes can be made by creditors erroneously reporting that you haven't paid a bill, or you may be a victim of identity theft, where someone is making unauthorized purchases by using your credit card information.

Your delinquent account is reported to the credit bureaus, and you may not be able to borrow money, qualify for an insurance policy or rent an apartment.

If you find mistakes, send a certified letter, return receipt requested, to the credit bureau, stating why you believe that the information is not accurate, and that you would like the disputed information removed from your credit report. Send copies of supporting documents with your letter, and keep all correspondence that you receive.

Pay your bills by the due date every month. If you pay late, or have your account referred to a collection agency, you'll have a lower FICO score.

Establishing your credit history by using credit cards is a plus, but if you have too many credit card accounts, your FICO score can be negatively affected.

The type of credit account that you have is also considered. For example, if you received a loan from a finance company, your FICO score may be lower.

If you've just received approval for credit, and haven't had time to establish a credit history, your FICO score may not be as high, but by making your payments on time, and keeping a lower balance, you may be able to improve your FICO score.

How to Build Credit With a Prepaid Credit Card

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A prepaid credit card, also called a secured credit card, is a good option for those who haven't yet established credit or who have poor credit and are trying to rebuild their credit scores. A prepaid credit card requires you to open a savings account with the credit card issuer that ranges from a few hundred to thousands of dollars. The credit card issuer then allows you to access a credit line that's a certain percentage of your deposit amount, which can be between 50 and 100 percent of the total. Secured credit cards can be used to pay for goods and services just like an unsecured credit card.

Instructions

Before you apply for a prepaid credit card, ask questions to protect yourself against usurious charges buried in fine print. The Federal Trade Commission urges consumers to ask the issuer about their application and processing fees and if they will be refunded should you be denied the card. Inquire if there's an annual fee and note if the prepaid credit card has an interest rate on the balance that's higher than an average credit card.

Make sure that the prepaid credit card issuer reports to a credit bureau if you're trying to establish or rebuild credit. If the issuer doesn't report to a credit bureau, it won't help you build credit because it will not be reflected on your credit history.

Make sure to pay the minimum amount on your credit card statements in a timely manner. This is the only way to build or repair your credit history. If you have a good track record with the prepaid credit card issuer, they might convert your account to an unsecured credit card and increase your spending limit.

How to Deal With an Unstable Job

3:24 AM No comments

Dealing with an unstable job can cause extreme stress and worry, especially during tough economic times. An unstable job can lead to unemployment without notice, such as a layoff -- or even the closing of the company. Dealing successfully with an unstable job requires you to put your emotions aside while making good career and business decisions for you and your family. One of the worst moves is waiting to see what happens with your unstable job. Getting out in front of a possible layoff could allow you to transition to a new position without missing a paycheck.

Instructions

Start a job search. Ideally, you should never stop looking for the next job, even in good times. But you should bring a greater sense of urgency to the mission when you are in an unstable job. Spruce up your resume and start applying for open positions. This gives you a head start on finding a job if your company folds or you are laid off. Being proactive about finding other opportunities will make it easier to deal with the instability of your job.

Ask your supervisor for some straight talk about your unstable job. Use the discussion to determine why the job is unstable. There is a chance the company may be doing just fine, but your job is at risk because of advances in technology. If that's the case, ask your boss how you can prepare yourself for another job in the company. Reinventing yourself by going back to school or taking part in cross-training opportunities are possible options.

Participate in all-hands meetings about the direction of the company and departmental meetings as well. Also read trade publications and blogs about your industry and the type of job you have. If you are a machinist and other companies are laying off machinists because of technology, then that's a sign that your job could also be at risk.

Meet with a human resources representative to discuss your concerns. An HR person is unlikely to tip you off about a layoff, and you should not ask such a question. However, you can use the time to review your benefits and ask about severance packages offered in the past by the company. Also ask the representative about other jobs in the company that appear more stable than yours and how you can qualify for those positions.

Take a new job inside or outside the company offering greater stability if you're offered a position.

How to File a Debt Management Plan in Missouri

1:54 PM No comments

Missouri reports on its website that a debt management plan is a written agreement between you and a "debt adjuster," such as a nonprofit credit counseling agency. The state reports that the agreement establishes that the debt adjuster will perform debt management services for you for a fee. The terms of the agreement are negotiated by you and the debt adjuster. The agreement becomes a contract and is considered official--or filed--when both sides agree and sign.

Instructions

Search the database for the U.S. Trustee Program to find a government-approved nonprofit credit counselor in Missouri (see Resources). Approved agencies specialize in debt management plans.

Schedule a visit with the agency in Missouri. Take a list of all your debts including recent copies of billing statements. Ask for details about debt management plans. Typically the plans require you to authorize the counseling agency to manage your budget and pay your bills. You are charged a monthly management fee and must also send the agency a lump sum check each month covering your debts. The agency then makes direct payments to credit card companies and other creditors.

Agree on a plan and sign the contract.

How to Run a Debit Card as a Credit

3:29 AM No comments

Your debit card looks like a credit card, but functions very differently. A debit card is connected to the funds in your checking account. When you use your debit card, your bank immediately removes the funds from your checking account. You have the option, however, to use your debit card for credit transactions. Like debit transactions, credit transactions on a debit card pull funds directly from your checking account. The difference is that credit transactions may take two days or longer to process. Only then will your bank withdraw the money from your checking account.

Instructions

Hand your card to the cashier when you are ready to pay for your purchases or swipe its electronic strip through the customer card terminal at the register.

Show the cashier your ID if she asks for it. Some merchants routinely check ID when customers use credit or debit cards.

Select "credit" on the customer card terminal's screen or, if there is no customer card terminal, inform your cashier that you'd like to run the card as a credit purchase rather than a debit purchase. Unlike a debit purchase, you will not need to input your PIN when using your debit card as a credit card.

Sign the merchant's slip the cashier hands to you or provide the store with an electronic copy of your signature by signing within the space provided on the customer card terminal's screen.

Can a Mortgage Company Garnish Wages?

11:21 AM No comments

When a person takes out a home loan, this loan is nearly always secured by the home itself, which acts as collateral. If the person goes into default on the home loan, the company that issued the mortgage may initiate foreclosure proceedings. In many states, if the home is foreclosed upon and sold, the former owner is no longer obligated to pay the lender anything. However, in some areas, he may owe additional fees, which the lender may attempt to gain through garnishment.

When a home goes into foreclosure after the borrower has defaulted on the loan, the lender is legally obligated to put the property up for public auction. In doing so, the mortgage company may incur a number of fees, such as legal fees and fees paid to the auction house. In addition, the company may not recoup the full amount that remains outstanding on the loan through the auction sale.

In some states, such as Connecticut and Florida, a borrower who has walked away from a foreclosed home has no legal obligation to pay any additional money to the lender. However, in other states, such as Alabama and Arkansas, if the lender does not recoup the full cost of the loan and the foreclosure fees after the sale of the house at the auction, the borrower is legally obligated to make up the difference.

If the former owner of the home is liable for the outstanding balance and refuses to pay, the mortgage company may attempt to force him to pay by suing him in court. Because the borrower's obligation to pay these fees is likely spelled out in his loan contract, the mortgage company may sue him for breaching the contract and demand damages in the amount of the fees, plus legal costs.

If damages are awarded to the mortgage company, the home's former owner will be given a chance to pay this money. If he fails to do so within the time period ordered by the judge, the judge may allow the mortgage company to take actions to collect the money against the borrower's will. Potentially, the mortgage company could be allowed to garnish the borrower's wages until the damages have been paid off.

Can Your Check Be Garnished for Old Credit Cards?

4:26 AM No comments

Garnishment of your check for an old credit card debt is possible, but there are limitations. State statue of limitation laws limit how long credit card companies and other debt collectors have to pursue an old debt in court. The length of time varies depending on the state, but the average is about six years. After that, civil courts consider credit card debts as too old for consideration by the court system.

Wage garnishment forces employers to send a certain percentage of your paycheck to a debt collector each month for a debt you did not pay. Garnishment is possible only after the credit card company or debt collector files a civil lawsuit, wins a judgment and asks the judge for permission to collect the debt through garnishment. Judges usually agree to the request if the debtor has not made payment arrangements with the debt collector. Employers must cooperate with garnishment orders and will begin the deductions after receiving a notice from the court.

State statue of limitation laws are an effective defense in a credit card lawsuit. The laws do not prevent a credit card company from pursuing an old credit card debt, however. Lawsuits are possible even when the credit card debt is beyond state statue of limitation guidelines. It's up to the debtor in the case to point out to the judge that the debt is too old for consideration by the courts. "The New York Times" reported in 2011 how one debtor escaped a possible judgment and garnishment by giving the judge a handwritten note citing his state's statute of limitation laws. After verifying the information the judge dismissed the case.

Consumer affairs attorneys can advise debtors about statue of limitation laws, or the debtor can contact a local office for the state attorney general. Other help is sometimes available from local law schools or organizations offering free legal services to the poor such as the Legal Aid Society. Debtors with old credit card debts should review statute of limitation laws before agreeing to pay. Without the threat of a lawsuit the debt collector loses a huge advantage. The debtor remains responsible for the debt for life, and the debt collector can continue pursing the debt through traditional methods such as notices by mail and phone calls. However, the Fair Debt Collection Practices Act, a federal law, gives debtors the right to demand in writing that a debt collector not contact them by mail or phone.

Some debt collectors specialize in tactics for "re-aging" debts so that they again become eligible for lawsuits, judgments and garnishment. Making a partial payment on an old credit card debt can reset the debt under statute of limitation guidelines, in some instances. Debtors determined not to pay an old credit card debt should not discuss the debt with a debt collector without the advice of an attorney.

Comparison of Consolidated Debt to Paying Off Credit Cards

1:35 PM No comments

People who are struggling to pay their debts may think using one loan or a line of credit to pay off several debts is a quick fix for their financial problems. Those methods may work for some people, but others find themselves deeper in debt due to the high-interest charges that often come with loan and credit card consolidation options.

Debt consolidation often involves taking on more debt to solve a financial problem. Yet that can create more problems for consumers who don't reduce their spending and change other behaviors that created their financial troubles in the first place. A Bankrate.com article, "Debt Consolidation: Cure or Continued Credit Problems?" says 70 percent of Americans who get loans to pay off credit cards accumulate the same amount of debt or more within two years. Furthermore, people who need loans to solve their debt problems probably won't get low interest rates on their loans. Lenders give the best rates to people with high credit scores, and large amounts of credit card debt usually lowers a borrower's score.

Homeowners who are deep in debt may be able to get home equity loans to pay off their credit cards, but the loans aren't a good option in some circumstances. Home equity is equal to the appraised value of a home minus the balance owed on a mortgage, and people who've lived in their homes for many years may have a lot of equity available. However, homeowners who end up in more financial trouble and fail to pay back the home equity loans they used to consolidate their credit card debt could default on their loans and lose their property.

Some people use credit cards to consolidate debt by transferring balances from high-interest cards to low-interest ones. Their intention usually is to reduce their interest charges while they pay off their cards. However, credit card companies usually offer low interest rates for a limited amount of time to people who transfer their balances from other cards. Cardholders who don't pay off their balances before those low rates expire could end up paying the high interest rates they were trying to avoid. Cardholders who are late with a payment after consolidating their credit card debt can be hit with penalty interest rates that exceed 20 percent.

Debt management plans offered by nonprofit organizations such as the National Foundation for Credit Counseling may be a better option than debt consolidation loans and credit card transfers. People who enroll in debt management plans typically meet with a credit counselor who helps them create a budget and a debt repayment plan. According to the Bankrate.com article, someone with $20,000 in debt could save more than $10,000 in interest payments and fees by working with a counselor to pay off credit cards rather than taking out a debt consolidation loan. Credit counselors can save their clients money because they typically negotiate with creditors to reduce the interest rates and fees their clients are charged.

Welcome to our website credit and debt managementr.

Tuesday, December 31, 2002

Get a Job

Talk with Your Creditors

Check with Local Agencies

Ask Your Family's Assistance

Debt Law

Debt Collection

Wage Garnishment

Considerations

Community Property

Legal Separation

Joint Accounts

Considerations

Function

Ratio Calculation

Reducing Debt

Considerations

Forbearance

Time Frame

Alternatives to Forbearance

Monday, December 30, 2002

Instructions

Instructions

Credit

Budgeting Repayment

Fees

Transfer of Liability

Loss of Inheritance

Stress

Solutions to Debt Problems

Saturday, December 28, 2002

What is a Garnishment?

Defense Finance and Accounting Service

Uniformed Services Former Spouse Protection Act

Military Pay Allowable Garnishments

Starting a Garnishment

Friday, December 27, 2002

Credit Rating

Time Frame

Alternatives

Warning

Thursday, December 26, 2002

Instructions

What is My Debt-to-Income Ratio?

What is My Credit-to-Debt Ratio?

Which Debt Should I Pay Off First?

Should I Consolidate My Debt?

Disputing Negative Entries

No Time To Spare

Credit Counselors

Warning Signs

Wednesday, December 25, 2002

Background

Effect on Your Credit Score

Additional Effects

Time Frame

Foreclosure Deficiency

Foreclosure Judgment

Locating an Inheritance

Considerations

Instructions

Tuesday, December 24, 2002

Instructions

Debt Management Plans

Bankruptcy and Your Assets

Chapter 7 Basics

Chapter 13 Basics

Wage Garnishment

Garnishment Limitations

Consequences

Stopping Garnishment

American Association of University Women

Pell Grants

GEM Fellowships

Harry S. Truman Scholarship Foundation

EFWA Master's Scholarship

Monday, December 23, 2002

Instructions

Instructions