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New offers options to American consumers who need an effective debt reduction plan. We have settled over 150 million dollars worth of unsecured, credit card debt while saving clients thousands of dollars. AmeriGuard believes it is important to make an informed decision especially when it affects your financial health. Understanding your options can be overwhelming; that’s why we offer experienced, knowledgeable guidance along the way. provides the information you need to participate in creating a better future..

Monday, April 29, 2002

Who Pays Off Credit Cards When a Relative Dies?

If someone close to you dies, the last thing you need is credit card companies calling about debt your loved one left behind. In general, the executor of an estate handles the estate's debts, including credit card debt. Inform creditors of the death and refer them to the estate's executor if they contact you regarding a deceased loved one's debts.

Singly-Owned Accounts

    If a person had a credit card in his own name, and nobody else had an account attached to that credit card, the executor of his estate must pay off that debt using the estate's proceeds. The executor must pay off all debts before distributing inheritances. If the credit card debt uses all of the estate's assets, heirs will not get any inheritance. If there is no will, state law determines who is the executor of the estate.

Joint Accounts

    If the decedent held a credit card account with a co-signer, such as a spouse, child, or business partner, that person is considered jointly liable for all incurred debts. Thus, the co-signer is responsible for paying off debts, and her credit may be negatively affected if she fails to do so. However, if the person was authorized to use the credit account, but did not co-sign the credit application, she is not responsible for debts and the account is treated like a single-owned account.

Protections for Families

    The Credit Card Act of 2009 prohibits credit card companies from charging interest or late fees while a late card holder's estate is being settled. The credit card company must also inform the executor of the total debt owed as soon as possible after learning of the debtor's death. Creditors may not begin collection proceedings against the estate's heirs for unpaid debts unless the heirs are co-signers on the account.

Insolvent Estates

    If the debtor's estate lacks assets to pay all of the decedent's debts, the estate is considered insolvent. The executor must decide which bills to pay with the existing assets and inform creditors of insolvency. If a decedent's estate cannot pay off a credit card due to insolvency, the credit card company must write the unpaid amount off as a loss, as heirs cannot inherit debts.

Sunday, April 28, 2002

How to Clear Collections Off Credit Reports

How to Clear Collections Off Credit Reports

Having a good credit report is essential to financial mobility. Collections on your credit report can make it hard to get new lines of credit, certain jobs and housing. It is important to be organized and diligent when working to clear collections off credit reports. Setting up a plan and sticking to it will speed up the process and improve your financial situation.

Instructions

How to Clear Collections Off Credit Reports

    1

    The first thing to do is get a copy of your credit report. You are entitled to one free credit report every year. You can either write a letter to one of the main credit agencies (Equifax, TransUnion or Experion) or obtain it through one of the many Web resources. Remember, the first one is free so if you run across a website that charges, youve gone to the wrong place.

    2

    Collection accounts that are inaccurate can be disputed. Notify the credit agencies in the form of a letter about any collection accounts you want to dispute. Make sure you keep copies of all correspondence regarding the disputed debt and have proof of contact in the form of receipts.

    3

    The credit agencies will notify the creditors of the dispute, and they have 30 days to contact you. Failure to make contact within the 30-day period on the creditors part removes any responsibility you have for the debt and the collection account will fall off of your credit report.

    4

    Creditors would rather have debts paid than pursue payment. A simple call to creditors who have moved your account to collections could help get the account current. Negotiate a payment plan that will pay off the debt and ask them to change the status of your account from collections to paying on time.

    5

    If you settle an account, make sure that you pay as little as possible. Negotiate a rate that is a good deal instead of trying to pay as much of the debt as possible. You may lose a few points on your FICO score, but the flip side is that a paid-in-full collections account may only affect your score at little, if at all. If you can spend less by settling collections you will have more money to pay off the rest of your debt.

Free Legal Aid for When You Are Unable to Pay Child Support for the State of Georgia

Free Legal Aid for When You Are Unable to Pay Child Support for the State of Georgia

The penalties in Georgia for failing to pay court-ordered child support are very strict. Missing consecutive payments can cause the courts to order a lien on your car or other property, up to 12 percent interest on your debt, garnishment of your wages, loss of your license and even prison time. It is possible to have your child support obligations adjusted or deferred if you are experiencing financial hardship. Various legal resources are available to help you avoid the penalties of failing to pay child support during difficult times.

Georgia Department of Child Support Services

    The DCSS is a branch of the Department of Human Resources that handles the collection and disbursement of child support in in Georgia. If you currently pay your child support via DCSS, you can request a modification of your support obligation if you can show a significant change in your financial situation, such as a loss of a job. If the DCSS handles collecting your child support and you are going to miss a payment, you must notify your case worker immediately to avoid legal recourse.

Atlanta Legal Aid Society

    If you live in Gwinnet, Fulton, Clayton, Cobb or Dekalb county you may qualify for legal advice or representation provided by the Atlanta Legal Aid Society. Services are based on income level, and prioritized by the status of the case. If you have been served notification of a pending court date due to failure to pay child support, contacting the ALAS may provide you with the representation you need to avoid harsh penalties.

Georgia Legal Services Program

    The Georgia Legal Services Program is similar to the Atlanta Legal Aid Society, but works with low-income people in rural areas of Georgia. The GLSP assists with domestic and civil issues, but does not work with criminal cases. It is best to inquire for legal assistance before you fall significantly behind on child support payments.

Family Law Information Center

    The Family Law Information Center in downtown Atlanta. is designed to assist individuals who wish to represent themselves in legal matters, including child support enforcement and modification of child support orders. The FLIC offers consulting appointments as well as a vast library of forms and information to help assist you if your income is too high to qualify for legal aid.

Saturday, April 27, 2002

Is an Ex-Wife Responsible to Pay Credit Card Debts From Money Willed to Her by a Dead Spouse?

If you are a co-signer on your ex-spouse's credit account or your name is legally on the account, you are responsible for paying it even if your divorce decree states that your ex-spouse must pay it. If you do not pay your bills because your divorce decree states your ex-spouse is responsible and he doesn't pay them either, you can go into default; if your creditors go to court and get a judgment against you, they can garnish your wages for the amount of the debt and may be able to garnish any inheritances you receive.

Remove Name from Accounts

    If your divorce decree states that your ex-spouse is responsible for particular debts such as joint credit accounts, contact the creditor and remove your name from those accounts. If you do not do this, you are still legally responsible for the debt regardless of what the decree says, and you may ruin your credit if your ex-spouse fails to honor the decree and pay the debt. If you receive an inheritance, depending on state laws, the creditor may be able to garnish it to repay the debt.

Stay Out of Default

    If you do not choose to remove your name from a joint account, monitor the account carefully and pay the bills if your ex-spouse fails to do so. This keeps you out of default, so you will never have to face a situation in which your inheritance is at risk of being garnished to pay your ex-spouse's debt. If the court orders you to pay child support or alimony, pay them on time every month so that you won't go into default.

Using Inheritances

    Even if you are in debt, you are not legally required to use an inheritance to pay back the debt. However, if you have defaulted on debts, even if your ex-spouse was partially to blame, and a creditor has a judgment against you, the creditor may be able to get a court order requiring you to turn over part or all of the inheritance to pay the debts.

Bankruptcy

    If you receive an inheritance after filing for bankruptcy, the inheritance automatically becomes part of the bankruptcy estate if it was willed to you. However, if you inherit a retirement account or other account that is payable upon the account holder's death, it is not considered part of the bankruptcy estate and you may keep it rather than turning it over to the bankruptcy trustee.

How to Beat Arbitration for Credit Card Debts

In you are subject to "forced arbitration" in a credit card dispute, this means that you give up your right to go to court. This is harmful for consumers who are victims of fraud and predatory lending. Chances are if you own a credit card issued by a major bank, you're subject to a mandatory arbitration clause. Few people know about the mandatory arbitration clause buried in the fine print of their credit card agreements. In arbitration there's a judge, jury, or right to appeal, making arbitration agreements binding. Avoid arbitration if you can.

Instructions

    1

    Contact your credit card company and ask if there's a mandatory arbitration clause in your credit card agreement. Request a copy. You should be able to find information about arbitration under the dispute resolution section of the agreement. Understanding your right to dispute prepares you for how to proceed to resolve your credit card debt.

    2

    Work out a settlement agreement with your credit card company if the debt is legitimately yours. If the charges were unauthorized and you are a victim of fraud, you should be able to have those charges reversed. Debt negotiation with your credit card company is going to take finesse on your part, particularly if you have fallen way behind in your payments. Your credit card company may be willing to settle your debt for a fraction of what you owe, but chances are you may have to make a lump sum payment. If you can't afford to make a lump sum payment, establish an affordable payment schedule.

    3

    Obtain a copy of your repayment plan agreement and stick to it. If for some reason you cannot make a scheduled payment, contact your card lender immediately. Apprise the credit card company of any changes in your financial situation that will hinder you from making timely payments.

Ways to Clean Up Your Credit

Cleaning up your credit is necessary if you plan on buying a home or borrowing money in the next few years. A low credit score means higher interest rates, and lenders may even deny you a loan. There are several things that you can do to change your credit score to help you qualify for a good mortgage or a better loan.

Pay Off Old Debt

    One of the best ways to clean up your credit is to pay off past due debts. This means becoming current on all of your payments that you are making now as well as paying back loans that have gone into default. Creditors are willing to negotiate a lower payment amount if you are willing to make a lump sum payment. Generally this is about 50 percent of the debt. Once you have the money saved, call the creditor and offer the amount as settlement in full. If they are willing to accept the payment do not send the money until the creditor sends you a letter saying they will accept the amount paid as settlement of the debt.

Check Your Credit Report

    Check your credit report at least once a year. This will allow you to dispute fraudulent charges or correct mistakes that may have been made. When you dispute a charge you need to contact both the credit bureau and the financial institution that have made the incorrect report. You may also need to file a police report if you have been a victim of identity theft. In the letter to the financial institution, explain the mistake and then request that it report the correction to the credit bureau.

Pay Down Your Debt

    Another reason that your credit score may be low is because your debt-to-income ratio is too high. This can be fixed by paying down your debt. Stop using your credit cards and apply extra money toward your loans. Once you have lowered your debt-to-income ratio you will be in a better position to qualify for a good loan.

Establish a Good Payment History

    Another way to improve your credit score is to establish a good payment history. Paying on time each month consistently will help to improve your debt score as well. This is particularly important if you have defaulted on loans in the past or declared bankruptcy. It is important to consider this as you take on new debt or use your credit cards. Do not borrow more than you can pay back each month.

Friday, April 26, 2002

About Credit Debt Management

About Credit Debt Management

Many consumers have too much debt or the inability to pay debt obligations. Credit debt management plans are offered through consumer credit agencies to help individuals gain control of their finances and reduce or eliminate debt. Credit debt management plans cover a variety of financial situations and provide several benefits for consumers who struggle with debt.

Function

    Credit debt management involves plans, strategies and programs consumers use to get out of debt or pay off delinquent bills. Consumers typically enroll in debt management plans when creditor accounts pile up and they can no longer meet debt obligations. Credit counseling agencies administer debt management plans and offer recommendations and advice for consumers based on their unique financial situation. Counseling agencies include community-based organizations, non-profits and private institutions.

Types

    Credit debt management programs offer unique solutions for a varying types of debt. Most programs help consumers manage unsecured debt, such as credit cards, lines of credit and medical bills. Credit counseling is a type of credit debt management program that helps consumers understand the type of debt they have, formulate a budget and develop a financial plan to pay down debts over time. Credit and debt consolidation is a type of credit debt management program in which consumers consolidate eligible debts and make a single monthly payment toward all debts at once. Debt negotiation is a management program that allows consumers to negotiate lower payments or better terms with creditors to make payments more affordable.

Benefits

    Credit debt management is beneficial because it helps consumers organize personal finances. By using debt management services, consumers are able to determine how much debt they are obligated to pay and the actual costs associated with the debt, including fees and interest payments.

    Another major benefit of credit debt management is that it helps consumers become debt free. Successful debt management plans help consumers completely eliminate personal debts without accumulating new debt. Consumers emerge with a new understanding of how credit works. They know how to develop and effectively utilize a budget, as well as how to implement responsible spending habits.

Considerations

    It is important to note that not all financial situations benefit from credit debt management. Debts such as alimony and child support, certain taxes, judgments and some secured debt may not be eligible for debt management programs. Further, a debt management plan that requires repayment of debts over time may not be an option if a consumer does not have regular income or has very little income. In these instances, the consumer may not be able to afford to make payments.

How Can I Pay Off My Credit Card Debt?

How Can I Pay Off My Credit Card Debt?

America's revolving debt balances increased an astonishing 75 percent over the 10-year period ending in 2007. Since then, credit card use declined precipitously, corresponding with the downturn in the economy. Many consumers found themselves in over their heads, struggling to manage their finances. Eliminating credit card debt is life-changing. It won't be fun or easy, but the rewards of an empty mailbox and a full wallet will last a lifetime.

Where to Begin

    Getting a realistic picture of what you can and can't afford will help tremendously.
    Getting a realistic picture of what you can and can't afford will help tremendously.

    Choose a time when the house is quiet, and gather the necessary materials: pen, paper and calculator or a computer spreadsheet. Collect the bills you pay on a regular monthly or quarterly basis. Don't forget to include groceries and gas or other commuting expenses. Make a list of recurring bills; with the credit cards, include the creditor name, account number, phone number, balance, minimum payment and interest rate information. Subtract your expenses from your income. What's left will be what you have to work with.

Methods of Debt Repayment

    Solving the debt puzzle.
    Solving the debt puzzle.

    Call your credit card companies. Customer service representatives often can reduce interest rates over the phone. Be sure to ask if this will affect your credit report or change your available credit line. The upside to these phone calls is that a lower interest rate will increase the amount of principal you pay off every month, shortening the life of the loan and saving money.

    The best and least costly way to reduce credit card debt is to pay off the card with highest interest rate first. Make a list, with the highest interest rate loan at the top, and plow all additional funds into increasing the payment on that loan, without incurring any new charges.

    Most credit card issuers allow multiple monthly payments; it may be easier to make payments several times during the month instead of in one lump sum. Also, there's a psychological benefit from watching the balance go down weekly. Developing and maintaining a regular debt repayment schedule will become its own reward, with the appropriate amount of commitment.

    Don't forget to put the credit cards away. Paying one only to run up another will only make the debt problem worse.

Push Your Payments

    Discipline and a realistic attitude are the keys to success.
    Discipline and a realistic attitude are the keys to success.

    Once you pay your first bill in full, apply the payment that you would have made on that bill to the next bill on the list the following month. Continue in this fashion until your debts are paid. Be certain to check the interest rate on the outstanding cards, in case a rate skyrockets suddenly.

When You Need More Help

    Help is available if you need it, so don't be afraid to ask!
    Help is available if you need it, so don't be afraid to ask!

    Don't give up! Money matters are frustrating, and help is available. Contact the National Foundation for Credit Counseling, a nonprofit agency dedicated to helping consumers get back on their feet. NFCC offers a free consultation, and a debt consolidation or management plan may work. Keep in mind that a consolidation or management plan affects your credit score and also makes it difficult to get a loan.

    Debt settlement is also a possibility, but it is very damaging to credit; when the settlement is reached, you usually must pay it in one lump sum. In addition, it can be difficult to find a reputable debt settlement specialist. However, if the next solution is bankruptcy, debt settlement is your best option.

    Remember that paying debt is the opposite of racking it up. Good financial management begins with understanding and controlling credit card use.

Thursday, April 25, 2002

The Ethics of Debt Consolidation

The Ethics of Debt Consolidation

Debt consolidation is the process of combining several loans into one loan, often with lower interest and a lower monthly payment, and is sometimes used by financially overwhelmed debtors. The moral obligation to repay debts is assumed in laws dating back to the Code of Hammurabi, written in 1,700 BC. In this code, provision is made for families who could not repay their debts to work for their creditor until the debt was paid. On the other hand, interest is usually a big factor in today's debt, and the Bible forbade charging any interest on money loaned to the poor.

Ethics of Partial Payment

    Franklin Debt Relief points out that if a consumer is truly so overextended that repayment is impossible, than any plan that repays some of the debt is an honorable alternative, since both debtor and creditor benefit. Many creditors are not sure they are in this desperate a situation, however. Some debtors who calculate the actual cost of repaying a debt with interest are shocked by the total amount they will pay and wish to renegotiate the terms.

Ethical Viewpoints

    The morality of any given action must be determined by the person considering the action, but according to Franklin, there are three schools of thought on the ethics of debt consolidation. One view is that the credit card companies use deceptive and aggressive practices to trap consumers into high interest that makes repayment nearly impossible, so the blame for inability to repay falls on the credit card company. Another view is that a debtor should bite the bullet and pay back the debt at the terms in the original agreement.

Mitigating Circumstances

    A third view is that mitigating circumstances should be considered. Each debt situation is different, and unexpected hardships can occur that change the ethical equation. For example, an accident, sickness, or losing a job through no fault of the worker can throw a debtor into a financial crisis. In this case, debt consolidation or negotiation may be the only option available.

Ethics and Spending Habits

    Dave Ramsey, Christian author and radio show host, specializes in personal financial advice. According to Ramsey, while debt consolidation is tempting for those feeling overwhelmed by debt, it is not very effective. Ramsey states that 78 percent of those who complete debt consolidation find themselves in debt again. Instead, Ramsey advises creating a plan to pay off debts and to pay cash for purchases, or not buy at all. Ramsey considers debt to be a symptom of a deeper problem --- failure to live within the family income.

Ethical Credit Counseling Agencies

    According to the Federal Trade Commission (FCC), consumers should also beware of the ethics of the credit counseling agency they contact. The FCC lists guidelines for getting out of debt and choosing a credit counseling agency on its website.

What Can a Credit Card Issuer Do for an Unpaid Account?

When you apply for a credit card, you don't intend to get in over your head financially. However, excessive use of credit cards can lead to large monthly bills that you may have difficulty paying. This may cause you to miss payments and fall behind on your debt. Your creditor may take several actions if you do not make your credit card payments.

Creditor Contact

    As soon as you miss a credit card payment, your a collection representative employed by your creditor will likely call you to discuss your late payment. The creditor will also send you a late notice requesting you to bring your account current. If you do not respond, the creditor may refer your account to a collection agency, which will assume contact efforts on the creditor's behalf.

Fees

    Creditors typically charge fees to your account when you miss a payment -- some will give you a grace period before assessing fees, while others will impose fees the day after your payment is due. You will typically incur a late fee for each month the account remains delinquent. If late fees and interest charges cause your balance to exceed your available credit limit, the creditor will also typically assess an overlimit fee each month. The fee amounts vary by creditor.

Demand Letter

    If you continue to ignore your creditor or the collection company it has hired to contact you, the creditor or agency may send you a demand letter. This letter demands that you pay the full balance of your account, and states the date by which you must pay. In some cases, the creditor may also include options for reinstating your account by setting up a repayment plan or agreeing to another solution.

Legal Action

    Failure to respond to a demand letter issued by a credit card company or collection agency may force the creditor to pursue legal action for recovery of the debt. The creditor or collection agency could file a civil lawsuit against you in county or district court -- after giving you an opportunity to respond to the suit, the court will issue a judgment. After obtaining a judgment, the creditor may pursue garnishment of your bank account funds and place a lien on your personal property. In most states, it may also garnish up to 25 percent of your post-tax wages to apply toward your debt.

Ways of Paying Down Credit Card Debt

There's no right way to pay off credit card debt. No matter what your method, it's better than just paying your minimum payments and letting your cards carry balances. However, there are different ways you can go about paying down your cards; the method that appeals to you the most is the one you should use to pay your debts.

Importance

    It might be easy and convenient to pay only your minimum payments; after all, you'll eventually get to the rest of your balance. However, thinking this way is shortsighted. Paying just your minimums will cost you thousands of dollars in interest. Since the credit card reform laws were enacted in February 2010, you can see how long it will take to pay down your debts and how much interest you'll pay if you only make minimum payments. This should be all the motivation you need to get yourself out of debt now, not later.

Highest Interest Rate First

    The best way to reduce the total amount you'll owe on your credit cards is to begin by focusing on the card with the highest interest, since you're paying more interest on it than any other card. Tackle the interest that has been keeping you in debt. Once you have paid this card off, move to the one with the next highest interest rate.

Lowest Balance First

    Another method you can employ is to begin by paying off the card with the lowest balance. Paying off a card with a $500 balance is a lot easier to stomach than starting on a card with a $5,000 balance. This method can help you get the ball rolling and allows you the chance to see more immediate success, which will keep you going on your plan to pay down your debts.

Debt Management Assistance

    Seek outside help. Computer programs such as ZilchWorks create payment plans for your cards based on your outstanding balances, interest rates and other expenses. Another option is to seek credit counseling and enroll in a debt management program. Debt management programs use their own software to create budgets and can negotiate interest rate reductions for you. However, you must usually pay a monthly fee for this service; furthermore, most debt management companies require you to close out your credit accounts as a condition of the program.

Requests for Detailed Account Information From a Collection Agency

The Fair Debt Collection Practices Act is a federal law that allows people to challenge the validity of a debt when a collection agency tries to collect it from them. This is done by sending the collection agency a debt verification letter.

Verification Request

    Once a debt collection agency contacts a consumer in the mail, the consumer has 30 days to dispute the validity of the debt. If a consumer is unsure of the source of the debt, or if he believes that he has received the letter in error, he sends a letter to the collection agency requesting that the debt be verified.

Verification Questions

    The letter requesting verification of debt will ask for documentation that proves that a debt is owed. It will also ask for the name and address of the company to which the alleged debt is owed, the total amount of the debt and the original contract that the consumer signed with the company.

Agency Response

    The collection agency is obligated to investigate the matter thoroughly and to mail a reply. Its answer must include a photocopy of the credit card or loan contract that the consumer signed and a copy of an itemized bill from the creditor. If the collection agency purchased this debt from another collection agency, a letter of transfer of debt will be sent as well.

About Consolidating Debt

About Consolidating Debt

Consolidating debt is an easy task in theory; you take some or all of your credit accounts and combine them into one account so you can enjoy streamlined finances as well as a potentially lower interest rate and monthly payment. The trick is to find a lender willing to consolidate all your debt into one account while also making sure it's a financially advantageous move for your situation. Consolidating debt is not a surefire solution to debt problems, but it can help many people tremendously.

The Facts

    A debt consolidation involves taking two or more accounts and combining them into one account. While some people will consolidate two or three accounts, other people may consolidate several accounts at once. Consolidating can be accomplished in a few different ways. Transferring a few credit card balances to one account is considered a consolidation, as is obtaining an installment loan and paying off accounts with the loan proceeds. Using a cash-out mortgage refinance or equity loan to pay off debt is also considered consolidation. A loan does not have to be classified as a "debt consolidation loan" to be used to combine several accounts, but some lenders offer special interest rates for loans that are used for this purpose.

Benefits

    The benefits of consolidating debt can be numerous. Many consumers find that the process of paying bills is much easier when there is only one payment to make each month instead of several. It is easier for some people to concentrate on making a concerted effort to pay off one account instead of dealing with a few. Consolidation can save borrowers quite a bit of money in interest payments as long as the interest rate is lower for the new loan than it was for the existing accounts. Monthly payments are often lower for one consolidated account than they are for several smaller accounts.

Risk Factors

    Sometimes consolidation isn't the best decision. Consolidating accounts that have tax-deductible interest, such as mortgage debt or some student loans, into loans that aren't tax-deductible can wind up costing the borrower more money in the long run. Consolidating debt into an equity loan can lead to foreclosure if the borrower does not keep up on the payments. Additionally, if borrowers do not close all the accounts that were consolidated, they may start using them again and wind up with more debt than they started with before the consolidation. To avoid these risk factors, potential borrowers must take care to find the best consolidation loan with the most attractive terms while also closing all other accounts once they have been paid off by the new loan.

Time Frame

    Consolidation can take some time, especially when an equity loan is involved. Just because a consolidation loan is approved does not mean that the other accounts have been paid off in their entirety. The actual consolidation may not be complete for one or two payment cycles, so borrowers should always continue to make payments until they receive notification that the accounts have been paid off in full by the consolidation loan.

Expert Insight

    Financial experts disagree about the merits behind consolidating debt. Some experts claim it's the best way to get finances under control while saving money on interest, but other experts caution consumers against consolidation, especially when home equity is involved. If a consumer looks at the numbers and decides a consolidation makes sense mathematically, then the next step is to see if the consolidation makes sense in all other aspects. A person who pays bills on time all the time may benefit greatly from a consolidation, while a person who is often late on payments and often overextended may encounter more trouble from consolidating debt.

Wednesday, April 24, 2002

Missouri Law for Credit Card Default

Missouri Law for Credit Card Default

Credit cards can be a vital financial tool for an individual or household, but they must be used with caution, or else you risk damaging your finances. Federal regulations have protections in place that help protect individuals from being left to the mercy of credit card companies. Although some states have additional protections for credit card holders, Missouri is one state that has not enacted legislation that further defines what occurs when a credit card account enters default.

Federal Fair Debt Collection

    Residents of the state of Missouri that owe debt on credit card accounts are granted protections under the federal government's Fair Debt Collection Practices Act (FDCPA). As of January 2011, no similar legislation or enhanced protections for debtors have been enacted by the state of Missouri. Under the federal act, a debt collector may contact you via telephone, e-mail, mail or fax at home between the hours of 8 a.m. and 9 p.m. You can ask the debt collector to stop contacting you unless the agency decides to take specific legal action on the debt. The act also prohibits a debt collector from engaging in harassment, such as making false or profane statements, or threatening to have you arrested.

Statute of Limitations

    Each state has its own laws governing the statute of limitations, or time limit after which a legal claim is nullified, for the collection of debts. In the state of Missouri, the statute of limitations on open accounts, including credit card accounts, is five years. The statute of limitations for written agreements contemplating a payment is 10 years; and for the sale of goods under the Uniform Code Council, a transactional standard used by the grocery industry, the statute of limitations is four years.

Claiming FDCPA Violations

    If a debt collector violates the Fair Debt Collection Practices Act, you can make a claim and possibly receive damages from the debt collector. Damages that are recoverable from a debt collector can cover any actual losses and any court or attorney's fees. Claims must be made within one year from the date of the actual violation. Keep copies of any correspondence that you believe constitutes a violation of the FDCPA; if the violation happens during a telephone call, write down notes about the conversation immediately afterward and include the date and time.

Fair Credit Billing Act

    Credit card accounts in the state of Missouri also fall under the governance of the federal Fair Credit Billing Act, which gives credit card holders a way to dispute unfair or suspicious charges. Under this law, accounting mistakes, failure to mail your credit card statement to your permanent address or a charge made for an item you did not accept on delivery count as billing errors. Notify the creditor of the error within 60 days of receipt of the bill; within 90 days of receiving notification, the creditor must drop the charge or explain why it has not been dropped.

How to Pay Delinquent Debt

In this day of tightened loan qualifying standards, your credit score and how you manage your debt is more important than ever. Mortgage lenders, banks, credit card companies and other lenders look at these two factors when determining how much of a risk you would be. The more of a risk you are, the less likely they will be to approve you and the higher the interest rate you will pay. Paying off delinquent debt, even if it is a few years old, will show that you take fulfilling your financial responsibilities seriously and make you a better risk. There is a way to pay delinquent debt that makes it manageable while stopping the bleeding.

Instructions

    1

    Contact the debt holder to see if you can negotiate terms, whether this is with the original debt holder or with a collections agency. If this is an old debt, your credit report should include a contact or information that will help you find one.

    2

    Ask for a reduced settlement amount that you can afford to pay in full. Sometimes you can even get the debt holder to remove the notation from your credit report if it is paid. At the very least, you can get confirmation that it is paid in full, which you can send to the credit reporting agencies like Equifax, Experian and TransUnion to show it is a closed debt.

    3

    Negotiate payment terms if you can't pay the debt in full. Make sure that it is a reasonable payment amount and schedule so that you will not fall behind, even if they try to push you to do more. As long as you are paying according to the agreement you made they cannot keep reporting you as an active delinquent account. You must pay the full amount agreed to, on time, in order for this to work.

    4

    Enlist the help of a reputable debt solutions company to help keep you on track if there are multiple accounts. These companies can negotiate settlement amounts and debt repayment arrangements for you, generally for a small fee. Some companies will even take a single monthly payment from you and make the payments to all the debt holders for you. Take the time to investigate these companies thoroughly before you sign anything with them and do not work with one based on a flyer, commercial or email you receive from them.

    5

    Get any settled amounts, repayment arrangements, paid-in-full receipts or contracts in writing. Keep copies of canceled checks, money orders or receipts that show that you are or have been fulfilling your side of the agreement. This will prevent further collection attempts for the balance of a settled account or claims that you have made no payments.

    6

    Read any agreements in full before signing anything. If possible, get repayment arrangement details in writing before sending a check. Take the time to dispute anything that is not in line with the agreement before signing or approving anything.

    7

    Do not permit direct withdrawal from your account unless you set up a separate account just for that transaction. This will prevent any financial abuse by the debt collectors. While there are laws in place to protect consumers, debt collectors know them far better than you do and are not obligated to be fair or nice.

Tuesday, April 23, 2002

Can Property Be Seized to Pay Unsecured Debt in Arkansas?

If you have a credit card with a balance, then you have unsecured debt. If you have used utility services in your home, then you have unsecured debt. In the United States, we all have unsecured debt, and sometimes we fall behind on payments. Creditors do not usually seize our property because we have fallen behind on payment. Whether your property can be seized for unsecured debts in Arkansas depends on certain factors.

Unsecured Debt

    Normally, when you go without paying unsecured debt such as your credit card bill, your electric bill or your telephone bill in Arkansas, you keep your property. A credit card company does not ordinarily seize property that you purchased with your credit card. The telephone company does not go into your home to retrieve the telephone that you purchased, and the electric company cannot go back in time to take away the electricity that you have already used, or take away appliances used with it. Each of these companies can prevent you from using their services going forward, and each has certain remedies under law.

Secured Debt

    When you have secured debt and miss a payment, you may reasonably find yourself becoming concerned that someone is going to seize your property. That is because when you incurred the secured debt, you signed a contract saying that if you do not pay the debt, the secured creditor can come in and seize certain property. In the matter of a car loan, for example, the car itself is collateral for the debt, and the creditor legally can seize, or "repossess" the property for nonpayment. This factor is consistent across all states, including Arkansas.

Interest in Property

    Because the creditor to whom you owe an unsecured debt does not have a security interest in your property, that creditor cannot normally seize your property if you fail to pay that debt. An unsecured creditor can, however, take steps that could enable it to seize your property under certain conditions.

Judicial Remedies

    An unsecured creditor could sue you in an Arkansas civil court. If the unsecured creditor sues and obtains a monetary judgment against you, then the unsecured creditor can demand payment from you. If you do not pay the unsecured creditor, the creditor can go back to the court to obtain a writ of execution. The writ of execution would enable an unsecured creditor to seize your property. Once the property has been seized, the unsecured creditor can sell the property and pocket the money as a remedy for your failure to pay.

How to Cash in Retirement to Pay Debt

How to Cash in Retirement to Pay Debt

If you are saddled with debt, cashing in your 401k or IRA might seem like a good idea. But it is important to evaluate all of your options before making that decision. In some cases, raiding your retirement nest egg can make sense, but it is important to understand both the short-term tax ramifications and the long-term financial pitfalls that could result from that decision.

Instructions

    1

    Consider your other options carefully before invading your retirement funds. You might be able to take out a loan from your 401k instead of withdrawing the money outright. You will, of course, have to pay the money back, but the money can be withheld from your paycheck, and you will be paying yourself back over time.

    2

    Calculate the taxes you will owe if you withdraw the money in your 401k or IRA before age 59-1/2. Depending on your circumstances you could be subject to a 20 percent tax penalty. You will also be required to pay ordinary income taxes on the money you withdraw.

    3

    Contact your employer and request the appropriate paperwork to process the withdrawal from your retirement plan. Fill out the paperwork completely and mail it to the address listed on the form.

    4

    Contact the brokerage firm or mutual fund company holding your IRA and ask to speak to a representative. Inform the representative that you want to cash in part or all of your IRA. The representative will probably explain the tax ramifications of the decision to you so you can make an informed decision.

    5

    Ask the firm to send you a check for the proceeds of the retirement fund to your home address, or transfer the money to your bank account. If you have a bank account on file with the mutual fund or brokerage firm, they may be able to wire the funds directly into your account.

    6

    Delay doing your taxes until you receive all of your paperwork from the brokerage firm or mutual fund that held your retirement account. You will need to account for those funds, and pay any taxes due, when you complete your tax return.

Monday, April 22, 2002

5 Steps to DIY Debt Management

Filing bankruptcy or hiring an agency to manage your debts can provide an easy fix. Unfortunately, these methods do not help your credit score. Rather than rely on others or take extreme measures to get rid of debt, consider effective do-it-yourself methods to dissolve your consumer debts.

Negotiate with Creditors

    Instead of filing bankruptcy to erase a substantial amount of debt, you can negotiate a debt settlement with your creditors. Settlements can benefit both you and your creditors. For starters, you're able to pay off your debt at a lower amount and avoid bankruptcy, and creditors are able to get something instead of nothing. By filing bankruptcy you're no longer liable for your debt. Thus, creditors take a loss. By negotiating a settlement, creditors can recover a percentage of the money owed.

Decrease Spending and Increase Payments

    Poor money management can keep you knee deep in debt. Think of the money you spend on non-essentials such as eating out or shopping. You can possibly reduce and pay off debt balances by re-prioritizing your spending. Rather than spend $200 or more a month eating out or entertaining yourself, use this money to pay down credit card balances. Paying lump sums or higher payments each month will slowly reduce your balances and eliminate debt.

Get Rid of High Interest Rates

    Some consumers don't take their interest rates into account when paying down debt. But the higher your rates, the longer it will take to pay down the balance. Interest rates impact payments, and creditors only apply a percentage of payments to your principal balance. Talk to your creditors about reducing your interest rate, or apply for a low-interest credit card and move your balances to the new card. Continue to make larger payments with the lower rate to reduce your debt faster.

Avoid Additional Fees

    Balances on a credit card don't just result from excess spending. Lenders charge late fees each time you submit a payment late. Plus, there's a fee for cash advances and exceeding your credit limit. Be responsible with credit to help reduce or eliminate additional fees that can increase your balance. Always pay your bills on time and keep your balances low to avoid going over your limit.

Lock Away Credit Cards

    You can't manage your debts if you continually use credit cards to acquire new debt. Credit cards do provide a protection. The problem arises when you do not pay off charges on your credit card, but allow balances to increase month by month. Controlled spending is key to managing debt. If you can't keep yourself from making extra credit card purchases, you can go to extreme lengths and either cut your cards in two or lock them away.

Sunday, April 21, 2002

How to Legally Get Rid of All My Debts Including a Past Due on Home Equity Loans

It is possible to legally get rid of all your debts, including a past-due payment on a home equity loan, but you may lose your home. Your home serves as collateral for the home equity loan, and the lender will foreclose if you stop making payments. Filing for bankruptcy can help reorganize your debts and eliminate certain types of debts, such as credit cards. Even after bankruptcy, however, you remain fully liable for mortgage debt. Your only legal option for eliminating the home equity loan is to pay it off, sell the property, or surrender the home through foreclosure or bankruptcy.

Instructions

    1

    Seek advice from a nonprofit credit counselor. Eliminating all of your debt, including real estate debt, is a big project and unbiased advice could be helpful. A credit counselor can suggest long-term strategies for legally eliminating your debt such as debt management plans, which allow credit card and other unsecured debt to be eliminated in about four years. Authorize the credit counselor to obtain your credit report and make debt elimination suggestions based on your specific situation and level of debt. Find a credit counselor near you by checking the HUD website (link included in Resources section of this article).

    2

    Hire a real estate agent to sell your house. Use proceeds from the sale to pay off any existing mortgage and the home equity loan. Pay off other bills with any money remaining. Selling your house may not be your desired strategy, but it is the best legal solution for eliminating the home equity debt unless you have other cash resources.

    3

    Sell all other assets that are secured debts, such as automobiles or boats.

    4

    Settle credit cards and other unsecured debts by offering to pay less than the full balance. The SmartMoney website reports that lenders will sometimes settle delinquent credit card accounts for as little as 20 percent of the balance. Call the customer service number on your credit card statement and explain you can no longer continue making payments as agreed and must settle. Ask to settle for 20 percent of the balance and keep negotiating until you have a deal. Get the terms in writing before making payments.

The Steps to Separate a Deceased Spouse From the Credit Report

If you have recently lost your spouse, you probably don't want to think about closing his credit cards yet. However, you must contact your spouse's creditors as soon as possible to inform them of the death and close your spouse's accounts. Notification prevents identity thieves from using your late spouse's name, and bill collectors from contacting you looking for your spouse. If you live in a community-property state, all debt may pass to you; otherwise, you will be responsible only for paying off joint accounts.

Contact Credit Bureaus

    Send a letter to the three major credit bureaus (Experian, Equifax and Transunion) informing them of your spouse's death. Include both your Social Security number and your spouse's Social Security number, as well as both of your full legal names and any other name under which your spouse opened credit. Provide your spouse's date of death and attach a copy of the death certificate to your letter. Send the letter via certified mail and ask for delivery confirmation to ensure each credit bureau receives the letter.

Contact Credit Card Companies

    If your spouse had any credit cards in his name, you must inform them of his death as well. Get a final statement from each credit card company listing any balance your spouse owed and give it to the executor of your spouse's estate. The executor must use estate assets to repay your spouse's debts; if the executor cannot do this, the creditor must write off the spouse's debt.

Joint Accounts

    If you and your spouse had any joint accounts, such as joint credit card accounts, you must reopen these accounts in your name only and continue paying the balance on them. You are legally responsible for the debt attached to these accounts. If you fail to pay the debt, the creditor can take adverse action against you such as referring your account to a collection agency, garnishing your wages or repossessing collateral for a secured debt.

Closing Credit Report

    Experian states that it will not close a credit report after receiving a letter informing it of a customer's death, as identity thieves could easily use the deceased customer's name without its being detected. However, Experian will flag the account as belonging to a person who is no longer alive, and if a customer attempts to open a credit account in the customer's name, it will notify the lender that this customer name belongs to a deceased individual. The other credit bureaus follow similar procedures.

What Effect Does Settlement on a Collection Debt Have on Your Credit?

If collection agencies are hounding you over old debts, an offer to settle your debt for less than you owe may sound appealing. Although settling a debt for less than the full amount may not have a detrimental effect on your credit, it won't improve your credit score, and it can also hurt you financially.

Settlement

    When a debt collector offers to settle your debt for less than you owe, he's not doing you a favor. Instead, he's working on the principle that something is better than nothing. He has bought your debt for pennies on the dollar, so the chance that he's going to break even or turn a small profit is good. If he reports your payment to the credit bureaus, it's not really a point in your favor, because he's reporting that you only paid a fraction of the original debt.

Credit Effects

    By the time you settle a debt in collections, most of the damage to your credit report is already done. The harm began with the first payment you missed, and compounded when your original creditor wrote off the debt as unserviceable, or turned it over to a collection agency. By neglecting to pay your creditor, and allowing your debt to go into collections, you've indicated that creditors can't trust you to pay your bills. If the collection agency reports the debt payment as a settlement for less than the full amount, your score may even go down. Furthermore, having settled debts on your credit report is often a red flag to prospective lenders.

Written Agreements

    If you wish to accept a settlement offer, Bankrate's Steve Bucci recommends that you contact the collection agency in writing, and ask them to send you a written agreement that sets forth the terms and conditions of the deal. This agreement should specifically stipulate that your payment will constitute "payment in full." If the agreement is acceptable, send the collection agency a cashier's check or money order in the agreed-upon amount, along with a copy of the agreement. To ensure that the collection agency receives your payment, use certified mail and request a return receipt. Keep copies of all these documents in your files, so that you can prove you paid the debt. Not doing so can leave you open to harassment from yet another collection agency.

Tax Implications

    When you agree to a debt settlement that entails forgiveness of more than $600 in debt, the collection agency will report this amount to the Internal Revenue Service, which views it as taxable income. If this happens, you may have to pay tax on this amount when you file your next tax return.

Statute of Limitations

    Depending on where you live, debt collectors may be trying to settle on a debt that's past the statute of limitations, which means it's no longer a viable debt. Each state has its own schedule for statutes of limitations (see Resources). Check your state's limitations on debt collection before agreeing to settle an outstanding debt with a collection agency.

Saturday, April 20, 2002

Laws on Residential Real Estate Foreclosures in Texas

Facing foreclosure is a difficult time for homeowners. The emotions and stress can get in the way of rational thinking, which may help you find a way to avoid foreclosure and keep your home. Texas has laws regarding the foreclosure of residential property, and if lenders do not follow those laws, the homeowner can possibly delay or prevent the foreclosure process. Delaying a foreclosure can provide the time you need to find a way to keep your home.

Title Theory

    Texas is a title theory state, meaning that the title of the residential property is in trust for the homeowner until the loan is fully paid. When the loan is paid in full, the lender releases claim on the property. Until that happens, the lender can foreclose and take the home for any breach of contract. Breaches of contract include nonpayment of the mortgage loan and nonpayment of property taxes or insurance.

Nonjudicial Foreclosure

    In this type foreclosure, no court action is required other than notice of foreclosure. If your mortgage contains a power of sale clause, the lender's representative -- known as a trustee -- can place the property for auction. If your mortgage does not contain the clause, the lender has to go through the court system to foreclose on your property. A nonjudicial foreclosure will typically take approximately 60 days to complete if the homeowner does not contest the foreclosure.

Notice of Sale

    Lenders must serve notice to Texas homeowners before starting a foreclosure proceeding, giving you 20 days to bring the loan to current status. If you do not bring the note current, the lender must file notice to you and the county clerk of the county where the property is located, providing the date of the property auction or sale. Notices must be provided at least 21 days before the sale date and posted at the court where the sale will take place.

Sales

    Auctions must be held at the courthouse in the county where the property is located. Texas law requires auctions be on the first Tuesday of the month between the hours of 10 a.m and 4 p.m. The highest bidder, even if it is the lender, wins the auction. Original lenders can apply the balance of the loan to the bid when bidding on property.

Deficiency Judgment

    Texas statute of limitations gives a lender two years to sue the homeowner to recover any amounts that are not paid from the sale of the property. Along with the balance remaining on the loan, lenders can sue for court costs and attorney fees. If the court finds in favor of the lender, it will enter a deficiency judgment against the borrower, allowing the lender the right to attach other properties or garnish wages to recover the amount granted by the judge. If the lending company attaches other property, it will place liens on other property that you own that prevent you from selling the property without paying the amount you owe.

Friday, April 19, 2002

What Is My Obligation If My Bill Is Sold to a Collection Agency?

Consumers may look upon debt collectors as nothing more than an annoyance. Some people may assume they have more of an obligation to repay a creditor than a collector. However, debt obligations generally are the same no matter who is collecting a debt. Consumers who don't deal with the debts they owe are in for lengthy credit problems.

Creditor Collections

    A collection agency sometimes only represents a creditor, which means the creditor hasn't sold the debt. A consumer can't always tell if a collection agency has bought a debt, especially when a company hires an outside agency instead of doing its own collections in-house. You may need to contact your creditor to find out the status of your debt. In any case, consumers are obligated to repay the debts they accumulate even if a debt has been sold to a collection agency.

Charge-Offs

    Sometimes debts become charge-offs because the original creditor classifies the unpaid amount as bad debt and stops efforts to collect it. However, that doesn't mean a consumer is no longer obligated to repay the debt. Charged-off debts are often bought by collection agencies who profit by collecting as much of the unpaid debt as possible. In such cases, the collection agency owns the debt. People who still don't pay a charged-off debt may find themselves caught up in a debt-collection cycle. That's because the collection agency that bought the debt may sell it to another agency if it can't collect on it. Ultimately, agencies may resell a debt several times.

Credit Reporting

    A collection agency that buys your debt also gains the right to report your payment activity to credit bureaus, so it's important to send payments on time. For example, collectors can report late payments to credit bureaus if consumers work out payment arrangements with them and then don't pay off their accounts as agreed. The collector also reports to a credit bureau when a consumer pays off a delinquent account.

Considerations

    Collection accounts generally appear in consumer credit files for seven years, even if people pay off their account balances. Experian and other credit bureaus delete delinquent accounts from credit files seven years after creditors first report the accounts as delinquent. Consumers don't have to put up with abusive collection practices, despite their obligation to pay their debts. The U.S. Fair Debt Collection Practices Act prevents collectors from using threats of violence to collect debts or falsely claiming a consumer has committed a crime by not paying a debt.

Thursday, April 18, 2002

What Are the Causes of Action for Debt Owed?

Many ramifications, or causes of action, stem from unpaid debt, ranging from poor credit scores to garnishment of a debtor's bank account or wages. Creditors and debt collectors take punitive action, such as foreclosure or repossession, only if the debtor fails to pay on an account as agreed. That makes it possible for some people to carry excessive debt for years as long as they can make at least the minimum monthly payment. Serious problems begin when the debtor starts missing payments.

Credit Scores

    Credit scores indicate if a person has good or bad credit and are usually a part of the credit approval process. Late payments and other negative information placed on credit reports can have a major impact on credit scores. Credit scores range from 350 to 850, with scores of 720 or higher considered excellent. Scores below 620 usually indicate poor credit. It is possible to drop from excellent credit to poor credit within just a few months following say, a series of missed credit card payments and subsequent default on credit cards.

Lawsuits

    People who default on loans risk legal action. Creditors and debt collectors can file civil lawsuits to collect unpaid debts. Lawsuits are serious matters and can lead to monetary judgments or even bankruptcy. Credit card companies often use lawsuits to collect on unpaid credit card debt. Illinois Legal Aid reports that the lawsuits are so effective that the credit card company virtually always win in court. Banks and debt collectors also sometimes use civil lawsuits to collect balances remaining after automobile repossession or home foreclosure.

Credit Reports

    The Fair Credit Reporting Act allows placement of negative credit information such as judgments to remain on credit reports for seven years. Most other negative credit information, including late payments, remains on reports for seven years as well. The notable exception is bankruptcy, which remains on credit reports for a minimum of 10 years. Effects on credit scores and credit reports are two of the biggest fall-outs from debt problems.

Garnishment

    Bank or wage garnishment is possible after a debtor loses a debt lawsuit. The plaintiff, or debt collector, can ask the judge for the right to garnish the debtor's bank account or wages for the entire amount of the judgment. By law, banks and employers must comply, with employers deducting a percentage of the debtor's paycheck each payday to send to the debt collector. Banks respond by freezing the debtor's checking account and allowing the debt collector to freely make withdrawals in a lump sum or installments to pay the judgment.

Credit Reporting Agencies FAQ

Credit Reporting Agencies FAQ

Credit reporting agencies are bureaus that collect financial and other identifying information about consumers. They are sometimes referred to as consumer reporting agencies. These agencies compile information about an individual's spending and payment habits as well as publicly recorded information into a document called a credit or consumer report. The agencies release the information within the file to creditors who have permission to view a consumer's report.

How Many Credit Reporting Agencies are There?

    There are several credit reporting agencies, however there are three major credit bureaus. These bureaus are Equifax, Experian and Trans Union. When you apply for credit, your creditor will request a credit profile from one or more of these agencies to determine your credit worthiness. Depending on the information within your profile, the creditor will decide whether or not to extend credit to you.

What Kind of Information Do Credit Reporting Agencies Have About Me?

    Each agency reports different types of information about a consumer. Credit reporting agencies report information such as name, date of birth, current and previous address information and employment history. Information that is a matter of public record is also included in your file such as bankruptcies, foreclosures, evictions and tax liens.

    A record of your payment history with creditors such as your mortgage company or auto lien-holder are a major part of the information in your credit file. Creditors report your timely (or untimely) payments to the major credit bureaus. Credit reporting agencies document how well you meet financial obligations and pay your bills. If you are consistently late paying your credit obligations, the history will reflect negatively on your credit file.

How Do I Know If My Credit File Has Accurate Information?

    The most effective way to determine if the information in your credit file is accurate is to request a copy of your credit report. Each major bureau has different information about you so it is best to order a copy of your report from all three major bureaus. The Fair Credit Reporting Act (FCRA) allows consumers to request a free copy of their credit report from each major bureau once every 12 months. You can order a free credit report on-line, by telephone or by mail.

Can I Have Inaccurate Account Information Removed From My File?

    Yes. By law credit reporting agencies must remove inaccurate or outdated information from your credit file. If you find inaccurate or outdated information within your credit report, you must notify the credit bureau by filing a dispute. The agency then contacts the creditor that reported the information. The creditor has 30 days to validate that the information in your file is accurate. If the creditor does not respond within 30 days, the credit reporting agency must remove the information from your file.

How Do I Maintain a Good Credit Record?

    Maintaining a good credit record takes work. The first step in keeping a good credit record is to ensure all information within your file is correct. Second, you must ensure that you pay all credit obligations on time and in good faith. Finally, be patient if your file contains negative information. Late payments, charge-off accounts and other negative information can only remain on your report for seven years. The older the negative information, the less impact it has on your ability to obtain credit in the future.

How to Easily Read Your Credit Report

The law entitles every consumer to a free copy of her credit report once a year. Consumers are allowed to view their reports with each of the three major credit reporting agencies--Equifax, TransUnion and Experian--for free. But once you get those reports, you need to know how to read them, and how to spot errors and possible fraudulent activity. Taking the time to review each report carefully is one of your best protections against identity theft, so the time you spend learning about your credit report will be time well spent.

Instructions

    1

    Gather all of your credit cards before you start reviewing the credit report. Having your credit cards available makes it easier to spot fraudulent accounts and accounts you no longer have.

    2

    Review the top part of the credit report. The first section lists your name, address and other identifying information. Contact the credit reporting agency at once if this information is incorrect.

    3

    Turn to the next section of the report. This section lists all of the accounts you have open, including your credit cards. Check that list against the credit cards you gathered in Step 1. Note any closed accounts that still show as open, then contact the credit agency and inform them the accounts are no longer active.

    4

    Review the activity listed for each of your accounts. If you had any missed payments, late payments or chargeoffs, they will be listed in this section. This section also lists the date each account was opened, whether it is an individual or a joint account, the date of last activity on the account and the outstanding balance.

    5

    Check the next sections of the credit report and look for any activity. These two sections list collection activities and courthouse records, and they will be blank if no such activity exists in your credit file.

    6

    Check the Additional Information section and ensure it is accurate. This section lists any prior addresses where you lived and any former employers that were reported to your creditors.

    7

    Review the Inquiries section of your credit report for anything you do not recognize. If you notice an inquiry you did not authorize, notify the credit reporting agency at once, since this could be an early warning sign of fraud on your account.

Can Debtors' Wages Be Garnished in Arkansas?

Although a creditor will typically make numerous attempts to resolve delinquent debt issues outside of the judicial system, your creditor may resort to a lawsuit if you do not make an effort to pay a past-due debt. In most cases, a lawsuit results in a judgment against you for the debt. In Arkansas, a creditor with a valid judgment may garnish your wages to recover the judgment debt amount.

Procedure

    After receiving a judgment against you in an Arkansas court, the creditor may complete an application for a writ of garnishment through the court that issued the judgment. The writ of garnishment application shows that you have not paid the debt, and that you have wages that can be used to satisfy the debt. The court will serve notice to your employer, which must confirm that you have funds available in the form of wages or salary. After receiving a garnishment order, the employer will begin sending part of your earnings to the court to apply toward your judgment debt.

Garnishment Limitations

    Arkansas follows federal law regarding the amount of money a creditor can take from your earnings through a wage garnishment. Federal law protects your wages from garnishment if your weekly income is less than 30 times the federal hourly minimum wage, regardless of the number of hours you work. if you earn more than this amount per week, the creditor can garnish up to 25 percent of your disposable income, which is your earnings after statutory tax deductions.

Exemptions

    Under Arkansas and federal law, certain types of income are exempt from garnishment in most cases. Social Security income can only be garnished if the debt involves past-due taxes, alimony or child support. Arkansas law also protects other types of income, such as unemployment benefits, worker's compensation payments, public employee pensions and disability benefits.

Considerations

    Because a creditor seeking wage garnishment in Arkansas has typically already obtained a judgment against you for your debt, your options for avoiding or ending a garnishment are limited. However, an attorney may help you avoid garnishment in certain cases. If the Arkansas statute of limitations -- which is four years for open accounts and five years for written contracts -- has expired, the creditor cannot legally seek judicial enforcement of the repayment of your debt. Also, an attorney can determine whether the creditor filed the judgment suit or ordered the garnishment improperly. If so, the court may vacate the judgment, preventing the creditor from executing or continuing wage garnishment.

Tuesday, April 16, 2002

How to Put a Personal Lien on a Florida Vehicle

Personal liens are a debt collection tool. If you loan someone money and they don't pay you back, a lien on their vehicle or their house gives you the authority to sell it in order to collect your money. In Florida, the law protects state residents' primary homes from judgment liens, but not their vehicles. Once a court establishes the debtor owes you money, you record your lien with the state government. That makes it effective against the debtor's vehicle and other personal property.

Instructions

    1

    File suit against your debtor. To create a lien against his property, you'll need a judge's decision that the individual does, in fact, owe you money. If the court doesn't grant you a favorable judgment, you can't apply a lien.

    2

    Register your judgment on the Florida Secretary of State's website. You can do this online, or mail in your form. This doesn't specifically target the debtor's vehicles: It applies to any personal property she possesses anywhere in the state.

    3

    Locate the vehicle. The judgment gives you the legal right to settle the debt by selling the debtor's vehicle, but you have to find and identify a specific vehicle for the county sheriff to seize. This may be as simple as driving by the debtor's house, or it might take going through state vehicle-registration records.

    4

    Ask the clerk of courts for the county where you filed your lawsuit to give you a writ of execution. Deliver the writ to the sheriff of the county where the vehicle is located, along with instructions on which vehicle you want seized, and a deposit to cover the sheriff's expenses. You can seize not only wheeled vehicles, but also the debtor's boat.

    5

    Check the Secretary of State's website for any other judgment liens filed against the debtor. You'll also have to research whether there are other creditors, such as an auto-loan company, with a claim on the vehicle. Before the sheriff sells the vehicle at auction, you'll have to notify all these creditors.

    6

    Schedule and advertise a vehicle auction where the vehicle goes to the highest bidder. After the sheriff pays his costs -- you'll get your deposit back -- he'll pay off any and all liens in the order they were filed. If there's not enough to cover all of them, you may not settle the debt.

What Is an Extended Consumer Alert Credit File?

What Is an Extended Consumer Alert Credit File?

Identity theft can ruin your credit and cause you immense stress. If you have suffered from identity theft, you may be eligible to request that an extended consumer alert be placed in your credit file to prevent future occurrences.

Facts

    An extended consumer alert is a form of fraud alert that can be placed on a consumer's credit report to alert future lenders to the fact that the individual has been a victim of identity theft.

Features

    An extended consumer alert contains an individual's telephone number and a notice to potential creditors that the individual must be contacted to give his approval before credit is extended in his name.

Time Frame

    An extended consumer alert remains in your credit file for seven years and can be renewed.

Considerations

    In order to qualify for an extended consumer alert, you must have a police report documenting an incident of identity theft.

Process

    To get an extended consumer alert placed on your credit report, notify one of the credit bureaus in writing that you have been a victim of identity theft and include a copy of your police report. The credit bureau will then alert the other two credit bureaus, and alerts will be placed on all three of your files.

Monday, April 15, 2002

What Does Prorated Mean?

What Does Prorated Mean?

Consumer Credit Act Definition

When the last provisions of the U.S. Credit Card Accountability, Responsibility and Disclosure, CARD, Act took effect in August 2010, a White House blog post called the act the "Credit Card Bill of Rights." The post asserts the legislation ended "unfair rate hikes and hidden fees" for credit card users. However, one of the best ways to define the act is by determining how it does and doesn't protect you when using credit cards and dealing with card issuers.

Interest Rates

    Credit card companies may raise their interest rates for several reasons, but the Credit CARD Act puts limitations on how payments are applied to customers' accounts when interest rates are raised on new balances. A post to "The New York Times" "Bucks" blog notes that account payments made above the minimum monthly payment generally must be applied to the balance with the highest interest rate. According to the blog post, some people who monitor the credit card industry say such changes are causing issuers to raise minimum monthly payments and increase some fees to bolster their revenue.

Penalty Fees

    Penalty fees for making late payments are largely limited to $25 by the Credit CARD Act, unless one of a customer's last six payments was late. In such cases, a card issuer can charge a late fee of up to $35. The Bankrate.com Credit Cards Blog notes that issuers can still exceed the legislation's cap on penalty fees if they can prove to the U.S. Federal Reserve Board that a higher fee is justified based on the costs they incur due to customers' late payments.

Inactivity Fees

    Credit card companies can no longer charge people inactivity fees, where customers essentially pay charges for not using their credit cards as much as their card issuers want. Yet the Bankrate blog warns that not using a card can affect consumers in other ways. Card issuers can still reduce your limit or close your account if you rarely use your credit cards.

Payments

    In its explanation of the Credit CARD Act changes, the U.S. Federal Reserve Board notes how customers' payments are affected. For example, a credit card company must deliver its customers' bills at least 21 days before their payments are due. Furthermore, if a payment due date is on a weekend or holiday, customers have until the next business day to pay their bills because companies usually don't process payments on weekends or holidays.

More Debt Than Assets in the Death of a Spouse

More Debt Than Assets in the Death of a Spouse

When a spouse dies, it can be difficult to make financial decisions while you are still grieving the loss of a loved one. However if your spouse left a lot of debt behind, you will need to make difficult decisions about how to deal with the debt and whether or not you can afford to keep your home. A spouse does not necessarily become responsible for all of her spouse's debts.

Co-signer

    Any debts that both spouses co-signed become the sole responsibility of the remaining spouse. If you feel that you will not be able to continue to make payments after the death of your spouse, you will need to contact your creditor and let them know the difficulties you are facing. Some creditors will be willing to work out new terms so they will be paid back the money. Other creditors will not.

Estate Pays for the Outstanding Debts

    Any assets the spouse owned or co-owned will need to be sold and half of the value will be put into the estate of the deceased. This money will be used to pay off any debts that are remaining from the spouse. This will include the sale of the home, unless you can come up with the value of your spouse's half of the home to contribute to the estate instead. Often if there are more debts than assets, you are better off selling the home and using your half of the proceeds from the home. The creditor will forgive any debts left after the assets have been spent.

Executor Handles the Estate

    The executor will handle the estate. This may or may not be the spouse. The executor will need to contact the creditors and inform them of the death. He will need to send a copy of the death certificate to the creditors, so they will not continue to call and harass the spouse. After the estate is settled, he will send a letter with the final payment amount, stating that the estate cannot pay off the remaining debt.

Life Insurance Money

    Any life insurance money will go directly to the named beneficiaries. It is not part of the estate. This money does not need to be used to pay off any debts left behind. However if the spouse was a co-signer and receives life insurance money she may choose to pay off those debts with the money. Before paying off the home, you should consider whether or not you can afford to live there after you have settled the debts associated with it. If you cannot, you would be better to save the life insurance money for something else.

The Downside or Negatives of Credit Counseling

Credit counselors give you an array of potential solutions when debt threatens to sink you. A good credit counseling firm offers everything from online financial education materials to classes and personal counseling to setting up a repayment plan with your creditors, according to the Federal Trade Commission (FTC). Credit counseling is not right for everyone, and it has some downsides.

Service Recommendations

    Legitimate credit counselors talk to you about your individual circumstances and make personalized suggestions tied into your situation. The FTC warns that some firms pay their counselors commissions for pushing certain services like debt management plans (DMPs). You may get pushed into a formal plan when simple budgeting or a less drastic solution would have worked just as well.

Training

    Not all credit counseling firms have well-trained employees, which puts you at risk of receiving bad advice. The Better Business Bureau (BBB) advises finding a counseling firm with employees trained and certified by an outside organization. The company should also be properly licensed to do business in your state, and ideally it should belong to a professional group like the Association of Independent Consumer Credit Counseling Agencies or National Foundation for Credit Counseling.

Cost

    Many credit counseling companies advertise nonprofit status, but the FTC advises that this does not mean they provide free services. Some even lie about being nonprofit, so always double check with the National Association of State Charity Officials. Ask the firm where it gets its funding. The BBB explains that the bulk should come from creditors, not clients, and good counselors disclose fees in writing before working with you. Insist on a formal contract that enumerates all services and fees when you decide on a credit counseling company.

Stability of Counseling Firm

    Credit counseling firms sometimes go out of business, which causes problems when you are in the middle of a DMP. The FTC advises immediately contacting your bank if your payment goes to the counselor through automatic deduction. Your plan may be transferred to another credit counseling company or you may be on your own. Call your creditors directly if your plan is not transferred and ask if you can continue paying as agreed under the same terms. Otherwise your credit rating is damaged because of the skipped payments and defaulted agreement.

Privacy

    You reveal extremely personal financial information to a credit counselor. The revelation is necessary to make the best recommendations for you, but the BBB warns that it causes problems if your data gets into the wrong hands. Always ask credit counselors how their firm secures and protects your information.

Sunday, April 14, 2002

How to Get a Credit Card Balance Reduced

How to Get a Credit Card Balance Reduced

When you've got a high amount of credit card debt, it's hard to make any headway even if you're making the minimum monthly payment. Fortunately, you may be able to negotiate with the credit card companies and get the balance(s) reduced. It only takes a few simple steps to see if any of your credit card issuers are willing make a reduction to help relieve your debt load.

Instructions

    1

    Gather all of your credit card bills and make a note of the accounts that have the highest balances and interest rates. Those are the ones to start with in your negotiation efforts. High balances give the card issuer more room to work, and if you can get a reduction on the balance of your high interest accounts, you can save a great deal of money in interest payments.

    2

    Call the customer service number of each account, and when you reach a customer service representative, ask who you need to speak to to negotiate the balance. Usually a front-line representative will not have the authority to reduce the balance. Don't waste time explaining your purpose and situation with someone who has no power to help.

    3

    Ask for a balance reduction, explaining your specific reasons for requesting one. Most credit card companies would rather receive a reduced amount than lose the entire amount if you declare bankruptcy or simply default on the debt. Rather than paying a collection agency to pursue you or having to write off the debt, they are often willing to take a lower balance.

    4

    Ask for a written confirmation of the verbal agreement. No matter what you agree to verbally and how reassuring the agent may sound, no agreement is final until it is in writing.

    5

    If you are not successful doing the negotiations yourself, call (800) 388-2227 to find a consumer credit counseling service. These agencies can handle the negotiations for you, and they have experience and know the right people to talk to within the major credit card companies.

Saturday, April 13, 2002

How Long Can Medical Accounts Stay on Your Credit Report?

A positive credit record demonstrates to lenders, employers, credit card providers and even insurance companies that you represent a low financial risk to the company. Each time a company reports financial information about you to the credit bureaus, this data affects your overall credit scores. Medical accounts are no exception. Unexpected medical debt you cannot afford will tarnish your good credit rating. Fortunately, if a medical debt appears on your credit report, its only temporary.

Medical Collections

    Health care providers do not have an ongoing financial relationship with you and therefore have little incentive to become a member of the credit bureaus' reporting system that allows members to report accounts and payments on debtors' credit reports. If you leave medical debt unpaid, however, your health care provider will sell your account to a third-party collector in an effort to recoup some of its losses. Thus, if a medical account appears on your credit report, it likely has a derogatory effect on your credit rating.

Time Frame

    The Fair Credit Reporting Act requires that collection accounts -- including medical collections -- all adhere to a seven-year reporting period. This does not mean, however, that a medical account only appears on your credit report for seven years. The reporting period for collection accounts does not begin until you miss 180 days' worth of payments. Because of this, a derogatory medical collection has the potential to remain on your credit report for 7 1/2 years total.

Medical Debt Judgments

    A medical collection account isn't the only way your unpaid health care debt can appear on your credit rating. If the care provider or collection agency sues you, a judgment for the debt may also appear on your credit report.

    Judgments are public records reflecting a court's decision in a lawsuit. These derogatory entries can linger within your credit history for much longer than seven years. The FCRA permits the credit bureaus to leave judgments in place on your credit report for the same length of time that the creditor legally has to enforce its judgment. If your state's laws note that judgments remain in effect for 10 years, for example, the medical judgment will continue to appear on your credit report until the 10-year enforcement period expires.

Considerations

    Although a medical collection on your credit report lowers your credit scores, it may not prevent you from qualifying for a loan or credit card. Unlike standard collections, medical collection accounts do not signify that you were irresponsible with money or took on more debt than you could afford. It simply indicates that you fell unexpectedly ill or lacked enough insurance coverage to pay off your medical bills -- neither of which makes you a higher risk to lenders. For this reason, some lenders overlook medical collection accounts altogether when evaluating consumer risk.

Can Hospital Bills Be Garnished From a Tax Return?

Even a short stay in the hospital can be extremely expensive. A person may go in with a scrape on the knee and come out with several thousand dollars worth of hospital bills. However, as with any other outstanding debt, these bills must be paid. In order to receive payment of bills, hospitals may attempt a number of different methods. However, garnishing wages from a tax return may be tricky.

Hospital Bills

    When a person checks into the hospital, he becomes liable for all medical expenses that are not covered by his insurance. In such a case, the hospital becomes like any other creditor seeking payment. Although the specific state laws that apply to garnishment may prohibit it in some cases, in others a creditor --- including a hospital --- may use this as a method of making sure that a debtor pays what he owes.

Private Creditors

    Private creditors are generally allowed to use garnishment to seize funds from a debtor, but only after winning a civil judgment in civil court. The judge will then determine what income stream the creditor can seize. However, in few cases can a private creditor garnish income from a government agency. This means that a creditor will generally be forbidden from garnishing wages from a tax refund issued by a state or federal government.

State Debts

    If the hospital into which the person checked in was managed by the state, then an exception could theoretically apply. Generally, it is only possible for a state agency to garnish a tax return. If a judge ruled that a public hospital counted as a state agency --- say, as an adjunct of the state's department of health --- then garnishment of the patient's tax return might be possible.

Michigan

    The only state that allows private creditors to garnish a person's state tax return is Michigan. In Michigan, creditors are allowed to apply to the state treasury to have a debtor's tax returns seized before they are issued to him. This must be done well in advance. The debtor will have a chance to respond to the request. Some creditors will be allowed to pursue this garnishment, while others will not.

Friday, April 12, 2002

Christian Help and Solutions for Debt

Christian Help and Solutions for Debt

For Christians, debt represents a bondage. According to the biblical book Proverbs, "The borrower is the lender's slave." Christians seeking to break the chains of debt bondage look for resources that are in line with their faith and beliefs. Thanks in part to the Internet, Christians can find the resources and tools they need to conquer debt.

Crown Financial Ministries

    Crown Financial Ministries offers financial and debt management advice through ministry, articles and online tools. Many churches offer Crown classes that teach money management skills in a spiritual setting. Those that are unable to attend the classes can find the classes, teachings, articles and financial calculators on the Crown Ministries website. The site offers resources for those wishing to start Crown classes in their church. Crown ministries is a nonprofit organization without affiliation to any church denomination. The organization is a member of the Evangelical Council for Financial Accountability and adhere to the council's standards.

Christian Principles for Getting out of Debt

    Christians looking to get out of debt should first pray for guidance in their journey and transfer ownership of the situation to God. Even though they are in debt, Christians should continue to tithe to show that they have transferred ownership to God and have faith in his leadership. Accruing no more debt is also an important part of breaking the debt cycle. Pay in cash; do not use credit cards. Mapping out a realistic household budget is important in managing spending. Lifestyle changes may be in order for those deeply in debt.

Christian Debt Counseling

    Debt counselors work with clients to construct a debt management plan. A debt counselor helps develop budgets and works with clients on money management skills. Christian debt counselors do this with spiritual principles as their guide. Christian counselors work with their clients to ensure that their spiritual needs are being met, and they don't work as agents for creditors. The website for Christian Debt Solutions offers many links to reputable companies as well as links to free budget-setting tools.

Christian Debt Consolidation

    Christian debt consolidation counselors review clients' outstanding debts in order to develop a plan for repayment. Counselors offer plans that consolidate credit card payments and other unsecured loans into one monthly payment. A company should let clients know whether consolidation is a valid option or if lifestyle changes or bankruptcy are the better choices. Clients who use this service pay a monthly fee to the company, which is then passed on to their creditors. The debt consolidation company takes a percentage of the monthly payment as a fee.