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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..

Sunday, July 31, 2005

Florida State Laws on Debt Collections of Credit Card Debt

Florida State Laws on Debt Collections of Credit Card Debt

Florida is the most indebted state in the U.S., according to a 2009 research by Forbes magazine. The state has a household median income of $43,333, which is below the national average of $50,233. Yet average credit card debt is $9,797.38. In order to pay off the credit card debt, the Florida consumer will have to give up 22.61 percent of his income, which is unlikely for most households. That is a dilemma for most credit card companies, more so because they have very few legal remedies. Florida debt collection laws are heavily tipped in favor of the consumer.

Wage Garnishment

    Some creditors prefer debt settlement with debtors, which perhaps is sensible in a state like Florida. Others still sue even when the odds are against them. In the event of judgment going in favor of the creditor, the only options he has to recover the money is through wage garnishment, lien on the property, or bank account seizure. But the Florida Homestead Protection Articles shields heads of households from wage garnishment. Besides, wages directly or indirectly deposited into your account cannot be garnished or seized until six months after the money was banked. There are also other laws that protect an indebted consumer.

The Statute of Limitation

    A creditor has a limited period within which he could collect a debt that is past due. In Florida it is five years for most types of written contracts debt under which a credit card debt falls. Counting begins from the day an activity was recorded on the debt. The creditor, however, is free to take the owing consumer to court in a bid to recover time-barred debt. But judgment is less likely to go in her favor if the debtor uses the statute of limitation as grounds for his defense.

Cease and Desist Letter

    When a creditor who receives a Cease and Desist letter or a Power of Attorney continues contacting the consumer, he will be in violation of the Fair Debt Collection Practices Act, which is a federal law. Penalties include up to $1,000. The only time a collection agency or the original creditor can contact you is when new specific remedies are invoked such as a law suite.

How Bad a Settlement is on Your Credit

A debt settlement is a process by which a creditor agrees to accept less than the amount owed to settle the debt in full. For example, if a consumer has a $10,000 bill but can't pay it, the creditor may accept a lump sum payment of $5,000 to completely settle the account. While settling a debt can help a consumer to remove a financial hardship, the settlement will hurt the consumer's credit score.

Impact on Credit

    Though debt settlement will certainly have a negative impact on a consumer's credit score, the exact amount of the impact will vary depending upon a number of factors. While it isn't possible to state how much lower a credit score will be due to a debt settlement, those with higher credit scores will suffer the largest reduction. The reason for this is that consumers who have a low credit scores will typically already have negative information on their credit report.

Considerations

    Most consumers seeking to settle debt are already behind on the payments. In fact, most creditors will not consider settling unless the consumer is already behind. While settling a debt will result in a negative impact on a credit score, doing nothing and allowing the debt to get further behind will also provide negative information to the reporting agencies. With a settled debt, the account stops showing an open, past-due amount month after month. However, the creditor reports that the consumer paid less than the full amount to settle the account, which hurts the credit score. If a consumer is going to negotiate a settlement with a creditor, the consumer should consider negotiating the deal himself. There are debt settlement companies that provide this service, but they often charge large fees.

Alternatives

    Consumers should consider entering a debt management plan with a credit counseling agency. A credit counseling agency may be able to negotiate a lower interest rate and reduced payment amount with the creditor. Credit counseling agencies often charge fees for their services. While credit counseling may reduce a credit score, the impact of credit counseling will be less than the impact of debt settlement. Another alternative for consumers to consider is bankruptcy. However, bankruptcy will have similar or worse effects on a credit score than debt settlement.

After a Settlement

    After a consumer completes a debt settlement, the consumer should request a copy of her credit score. The consumer should make certain the creditor properly reports the settlement to the credit reporting agency. Consumers should diligently pay all debts on time after the settlement to begin rebuilding a good credit history. A consumer can open a secured credit card that reports card activity to the credit reporting agencies as a way to increase the amount of positive information received by the credit reporting agencies.

How to Measure & Manage Credit Risk

How to Measure & Manage Credit Risk

Measuring and managing your credit can help you avoid financial ruin. Having too much credit available to you--or carrying too much debt--can be dangerous. Large credit lines can lead to impulse spending for luxury items you might not buy if you had to pay cash. People who max out their credit lines when times are good can suddenly find themselves struggling to avoid bankruptcy after a job loss or major illness. Managing your credit properly can help you avoid spending too much.

Instructions

    1

    Calculate the total amount of your revolving credit lines. Credit cards and lines of credit are examples of revolving credit. Gather billing statements for these accounts to determine if your income can support the credit lines. According to the website Bankrate, your total credit lines should not exceed 20 percent of your household income. That means a family with a gross household income of $90,000 should have only $18,000 in revolving credit lines. That might be tough to do if you have a home equity line of credit, which often feature credit lines of $50,000 or more, depending on how much equity you have in your home. However, you should try to remain under the 20 percent threshold for all your other revolving lines of credit.

    2

    Check your billing statements to determine how much credit you are using. According to Bankrate, you should use no more than 30 percent of your credit lines at any time. For example, if your credit lines total $12,000, then you should not carry balances totaling more than $4.600. The more credit you use above the 30 percent threshold the greater the financial risk.

    3

    Determine how much money you have in your savings accounts. The less money you have in savings, the greater the risk of you incurring excessive debt after a job layoff or major illness. Suze Orman, a nationally recognized expert on personal finances, recommends that you have at least eight months of pay put aside for emergencies. Some people who lose their jobs are forced to rely on credit for living expenses because they have little money in savings. The result is often a mountain of debt that could take years to repay.

Saturday, July 30, 2005

Do I Have to Include All Back Debt in a Debt Management Program?

Do I Have to Include All Back Debt in a Debt Management Program?

One issue that many borrowers consider before enrolling in a debt management plan is whether or not they should include all back debts. Generally, all unsecured debts must be included; however, there is an exception. Loans that are secured by assets can't be included, since their payments aren't usually negotiable.

Debt Management Plan Expectations

    Debt management plans, DMP, that are administered by nonprofit agencies are voluntary agreements and can be terminated by either party. Participants should be aware, however, there are rules that must be followed in exchange for the friendlier repayment terms that the DMP provides. The biggest expectation is that the participant will include all back debts that are eligible for the program. Participants should also avoid using credit during the repayment period. Lenders expect to see that the participant is undergoing credit counseling while the debts are repaid.

How Debt Management Plans Work

    A consumer who is behind or about to be behind on his loan payments contacts a credit counseling agency for consulting. The counselor may suggest entering a debt management plan. In a DMP, the agency will negotiate with the lenders on behalf of the participant; this negotiation usually results in lowered interest and possibly payments. The account is brought current once the participant begins making regular payments to the agency, which the agency distributes. Accounts are paid in full, usually within five years. They're also closed. This ensures the participant will not run up additional debt during the repayment period.

Secured and Unsecured Debts

    Counseling agencies want to see all unsecured debts enrolled in the DMP so that each lender is treated fairly. Delinquent loans on secured assets, like cars or homes, are not eligible for inclusion in a DMP. However, if you need a credit card for your job -- for example, if you entertain frequently or travel -- then you may be permitted to keep one card open. The expectation is that the borrower will pay this bill in full and on time every month. Debts that are owed to a taxing authority, such as the IRS, or to friends or family are also not included in a DMP.

If You Back Out

    If you decide to back out of a DMP because you don't want to include all of your debts, contact your counseling agency first. Although the lines will be reinstated, so will the higher interest rates. The lender may also consider your account to be in default, and may opt to proceed with collection action. It may also begin contacting you again -- something you probably wanted to avoid. If you have been making extra payments and your account is paid in full, it's essential to notify the counseling agency. If it's not notified, then it may consider your account failed, and report it as such to your lenders.

How to Determine Which Debt to Pay Down

Understanding how to pay off debt can save borrowers hundreds if not thousands of dollars. How much you save depends on how much you owe and how successful you are in following a good debt payoff pace. Determining which debt to pay down first is a common question. Discovering how to evaluate your debts and figure out who to pay and when to pay them is the first step in getting yourself out of debt.

Instructions

    1

    Collect the most recent statement from all of the debts you owe. Focus on credit cards, personal loans, car loans and student loans. Mortgages are usually too high to consider paying off unless you have no other debt to consider.

    2

    Make a list of the amount owed on each debt, the interest rate you are paying and the minimum amount due every month.

    3

    Order your list according to the interest rate you are paying. List the debt with the highest interest rate at the top of your list. Follow this with the debt that has the next highest interest rate. Continue until you have finished listing all of your debts according to the interest rate you are being charged.

    4

    Pay the debt at the top of your list with as much money as you can afford until it is paid off. This is the debt you should pay down first because it is the debt you are losing the most money on. The higher the interest rate, the less you pay on the balance of what you owe.

How to Clear My Credit in South Carolina

When you have negative information on your credit report, it can hinder you from getting a home, a car and even employment. The good news is that with a lot of diligence and determination, a bad credit report can be turned into a good one. As you attempt to clear your credit in South Carolina, it is important that you pay attention to the state's statute of limitations that govern the time-frame for creditors to take legal action against you. Otherwise, your attempt to fix your credit may do more harm than good.

Instructions

    1

    Order a copy of your credit report from Experian, Equifax and TransUnion. These are the three major consumer credit report bureaus. You are allowed one free report each year from the bureaus or from the Annual Credit Report website. You must pay for additional copies. Be sure to get a report from each bureau, since the information on your report may be different for each agency.

    2

    Examine your credit reports thoroughly. Document all accounts that have a "Date of Last Activity" that is greater than seven years. These accounts are outdated and need to be removed from your credit report. Note than bankruptcies can be reported for up to ten years instead of seven.

    3

    Submit a dispute to the credit bureaus to dispute all of the outdated accounts. In the dispute, mention the report number that is on your credit report, the account that you are disputing and the reason you are disputing it. The quickest way to submit a dispute is through the credit bureau's online dispute form. However, you can also mail or fax your dispute. The credit bureau is required to investigate and resolve your dispute within 30 days.

    4

    Contact creditors for accounts that are not old enough to be removed from your credit report but have not yet reached the state's statute of limitation. In South Carolina, the statute of limitations on "Breach of Contract" debt is three years from the date of last activity. This includes any credit that requires you to sign a contract, such as credit cards and loans. The limitation for judgments is ten years from the date of last activity.

    5

    Advise the creditor that you would like to set up payment arrangements to clear up the debt. Only do this if you fully intend to pay off the debt. Under South Carolina statute of limitations, if you make a partial payment on the debt or acknowledge the debt in writing, you "reset" the statute of limitations. In other words, the date of last activity will be reset, and the three- or ten-year period starts all over again.

Friday, July 29, 2005

How Can I Get Assistance Paying Bills in Jacksonville, Florida?

The city of Jacksonville, Florida, is located in the northeast part of the state. The county seat is Duval, and the greater area offers lots of assistance in paying bills in Jacksonville. Help is available from public and private Jacksonville organizations, including the Jacksonville Urban League and the United Way of Northeast Florida. Help paying bills is usually restricted to necessities, such as food and shelter, although there are programs available for helping people manage excessive debt. The contact information provided here is current as of June 2011.

Instructions

    1

    Contact a nonprofit credit counselor in Jacksonville if you are struggling from excessive credit card spending or other bills. The U.S. Department of Housing and Urban Development maintains a list of government-approved credit and housing counselors in Jacksonville. Examples include Family Foundations and Wealth Watcher. The agencies do not offer grants for paying bills, but can negotiate payment plans with lenders. Find a list of government-approved credit counselors in Jacksonville by visiting the HUD website.

    2

    Contact the Jacksonville Branch of Catholic Charities at 904-354-3416. The organization helps people of all backgrounds and faith and can assist with rent, mortgage and utility payments.

    3

    Call the Northeast Florida Community Action Agency for emergency financial assistance with utilities, mortgage payments and medical needs, including eye care and prescription drugs. Call 904-398-7472.

    4

    Contact the Salvation Army for help paying rent or utilities on an emergency basis. Call 904-366-9222.

    5

    Contact the Jacksonville Urban League at 910-356-8336 for help avoiding foreclosure.

    6

    Schedule a meeting with an attorney from Jacksonville Legal Aid to discuss options for filing for bankruptcy, if conditions warrant. Chapter 13 bankruptcy allows for people to pay certain bills, such as credit cards, through a court-ordered payment plan. Contact Jacksonville Legal Aid at 904-356-8371.

Thursday, July 28, 2005

How to Calculate Late Rent

How to Calculate Late Rent

Many landlords and apartment complexes require you to pay your rent on the first day of every month. You may have a grace period, which allows you to pay your rent after the first without incurring a late fee. The grace period can extend to the 5th or 10th of the month, depending on the management company of the apartment complex. Once the grace period has passed, you will be assessed a late fee on top of your standard rent payment.

Instructions

    1

    Review the amount that you pay for rent every month. Your rent payment is usually the same amount every time you make a payment. When you know your monthly payment, determine when the payment is due.

    2

    Find out how much the late fee is. Every apartment complex or management company has its own late-fee charge. Sometimes it can be a flat fee, such as $35, plus $5 per day for every day thereafter. For example, if your rent is $500, and the grace period ends on the 5th with an additional fee of $5 imposed for every day thereafter, you can calculate your late rent payment with this information.

    3

    Determine what day your rent payment will be made. If you make your rent payment of $500 on the 10th of the month, your late rent will be $550. The late fee of $35 is imposed on the 6th (the day after the expiration of the grace period), and you will be charged $5 for the 7th, 8th and the 9th of the month. There is no $5 fee for the 10th since the payment was made on the 10th.

Tips for Someone Who is Trying to Rebuild Credit

Tips for Someone Who is Trying to Rebuild Credit

Credit problems aren't easy or quick to fix, but there are things you can do that, in time, will dramatically improve your credit report and your credit score. The key to credit restoration is patience and understanding the FICO scoring model.

Pay Your Bills On Time

    According to Fair Isaac, payment history accounts for 35% of a consumer's FICO score. That's a big number. Late payments can negatively affect your score. One or two payments beyond the 30 day mark won't kill your score, but late payments into the 60, 90 and 120 day range will drop your score dramatically. After that, the only thing that can repair it is to make payments on time. The older the late payment becomes, the less of an impact it has on your credit score. The longer you make your payments on time, the more your FICO score will improve, because the new history will offset the old.

Reduce Debt

    A consumer's debt ratio makes up 30% of the FICO credit score. This number takes into account your available credit lines and how much of that credit line is used at any given time. The closer your are to the maximum limit on a credit card, the more of a negative impact it will have on your score. This is why maxing out a credit card causes a score to drop. This 30% also includes the amount of debt a consumer has in auto loans, mortgage debt and student loans. The more debt you have overall, the more risky you are to lenders, and your credit score will reflect that risk in the form of a lower number.

Get a Secured Credit Card

    Once a credit score is damaged, traditional credit card issuers may decline your application because your score does not qualify you for a card. The solution in this case is to apply for a secured credit card. With a secured credit card, you place a deposit with the issuing bank. The bank then issues a credit card with a credit limit equal to the amount of your deposit. This card will function just like a regular Visa or MasterCard and will display as a credit card account on the credit report. You and the bank are the only ones that will know that it's secured. Deposits are placed in a savings account or CD. Some earn interest, but others do not. Check with the issuing bank for clarification on all details regarding a secured card. After a certain period of time, most banks will upgrade a secured card to a regular card and refund the deposit to the consumer. This varies from bank to bank, however. Paying this card on time will increase your credit score. Be careful though; 10% of your FICO score is devoted to new credit, but if you take on too much new credit at once, that's considered risky. It's a fine line; one that a consumer must walk carefully.

Limit credit inquiries

    Credit inquiries are a part of the New Credit section of your credit score, which again is 10%. Having one or two inquires while applying for secured cards won't damage your score, but multiple inquiries within a short period of time will. The reason this affects your credit score is that FICO considers it an indicator of risk. People will often apply for more credit when they've maxed out their cards or find themselves in a financial bind. Only apply for credit if it's necessary. The exception to this rule is applying for a car loan or a mortgage. Multiple credit pulls for these loans are not counted negatively on the credit score if they occur within a short window of time: two weeks.

Maintain your length of credit

    Don't close any old accounts. The longer your credit history, the higher your credit score will be. This also accounts for 10% of your FICO score. The length of your credit history is an average of how long all of your accounts have been open. Even if you open a new line of credit, closing an older account will shorten the average time of your accounts. You don't have to use the older credit cards once the payment history is current, simply keep them open. As the new accounts continue to age along with the older accounts, your credit score will improve.

The Best Low Fixed-Rate Credit Cards for Balance Transfers

The Best Low Fixed-Rate Credit Cards for Balance Transfers

The best low fixed-rate credit card for balance transfers is one that offers an adequate credit line for your needs and charges no fees. The challenge is that the market is constantly changing. The "best" card today may not be the best card in six months. The good news is that, with a few simple tools, you will be able to locate the card that's right for you---whenever you want.

Consumer Reports

    Consumer Reports rated thousands of credit cards and recommended four best options for balance transfers. None of the four charge a balance transfer fee. This review is conducted annually, and the Consumer Reports data referenced in this article is current as of November 2008.

    The American Express Clear Card offers a fixed 3.99 percent interest rate on balance transfers for 12 months. After the 12-month period rates are 13.49 to 18.99 percent, so mark your calendar and re-evaluate your options during the eleventh month if you sign on for this card.

    The Iberiabank Visa Classic charges no interest on balance transfers for 6 months. After that, interest rates are 7.5 to 9 percent.

    Pulaski Bank Visa Gold charges no interest on balance transfers for 6 months and a fixed rate of 8 percent after the introductory period.

    Simmons Plus Visa Gold offers no introductory period, but a consistent fixed rate of 7.25 percent on balance transfers.

Product Selectors

    Product selectors, such as Credit Card 321 and Low Cards, have databases categorizing credit terms for more than 1,000 cards. You may search according to your credit history, keying in whether you have an excellent, good, poor or no credit rating. Other search options include no interest introductory offers, interest rates, balance transfer offers, rewards programs and cards with terms written in Spanish.

Check Your Mailbox

    In the same way that your local grocery store sends sales fliers and coupons, banks send credit offers. They are trying to win your business and frequently offer substantial discounts on their products.

Warnings

    Balance transfers and cash advances are not the same thing. Your credit company may send checks or an access card in the mail, and, thinking you are "transferring a balance," you use them to pay off another account. Wrong! Those are frequently categorized as cash advances and carry hefty fees. Read terms carefully, and call Customer Service if you have questions.

    Transferring a balance can take up to 60 days to complete, so be sure to keep making minimum payments on the account from which you are transferring the balance until you are certain the transfer is complete.

What is a California Bank Account Lien Exemption?

State laws govern the rights of prevailing parties in civil lawsuits to enforce and collect their judgment awards. In California, prevailing parties must file a judicial enforcement order before they can collect their judgments and their winnings from losing parties. Through collection efforts, private creditors can garnish wages or levy bank accounts. Although both public and private agencies and individual creditors can garnish bank accounts and wages, California law limits the amounts they can lien or garnish, and does not allow them to garnish or levy exempt property.

California Judgment Exemptions

    Included in the list of exemptions are: a motor vehicle, limited to $2,725 in personal assessment value; jewelry, artwork and heirlooms, limited to $7,175 in appraised value; personal business or commercial property, limited to $14,350 in assessment value; public benefit payments, such as limited percentages of unemployment benefits and Social Security benefits; and life insurance policies, limited to $11,475 in gross payments. To claim an exemption, a California debtor must file an exemption notice. California creditors can file a "Notice of Opposition to Claim of Exemption" if they receive an opposition to their judgment lien collections or wage garnishments within 10 days.

Wage Garnishment Exemptions

    According to the California Civil Procedure Code and the federal United States Code, courts can order employers to garnish an employee's wages to satisfy unpaid judgments. However, courts cannot order employers to withhold an employee's wages if his wages do not exceed the federal weekly minimum wage. As of 2011, the weekly minimum salary wage is $455 or $7.25 per hour. If a debtor's employment wages exceed federal minimum wage, a California court can require an employer to withhold up to 25 percent of the weekly or hourly wage exceeding the minimum wage.

    Furthermore, creditors of secured debts can lien personal and real property to enforce their judgments. California government agencies and the federal government can also intercept state income tax refunds.

Procedural Rules

    Pursuant to California Code of Civil Procedure, debt collectors can enforce their judgments after waiting for at least 30 days after courts enter them. Typically, creditors have 10 years to collect their judgments in California, and judgments are enforceable for 10 years against debtors. To enforce a civil judgment through garnishment of wages or bank accounts, a creditor must complete a Writ of Execution and file it with a local California circuit or superior court. To place a lien on a debtor's personal or real property, a creditor must complete an Abstract of Judgment and file it with the local county or city clerk in which the property is located. Since California is a community property jurisdiction, spouses and registered domestic partners are jointly liable for repaying their spouse's judgment, even if they were unnamed parties in the underlying lawsuits.

Considerations

    Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in California.

How to Get Settled Debt Off Your Credit

Negative debt accounts still have an adverse effect on your credit even after you have settled with the company or debt collectors. The debt will not fall off of your credit report on its own until it is over seven years old. You do have a few options to attempt to get it removed sooner, although the effectiveness of these methods depends on the company and credit reporting bureaus.

Instructions

    1

    Obtain a copy of your credit report from Experian, Equifax and Transunion. If you have not already requested your free annual credit report, go to annualcreditreport.com and follow the onscreen instructions to get a free copy of each of your reports.

    2

    Check the age of the settled debt. If your debt is close to the seven-year mark, you may wish to wait for the debt to fall off on its own. The date is calculated from your last payment, not the opening of the account.

    3

    Contact the company you settled the debt with. If your account was a charged-off account, in most cases you'll need to contact the original creditor. If the original company passed the account to a collection agency, you need to contact the agency.

    4

    Ask the company whether it will remove the settled debt from your credit report. The company is not legally obligated to do so, but it may consider your request. You can also inquire about paying for delete if you have not already settled the debt. A pay-for-delete arrangement has the company remove the account off of your credit report in exchange for a negotiated payment.

    5

    Dispute some aspect of the account with the credit reporting agencies. If the company refuses to remove the account from your report but the report listing contains factual errors, you can dispute the account information. If the credit reporting agency cannot verify the data, it will delete this account from your report.

Wednesday, July 27, 2005

How to Pay Off 50,000 in Debt in Three Years

Millions of Americans find themselves in massive debt each year. If you're in this situation, you can pay off your debts---even the large ones---as long as you're willing to develop a plan to eliminate your debt and stick to it. Being on a shorter timeline to eradicate debt makes your task more challenging, but not impossible. Even if your debt reaches $50,000, you can still pay it off within three years.

Instructions

    1

    Do the math. Before you can create your action plan for paying off your debt, you need to know how it breaks down. To pay off $50,000 in three years, you'll need to pay off $16,667 per year, not including accruing interest. That equates to $1,389 per month.

    2

    Review your budget and expenses. Unless you have an extra $1,389 going into your savings account each month, you must locate the funds to make debt payments. Identify budget items you can do without for the next three years. Looking in your checkbook register or online banking account can provide additional insight to areas you can cut out.

    3

    Contact creditors. The higher the interest rate you pay on your balance, the longer it takes to pay off your debts. Even before you miss payments, contact your lenders and let them know your commitment to paying what you owe. Ask for a lower interest rate to help. While creditors may not like the idea, they would rather get back the full balance than risk getting nothing if you file bankruptcy.

    4

    Work with a reputable credit counseling agency. When unsecured credit forms the bulk of your debt, a credit counselor can negotiate lower interest rates on your behalf. You might not like asking for help, but interest payments on $50,000 can snowball, making it impossible to pay off within your three-year deadline.

    5

    Decide on a payment strategy. Just because paying off the highest interest rate balances first saves money on interest payments, it doesn't mean this is the best plan for you. If you need more than $1,300 for monthly debt payments, you may benefit more by focusing on paying off debt with the higher payments first. Once that debt is gone, you have more money to use for other debts.

    6

    Look for additional sources of cash. $17,000 per year is fair amount of money to pay towards debt. Using the funds in your savings account can help you make a dent in that number and lower the amount of money you need each month for payments.

    7

    Borrow from your retirement accounts. Check with your 401k plan administrator about your loan options. Once vested, many employers allow you to borrow half the value of the account without the 10 percent early withdrawal penalty.

Explain Debt

In your day-to-day life, you probably encounter or use a variety of types of debts. The Federal Reserve estimates that the total amount of United States household debt, which includes credit cards and mortgages, was $10.3 trillion in 2010, according to the Wall Street Journal. Understanding what debt is and how it affects you is key to becoming an informed consumer.

Debt Basics

    Debt, at its most basic level, is something you owe to someone else. Typically, when people refer to debt, they are talking about consumer debt. Consumer debt is any debt used or acquired by a consumer. This is different from institutional debt, which generally is any debt held by governments, companies or other organizations. Consumer debt is measured by the amount of money a consumer owes to a lender, typically either a bank or other institutional lender.

Types of Debt

    Consumers use a variety of debts, though not all consumers use the same kind. Many consumers, for example, borrow money from a bank or lender to buy a home they otherwise could not purchase, because they do not have enough money to buy the home outright. This debt, known as a mortgage, allows people to buy the property and live in it while making monthly payments to the lender. Credit cards, another commonly used form of debt, are considered a revolving debt, because the total amount owed depends on the cardholder's use of the card and the amount of debt paid off each month.

Debt Fees

    Lenders do not give away money without receiving compensation. Typically, a lender who offers a borrower a loan requires the borrower to pay the loan back over time with interest. Interest is usually charged as an annual percentage rate (APR). For example, if you take out a $10,000 loan with a 5 percent APR, you pay $500 per year in interest fees to the lender.

Government Debt

    The term debt also is often used when referring to the federal government's debt, known as the deficit. Governments, like businesses and consumers, depend on income when they spend money. When a government spends money, known as an outlay, it gets that money either through its income, typically in the form of taxes, or borrows money from others. When a government has to borrow money, it runs a deficit. The total of all deficits the government has acquired is known as the national debt.

My Credit Report Is Incorrect

Your consumer credit report is the key to purchasing power with credit --- a credit report that is free of negative entries and shows a long history of on-time payments can help you qualify for car loans, lines of credit, credit cards and mortgage loans. If your credit report contains a negative entry that you believe was made in error, you can take steps to have the entry removed to preserve your credit score and maintain your creditworthiness.

Review Your Credit Reports

    Periodically reviewing your credit reports can help you identify errors that can compromise your creditworthiness. You can obtain copies of your credit reports for free once every 12 months at AnnualCreditReport.com. Review the payment history for each account, as well as the public records section, to identify errors.

Collect Documentation

    Before disputing an error on your credit report, you will typically need to obtain documentation supporting your position. For example, if your credit report contains an erroneous late payment, you can print out bank statements showing when you made each payment to the creditor, or call the creditor and ask for written verification that you made your payments on time. If the report shows an account you have never owned, contact the creditor and obtain a letter stating that you have never done business with the company.

Write a Dispute Letter

    Compose a letter to each credit bureau reporting the erroneous information. State that the entry was made in error and explain why the information listed on your credit report is not correct. Ask the credit bureaus to investigate the entry to verify that the entry is erroneous. Make copies of the letters for your records, attach copies of your documentation to the letters and mail them to the credit bureaus. You may send the letters via certified mail so you can verify that the credit bureaus received them. You may also file a dispute with any of the three major credit bureaus online.

Investigation and Resolution

    After a credit bureau receives your dispute request, it must complete an investigation within 30 days unless it deems your request frivolous. Once the credit bureau completes its investigation, it will notify you of its findings in writing. If the credit bureau agrees that the entry was made in error, it will remove it from your report and provide you with an updated copy of your credit report at no cost to you. At your request, it will also notify any person or business that has obtained your credit report within the past six months of the correction.

Considerations

    If a credit bureau finds in your favor, you should send a copy of the bureau's findings, along with copies of your original dispute letter and documentation, to the creditor named in the erroneous entry. This may help prevent the creditor from reporting additional erroneous information in the future.

    Also, if the credit bureau does not agree with you, you may still request the bureau to include your dispute letter in your credit file so future prospective lenders can see that you questioned the entry. This may compel a prospective creditor to give you an opportunity to explain the negative entry before issuing a lending decision.

Tuesday, July 26, 2005

Grants Used for Paying Bad Debts

Grants Used for Paying Bad Debts

A grant is a monetary award used to improve the public good that doesn't have to be repaid. Borrowers who are desperate to pay off debts may find ads that offer grants tempting. While there are legitimate resources for borrowers who are desperate, no government or private grants exist for paying debt. If a borrower does decide to apply for a grant anyway, know the rules to protect yourself against fraud.

Government Grants and the FTC

    The federal government gives away billions of dollars in grants funding every year. Grants.gov lists 26 federal agencies that provide grants for many purposes; however, as the site clearly states, "Grants.gov does not offer money for personal financial assistance or debt." The Federal Trade Commission also warns consumers about applying for get-out-of-debt grants on its own website. Despite these clearly worded warnings, consumers get tricked every day into applying for fake grants. State and local governments also offer grants to eligible applicants, as do some corporations and nonprofits. However, just like federal grants, funds are to further the public good -- not pay off a borrower's bad debt.

Applying for a Grant

    Whether a government or privately-funded grant, applying for a grant is free, and grant information is also freely available on the Internet. You do not have to provide your Social Security number or credit card number on a grant application; if you are asked for this information -- it's a scam. To find out about government or corporate grants, simply contact the organization's grant's department directly. Information is easily obtainable.

If You're a Victim

    If you've already provided personal information over the Internet, on the telephone or through the mail for "free" grant information, contact the Federal Trade Commission to file a complaint and contact your state Attorney General's office. Check your credit report as soon as possible. The worst criminals collect victims' personal data and then open false credit accounts with it. If this has happened to you, notify each credit bureau immediately. Closely monitor your existing legitimate bank and credit accounts for unauthorized activity.

An Alternative

    Contact a nonprofit credit-counseling agency for help. The National Foundation for Credit Counseling is one such agency. It has an outstanding reputation, and is the oldest debt counselor in the country. Consolidated Credit and Green Path are two additional highly regarded, reputable credit counseling agencies. Their counselors provide a free initial budget analysis, and if you're eligible, you can enroll in a debt management plan. Known as a DMP, it can reduce your interest and payments and still have you completely debt free within five years. If the DMP isn't an option, the counselor will be able to discuss other options with you. However, a grant to pay off your debt won't be among the choices.

Can Creditors Attach a Lien to a Property That Is Willed to Children?

Debts are persistent. They don't just go away when you die. They hang around a while to see if they can find a new home -- specifically, in your estate. Credit laws allow creditors to collect debts from most parts of your estate. In some states, they can force payment from a home, both before and after death.

Debts Don't Die

    A debt has a life of its own, determined in part by state law. It follows a borrower's assets, not the borrower himself. Debts do not transfer to heirs but do stay with the borrower's estate until the estate is closed and the property transfers to the heirs.

Probate Court

    Probate is the process an estate goes through after someone dies. It occurs in court, specifically called probate court. Debts love probate court. Its where they go to get collected after the death of the borrower. Part of the duty of the probate court is to advertise the settlement of the estate to creditors. There they provide documentation of the debt, and the court uses estate proceeds, including the sale of assets like property, to repay the debts before the estate property is transferred to heirs. Once the probate process is complete, the debts are expunged once and for all, whether they have been repaid or not.

Exemptions

    What estate assets are exempt from debt collection are determined by state law. All life insurance is exempt, unless it is payable to an estate or trust. Some states place exemptions on portions of an estate. Minnesota, for example, exempts one house, a vehicle and up to $10,000 in personal belongings. Other states have no exemptions. Check your state's credit-collecting law to find out if a creditor has a right to collect its debt from a property.

If They Can Collect

    If a debt collector is allowed to collect a debt from property during a borrower's lifetime, it would do so by placing a lien on the property. If a debt collector is allowed to collect a debt from property after a borrower's death, it would generally do it through probate court and not a lien, although it might start with a lien just to protect its interests. The probate court might force the sale of the property to repay the debt but might also use other assets from the estate. In any case, the debt is collected not just from one source but from the entire estate so that the assets left to all heirs is equally reduced by the debt.

Monday, July 25, 2005

About Home Foreclosures

Homeowners who fall behind on their mortgage payments may find themselves in the unfortunate position of facing foreclosure. Those who find themselves having trouble making payments in a timely manner are well served by proactively working with their lenders and educating themselves about foreclosure regulations in their state. In many cases, foreclosure can be avoided if consumers act wisely and reach out to their lenders for assistance before allowing their payment problems to progress too far.

Considerations

    If a homeowner becomes unable to make mortgage payments in a timely manner, it's essential to reach out to the mortgage lender right away. By taking action before becoming seriously delinquent, a homeowner may be able to work out arrangements that can avoid facing foreclosure. In some cases, lenders can negotiate repayment terms, adjust interest rates, or refinance existing loans when help is requested before repayment problems become serious.

Time Frame

    Foreclosure regulations vary from one state to another, so it's difficult to assign a specific time frame within which foreclosure is likely to occur. Once a mortgage loan becomes delinquent, lenders have the option of beginning foreclosure proceedings in a manner consistent with what is allowed by state law. In most situations, mortgage lenders will initiate foreclosure proceedings once mortgage payments become three or four months past due.

Misconceptions

    Lenders are not anxiously awaiting opportunities to foreclose on homes. It's much better for lenders to keep borrowers in their homes, making payments on their loans than to deal with the legal expenses associated with initiating and following through with foreclosure proceedings.

Prevention/Solution

    Homeowners who are faced with the possibility of foreclosure may benefit from reaching out to a housing counseling agency certified by the U.S. Department of Housing and Urban Development (HUD). These organizations offer free or affordable advice to people dealing with the reality of potentially losing their homes to foreclosure. A qualified housing counselor can educate homeowners about the available options for avoiding or remedying foreclosure and their potential consequences.

Warning

    If a home goes into foreclosure and the property is sold at auction, the homeowner is not necessarily free from financial obligation associated with the mortgage loan. The homeowner will be responsible for paying the difference between the outstanding balance on the home loan and the purchase price of the property when sold at auction.

How to Know if Your Unemployment Will Be Extended in California

If you are currently receiving unemployment benefits in California and are close to using up the awarded compensation, you may be concerned about what happens next. In California, as well as other states, an extension of benefits may be available to you. As long as you are still unemployed, looking for a new job and within the specified time frame, you may be able to continue receiving your unemployment compensation in the state.

Instructions

    1

    Claim all your current awarded benefits. Before you can qualify for an extension of benefits, you must use up all your existing benefits.

    2

    Check the extended benefit claim deadlines on the California Employment Development Department website. The deadline indicates the last day you can start the extension and still be eligible to claim it. As of May 2011, four federal extensions are available for California residents as well as a separate California benefits extension. The last of the four federal extensions is available to residents of states in which the average unemployment rate over the previous three months exceeds 8.5 percent. As of May 2011, California is among the states that qualifies for that extension.

    3

    Look on your last benefit payment stub for a message about qualifying for the extension. In California, a message typically is provided on the stub and a separate letter is sent to your mailing address if you qualify for the extension.

    4

    Contact the California Employment Development Department (EDD) by secure email via the California Employment Development Department website to ask about your extension status. Response time typically is within 72 hours.

What Is a Credit Card Judgment in Texas?

What Is a Credit Card Judgment in Texas?

Texas residents who have met with financial difficulty may wonder about the abilities of their credit card companies to collect the unpaid debts. Consumers in Texas can get sued by their card companies. If the card company wins, the court grants a judgment and makes it much easier for the company to collect the debt.

Debts

    A credit card is usually a form of unsecured credit, meaning your card company doesn't require that you give it collateral or some form of secured interest in your property. If you don't pay back you credit card balances or miss your payments, the card company has to either convince you to pay back the debt or sue you to recover it. If it sues you, it then becomes a secured creditor.

Lawsuits

    A credit card lawsuit usually happens when you fall behind on your payments and owe a significant amount of money, though a card company can sue you whenever you default on your loan regardless of how much you owe. The card company must, usually, file the lawsuit in the Texas county in which you live. It must also tell you that the lawsuit has been filed, either by sending it through certified mail or personally delivering it to you.

Judgment

    A credit card judgment is a court decision in which a judge has ruled in favor of the credit card company that sued you for the unpaid debt. The judgment will state the amount of money you must pay, along with any interest or fees the court awards the plaintiff, meaning the company that sued you. If the company obtained a judgment without your going to court, it means the lawsuit was filed against you and you did not respond in time or failed to show up in court. This is known as a default judgment and is just as valid as if you had shown up and lost.

Collections

    Once a creditor has sued you in Texas and received a judgment, the creditor has 10 years in which to collect upon the debt, known as the statute of limitations. The creditor can take a number of actions to collect upon the debt. While it may continue persuasive efforts, it can also try to garnish your bank account or seize some of your property and force its sale.

Sunday, July 24, 2005

How to Stop Bank Garnishment

How to Stop Bank Garnishment

If you have an unpaid debt with a creditor, that creditor may garnish your bank account. If a creditor files a lawsuit against you and wins the case, then the creditor can freeze your bank account and seize the funds to cover the past due balance you owe. So, it is best to avoid a bank garnishment, if at all possible. Fortunately, there is a way to prevent a creditor from freezing your bank account. Learn how to properly stop a bank garnishment.

Instructions

    1

    Contact your creditor about your payment options. Try to negotiate a settlement offer or monthly payment plan with your creditor. Your creditor may allow you to settle your unpaid debt for a fraction of what you owe. Make sure you accept an offer that is affordable for your budget.

    2

    Request a confirmation letter. Ask your creditor to send you a formal letter describing the settlement offer or payment plan. The letter should state your current balance, your payment due dates and the terms of the agreement.

    3

    Make your scheduled payments in a timely manner. It is important to follow the payment schedule and submit your payments by the appropriate due dates. If you fail to make your payments on time, your creditor may proceed with a lawsuit and garnish your bank account.

    4

    Submit your final payment to your creditor. Once your balance is paid in full, you no longer have to worry about a bank garnishment. However, you should ask your creditor to send you a letter confirming that your account is paid in full and that you have a zero balance.

    5

    Check your credit report for updates. Your creditor should report your account status to the credit bureaus as paid in full. Give your creditor at least 30 days before you check your credit report. You can order a free copy of your credit report from Experian, TransUnion and Equifax, by visiting AnnualCreditReport.com.

What Happens When a Garnishment Expires?

A garnishment is one of the most feared collection actions that a creditor can undertake. A garnishment entails getting permission from a court to take money out of an individual's bank account or siphoning off the money from the individual's employer, out of his paycheck. When a garnishment expires, the judge may renew it if the debt has not been fully repaid, or he may choose not to.

Garnishment

    All garnishments can only be implemented with the approval of the judge who's hearing the creditor's case against a debtor. The debtor will be given an opportunity to pay off a debt after he's been hit with a legal judgment. However, if he doesn't, then the creditor can ask permission of the judge to seize the money by force, through garnishment.

Expiration

    Garnishments are not indefinite. A typical garnishment will only last for a set period of time, anywhere from a week to a year or more. After the garnishment expires, then the debtor's employer is no longer required to abide by its orders and he can stop setting aside the money that he would normally pay to his employee, the debtor, until the employer receives a new, up-to-date order.

Renewal

    Under a garnishment, a creditor is only allowed to take a portion of a debtor's salary. If the salary has been taken for many weeks and the debt has still not been paid off, then the garnishment may expire. At this point, the creditor can ask the judge to renew the order for an extended period of time, a request that the judge has the right to grant or deny.

State Laws

    Whether a judge will grant or deny a new garnishment order depends on a number of factors, including the state's garnishment and debt laws. Some states have limits on how many garnishment orders a person can face. In addition, if the debtor tells the judge that he will now pay off the debt on time without garnishment, the judge may not reinstate the garnishment order after expiration.

Saturday, July 23, 2005

How to Sell Small Business Assets

Selling small business assets means you could be closing your business or trying to raise cash. Either event could be stressful, but you can make the process easier by making a careful plan for selling your assets. A small business asset is anything of value -- equipment, furniture or even a customer list. The U.S. Small Business Administration reports that most physical business assets such as equipment or furniture should be priced at about 20 percent below their retail value based on current age and condition. Check online classified sites for similar articles being offered for sale to help determine your selling prices.

Instructions

    1

    Contact your lawyer and accountant. The SBA reports that this should be your first move before you start selling off assets. An accountant or attorney can advise you about possible legal and tax implications. The SBA recommends making a list of the assets you wish to sell and then evaluating the list with your lawyer of accountant. You can sell off assets for which you are still making payments, but satisfying the balance due to creditors should be included as part of your plan.

    2

    Prepare assets for sale. The SBA reports that you should wash, paint or repair physical assets that you want to sell, if necessary. A physical asset could be a printer, office furniture or a copier. The goal is to spruce up the assets so they can be sold for the most money possible.

    3

    Evaluate assets tied to lease-purchase agreements. Equipment that you have been leasing with an option for purchase could result in a tidy profit, according to the SBA. The agency reports that you may be able to complete the purchase on say, a forklift, by paying a few hundred dollars -- and then sell the forklift for a few thousand. Check all of your lease-purchase agreements for items that you are better off selling at a profit than returning to the leasing company.

    4

    Sell intangible assets through negotiation with potential buyers. Intangible assets include customer lists, licenses, permits, trademarks and more. Pricing intangible assets may require some research. For example, you county may no longer be granting liquor licenses for a bar, but you may own a bar with a license that can be transferred to a buyer. Under that scenario you would check county records for fees paid to acquire liquor licenses. Then negotiate with the prospective seller based on previous transactions.

    5

    Sell your assets in a variety of ways. Use online classified sites if your business is small and you only have a few items to sell. Slash retail inventory by having a big sale. Or if your company is large, hire an auction company specializing in business assets.

What is a Good Credit Score in Canada?

What is a Good Credit Score in Canada?

Credit scores in Canada range from 300 to 900, with the higher numbers indicating a healthier financial record and less of a risk to the lender. Good credit scores start in the low 700s; the higher they are, the easier it will be for you to get a loan. Your interest rates are also determined by your credit scores, with the best rates going to those with scores over 760. Your credit score not only impacts your ability to get a loan, but it also impacts your options when renting a home or purchasing a cell phone. Maintaining a good credit score is essential to your financial well being.

Function

    Good credit scores in Canada function as the foundation for attaining any type of financing or loans. You can keep track of your credit score by subscribing to an online monitoring service or by contacting the three main Canadian credit reporting bureaus.

Types

    The three credit bureaus in Canada are Equifax Canada, TransUnion Canada and Northern Credit Bureaus Inc. You can request a free copy of your report from Equifax and TransUnion as often as you need it, but Northern Credit only offers one free report per year.

Significance

    Higher credit scores in Canada mean lower interest rates for the money you are borrowing. A good credit score, 760 or above, will help you qualify for the best rate possible on any type of financing. Good credit scores are not the only consideration, but it is impossible to receive a low interest rate without a good credit score.

Considerations

    Credit reports in Canada are based on your payment history, your outstanding debt, the types of credit you are using, your credit history or how long you've had credit and the types of credit you are pursuing.

Prevention/Solution

    Improving your credit score before you apply for a loan could have a significant impact on your monthly payment as well as your ability to qualify. You can repair your credit yourself with patience and persistence. Be careful of companies who claim they can quickly repair your credit for a fee; this is not possible, as credit repair takes time. Your first step is to order your credit reports from the three reporting agencies. Dispute any incorrect or outdated information in writing with each agency. They should respond to your request within 30 days. A few ways to ensure that you have a good credit score are to never go over the limit on your credit cards; try to pay off your debts as soon as you can; build a positive credit history with credit cards and other consumer loans.

How to Live With a Zero FICO Score

How to Live With a Zero FICO Score

A FICO score is what creditors and lenders use to determine whether or not to lend credit or provide financing. In this society and where most everyone purchases items using credit, it is tough to live without a good FICO score. Although it may be tough, it is not impossible to live with a zero FICO score. If you are patient and plan in advance, you can live comfortably with a zero FICO score.

Instructions

    1

    Begin a savings account. When you have a zero FICO score it is difficult to get credit to purchase large or expensive items or handle unexpected emergencies. Since you don't have the luxury of having credit that means you'll have to use cash. Open a savings account and begin a savings habit. Aim to save at least $1,000 as an emergency fund.

    2

    Place large deposits on expensive items. It's not impossible to get credit with a zero FICO score, but to do so, you will need to place large up front deposits on big ticket items such as a car. The larger your initial deposit the better your chances for getting financing.

    3

    Obtain a store credit card. It is easy to get a retail store credit card with little or no credit. The up side to getting a retail store credit card is that it is a vehicle for improving your FICO score. The downside to getting a retail store credit card is they charge high interest rates. If you use the card wisely and demonstrate responsible financial management you can soon graduate from the retail credit card to one that carries a lower interest rate.

    4

    Apply for new credit slowly. When working on improving your FICO score refrain from applying for too many credit cards at one time. A sudden flurry of new credit inquiries will hurt your credit instead of help it. Wait about three months before applying for new credit.

    5

    Maintain low credit balances. Once you are approved for new credit cards, refrain from using 100 percent of the available credit. The credit reporting agencies look at your debt ratio when determining your FICO score. Your debt ratio is the ratio of the total amount of outstanding debt to the total amount of credit available to you. They like to see a number of 35 percent or lower. Therefore, if you have $250 credit available to you, don't use more than $87.50 in order to maintain a favorable debt ratio and improve your FICO score.

Thursday, July 21, 2005

Assistance to Settle a Debt

Assistance to Settle a Debt

Because it is a struggle to get out of debt, it's not unusual for people to seek help in debt elimination. One option is to get assistance with debt settlement. Debt settlement means that you approach the credit card company and ask to pay only a portion of what you owe.

Settlement Companies

    Most assistance for debt settlement comes from debt settlement companies. These companies act like middlemen on your behalf, negotiating with your creditors to determine a final settlement amount. In return, you pay them a fee, unless the settlement company is a non-profit organization. Although you can do much of what the debt settlement company does on your own, debt settlement companies have have more experience with negotiation and are familiar with debt regulations. They thus often get better deals than you'd strike with the creditor by yourself.

Regulations

    As of 2011, regulations are in place for debt settlement companies that provide financial help. They cannot charge you upfront fees until they have worked with at least one of the debts you have, you have a written settlement agreement between you and your creditor and the you've paid at least one payment to your creditors under the settlement agreement. However, with the exception of Illinois, there is no cap on the amount of the upfront fee.

Before Selecting a Company

    Some debt settlement companies are not legitimate and actually prey on those with debt. To prevent getting ensnared by one of these companies, always check the company's ratings with the Better Business Bureau, as well as any certifications the company has that demonstrates compliance with current Federal Trade Commission regulations.

Timeline

    Regardless of whether you get assistance from a non-profit or for-profit debt settlement company, debt settlement is not an overnight process. It can take up to four years to complete a debt settlement program.

Considerations

    Because certain debts like child support are not eligible for settlement, you cannot always depend on a settlement company to manage your accounts and contact creditors. You may have to hire a competent attorney for these cases. This is not an ideal situation, as attorney fees can worsen your financial stability. You also have the option of getting advice from other financial professionals like your tax agent, bank officers, FTC and other government officers related to finance offices, your local Chamber of Commerce workers and independent financial consultants.

Open Credit Vs. Line of Credit

Open Credit Vs. Line of Credit

Open credit and a line of credit are obtained through applying for loans with financial institutions. They help establish credit and increase a credit score, if the accounts are kept in good standing. They differ in their qualifications and limitations.

Open Credit

    Open credit refers to your current accounts that are in repayment. Open mortgage loans, credit cards, auto loans, personal loans, even your account with a utility company are types of open credit.

Qualifications For Obtaining Open Credit

    Whether a lender gives you a loan depends on credit score, credit history, job stability, income, collateral and other factors. These factors also influence how much open credit or line of credit you'll receive. Credit often is determined by credit score---620 or higher is generally a good score. However, the credit score will be determined somewhat by credit history. Late payments, collections and charge offs can negatively affect a credit score. All of these factors can hurt you when you apply for open credit or lines of credit.

Line of Credit

    A line of credit refers to a revolving account, like a credit card account, that allows you to take out or borrow any amount of money needed at any time up to a predetermined amount, or credit limit, that the lender sets on the account.

Qualifications for a Line of Credit

    Lines of credit can be secured or unsecured, depending on the creditworthiness of the borrower. An unsecured line of credit does not require anything as collateral and is based on credit score and credit history. Secured lines of credit are based on the value of the collateral, such as a home. For example, some homeowners have a home equity line of credit, which allows them to borrow money based on the equity in their home.

Differences

    Open credit is like an installment loan because it does not allow you to borrow more money as the account balance lowers. With a line of credit, however, as the balance lowers, more money can be borrowed on the account up to the credit limit of the account. A line of credit allows you to borrow more money without applying for a new loan.

Tuesday, July 19, 2005

What If Someone Is Using My Social Security Card Number?

When someone uses your social security number to obtain credit or for other personal gain, it is a crime. Identity theft victimizes millions of people each year, costing companies billions of dollars and ruining your good name.

Get a Credit Report

    The only way to determine whether or not your social security number has been used without your permission is to regularly scan your credit report. You can sign up for a monthly monitoring service through any of the three national credit reporting agencies: Experian, Equifax, or Trans Union.

File an Identity Theft Report with the FTC

    If you discover that accounts have been opened, you must file an identity theft report with the Federal Trade Commission (FTC) and your local police department. Filing these reports will help you close the accounts and have them removed from your report without the liability of paying them.

Place a Fraud Alert on Your Credit File

    Contact the credit bureaus and have a fraud alert placed on your credit file. This alert will prevent any new accounts from being established without your knowledge. The initial alert is good for 90 days. You can request an extended alert, which is valid for seven years.

Place a Credit Freeze on Your Credit File

    You can also request a credit freeze. This prevents any unauthorized person or lender to access your credit report unless you lift the freeze. You will still be able to review and purchase your report, but lenders will not. This process will prevent new accounts from being opened.

Submit Police and FTC Reports to Creditors and Bureaus

    Begin contacting the credit issuers and credit reporting agencies. The goal is to submit the FTC and police reports to the fraud departments and begin the process of closing the fraudulent accounts and ensuring that you are not liable. This can be a long and arduous process.

Financial Assistance in Paying a Hospital Bill

Financial Assistance in Paying a Hospital Bill

For those who lack insurance or whose insurance provider does not cover the total health care costs they incur, a single medical emergency can spell financial ruin. For example, the cost of an appendectomy, a relatively common surgery in the U.S., typically falls between $15,000 and $18,000 -- a tall order even if you're only liable for a portion of the debt. Your fear of incurring medical debt shouldn't prevent you from seeking the care you need. Financial assistance is available for those who cannot afford their hospital bills.

Government Assistance

    The U.S. government's Medicaid program provides low-income individuals and their families with health care coverage. Although Medicaid is a federal program, each state has its own qualifications consumers must meet before receiving coverage. In addition to covering 100 percent of most medical services, Medicaid is retroactive for 90 days before the date the government approves your application. Thus, you can apply for Medicaid after receiving care and, if you qualify, the government will pay any outstanding medical bills for services rendered within the last three months.

Charity Care Programs

    While few hospitals advertise the service, most have a charity care program that provides medical services free or at a reduced rate to those who cannot afford them. Contact your hospital's billing department and ask to speak to a financial counselor. The financial counselor will inform you if the hospital has any financial assistance programs you may qualify for.

Negotiating Medical Debts

    Just because the hospital sent you a bill for a certain amount, that does not mean that the hospital won't accept less as payment in full. Insurance companies have contracted rates with health care providers that are often much lower than the prices hospitals charge the uninsured. Because of this, consumers shouldn't be afraid to ask for a discount. Even if the hospital won't budge on the amount it claims you owe, most health care providers will set up a payment plan for you if you ask.

Medical Billing Advocates

    Although the service isn't free, a medical billing advocate can provide you with invaluable financial assistance by locating errors within your bill that could leave you paying hundreds -- sometimes thousands -- more than you actually owe. The average person would have trouble deciphering the codes and technical language that appears on a hospital bill. Medical billing advocates, however, are specially trained in reading hospital bills and spotting costly errors. Some even work with health care providers to negotiate lower balances for their clients while simultaneously correcting billing mistakes.

Monday, July 18, 2005

What to Do When You Have Been Served a Credit Judgment

Nobody likes getting court papers or threats from lawyers. But debts and lawsuits won't go away on their own: You'll need to take action. While it is always best to try and settle problems with creditors before legal action becomes a possibility, if a creditor serves you with a summons, seek legal advice and prepare to go to court.

Don't Ignore It

    Never ignore a threat of legal action or an actual summons. By ignoring the problem, you give up your right to appear in court and defend yourself. When this happens, the judge can issue a default judgment against you, making you responsible for paying the debt. Once your creditor has its judgment, it can begin using aggressive tactics to collect your debt, including wage garnishment and seizing your bank account. You'll also end up with a court judgment on your credit report, which will hurt your credit score significantly.

Talk to a Lawyer

    Court papers can be confusing, so it is a good idea to talk to a lawyer, if possible, about your situation. If you cannot afford a lawyer, contact the legal aid society in your area. While it may not be able to send an attorney with you to court, it may be able to advise you on how you can deal with this matter on your own. A lawyer can also let you know whether any of your income or assets are exempt from garnishment or seizure: For example, Social Security benefits, unemployment and welfare money is typically exempt from garnishment or seizure. If you have exempt assets, separate them from non-exempt assets by placing them in a different bank account.

Try to Negotiate

    Contact your creditor and ask if you can work out a settlement and avoid going to court. Some creditors may be willing to accept a payment plan or a cash settlement for less than you owe. Others will demand the full amount. Be sure to get any settlement agreement in writing, along with evidence that your creditor has asked the court to dismiss its case.

Go To Court

    Don't miss your court date. If you can't make it, call the courthouse and find out what you have to do to reschedule. The papers you receive will tell you how you can file your "response" before going to court. There is usually a fee for this, but if you can't afford it, you may be able to ask the court to waive your fee. The court clerk will have the forms you need to request a fee waiver. Once you go to court, you, or your lawyer, can present your case.

Avoid Being in Contempt

    There have been a few cases in which debtors have ended up in jail because of missing a court hearing. Nobody is placed in jail simply for being in debt. However, if a creditor gets a judgment against you and you aren't in court, the judge may issue a summons asking you to appear so the creditor can question you about your finances or ask you to fill out a financial disclosure form. If you don't show up at this hearing, the judge may hold you in contempt of court, which could result in your arrest. To avoid this, pay attention and respond to any communication you receive from a creditor, the creditor's lawyer, or the court.

Credit Card Payment Problems

Credit Card Payment Problems

Credit cards are important financial tools that offer benefits and many conveniences. Unfortunately, if you don't handle credit card payments appropriately, you may find yourself falling into deep debt and experiencing serious financial trouble. Learn how to resolve issues with credit card payments to save time, hassle and stress.

Problems

    When financial difficulty occurs, you may struggle to make the minimum payments on credit cards. If your credit card bill contains errors such as incorrect or double charges, you may become confused about whether or not to make a payment, and for what amount. In some events, a credit card company may neglect to credit a payment that you made to your account. An embarrassing situation you could encounter is attempting to make a payment with a credit card, only to have the purchase declined.

Causes

    Unemployment or unexpected expenses can cause you to fall behind on credit card payments. Human error or having a payment lost in the mail can result in a payment not being credited to your account. If unexplainable charges start to appear on your card, you may be the victim of fraud. In the case of a declined purchase, perhaps you have gone over your limit of available credit or the credit card company has placed a fraud alert on your card because of suspicious activity.

Results

    If you fall behind of credit card payments, the company will report this information to credit bureaus, which will result in blemishes on your credit. The company will also begin to apply late fees, and eventually they may even close your credit account if you continue not to pay. If you continue a pattern of non-payment, your creditor may sue you in civil court to recover the money and they may even secure the right to garnish your wages to cover the outstanding amount.

Solution

    If you find yourself in a financial crunch, call your credit company to work out a repayment plan. The company may waive late fees or allow you to make a lower payment. If your credit card is stolen, you have the responsibility to immediately notify the credit card company so they can deactivate the stolen card.

    Always examine your credit card statement as soon as you get it. If you notice discrepancies, you only have 60 days to report the problem. If your credit card statement contains purchases you didn't make, contact the merchant and request they remove the charges. If you have to write a complaint, make sure you send a copy to your credit card company so they know you are disputing the charge.The credit card company has 90 days or two billing cycles to investigate the dispute. During this time, you don't have to pay the disputed amount.

Considerations

    Once you have negative information on your credit report, you will find it more difficult to receive additional credit or you may find that credit ends up costing you more because companies may continue to grant you credit, but with a higher interest rate. The negative payment history on your credit cards can also make it harder for your to secure certain types of employment, since some employers now run a credit check before they hire employees.

Sunday, July 17, 2005

What Is a Debt Reduction Plan?

There are several kinds of debt reduction plans available to those who can no longer handle their consumer debts. Whether you wish to restructure some of your money to credit card and loan repayment, personally negotiate with your creditors, hire a firm to help you negotiate with your lenders, or find a court-supervised payment plan through Chapter 13 bankruptcy, there is a debt reduction plan available for you.

Debt Reduction Calculator

    A fast and easy option to create a plan is to use a debt reduction calculator (see Resources). These free online tools show how you can save thousands of dollars and years off repayment time by just adding a few dollars to one or more credit card payment(s).

Lender Hardship Program

    These are not advertised, but most lenders do have a hardship program which will waive late and over-the-limit fees, reduce interest rates and lower monthly payments. Call or write your lender and ask to be enrolled in this type of program.

Debt Reduction Companies

    Debt reduction plans through companies do exist, and are commonly called "credit counseling." They will, for a small fee, renegotiate your payments with your creditors and then distribute money to them each month under your new debt management plan.

Chapter 13 Bankruptcy

    Chapter 13 bankruptcy (see Resources) is a court-supervised debt repayment plan that lessens the amount of credit card debt and usually allows you to save your assets, such as a house. These plans normally take 3 to 5 years to complete.

Warning

    All plans will have some negative impact on your credit. Whether or not you file Chapter 13 bankruptcy, entering partial or restructured payment plans does stay on your credit file as a negative financial event for 7 years.

Saturday, July 16, 2005

How to Handle a Deceased Spouse's Bills

The grief of losing a spouse can be compounded by the stress of having to deal with his debt obligations. Unfortunately, people are often unprepared for such a situation, which leaves them vulnerable to creditors. Although you don't have to prepare a game plan the day after your spouse passes away, once the creditors begin calling, you should be prepared to deal with them. Know your rights and understand which obligations you're responsible for and which ones aren't your problem.

Instructions

    1

    Compile a list of all your obligations. Break them down into your debts, your deceased spouse's debts and joint debts.

    2

    Retrieve your spouse's records. Look for initial applications and agreements with his various creditors. Review the terms of each agreement, specifically what happens in the event of the obligor's debt. Prioritize the debts that are secured by collateral such as your house, car or other possessions.

    3

    Contact each secured creditor, starting with the highest-priority debts. Explain to the company that your spouse has died and you're not able to pay the obligation. If you're a co-signer on the account, you're still liable. If the account is secured, the lender has the right to the collateral. If the creditor won't cancel the debt, work out a modified repayment program to fit your capabilities.

    4

    Contact each unsecured creditor. Explain to the debtors that your spouse has passed away and request that the obligation be charged off. If you are not a co-signer and the creditor has no collateral, it has no recourse to make you pay the debt.

    5

    Obtain your own financing to satisfy what debts remain that you can't pay on your own. If you can't work out an agreement with the secured creditors, alternate financing may provide you relief while allowing you to keep your possessions.

Unsecured Debt & Statute of Limitations in Maryland

Unsecured Debt & Statute of Limitations in Maryland

Statute of limitations on unsecured debt in Maryland determine how long debt collectors have to successfully sue you in court for an unpaid debt. Once the statute expires, the debt collector can still try to collect from you--but not in court.

Time Frame

    The statute of limitations in Maryland is three years for all unsecured debt except for promissory notes, which have a six-year statute of limitation, according to the credit website BCS Alliance. However the state of Maryland website advises that while the statute of limitations is generally three years, certain language in credit account contracts can extend the statute of limitations to as much as 12 years. The state advises you to consult with an attorney on your specific contract.

Considerations

    Statute of limitations in Maryland can be reset in a number of ways. New activity on the account resets the statute of limitation. For example, each time you make a partial payment the statute can be reset to the beginning--giving the debt collector at least three more years to pursue you in court. The statute of limitation can also be extended if you enter into a payment plan, or if you simply contact the creditor to discuss the status of the account.

Misconceptions

    A debt in Maryland that is beyond the state's statue of limitations can still be reported on your credit report in some instances. Credit reporting is regulated by the Fair Credit Reporting Act, a federal law that is separate from the Maryland state statue. Old debts can be reported on your credit report for a minimum of seven years, regardless of the statute of imitations.

My Wages Were Garnished: How Can I See How Much More I Have to Pay in Order to Be Finished Paying?

If a garnishment was issued against your wages, your employer is supposed to withhold the required amount from your paychecks until the garnishment is released---when you finish paying off the debt or the issuing agency tells your employer to stop the withholding. Only a specific portion of your pay is withheld to satisfy the wage garnishment each pay period. To ensure proper withholding, you should keep track of the deductions.

Instructions

    1

    Check your pay stub. Whether or not state law requires it, most employers give employees a pay stub, which show wages earned and deductions paid for the pay period. Your pay stub likely has your wage garnishment deductions for each pay period and the year-to-date information. If so, deduct the year-to-date garnishment amount from the total balance due.

    2

    Ask your employer for a copy of your deductions, which includes garnishments. If your employer does not give you a pay stub or if it does not include year-to-date information on your pay stub, ask for a record of your garnishment withholding so far and subtract the total from the amount due.

    3

    Calculate the balance yourself if you cannot obtain the deduction information from your employer. Depending on your state, your employer might be required to give you a copy of the garnishment order once she receives it from the issuing agency. In some cases, a process serves you a copy of the garnishment, which includes the calculation that your employer is supposed to use to determine your garnishment deduction each pay period. Multiply the amounts you have paid thus far by the number of pay periods so far in the year, then deduct the result from your total balance due.

    4

    Contact the issuing agency or creditor directly. Your employer is supposed to send your garnishment payments to the party listed on the garnishment order. For example, if you owe a credit card debt, she likely sends your payment to the creditor who initiated the garnishment. The creditor can tell you the amount received so far and what you still owe.

Friday, July 15, 2005

Can Someone With a Judgment Against You Repossess Your Car?

When an individual owes a creditor money and then becomes delinquent in repaying the debt, the creditor may seek a civil judgment against him in court, one that legally orders the debtor to pay the money he owes. The creditor can receive a civil judgment by filing a motion in a court of law. If he receives it, he is then allowed to take a number of collection actions. If, however, the debt is secured by a car, the car cannot be seized.

Repossessions

    When a person takes out a loan to purchase a car, the car generally acts as collateral on the loan. The loan contract will often grant the lender the right to repossess the vehicle under certain circumstances, such as if the borrower falls behind in his payments. Depending on the law of the state, a lender may need to receive a judgment against the debtor before seizing the vehicle. In many cases, however, the lender may seize the vehicle with such an order.

Unsecured Debt

    A loan in which the borrower offers a specific asset as collateral is known as a secured loan. When a loan is secured, the creditor is generally allowed to seize the collateral. If, however, a person runs up an unsecured debt with a creditor, the creditor is not allowed to seize the debtor's property, including his vehicle. An exception would be during a Chapter 7 bankruptcy in which the individual's assets may be liquidated and the proceeds distributed to creditors.

Liens

    Although a creditor cannot directly seize a person's assets, including a vehicle, even after receiving a judgment against him, this does not mean that the creditor cannot petition a judge to place a lien on the debtor's property. If a judgment grants a creditor's motion to have a lien placed on a person's vehicle, then the debtor will be prevented from selling the car without first paying off the lien.

Illegal Repossession

    Technically, a creditor can seize a debtor's car without receiving a court order to do so or without a contract granting him the right to seize it. This would, however, be illegal. If a creditor does illegally seize a debtor's property, this constitutes a violation of the federal Fair Debt Collection Practices act, as well as various state laws. If this occurs, the debtor has the right to take the creditor to court and seek possession of the car, as well as damages.

How to Sue for Violations of the FDCPA?

The Fair Debt Collection Practices Act protects consumers from abusive, illegal and harassment tactics by creditors, including collection agencies. The FDCPA has numerous provisions for creditors. For example, a creditor cannot threaten you with jail or with a lawsuit if the creditor has no legal standing or intention to sue. You can sue a debt collector who violates the act, as the laws provides for up to $1,000 for each violation.

Instructions

    1

    Make a detailed list of all creditor contact. Include dates and times the creditor called and a conversation summary. Keep all correspondence from the creditor. Make copies of all letters to the creditor before mailing. Copy the list and any other evidence -- such as harassing voice mails from the creditor -- of FDCPA violations.

    2

    File a complaint with the Federal Trade Commission online at the official website or call 877-382-4357. Get a copy of the complaint.

    3

    Ask witnesses for sworn statements. For example, if a co-worker heard repeated calls from the collection agency after the agency was told not to call at work, ask the colleague for a statement covering the facts and dates and times of the calls. Make copies.

    4

    Locate a copy of the FDCPA. Visit the official website of the Federal Trade Commission to get a copy online. Visit the local library to view federal law books containing the act.

    5

    List each violation of the FDCPA, using the act as reference. Write down the exact section, number and letter of each provision of the act the creditor violated.

    6

    Locate the small claims court with jurisdiction over the case. Use the court with jurisdiction over the collection agency's address.

    7

    Go to the small claims court. Bring the FDCPA violations list. Ask the court clerk for the small claims form.

    8

    Complete the form. Forms vary by area, but you commonly need the business's name and address, the nature of the lawsuit and the requested damages. Damages vary by case, but you can sue up to the small claims limit. Use the violation list to list the violations and the matching FDCPA provisions on the form.

    9

    File the form in court. Ask for a stamped copy.

Does Rent-to-Own Help Your Credit?

There are situations in which rent-to-own agreements can help a renter build credit, but renters will likely need to search for those opportunities. Rental information often isn't included in consumer credit reports, which means a good rental payment history may not bolster your credit rating.

Rental Stores

    Rent-to-own agreements for appliances, furniture and other items may not help you build a good credit history, since rent-to-own stores usually don't report a person's payment history to credit bureaus. There are exceptions, so shop around by calling rent-to-own stores in your area and asking if they report customers' payments to credit bureaus. It's best if they report to the three major bureaus: Equifax, Experian and TransUnion. You also should ensure that a store's rental contract specifies that it reports customers' payments to credit bureaus before you sign it.

Rental Homes

    Some homeowners initiate rent-to-own contracts that give tenants the option to purchase a home after a specified period. A portion of a tenant's rent payments usually goes toward purchasing the home. However, homeowners generally don't report a tenant's monthly payments to credit bureaus. Experian is the only major credit bureau that includes home rental payments in consumer credit reports. Experian's rental information generally comes from large property-management companies, not individual homeowners who initiate rent-to-own agreements for their homes.

PRBC Credit Data

    Tenants who have a rent-to-own agreement with a homeowner may be able to convince the homeowner to report their rental payment history to the PRBC credit-reporting agency. PRBC specializes in alternative credit data on home rental payments and other monthly payments that major credit bureaus don't track. Having a good payment history on file with PRBC could help you secure loans with lenders who are willing to consider that data when evaluating your creditworthiness.

Considerations

    There are other methods for establishing a good credit history if you can't get a rent-to-own agreement that helps you build credit. For example, consider getting a secured credit card with a company that reports its customers' payment history to the major credit bureaus. Secured-card issuers usually require customers to deposit a specified amount of money into a savings account. That money establishes a credit line for the cardholder, and cardholders use secured cards just like regular credit cards. Make your monthly payments on time and keep your balance low to build a good credit history with a secured card.