June 2006 ~ Credit And Debt Management

Thursday, June 29, 2006

Debt Settlement Laws

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An excessive amount of debt can lead to a settlement offer, in which you agree to pay a lump-sum amount to a creditor, who writes off the rest of the debt. Settlements typically are between 20 percent and 75 percent of the balance.

If you settle your credit card debt, you might be required to report the amount that's forgiven as taxable income. For example, if you settle a credit card balance of $8,000 for $5,000, you might have to report the remaining $3,000 as taxable income.

According to the IRS, if you are insolvent, meaning your liabilities exceed your assets, you do not have to report your settled debt as taxable income. You must be insolvent during the time in which you settle your debts.

When you file a petition for bankruptcy, which can wipe out the majority of your unsecured debt, you do not have to report your settled debt as taxable income. Unsecured debt does not have any collateral pledged as repayment for the loan; credit cards are examples of unsecured debt.

When you report settled debt or forgiven debt as taxable income, you might be entitled to a refund if you pay back all or a portion of it. An amended 1040X statement must be filed within three years of the original filing date or two years after you paid the taxes.

If you have mortgage debt that has been forgiven, you are not required to include it as taxable income, thanks to the Mortgage Debt Forgiveness Act, enacted in 2007. It continued under the Emergency Economic Stabilization act in 2008 and remains in effect until 2012.

The activities of debt-settlement companies are forbidden in 12 states if they operate as for-profit organizations. The states that won't permit them to do business are Arizona, Georgia, Hawaii, Louisiana, Maine, Mississippi, New Jersey, New Mexico, New York, North Dakota, West Virginia and Wyoming.

How to Fix Collections on Your Credit

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Many people struggle with collections on their credit reports and the challenge in fixing, removing and rebuilding their credit seems impossible. Until you fix your credit, you may have a hard time getting loans, or getting low interest rates on loans. There are several tested procedures used by credit repair specialists that you can use to fix collections on your credit.

Instructions

Request a current credit report for the year to review collection account details including debt owed, date reported, contact information and repayment options.

Contact the original creditor's recovery department. Discuss repayment options available with the company then establish a repayment agreement. Use a voice recorder to record the phone call for proof of contact.

Request a notarized letter with the company's account manager, financial director or recovery manager's information on it, stating the terms of the agreement. The letter is proof of your agreement for future negotiations and in case the company does not follow through.

Send the first payment scheduled through the agreement, after receiving the notarized letter. Send the check using a service with delivery confirmation. Photocopy the letter, check or money order, tracking number and delivery confirmation for your records.

Complete the payment agreement in its entirety; and contact the original creditor to remove the collections account with the debt recovery firm.

Provide the account number issued on the company's correspondence; inform the collections agency of the completed payment with the original creditor.

Request that the collections agency remove the former account from your credit report by informing the credit bureaus. Also, contact the creditor to follow up on this step.

Allow two to five weeks for all actions to be taken care of by all parties---original creditor, collections agency and credit bureaus.

Request a confirmation letter regarding the reconciliation of the account for your records.

If there are blemishes from the paid account, contact the credit bureau to appeal the credit reporting of the collections agency.

Dispute the information and wait for the results in 30 days. By this time, the credit bureau will investigate the contents of the account and ask the collections agency for verification that the account is valid.

Prepare an appeal letter with photocopies of the payment agreement with the original creditor, letter of notification to the collections agency and the confirmations of each delivery to both parties. The credit bureau will investigate the situation then proceed to remove the collections account from your credit report.

Government Grants for Debt Assistance

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Economic difficulties, including injury and illness, could force you into debt that becomes a crushing burden. Most people try to pay off the debt as best as they can, sometimes seeking assistance from family and friends; others decide to file for bankruptcy. However, under certain circumstances the federal government can provide assistance through a grant, low interest loan or other programs that can reduce or eliminate your debt load.

Identify the government department that might have a grant or assistance program that fits your situation. For example, if you own a business and you have credit card debt that you can identify as costs related to your business, you might get assistance from the federal Small Business Administration. The SBA has programs that can provide funds to assist in the refinancing of your credit card debt as long as you can show that the debt is related to your business (see Reference 1).

One such program is the ARC, or America's Recovery Capital, loan, part of the American Recovery and Reinvestment Act passed by Congress early in 2009. To qualify for this loan you need to show that your business is suffering hardship, that you have an established relationship with a bank and that your small business has been in operation for a minimum of two years. Moreover, you must produce financial statements to show that your cash flow projections for the next two years are sufficient to pay your loans.

If your business has accepted a Small Business Administration direct or guaranteed loan, you may be able to defer loan payments, reduce the interest rate or receive other credit or financial assistance if you are a member of the National Guard or the armed forces Reserves (see Reference 2). You can also receive relief if you are saddled with a student loan or you owe as a result of medical costs.

Determine the reason for your debt--student loan, business, health costs, tuition fees, car loan, home improvement, etc. and then visit the website of the federal government (see Reference 3) or the federal government's grants website (see Reference 4). These sites include a search engine that allows you to search for grants or other assistance programs related to your situation. It is imperative for you to identify a specific program or programs so that you can ascertain the requirements and whether your situation meets them.

The federal government agency to which you apply will review and approve or not approve your application for assistance. If you apply for a state grant, the state's Office of Social Service oversees the review and approval process. They base their decision on the financial need of the applicant, so you will need to prepare for applying by gathering records and documents concerning your current income, outstanding debt, monthly debt payments, sources of the debt, etc. The program you find that fits your situation will also provide information on documentation and other information it will require to review your request.

Contact the agency or department that offers the grant or assistance you have targeted and ask it how to apply. There are also organizations that can be found with an Internet search that will help you identify a grant program that fits your condition and will assist you, for a fee, in actually applying for the assistance.

How to Avoid Excessive Debit

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Developing a reasonable budget and sticking with it is one of the best ways to avoid excessive debt, according to the Federal Trade Commission. People who buy on impulse and live paycheck to paycheck risk building excessive debt. An unexpected major repair, job loss or illness can lead to overspending on credit cards and a mountain of debt that could lead to bankruptcy. Spending conservatively while saving as much money as possible helps avoid financial problems.

Instructions

Avoid paying for purchases with cash or debit cards whenever possible. Paying with cash helps avoid impulse buying brought on by easy availability to credit. Carry one credit card with a low balance for emergencies while leaving others at home.

Carry low balances on all revolving credit. Ideally, pay off all credit cards at the end of each month, or if you carry a balance, make sure it is no more than about 10 percent of the credit limit on each respective account. That means your balance should never exceed $300 on a credit card with a $3,000 credit limit.

Put down large down payments on big-ticket items such as a new home or automobile. If possible, pay more than standard 20 percent down on a new home purchase. Pay as much down as possible on a new car, or ideally, purchased a used car for cash.

Make biweekly payments, if possible, on installment loans, car payments and even mortgages. Biweekly payments help pay down debt faster because you'll make 26 payments over the course of the year while paying biweekly, as compared to 12 with monthly payments.

Save regularly while keeping three to six months' take-home pay in the bank at all times. This can help you avoid having to borrow money in the first few months after a job loss.

Does Child Support Seize My Tax Refund?

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When it comes to overdue child support payments, the government does not fool around. Creditors are not allowed to take your tax refund check directly from the government, but if you owe money for child support, the government makes an exception to this rule. Moreover, other assets you own and benefits owed to you can also be taken to make up for your late child support payments.

If you are in arrears on your child support payments, your tax refund check can be seized in two separate ways. Your ex-spouse can request that the government directly seize your tax refund, in which case you will not receive a refund check from the government. If you do receive a refund check, your money can be garnished from your bank account once you deposit it.

Tax refund checks are sent by the U.S. Department of Treasury. Congress has authorized the Treasury Department to manage the federal Refund Offset Program. This program can withhold your tax refund money if you owe back taxes to the federal government or your state government as well as back child support payments.

If you receive a financial judgment against you, your creditors can legally take, or garnish, some of your assets to make good on your unpaid debts. Certain benefits are protected from creditors, including Social Security money, money you hold in your retirement accounts, and other state and federal benefit money. The government makes an exception to these exemptions, however, if you owe money for child support.

If you owe child support money, a portion of your wages can also be garnished. The Consumer Credit Protection Act sets limits on how much of your pay can be garnished to pay your debts. In most cases, your creditors can seize only 25 percent of your paycheck. If you owe money for child support, however, 50 percent of your pay can be garnished if you are currently supporting a spouse or other children, and 60 percent if you are not supporting other dependents.

What Are Assets in a Judgment?

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With many Americans struggling with debt as of 2011, judgments against debtors happen on a daily basis. When this happens, a judge gives an award to your creditors, who are able to use some of your assets to collect what you owe. However, creditors can't simply waltz into your home and take whatever they like --regulations specify what a creditor can try to seize.

In the broadest scope, assets in a judgment may include anything you own. This is because creditors have the legal right to any item you use as collateral when you try to obtain credit.

Under most state laws, certain items are exempt from being considered an asset in a judgment. Usually this includes the same items that are exempted under bankruptcy. Items typically exempted include your homestead and furnishings, retirement funds, clothing, life insurance, vehicles and tools you use for work. Another common exemption includes Social Security. Notably, every state has different exemption laws, so you need to check with a debt attorney for your jurisdiction to find out what applies. There are limits on the dollar value to exemptions you file, which again vary by state.

Most states are separate property states. This means that the government treats everyone as individual entities financially and makes everyone responsible for their own debt. In these states, creditors cannot seize the property of a spouse, unless the property is joint and the person who did not acquire the debt doesn't claim the percentage of the property in court. A few states are community property states, which means that couples are treated as one financial unit and that courts can hold each person responsible for the debt acquired by their spouses. If you live in a community property state and do not have enough assets to cover your debt in a judgment, creditors legally have the right to look to the assets your partner has.

Sometimes the assets a judge would award a creditor do not have a value sufficient to pay off the entirety of your debt. In these cases, creditors often simply write off the debt you still owe, even if they're entitled to much of what you have. It depends on how much the creditor has to pay in legal fees when compared to the assets available. In addition, if you think that a creditor is going to take you to court, it is to your benefit to try to negotiate with the creditor. Creditors sometimes work with you to avoid the cost of suing. Lastly, keeping receipts for your property can prevent creditors and the courts from assessing property at a lower value -- this is important because a higher property value means an asset pays off more of your debt if it is seized.

How to Appeal to a Collection Agency to Deal

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Effectively negotiating with a collection agency to clear or reduce a debt will depend on your ability to negotiate, your ability to pay and your knowledge of collections laws. Knowing your financial situation and how much you can actually afford to pay each month, as well as what the agency expects to collect, will give you an edge for negotiating the best deal for yourself. You need to be as confident and knowledgeable as the agency that wants to collect from you in order to be successful.

Instructions

Determine the age of the debt and research the collections statute of limitations for your state. In some cases, the statute of limitations in your state may have passed, making it illegal for either creditors or collections agencies to actively pursue you for payment. Usually this limitation is three years, but each state has different laws. Keep in mind that if you have agreed to pay money against a debt or have actually made a payment against a debt, the statute of limitations defense may be null and void.

Make a budget. Before you contact the collection agency and commit to payments that you can't afford, sit down and take a realistic look at the money coming in and the money going out. Collection agencies are notorious for trying to collect as much money as possible as quickly as possible and are very good at what they do.

Analyze your debt. The first thing to understand about collection agencies is that there is a built-in expectation to collect much less than what is owed. As a matter of fact, the older the debt, the less likely an agency is going to be successful at collecting it. When beginning your negotiations with the collection agency, know that they will aim high. You should start your negotiations low, at around 25 percent of the debt owed, so that you will meet in the middle.

Offer to pay more in exchange for removal of the collection item from your credit file. More important than getting the collector off your back is getting your credit back in order. It is well worth paying a few extra dollars to the agency to have the item completely removed from your credit report. Having the account marked "Paid Collection" is not good enough. Request that the item be removed from your credit report and get the company's agreement in writing.

Cosigner's Rights & Responsibilities

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When a borrower applies for a loan or credit, lenders check the borrower's credit score to assess the likelihood that he will fail to make payments on the debt. Borrowers may have poor credit scores for a variety of reasons, such as having a short credit history, a track record of missing debt payments or a past bankruptcy, which can make it difficult to get approved for new debt. Loan co-signing is a process where a third party agrees to pay for a debt if the primary borrower fails to pay.

Lenders may be willing to approve loans or credit accounts to risky borrowers if they are able to get a co-signer that has good credit history and a dependable income. Young people like college students or recent graduates typically have short credit histories and may have difficulty getting a loan; co-signers are often parents or other relations of those with low credit scores.

When a borrower co-signs a loan, he becomes responsible for the payment of the loan. If the primary borrower fails to pay the loan, it falls to the co-signer to pay back the loan out of his own pocket. According to Wells Fargo, a co-signed loan becomes a part of the co-signer's credit history and includes late payments made by the borrower, meaning co-signing a loan can hurt the co-signer's credit score. If the primary borrower declares bankruptcy or dies the co-signer may still be responsible for paying back the loan.

The rights of a co-signer vary from one case to another depending on the terms of the loan, but oftentimes co-signers have few rights. The U.S. Federal Trade Commission advises co-signers to get copies of documents including the loan contract, the Truth-in-Lending Disclosure Statement and warranties and to get the lender to agree to notify you if the borrower misses a payment. However, lenders are not required to give copies of documents to co-signers or to notify them about missed payments. In the case of student loans, lenders may agree to release the co-signer form responsibility for paying the loan if the student dies or becomes permanently disabled.

The Federal Trade Commission warns that co-signers often end up paying for debts and that when you co-sign you essentially take on a risk that a lender isn't willing to take on itself. In addition, you may be responsible for paying late charges, and the lender can potentially sue you to collect payment.

Can a Grandchild Inherit a Grandparent's Debt?

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After a relative dies, there is often a lot of paperwork to sort through. If you discover that a grandparent died while in debt, you need to forward any bills, promissory notes or contracts to the state executor. You are not responsible for paying the debt, but the grandparent's creditors have a right to compensation from your grandparent's estate.

In the United States, debt is not inheritable. If your grandparents die while in debt, it is up to their creditors to try to secure payment from their estate. You are not required to pay off their debts from your personal funds. The creditor cannot harm your credit by reporting their debts as yours to credit bureaus.

The only instance in which you might be liable for your grandparents debts is if you cosigned for a loan or took out a joint credit card with one or both of your grandparents. In such cases, you are expected to pay off the debt because of your status as a co-debtor.

After someone dies, the executor or administrator of his estate must identify all the assets and debts of the deceased. Debts should be paid directly from the assets of the deceased. After your grandparents die, the person in charge of settling their estate should ensure that their assets first go toward paying their debts. If your grandparents leave behind a considerable amount of debt, their assets may be sold to compensate their creditors. The sale of their assets may be required even if they have left those assets to their heirs in their will. However, neither you nor any other heir is responsible for paying any debt balance left after your grandparents assets are liquidated for the purpose of paying off creditors.

After a relative dies, you and other family members may receive calls from people claiming to be debt collectors. In some cases, these "debt collectors" are nothing more than con artists who got your family's name through death notices or other public records. They may try to intimidate you into paying your relative's debt, even though you are not legally responsible for it. In other cases, legitimate debt collection agencies may contact you about debt repayment. In both cases, you should not agree to pay any debt, and you should direct the caller to the executor or the administrator of the estate. Even legitimate debt collectors sometimes try to persuade you to pay a debt on behalf of the deceased relative. If this happens, refer the collector to the estate's executor. If collectors persist in calling, exercise your rights under the Fair Debt Collections Practices Act and send them a letter via certified mail telling them not to contact you again.

How to Break a Contract With Credit Solutions

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Credit Solutions is a debt settlement company. They will contact your creditors and make settlement offers anywhere from 20 to 50 percent of your total outstanding debt. The fee charged is 15 percent of your total outstanding debt. There is no contract but there is an agreement that you sign. There is a process to complete if you want to cancel the agreement. You will not be penalized or subjected to any type of fee when you cancel. Credit Solutions does not waive fees such as late charges and they do not negotiate a lower interest rate for you.

Instructions

Determine how you will cancel the agreement. There are a couple of ways to cancel your agreement. You can call in and speak to a representative or you can fax some information in to the company.

Review the cancellation form and fax it it to Credit Solutions at (800) 768-0368. Any arrangements the company had with your creditors will be canceled. Once Credit Solution receives the form they will send you an email which confirms your cancellation.

Alternatively, call Credit Solutions at (888) 646-1424 and ask for client relations. The client relations representative will take the steps necessary to cancel your agreement. Once your agreement has been canceled Credit Solution will send you an email that confirms your cancellation.

Find out about funds paid into the program. Any money that you have paid into the program will not be refunded. Payments you have made go towards the settlement and repayment of your creditors as well as the fees charged by Credit Solution.

Contact your creditors and let them know you are no longer part of the Credit Solutions program. Payment arrangements will need to be made with all of your creditors.

Does Loan Preapproval Affect a FICO Score?

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Before shopping for a home, prospective home owners often visit one or more lenders and obtain a letter of preapproval for a home loan. A lender preapproves a home buyer after examining the prospective borrower's finances and credit history and determining the terms under which he would would issue them a loan. A loan preapproval itself does not affect the borrower's credit score, but a credit check run before the preapproval likely will drop the score by a few points.

Preapproved loans are sought by prospective buyers for two reasons. First, receiving a preapproved loan gives them an idea of how much the purchase of a house will cost. Second, showing a preapproved loan letter to house sellers may help convince the sellers the buyers can afford the house, making them more attractive candidates. To issue this letter, lenders must examine a number of documents related to the buyers' finances, including his credit report.

When a lender examines the credit report of a prospective borrower seeking a loan, this check is known as a "hard" inquiry. A hard inquiry is defined as an inquiry performed because a borrower is considering taking out additional credit. Each hard inquiry results in a person's credit score dropping several points. This is because credit reporting agencies interpret the fact that an individual is seeking new credit as an indication he may default on his current loan.

Only the inquiry made by the lender is reported to the credit reporting agency. A preapproved loan is not reported to the credit reporting agency unless the borrower agrees to its terms and decides to take out a loan. For this reason, only the inquiry affects an individual's credit score. The drop will be small--generally only several points--and lasts only a short time.

While shopping for a loan, prospective borrowers may apply to or request preapproved loans from a number of lenders. Each time the lender probably will run a credit check. However, multiple credit checks from similar lenders within a short period of time generally count against a person's credit score only as much as a single credit check. This is because credit reporting agencies interpret these checks as a sign that the individual is shopping for a loan, not preparing to take out multiple new lines of credit.

Guidelines for Debt Issues

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It's easy to rack up debts without thinking about how much debt actually costs and how long it takes to pay off balances. Not having a debt-management plan can lock you into paying high-interest credit cards and loans for years. At times, it may be worthwhile to abandon conventional wisdom about savings and investments to reduce a debt load.

The order in which you pay off credit-card debt can help you save money in the long run. There's more immediate gratification in paying off the card with the lowest balance first because you can get to a zero balance faster. However, you'll save more money by paying off the card with the highest interest rate first. Credit cards can have interest rates that exceed 20 percent, and people who've had past credit problems could be paying rates that are closer to 30 percent. The longer such high rates accrue on your credit-card balance, the harder it's going to be to pay off the debt.

Some people pay more than the required monthly payment on mortgages and student loans for the satisfaction of watching the balances on these typically large debts drop quicker. However, paying down those loans before paying off credit cards, car loans and other high-interest debts may not be the best option, reports MSN Money. Mortgages and student loans usually have lower interest rates than credit cards and car loans. Furthermore, the interest paid on home and student loans is often tax-deductible, which allows borrowers to recoup some of their costs. Consumers should focus on paying off high-interest, nondeductible debt first.

It's worthwhile to make more than the required minimum payment each month if you can't afford to pay off a high-interest credit card or loan. Your goal should be to pay off high-interest debt as soon as possible. Bankrate.com and other websites provide calculators that can give people a reality check about making low monthly payments on credit-card debt (see Resources). For instance, it would take 20 months to pay off a card with a $500 balance and a 19-percent interest rate if you made a monthly payment of $30. Yet the card would be paid off in nine months if you increased the monthly payment to $60.

Financial professionals often advise consumers to save money for emergencies. That's sound advice, but some financial experts note that it may be wise to cash out savings or investments to pay off high-interest debts. For example, a person's investments would have to pay out 18 percent before taxes to match the money being paid out on a debt with a 12-percent interest rate, reports The Motley Fool. Savings accounts especially don't provide such high returns. While savings and investment accounts don't offer guaranteed returns, consumers are guaranteed to save money by paying off high-interest debts.

How Long Until Debt Clears?

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Debt is seldom a good thing, because it reduces the amount of disposable income you have for financial emergencies and makes you less financially stable. However, proper debt management, along with state regulations, usually help your debt clear. How long it takes for this to happen varies according to your state, the type of debt, the debt management techniques you use and the amount of the debt.

Regulations regarding how long you can be sued for a debt vary based on your state as well as the type of debt. It is possible for a creditor to sue you for a debt that is up to 15 years old in some cases. However, most debt clears in three to six years.

The statute of limitations on debt -- that is, the time after which a creditor can't file a lawsuit to recover debt -- varies by state and on the type of debt. However, the statute of limitations is separate from your credit history. Even though a creditor may lose his right to sue you to recover debt in as little as two years in some cases, negative reports from a creditor can remain on your credit report for up to seven years. This means your ability to obtain new financing and lines of credit might be affected even after a creditor stops pursuing the debt.

Creditors who have obtained a judgment against you sometimes can renew the judgment, depending on the regulations in your state. The time that must elapse before a judgment can be renewed varies. However, creditors often can renew as many times as they like. As a result, you could owe a debt for the rest of your life.

Having an uncleared debt does not mean you cannot qualify for financing or lines of credit. However, obtaining credit may be difficult as a result of a higher debt-to-income ratio and the adverse effects on your credit rating. Creditors and credit bureaus may drop negative items associated with debt from your credit report before the seven-year mark if they believe the negative item no longer is relevant. Even if there are negative items on your credit report, you can help your situation by paying the debt off with consistent payments, closing the account and requesting the creditor indicate the account was closed at your request. Refinancing, debt consolidation and other debt management methods also affect how long it will take to eliminate your debt and repair your credit.

Debt Repayment Methods

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Personal debt, whether it be in the form of credit card debt, student loans or bank loans, is a huge problem in the United States. Students are borrowing thousands of dollars to pay the cost of tuition with no guarantee of finding a job after graduation and many under- and unemployed Americans use credit cards regularly just to get by. For those who already have debt and are in a position to start paying the money back, there are a few methods to consider.

The first step in any debt reduction plan is to stop accruing debt. If the debt is in the form of student loans and you are still a student, you may not be able to focus on reducing debt until you have graduated and found steady work. In the case of credit card debt, the first strategy should be to stop charging on those cards completely. You will not be able to reduce debt if you are still adding to that debt. Examine your income and decide a dollar amount you can comfortably dedicate solely to reducing the amount owed on the cards. Take into consideration how much money you need monthly for living expenses, food, gas and utilities; then decide on a dollar amount to pay monthly toward reducing your debt and stick to it.

Look at the interest rates on your credit cards.

In the case of credit card debt, people usually owe on more than one card. The first step to take is to stop using any of the cards and examine the interest rates. The card that has the highest interest rate should be the card you focus on first. This will save money in the long run, even if that card is not the one with the biggest balance. Most often, the card with the highest interest rate is a store charge card. Store charge cards typically have exhorbitant interest rates that the merchant will not reduce. These may be cards you can do without. An average person should have one to two major credit cards in order to maintain a decent credit score and in case of unforseeable emergencies.

Once you've graduated, whatever agency lent your student loan money will put you on a repayment schedule usually based upon your income. If the situation is such where you have multiple lenders, it may be beneficial to consolidate those loans with one lender. This locks in an interest rate for all loans for the duration of the loan. Unconsolidated loans are often subject to interest rate fluctuations and usually increases. When considering loan consolidation, consult a loan advisor to determine if this is the best course of action for you. If you decide not or are unable to consolidate, always pay off private student loans before paying federal. Private student loans always have higher interest rates and cannot be put into deferment if you should fall on hard financial times in the future and are unable to make the payments.

Can You Be Sued for Unpaid Credit Cards?

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If you are overwhelmed by credit card debt, you should be aware that you can be sued by credit card companies. After a creditor wins its lawsuit, it can take steps to collect its judgment, including wage garnishment, asset seizure and property liens.

A creditor has the option of suing to collect a debt, provided it does so within the statute of limitations for filing a lawsuit in your state. Each state sets its own statute of limitations for collecting credit card debt, which can range from just a few years to a decade or more. Lawsuits cannot be filed after the statute of limitations has expired.

If you are successfully sued for credit card debt, your credit report will likely list both your delinquent credit card account as well as the judgment, causing further damage to your credit.

Even though it is legal for a credit card company to sue you for an unpaid debt, you cannot be sent to jail for owing a debt. If a bill collector working for a credit card company threatens you with jail, he has violated the federal Fair Debt Collection Practices Act, and you may have grounds to sue the bill collector for violating your rights.

Can You Garnish on Credit Card Debt in Nevada?

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When a person takes out a credit card, allowing him to make loans against a line of credit, he runs the risk of incurring steep penalties and fees if he fails to pay the loans on time. When this happens, the person may find himself up to his neck in debt, at which point he may face severe collection actions from his lender. In Nevada, this can include garnishment.

A loan made against a credit card constitutes a legally binding debt obligation incurred by the borrower. The borrower must pay this money back within the time specified by the contract he signed with the credit card company. If he doesn't, he can be sued, because he has breached a legal contract. In Nevada, the credit card company has a right to receive damages in the amount that the borrower owes it.

One of the ways in which a credit can secure payment from a debtor is through wage garnishment. In order to to garnish -- i.e., forcibly seize a portion of -- a person's wages, a credit card company must first receive a writ of garnishment from a civil court judge. To receive this, the credit card company must first bring a lawsuit against the debtor and win it, after which he receives damages.

Not all states allow companies to garnish wages for private debts. However, Nevada does. Not only can a credit card company garnish the wages of an individual, but it can also attempt to seize money directly from his bank account. However, while a creditor can garnish wages and seize bank accounts in Nevada, there are certain limits on what can be garnished and how much. For example, a creditor can only garnish a maximum of 25 percent of a person's wages.

While a credit card company can legally sue a late payer for defaulting on the loan, it may not necessary do so. Garnishment can be experience, as the company must bear the legal cost of a lawsuit, so many companies forgo it. In addition, the creditor cannot garnish most kinds of government benefits, including Social Security payments. In addition, some low-income people may enjoy protection from garnishment, particularly if they are supporting dependents.

Can a Credit Card Company Sue Me if I Can't Pay?

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When a borrower does not pay back their loans on time, a credit card company has a number of options to try to secure repayment. These include filing suit against the borrower, even if the borrower is indigent.

Credit card companies are legally allowed to seek payment in a court of law. According to the Home Buying Institute, this can be done by bringing a petition to a judge demanding that the borrower make good on his debt. After hearing the case, the judge may order the borrower to pay. If this fails, the judge may order the borrower's wages garnished or a lien placed on his home.

According to BankRate.com, while a credit card company can legally sue you for non-payment, this does not mean that they will. Instead, the credit card company may consider it financially preferable to sell your debt to a collection agency, who will then set about seeking payment from you.

While a credit card company can sue you, they can initiate no criminal action against you. The United States does not have any equivalent to debtor's prisons, in which those who cannot pay back a debt are incarcerated. However, although debtors cannot be sent to prison for a failure to repay a debt, they can be locked up for refusing to pay if they have the means.

Can You Get Off a Note That You Co-Signed?

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Getting off a note that you co-signed is difficult, but there are some options. A note requiring a co-signer is a loan. Young adults finishing college sometimes purchase their first new car with an automobile loan co-signed by one of their parents. Other people qualify for home mortgages with the help of a co-signer. Lenders usually require co-signers only for people with poor credit or those who have yet to establish an acceptable credit history.

Co-signers assume complete responsibility for the loan if the primary borrower defaults on the loan agreement. Some loan agreements may allow the lender to declare a default after the first missed payment. However, the lender usually steps up collection efforts from the primary borrower before demanding payment in full on the loan from the co-signer.

Some people who co-sign decide that they no longer want the responsibility. Some may fear that the primary borrower may indeed default on the loan, leaving the co-signer with a debt he cannot afford. But lenders have no reason to release a co-signer from a loan obligation just because the co-signer asks. That's not in the best interests of the lender, which approved the loan because of the guarantee by the co-signer. Without that guarantee, the lender has no one but the borrower to hold responsible for the note.

The easiest way to get off a note that you co-signed is to convince the primary borrower to refinance the loan in his name only. That could be challenging, however. The primary borrower does not have to agree to refinance the loan, and there are no legal options for forcing the borrower to do so. Also, the primary borrower may lack the credit qualifications necessary for a new loan.

Filing for personal bankruptcy is the only other option for getting your name off a note that you co-signed. Bankruptcy automatically strips away your responsibility as a co-signer on all loans. However, bankruptcy also ruins your credit, with the bankruptcy filing remaining on your credit report for a minimum of 10 years. That makes filing for bankruptcy too big a price to pay for most people whose only financial issue is attempting to end their obligation as a co-signer.

A co-signer who cannot escape responsibility for a loan should monitor the primary borrower's payments on the loan. For example, the lender may agree to notify you if the borrower misses a payment. Such notices will not end your responsibility for the loan but will alert you to possible financial problems for the primary borrower. With that information, you can contact the primary borrower to discuss the situation. Having to make a payment or two while the primary borrower works through a temporary hardship is preferable to having to pay the entire loan after a default.

Do Credit Card Debt Programs Really Work?

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Many consumers find themselves knee-deep in debt and unable to get a handle on their personal finances. Several debt repayment programs exist to help consumers get free from debt. Some programs, such as credit counseling, help consumers repay the debts themselves. Other programs, such as debt settlement and bankruptcy, allow consumers to settle their debts for less than what they owe. All debt programs work to some degree.

Debt counseling services help consumers create payment plans to pay off their debt. For a fee, the consumer can work directly with a counselor. The counselor will look over the consumer's debt and income and create a custom monthly payment plan. Repayment plans can last several months or several years depending on the amount of debt a consumer has. During the repayment plan, the consumer must not accumulate any additional debt.

A debt settlement program helps a consumer pay off his debt by negotiating a settlement with his creditors and creating a payment plan. With a debt settlement program, the company will contact the consumer's creditors directly and negotiate a settlement amount for each debt. The consumer will then make a monthly payment towards an account held by the debt settlement agency. When the account reaches a certain amount, the agency will pay the creditor. Debt settlement programs will help a consumer pay off debt, but may hurt the consumer's credit report. Since the creditor goes unpaid while the consumer builds funds in the debt settlement account, the creditor may report several late payments to the credit bureaus.

A consumer can take out a personal loan or home equity loan to repay debts. With a personal loan, the consumer will not need any collateral. However, the consumer typically needs good credit to qualify. With a home equity loan, the consumer can take out a loan against the value of his house. While a debt consolidation loan allows a consumer to pay off large debts quickly, it also adds to the amount of debt the consumer has. The consumer will need to pay back the principal of the loan, plus interest. Failing to make the loan payments can worsen credit.

Bankruptcy will allow a consumer to either give up his assets in lieu of repaying debts or to restructure his debts. With Chapter 7 bankruptcy, a consumer must give up his assets. In return, he will not have to pay his outstanding debts. With Chapter 11 and Chapter 13 bankruptcy, a consumer can keep his assets but must repay all or a portion of his debts. Known as debt restructure, this gives a consumer time to repay his debts without penalties. Bankruptcy can help a consumer with debts, but will have a serious negative effect on his credit score. The consumer may have a hard time qualifying for loans or credit cards after filing for bankruptcy.

How to Contest Your Credit Score

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Inaccurate information on your credit report can be a major concern, especially when it affects your credit score. Even when a debt has been paid, a company may still report it as unpaid to one of the three major credit bureaus. Also, a collection agency may not always report that a debt was paid. Contacting the credit bureaus to get your credit score corrected can take a little time, but the process is very simple.

Instructions

Pull your credit reports from the three major credit bureaus (TransUnion, Equifax and Experian) and examine their content. This can be done once a year free of charge at www.annualcreditreport.com. Review each report for errors and contact the appropriate bureau if any are found.

Contact Equifax by accessing its website (see Resources) or call the 800 number listed on your credit report for filing a dispute. This process involves filling out an online form listing your concerns. Or call a customer service representative to discuss the items on your report that you are disputing. It can take up to 45 days to remove the incorrect information from the report.

Go to TransUnion's website (see Resources) to file a dispute, or call 1-800-916-8800 between 8 a.m. and 11 p.m. Monday through Friday. You'll need the following information: your TransUnion file number (located on the credit report), Social Security number, date of birth, current address, the name of the company involved in the dispute and the account number (provided on the credit report) and the reason for the dispute. It can take up to 45 days to remove the items from your credit report and correct your score.

Contact Experian through its website (see Resources) or call the number provided on the credit report for filing a dispute. The form for filing a dispute is on the site. Again, it will take up to 45 days to remove any incorrect information from your report.

Credit to Debt Ratios

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Understanding how debt is viewed by creditors and how it affects your credit limits can help you maintain a good credit score. Credit score calculations aren't only affected by whether consumers pay their bills on time. The calculations also weigh consumers' credit card balances against their total available credit.

The credit utilization ratio can affect how much credit companies make available to you. The ratio is expressed as a percentage and is calculated through dividing the amount owed on all credit cards by the total limits on the cards. If the balance on three credit cards with $5,000 credit lines totals $12,000, then the utilization ratio is 80 percent. Such a high percentage could cause creditors to reduce your credit limits out of concern that you're taking on more debt than you can repay. Several financial publications recommend keeping the credit utilization ratio below 30 percent.

Closing an old account at the wrong time can hurt your credit score by raising your credit utilization ratio. Calculate what your utilization ratio would be if you closed the account before you cancel it. Hold off on closing the account if your ratio would increase above 30 percent, unless you are able to pay down other debts. Reducing debts at the same time that you close the account can help keep your ratio from spiking.

Not using a credit card for long periods of time could cause the card issuer to close your account because it's not profitable to keep it open with no transactions. Closing the account would reduce your total available credit and possibly hamper your credit score by increasing your credit-to-debt ratio. Credit score calculations usually weigh how much debt people have against how much credit they have available. Credit scores often drop when the total amount of debt is close to or exceeds the total available credit. Use a credit card at least one time every four months and pay off the balance immediately to avoid having your account closed.

Consider asking your credit card issuers for higher limits to improve your credit-to-debt ratio. However, avoid using up the additional credit if the company grants your request. The goal is to raise your credit limits to reduce the amount of debt you have compared with your available credit. The U.S. Credit Card Accountability, Responsibility and Disclosure Act of 2009 requires that card issuers not increase credit limits without considering the ability of consumers to make minimum payments on their accounts. Therefore, customers with large amounts of debt may have a difficult time getting higher limits.

The credit-to-debt ratio is an important consideration in trying to maintain a good credit score. However, there are times when other factors outweigh efforts to keep the ratio low. For instance, people who have a difficult time not maxing out credit cards may want to close accounts before they rack up more debt than they can afford to repay. Some creditors also charge their customers inactivity fees for not using their accounts. People who are paying such fees on several accounts may benefit from closing their accounts.

Credit Debt Help Online

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Having too much credit card debt is a scary and powerless feeling. No matter how you look at your situation, you have a long way to go before you can be debt-free. Fortunately, there are some resources on the Internet that can help you. They won't get you out of debt overnight, but they can at least help you realize you're not alone; they can also help get you on the road to recovery.

Use the Internet to find people who are in the same debt situation. Online forums, blogs and message boards help you see that you're not the only one saddled with debt. Learn from the examples of these people to see which methods work and which don't. This research is vital to determining the best course of action for you.

Look at your finances and see what you can do differently. Mint.com is a site that allows you to view your accounts by entering the log-on information you use to access these accounts online; the site then summarizes your finances and makes suggestions based on the type of accounts you have. The site helps you keep track of where your money is going and give you information about credit cards with lower interest rates and bank accounts with lower fees.

Use online credit card calculators to see exactly where you stand. Bankrate.com features many calculators, allowing you to analyze potential plans to attack your debt. See how long it would take you to pay off your debt making just minimum payments, how much you'd have to pay to eliminate your debt by a specified time, how much it would save to transfer your balance to a different card and much more. If you don't want to do any of the work yourself, download a program called ZilchWorks, which creates a payment plan intended to pay down your cards and save you money.

Use an online credit counseling or debt settlement agency. Initiate the process online, but you may have to finalize the process in person with a loan officer or credit counselor.

How to Create a Personal Budget Sample

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A viable personal budget is essential to the success of any financial plan. By developing a sample budget, you can make timely bill payments, avoid loan default and set money aside to build your net worth. Before creating a personal budget sample, you should first outline your financial goals. With financial goals in place, you can make savings projections and balance risks versus rewards against each other when putting together an investment portfolio.

Instructions

Define your financial goals. Common financial goals include saving up money to provide for start-up business costs, a first-time home purchase, tuition expenses and a retirement lifestyle. Perhaps you will need to save up $30,000 within the next two years to put down on a Miami Beach condominium.

Pull up an online financial calculator, and toggle through the numbers to make projections. With the help of a financial calculator, you can determine the amount of money that should be invested at a set rate of return to arrive at a future value of cash.

Review your recent banking statements and pay stubs to calculate your current free monthly cash flow. To figure free monthly cash flow, subtract your monthly expenses away from your monthly income. Compare your current cash-flow levels to your financial-calculator projections to determine whether your financial goals are actually realistic. To achieve your goals, you may need to cut your expenses.

Categorize your expenses into committed and discretionary expenses. Committed expenses are necessary for survival and for avoiding loan default, such as your monthly rent or mortgage payment, utility bills and gasoline costs to go to and from work. Alternatively, discretionary spending is associated with consumer goods, such as luxury-hotel accommodations and designer clothes, which do not add value to your bottom line.

Cut discretionary spending if you are having trouble paying bills and are in jeopardy of falling short of your financial goals. For instance, to free up cash, eliminate cable television and fine restaurant dining from your budget.

Consider a major lifestyle change to reduce your committed expenses, if necessary. For example, you could sell your car and move into a smaller apartment closer to work. You could then rely on public transportation, while saving money on car insurance, gasoline and rent.

Calculate your new monthly free cash flow after making adjustments to your discretionary and committed expenses.

Spend cash to aggressively pay down expensive credit card debt. After your most expensive debt balances are paid off, you should work to accumulate six months' worth of committed expenses in cash reserves. Additionally, you should take out life and health insurance policies that provide financial relief for your family in an emergency.

Invest money into a diversified portfolio of stocks and bonds. Stocks perform well during a strong economy, but they are especially volatile amid recession. Alternatively, bonds generate interest income to stabilize your portfolio in most economic conditions. You should increase your bond market exposure as you age and near retirement.

How to Get Middle Credit Score

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The three major credit bureaus are Equifax, Experian and TransUnion. Each of them will issue a credit score to consumers. Credit data varies among the bureaus. Their data is based on proprietary information that is used to generate credit scores. To keep a level playing field, banks, credit card issuers and most lending institutions will utilize a consumer's middle credit score. The middle credit score is used to represent the average credit score from the major credit bureaus.

Instructions

Conduct a search online for Equifax.

Contact Equifax to request a copy of your credit report and credit score.

Conduct a search online for Experian.

Contact Experian to request a copy of your credit report and credit score.

Conduct a search online for TransUnion.

Contact Transunion to request a copy of your credit report and credit score.

Determine your middle credit score.

Review your credit reports and credit scores that you received from all three credit bureaus. To determine your middle credit score, write down your credit scores in order form, from lowest to highest. The credit score in the center, is your middle credit score. For instance, a consumer that received the following credit scores of 675 from Equifax, 700 from Experian and 760 from Transunion would have a middle credit score equal to 700.

How Long Does an Abstract of Judgment Place a Lien on the Debtor's Real Property?

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A property lien is a court judgment entitling a creditor to a share of the profits from the sale of a debtor's attached real property. The court may grant a creditor the right to attach a variety of assets including a home, place of business or automobile. The statute of limitations for a property lien judgment varies by state and can usually be quite lengthy.

Each state sets its own statute of limitations for creditors collecting on court judgments. Property liens usually follow this variable statute of limitations for determining how long real property remains attached for the pursuit of debts. Creditors may enforce property liens when real property is sold or liquidated by the court while these properties are under the statute of limitations. For example, the statute of limitations for a domestic judgment in California is 10 years while the same statute runs as long as 20 years in Alabama.

Some states, including California and Texas, allow creditors to renew the statute of limitations on a judgment with court approval. This means creditors can double the amount of time available to collect on property liens and increase the likelihood of receiving payment for debts owed. If successful, any notations for attached properties remain on debtors' credit reports and will continue to lower credit scores and make it difficult for debtors to acquire new credit accounts or loans for new property.

Real estate and personal property may have differing statutes of limitations depending on the particular laws in a county or municipality within a state. A debtor's home or place of business usually counts as real estate and an automobile or work vehicle counts as personal property. For example, according to the website for Onondada County, New York the statute of limitations for a property lien on real estate is 10 years whereas a judgment against personal property lasts 20 years. It's important to check local exceptions to larger state laws to have all pertinent information about a creditor's ability to collect on a property lien.

A debtor filing for Chapter 7 bankruptcy can expunge a property lien through the liquidation process. The court liquidates his real and personal property up to the exemptions he places on his property according to state bankruptcy law. Bankruptcy limits a creditor attempting to secure payment from the court on a property line by the state's homestead and personal property exemptions. This means if a debtor is able to protect the value of his home or other attached property from liquidation through state-allowed bankruptcy exemptions, the creditor cannot legally collect on the lien and the court expunges the judgment.

What Are the Three Credit Bureau Companies?

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There are three main credit bureau companies that determine your credit score. Each month, these three companies rely on information reported to them from your creditors to compile a credit report. However, credit bureaus offer more than just a compilation of credit history. The overall goal of each credit bureau is to provide tools to help businesses manage customer relationships more effectively.

Experian operates in more than 40 countries around the world. In addition to assessing the credit risk of a consumer, the company also offers analytical tools to businesses to help them increase their performance. For example, through Experian's consumer data tracking, a company can find the best location to generate more sales revenue. The Experian Plus scoring system is an educational tool that allows consumers to gain a better understanding of how their credit score is created and how they can gradually improve their scores. This creates a win-win situation for Experian's business customers, who are constantly seeking creditworthy borrowers.

Equifax was founded more than 100 years ago as Retail Credit Co. Equifax is a member of the Standard & Poor's 500, a stock index that includes the top publicly traded companies. The original purpose of Equifax was to help insurance companies rate the credit history of applicants. The bureau kept extensive records on customer transactions, much similar in detail to those maintained today.

TransUnion offers products for both small and large businesses. For example, independent landlords can use TransUnion to access the credit history of prospective tenants. This is a progressive approach to credit reporting as businesses are usually required to subscribe to expensive services in order to reap consumer credit reports, leaving small business owners and entrepreneurs to find third-party services for help. TransUnion boasts a global clientele of 50,000 businesses.

How to Build Credit in Canada

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Establishing good credit is important to many Canadians. Many factors can affect your credit status, such as, paying bills on time, credit card balances, etc. Many people are faced with trying to build their credit from a lack of credit or trying to increase their credit score. Even if you are lacking credit, there are several steps that you can take to build it.

Instructions

Check a current copy of your credit report. Order a copy of your report from the two major reporting agencies in Canada, Equifax and TransUnion. Review your report to determine your credit status. This will help you better prepare for building your credit.

Research accounts at several banks, such as the Bank of Montreal or Bank of Nova Scotia in Canada. Inquire about any fees associated with the account. Many banks will waive any setup fees for new members. In addition, you may also qualify for loans and low interest credit cards designated for new members.

Open a savings account and begin investing a small amount of money each month. If you can prove your ability to diligently save money, the bank may be more willing to extend a loan or credit card to you.

Apply for an account with a major department store, such as, Hudson Bay Company, the largest department store in Canada. Make timely payments and they will be reported to the credit reporting agency. You will begin to establish new credit as you continue to make payments. Being responsible with a department store card may help you get approved for a major credit card.

Obtain a secured Canadian credit card. Consider the secured RBC Royal Bank credit card which is extended to those with little or no credit history. You are required to deposit money into an account and this amount will determine your credit limit. For example, if you deposit $500.00 into the account, your spending limit will be $500.00. This is a great way to establish a new credit history since your payments are reported to the credit reporting agency.

Ask a friend or family to cosign for you. If you know someone who has good credit, a creditor may extend credit to you based off of a cosigner's credit.

About Consolidated Loans

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In today's economy, debt consolidation has become very popular. The rate of people opting to consolidate their loans is growing. A consolidated loan, usually from a debt consolidation company but sometimes from a local bank, is used to pay off unsecured debts. It takes multiple debts from creditors and turns it into one debt that is to be paid off to the lending company.

Consolidated loans have long been seen as a viable alternative to paying back individual debts. Consolidated loan companies will work with an individual's credit card or other loan issuers to negotiate manageable payments for that individual. The individual will then send a monthly payment to the debt consolidation company, which will in turn disperse payments to the individual's creditors.
Most people opt for consolidated loans when their monthly debt payments are getting too high to pay back and/or there are too many to keep track of. An individual uses the consolidated loan to get out of debt, in lieu of nonpayment or bankruptcy.

For many, a consolidated loan is a way to get out of debt without declaring bankruptcy. Most people who use a consolidated loan service are looking to salvage their credit and/or reduce the number of monthly bills they have to pay off.
In most cases, a person who opts for a consolidated loan ends up paying more over a longer period of time than he would if he paid each creditor directly. Many people feel that the added expense is worth the peace of mind. They no longer have to worry about keeping track of all their debts and paying large amounts of money to individual creditors.

Although a consolidated loan seems like a viable solution to handling debt, there are several things an individual should consider before taking that path.
Consolidated loans will take unsecured debt and make it a secured debt. Most consolidated loan companies will use the equity on a person's home to pay back debts. If a person cannot make the payments to the consolidated loan company, the company may seize his home as payment.
Advertisements that promote debt consolidation through a loan make it seem as if the solution is only a phone call away. The reality, however, is that the application process to get a consolidated loan can be very lengthy and complicated. This is because most debt consolidation companies realize that their clients are calling them because they are having trouble paying monthly credit card bills. The loan companies want to make sure there is minimal risk of a client defaulting on his loans.

Debt consolidation companies want their clients to believe that they are on their side. In reality these companies are often supported by creditors. The bottom line is that creditors would rather have some money than no money, and consolidated loan companies can collect payments that might not have otherwise been made on a regular basis to a person's individual creditors. So it is easy to see why creditors would want to work with consolidated loan companies. After all, the loan companies are looking to make money like any other business.
Even though a company may promise that it wants to help eliminate debt, it must not be forgotten that by agreeing to a consolidated loan is the same as applying for a credit card. Payments to a consolidated loan company can affect a person's credit positively or negatively just like a credit card.

Consolidated loans are a last resort for most people. Although they may help you to get out of overwhelming debt, it is always better to not allow yourself to spend more than you can pay back so you never have to consider a consolidated loan.
One of the biggest problems attached to credit cards is that they allow people to spend more than they have and it is easy to get carried away. It is always better to spend modestly and realize you'll have to pay the piper eventually.

Debt Consolidation for Disabled Fixed Income Families

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Debt consolidation can relieve some borrowers of the overwhelming burden of high-interest debt. It can also be a psychological victory as it gives borrowers a sense of control back. However, borrowers with fixed incomes may have trouble finding lenders to consolidate their debt. This problem is compounded if the only income coming in is from the government--such as Supplemental Security Income or disability payments. If you have disability money coming in and you need to consolidate debt, you'll need to work with a nontraditional lender.

Instructions

Pull your credit before you search for lenders. A strong credit score will go a long way when persuading a lender to take you on as a credit risk. Visit AnnualCreditReport.com for a free report. Also, pay for your FICO score--a three-digit number that represents your overall creditworthiness.

Review all of your income. This may just be your disability income coming in. However, you may have sources of revenue that you wouldn't normally count as income--such as rent, alimony, child support or Social Security payments. These income sources can often be used in income calculations. Collect all documentation relating to these.

Think about any unverifiable income you might have. This could be income from under-the-table work (like bar tending or babysitting). Some lenders have "no-doc" programs that allow you to simply add a small amount of income without verifying it.

Start researching lenders. Stay away from local banks and credit unions no matter how strong your credit score and report is. These companies cater to very cut-and-dried customers. Instead, reach out to finance companies (such as Wells Fargo Financial or CitiFinancial). These institutions often finance customers who have unconventional income or credit circumstances.

Apply at two or three lenders. A huge amount of applications results in too many credit inquiries--which will begin to drop your FICO score. Give loan officers copies of all of your income information. This will help them sort through what can be verified, what is considered consistent and stable and what can be used in income calculations.

Review all offers for debt consolidation. If you have strong credit and want to consolidate many debts (which will significantly decrease your monthly outgo each month), some lenders will do business with you.

Indiana Unemployment Questions

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The Indiana Department of Workforce Development manages unemployment insurance benefits programs for the state. Income assistance is available for people who have lost their jobs through no fault of their own or are no longer earning money after being self-employed. State unemployment offices, called WorkOne Centers, are located throughout the state (see Resources for a link). Representatives at WorkOne Centers can help determine if you are eligible for benefits.

As of 2010, people qualifying for unemployment benefits in Indiana are paid a minimum of $50 a week, according to the Indiana Department of Workforce Development. The maximum weekly amount is $390. Benefits are based on your earnings while you were employed. People who earned higher pay receive the most in benefits. For the maximum weekly benefit, you must have been earning at least $9,250 per quarter.

The Indiana Department of Workforce Development reports that your application for benefits could be singled out for a special review if you were terminated from your job (as opposed to being laid off), or if you were eligible for severance or vacation pay at the time of separation. Issues such as these must be resolved before payments can begin.

You are eligible for full benefits for 26 weeks. As of 2010, all benefits are paid through a 52-week "benefits year," which begins when you are approved. Once you are paid for 26 weeks, you will not be eligible to file a new claim for benefits until your benefits year ends. For example, if you received benefits for 26 consecutive weeks at the start of your benefit year, you would have to wait an additional 26 weeks to make a new claim.

You should receive your first benefits payment within three weeks of applying if there were no issues with your application.

Apply for unemployment benefits by visiting your nearest WorkOne Center, or apply online at the Claimant Self Service for Unemployment Benefits website (see Resources for a link). According to the Indiana Department of Workforce Development, you should view the tutorial on the website before attempting to apply online. The tutorial shows how to create an account on the system, and guides you through the application process. Help is available from clerks at the WorkOne Center if you decide to apply in person. In either case, you will be required to provide contact information for your last employer, along with your Social Security number, dates of employment and your address. You will also be asked questions about your self-employment if applicable.

You can qualify for benefits if you are out of work through no fault of your own. You can qualify even if the wages you earned on your job are insufficient for an unemployment claim. In this case, your benefit amount would be based on tax returns and other means of income verification used by the state. People who were self-employed can qualify for benefits in the same way.

Indiana unemployment benefits are paid through weekly deposits on a state-issued VISA debit card. A debit card will be sent to you after you are approved for benefits -- usually within 10 days. The card can be used like any other debit card, including cash withdrawals from ATMs.

How to Get a "Deed-in-Lieu of" After Bankruptcy

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A deed-in-lieu of foreclosure is an agreement to turn over real estate to a mortgage company. People seeking the arrangement usually are facing foreclosure because of missed mortgage payments, or cannot sell their home because it is worth less than the balance on the loan---a situation known as being "upside-down" on the mortgage. A discharged, or completed, bankruptcy should not affect discussions for a deed-in-lieu agreement. Many people with in bankruptcy choose to allow foreclosure during the bankruptcy as they restructure or eliminate debt. However, it is possible to wait until after the bankruptcy to seek a deed-in-lieu agreement.

Instructions

Read your statement or letters from the mortgage company to determine the status of your account. The bank will not consider your request for a deed-in-lieu of foreclosure, unless you are several months behind and standard foreclosure is imminent. If your mortgage is current, you must voluntarily begin missing payments to qualify for deed-in-lieu discussions.

Consult with a real estate agent and a nonprofit credit counselor for advice before missing payments. Missing mortgage payments after bankruptcy is another setback to your credit, and you should avoid that if possible. The real estate agent can advise about options for selling or leasing the house and avoiding giving the property to the mortgage company. The credit counselor can describe possible impact on your credit once you begin missing payments. Get a referral for a local nonprofit credit counselor by contacting your bank or credit union.

Consult with your bankruptcy attorney. The attorney can negotiate directly with the bank for a deed-in-lieu agreement---if you still wish to proceed after discussions with the credit counselor and real estate agent. Or hire an experienced real estate attorney. You can negotiate the agreement on your own, but using an attorney is best.

Authorize your attorney to contact the mortgage company about a deed-in-lieu of foreclosure. Or contact the bank yourself to explain why you wish to turn the property over to the bank. This could present a challenge because theoretically, the successful completion of the bankruptcy resolved your debt issues, presumably leaving you in a position to make the mortgage payments. However, you may have other financial setbacks since the bankruptcy.

Negotiate the deed-in-lieu of foreclosure through your attorney or on your own. Lenders make individual decisions on deed-in-lieu of foreclosure agreements, and there is not a standard approval process. Some lenders will agree and others won't. Keep negotiating with your lender until you receive a final answer. Your only option if the lender does not agree is to allow standard foreclosure or to pay the past-due mortgage payments and keep the house.

When Is it Smart to Get a Consolidation Loan?

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Consolidation loans represent a kind of "bundled loan" in which debtors combine several outstanding loan debts into one convenient monthly payment. Consolidation loans can help debtors stay current on their payments, but not always at a favorable interest rate.

Consolidation loans can help debtors who tend to fall behind on payments because they have difficulty keeping up with the various payment due dates. Consolidation loans may also prove an attractive option for people who have debts with uncomfortably high interest rates.

A consolidation loan allows debtors to make a single monthly payment covering the amounts owed to multiple creditors, according to Bankrate.com. This convenient, easy-to-remember solution helps debtors avoid late fees and possible credit rating damage. A lower interest rate can make the debt easier to repay in a timely manner.

The convenience of a consolidation loan may come with hidden extra costs. Bankrate.com warns that the interest rate on an unsecured consolidation loan may rise over time until the debtor actually faces a steeper total debt than before. Debtors should compare their current accounts against consolidation loan offers with care before taking out new loans.

Are Rent Arrears Cleared by Bankruptcy?

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Rent that is past due, or in arrears, is not cleared by bankruptcy unless you decide to leave the apartment or rental home and move on. Bankruptcy stops eviction but only temporarily in some cases. Eventually you will be evicted if you fail to pay the landlord. Some people with legitimate financial problems use bankruptcy to avoid being tossed out as they look for ways to pay past-due rent. Others manipulate the system by using bankruptcy to avoid eviction as they look for another place to stay.

A legal injunction in bankruptcy, called "the automatic stay," stops evictions. The automatic stay halts nearly all debt collection, including enforcement of judgments and garnishment of back accounts and wages. The stay is signed by a judge and is one of the most powerful features of bankruptcy. Generally, the automatic stay gives people 30 to 60 days to avoid eviction. Eviction can take place after that if the tenant has not paid the past due rent or made special arrangements with the landlord to pay by a certain date.

Bankruptcy allows the tenant to break the lease without financial penalty and simply move on. Most rental agreements include a penalty for early lease termination, with any early termination fee eliminated in bankruptcy along with past-due rent payments. Delinquent rent payments are treated as an unsecured debt in bankruptcy.

Landlords can get around the automatic stay by requesting that the injunction be lifted by the court to allow eviction. In this situation, the landlord argues that the tenant filed for bankruptcy simply to avoid paying rent. A judge will hear the case and offer a ruling. Typically, the bankruptcy court sides with the debtor and continues to provide protection under the automatic stay unless there is clear evidence that the debtor is trying to manipulate the system.

Credit reports and court records list bankruptcies and evictions. Having both on your record can make it really tough to find another place to stay. Other landlords will be reluctant to rent to you because of your past financial problems. It's best to avoid eviction -- and possible bankruptcy -- by explaining your situation to your landlord and asking for more time to pay. Bankruptcy should only be used legitimately and as a last resort.

As of 2011, the cost for filing Chapter 7 bankruptcy is $299 and $274 for Chapter 13. Chapter 7 is the fastest form of bankruptcy, lasting just a few months as it eliminates debt. Chapter 13 requires a payment plan lasting three to five years. Usually, Chapter 7 is available only to people with low or modest incomes.

Benefits of Loan Consolidation

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Loan consolidation is an option for people who are trying to simplify their bills and reduce their monthly financial obligations. There is a great deal of information available about loan consolidation, but here is a closer look at its real benefits.

If you have loans for such things as your car, college tuition and credit cards, it may be difficult to keep track of all of those payments every month. When you have many different debts to pay, it is possible to forget to make certain payments each month. When you consolidate your loans you make only one payment.

When you consolidate several loans into one loan you have the chance to lower your total interest debt. For instance, if you have several smaller loans, with the lowest interest rate being 12 percent, you can lower your interest debt by getting one consolidation loan with an interest rate of 9 percent or lower. You will lower the cost of your debt considerably, and you will also lower your monthly payments.

When you have several small loans you are required to pay a minimum service charge on each loan every month. With a consolidation loan you are reducing all of those service charges to one payment every month. This will lower the amount you pay in service charges and will also help lower your monthly payments.

The more sources of credit you have open the more of a negative effect they have on your credit score. When you consolidate your loans you not only reduce the number of accounts you have, but you are also deriving the benefit of paying off loans in full. This helps improve your credit score immediately.

If you are able to get a consolidation loan that offers a lower interest rate than any of the loans you are consolidating, then you may want to use that to shorten the amount of time you need to pay your debt off. It's possible that a consolidation loan with a shorter term will amount to a similar monthly payment as all of the individual loans combined. If this is the case, and you were able to afford all of your individual payments, then you would be able to take on a consolidation payment that keeps that monthly total roughly the same but pays your debt off months or years earlier.

What Are Consumer Credit Needs?

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People's credit needs are partly based on how well they manage their credit card accounts and the way they intend to use their cards. Some businesses require customers to submit a credit card in exchange for their services. However, mismanaging your cards can damage your credit rating and prevent you from getting loans and other credit accounts.

According to Bankrate, U.S. consumers appear to be almost evenly divided on whether they need more than one credit card. In a 2009 survey, The Center for Media Research noted that 51 percent of the U.S. population had two or more credit cards. Some people have several cards because they want to set aside one or more for a specific purpose. Bankrate suggests using one card exclusively for online transactions so that consumers can easily spot fraudulent charges if their account numbers are stolen online. Other consumers may just want one card with a low credit limit for online purchases to reduce the amount that potentially could be charged by an online thief.

Credit card accounts that are managed properly can boost your credit rating partly because they show creditors and lenders that you can responsibly handle your debt obligations. People with well-established accounts that have been consistently paid on time may have high credit scores because these scores are partly based on consumers' payment history and the length of time they've had their accounts. However, you can also lower your credit score by maintaining high balances on several credit cards. "Kiplinger" magazine and other financial publications recommend using no more than 25 to 30 percent of your available credit on all credit cards.

Consumers who exclusively use cash and debit cards are at risk of facing more serious financial difficulties than credit card users if their cards are lost or stolen. Cash that's lost or stolen is usually difficult to recover. Debit cards are typically linked to people's checking accounts, so fraudulent transactions can tie up cash that cardholders need to pay their bills and everyday expenses. Credit card users are generally only liable for $50 worth of fraudulent transactions if their cards are lost or stolen. Furthermore, some hotels and car rental companies do not accept debit cards from customers.

Credit cards essentially allow people to use a card issuer's money, and people who pay close attention to their monthly bills can avoid paying interest charges on that money. A "New York Times" article titled "Credit and Debit Cards: What You Need to Know" notes that a cardholder who manages to pay off purchases within a credit card company's billing cycle won't have interest charges applied to those purchases. Billing periods generally last up to 45 days. Your credit card statements should specify the billing periods for your cards.

How to Find Scholarships for Minority Women

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Scholarships are a good way to help keep the personal cost of an education down and to help students avoid taking out loans. There are hundreds of scholarships available if you know where to look. Many, but not all, of these require that the applicant meet certain criteria, such as being a specific gender, religion or minority. If you're a woman and an ethnic minority, you may qualify for a number of scholarships.

Instructions

Perform a web search. There are several free online search engines that you can use to look for scholarships. The reputable ones will not sell your information and will allow you to create an account to save your information. They may also be able to email you when new scholarships are listed that you qualify for. Fastweb.com and Petersons.com both offer these services.

Approach organizations dedicated to your ethnicity. Depending on your heritage, you should contact the organizations and advocates for your ethnic group. There are groups dedicated to Native American, African American and many other groups of people. These organizations will likely have some type of scholarship that you can apply for. You can also ask at your local church or other type of religious structure, like a mosque or synagogue.

Make an appointment with your financial aid adviser. One of the best resources you have is right on campus. Make an appointment to speak to someone about finding scholarships. They may have a computer in the office dedicated to scholarship searches or let you know of resources that you may not have been aware of.

Questions to Ask a Credit Counseling Agency

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Credit counseling agencies are companies that offer you advice on how to manage your money and debts more efficiently. They help you to organize your budget in a way that will fit your way of life and monthly payments. Credit counselors receive proper training and certification in these areas. They also help you develop a personalized plan to get out of debt. Credit counseling is a requirement for those who intend to file for bankruptcy.

One of the first questions you should ask a credit counseling agency is which services they offer. Look for a company with a variety of services, such as budget counseling, savings and debt management classes, bankruptcy filing and help to find alternatives to bankruptcy. Avoid any company that does not spend a considerable amount of time looking at your financial situation before offering their services. A reputable organization will offer a personalized evaluation of your situation.

Ask about fees, including total costs, monthly payment options and mandatory up-front fees. Get specific quotes for all of the services they provide and compare agencies to see which one offers the most value. Decide whether or not you have the income necessary to pay these fees. Up-front fees are often around $250. If you are having money problems -- which you probably are if you are filing for bankruptcy -- this can often be a burden, and you may decide to address your credit issues on your own.

Credit counseling agencies are required to have state licenses to offer services in that state. Ask the company if they have all of the necessary licenses. Ask if their counselors are licensed to offer you the financial help and advisement you need. A reputable company will only have licensed staff advising you. If a company is licensed, you then know that it is following all of the necessary regulations.

You have the right to demand the protection of your information. A credit counseling agency does not have the right to sell or share your information with third parties without your permission. Ask them how they will protect your information and how you will be assured of this. Ask if there is a confidentiality contract between you and the agency. Information that you have the right to protect includes your name, address, phone numbers and any records of your financial situation.

What Happens If You Can't Repay a Payday Loan?

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As a working consumer, you can sometimes find yourself in need of cash prior to the next payday. Depending upon your financial situation, it may not be possible to get a traditional loan from a bank. Payday loans can fill the void, but it's prudent to understand what can happen if you don't repay the loan.

A payday loan is a short-term cash advance issued by a payday lender that consumers take out against a future paycheck. Consumers must have a job and a checking account and present a paycheck stub to qualify. With a payday loan, a consumer writes a personal check to the lender to cover the amount of the loan. The check is dated for the next date the consumer gets paid. Consumers can obtain a payday loan in person from a lender or online.

You can use a payday loan between paychecks when you need cash. According to MarketWatch, the segment of the population that most often uses payday loans are the unbanked, or those who don't have access to traditional credit options, such as bank loans or credit cards. Payday loans come at a steep price, often carrying three-digit interest rates, however. They have large fees that you must pay back in addition to the borrowed loan amount. Payday lenders charge a set fee for each $50 or $100 increment of the loan, according to the Federal Trade Commission.

When you take out a payday loan, the lender cashes the check you've written on the date indicated on the check. If there aren't enough funds in the account, that check may be returned, and your bank could charge you overdraft fees. If you know you're unable to repay the loan, the lender allows you to pay the finance fee to roll the loan over until the next payday. On that day, you have to repay the original loan amount plus all accrued fees and interest.

Because of the fees, payday loans can balloon into an amount that becomes unmanageable. If you fail to make payments, the payday lender can turn the debt over to a collection agency. The agency can sue you and obtain a judgment against you. Once a judgment is entered, that agency can then garnish your wages or seize your bank accounts. Payday lenders can't have you arrested for check fraud or writing bad checks unless they can prove you had no intention of repaying the debt at the time you took out the loan, which is difficult to do, according to Bills.com.

If you have a payday loan that you can't pay, visit the lender and try to work out a payment plan, according to financial expert Dave Ramsey. This may prevent the lender from turning the debt over to a collection agency. To avoid payday loans in the future, Bankrate suggests you consider other alternatives, such as borrowing from a family member, getting a part-time job or obtaining a small loan from a credit union.

Welcome to our website credit and debt managementr.

Thursday, June 29, 2006

Taxable Income

Insolvent

Bankrutpcy

Refund

Mortgage Debt

Considerations

Wednesday, June 28, 2006

Instructions

Prepare for Negotiations

Contact the Creditor's Collection Agency

Review Accounts on a New Credit Report

Tuesday, June 27, 2006

Finding a Source of Assistance

Prepare to Apply

Apply for Assistance

Instructions

Tax Refund Check Garnishment

Treasury Refund Offset Program

Garnishing Benefits

Wage Garnishment and Child Support

Items Available as Assets

Exemptions

Community Vs. Separate Property States

Considerations

Sunday, June 25, 2006

Instructions

Co-Signing Basics

Co-Signer Responsibilities

Co-Signer Rights

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No Inherited Debt

Joint Debt

Settling a Will

Deceased Debt Collection

Instructions

Saturday, June 24, 2006

Preapproved Loans

Credit Check

Short-Term Effects

Multiple Inquiries

Credit Cards

Tax-Deductible Debt

Minimum Payments

Debts vs. Savings

General Guide

Statute of Limitations Versus Credit History

Judgment

Considerations

Thursday, June 22, 2006

Examine Finances

Credit Cards

Student Loans

Wednesday, June 21, 2006

Lawsuits

Credit Consequences

Misconceptions

Credit Card Debt

Garnishment

Nevada Law

Considerations

Features

Considerations

Effects

Tuesday, June 20, 2006

Responsibility

Considerations

Option

Bankruptcy

Precautions

Credit Counseling

Debt Settlement Programs

Debt Consolidation Loans

Bankruptcy

Monday, June 19, 2006

Instructions

Significance

Effects

Warning