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

Thursday, October 30, 2008

How to File an Answer to a Complaint for Credit Card Debt

The first inclination of people who receive a complaint over a credit card debt can be to toss it aside and hope it goes away. Doing this entitles a court to render judgment against you for the full balance of the account plus interest, late fees and any costs associated with the recovery of the debt. Typically, by the time a creditor files a lawsuit against you, responding to the complaint by filing an answer with the court is the only option you have to decrease or eliminate your debt without filing for bankruptcy.

Instructions

    1

    Read the summons that came with the complaint to determine how long you have to respond. Typically, you only have 20 to 30 days to file your answer. Your state laws determine how long you have.

    2

    Contact a lawyer if you do not feel comfortable filing the answer by yourself. The American Bar Association provides links to assist individuals looking for legal help.

    3

    Write your answer to the complaint. Your answer is your rebuttal to the information that the creditor provided to the court. Read the complaint and answer each allegation separately. Admit, deny or claim lack of knowledge of each allegation.

    4

    Include any affirmative defenses you have. If you do not state an affirmative defense in your answer, you give up your right to claim a reason that you should not have to pay the debt. Examples of affirmative defenses include incorrect serving of the summons, expired statute of limitations, identity theft and the debt collector not having the legal right to collect debts in your jurisdiction.

    5

    File your answer with your court clerk and pay any required filing fees. The clerk will schedule your court date. Send copies of your filing by certified mail to the complainant or its representative.

How to Get a Student Loan Refinanced

Unlike scholarships and grants, student loans aren't free. You must repay any amount that you borrow, plus interest, after you graduate or stop attending classes. Lenders charge fees for their services in the form of interest. Interest continues to build on the unpaid balance of a student loan until you pay off the debt in full. If your credit and salary have improved since you originally applied for the loan, you may qualify for a lower interest rate than the one your account currently carries -- allowing you to pay down your debt more quickly. Although you cannot "refinance" your student loan in the same way that you would refinance a mortgage or auto loan, you can take out a personal bank loan to cover the outstanding balance on your student loan and then repay the personal loan over time.

Instructions

    1

    Pull your credit reports. Your lender will evaluate your credit history when you fill out a new loan application. Mistakes on your credit file that reflect badly on your debt management skills, such as a collection account that appears within your file in error, can prevent you from qualifying for the new loan you need.

    2

    Dispute any errors you find before you start loan shopping. The Fair Credit Reporting Act allows you to dispute credit information with both the credit bureaus and the creditors that provided the information to the bureaus. The FCRA requires creditors and credit bureaus alike to investigate your complaint and fix any errors within your file.

    3

    Buy your FICO scores. If your lender approves your application, it bases your interest rate on your credit scores. Knowing your FICO scores ahead of time helps you obtain estimated quotes more quickly. You can buy your FICO score directly from the company that owns the scoring formula, the Fair Isaac Corporation, at MyFICO.com.

    4

    Make a list of lenders you want quotes from. Call each lender and explain your interest in refinancing your student loan to a lower interest rate. Give the customer service representative your FICO scores and ask what interest rate you would qualify for. This speeds up the process since the company does not need to gather extensive personal information from you in order to access your credit reports and scores itself.

    5

    Provide the lender with collateral or apply for the new loan with a co-signer if you don't have an excellent credit history. Both collateral and a well-qualified co-signer reduce the lender's financial risk -- making it more likely that the lender will approve your application and grant you a lower interest rate than you would have received otherwise.

    6

    Read the loan paperwork thoroughly and make sure you understand all the terms and conditions of the new loan before you sign the paperwork. After you sign the paperwork, make your payments to the new lender each month rather than your previous lender.

    7

    Contact your previous student loan servicer and request written documentation that your account was paid in full. Put the documentation in a safe place. This paperwork protects you should your original loan servicer later claim you still owe a balance.

Wednesday, October 29, 2008

Debt Relief and Divorce Rights

Debt Relief and Divorce Rights

Debt plays a major role in many divorce cases and can complicate what might already be a difficult case. Attorney fees, child support, alimony and the addition of a new set of living expenses can drive a party's finances to the brink of ruin; with a significant debt load in the mix, divorce might mean total destruction. Fortunately for debtors, there exist several ways to ease the pain of debt in divorce.

Debt in Equitable Distribution and Community Property

    Like property, debt can be classified and divided between parties pursuant to a divorce case. Regardless of whether the debtor's state is an equitable distribution (ED) or community property state, all debt incurred after the date of marriage and before either the date of separation or the date of divorce is presumed marital. This means that the other party can be forced to share in it even if that party's name and Social Security number aren't associated with the debt at all. A party must generally assert an equitable distribution or community property claim prior to the entry of an absolute divorce or lose the claim forever.

Getting Help From the Other Party

    Pursuant to a state's ED or community property laws, the other party can be forced to share in the other party's debt. The debtor may be able to negotiate a debt-sharing arrangement in a separation agreement or in a consent order for cases that are already in court. This assistance may be in the form of direct payments or by giving the debtor a greater share of marital assets to help balance out the debt. If the other party is unwilling to yield, the debtor can ask the judge in an ED or community property trial to assign part of the debt to the other party. Pending trial, the debtor can move for a temporary distribution of the debt load.

Dealing With the Creditor

    The wheels of justice turn with agonizing slowness in most family courts. Pending resolution of ED or community property issues, the debtor remains liable directly to the creditor on the debt regardless of what a family court judge eventually decides. Throughout this process, the debtor can negotiate directly with the creditor in an effort to obtain relief. Creditors can temporarily lower payments, grant extensions on repayment and agree to lump-sum settlements to extinguish the debt in full. Debtors should realize that where a creditor agrees to accept less than the full amount owed on a debt, the debtor may receive an IRS 1099 form for the forgiven amount. Under current law, the IRS considers debt forgiveness as a form of taxable income.

Bankruptcy Options

    Where the debtor cannot make even minimum payments on a debt load and still pay his reasonable living expenses, bankruptcy protection under Chapter 7 or 13 of the U.S. Bankruptcy Code may be the only option. In bankruptcy, a debtor receives a discharge of all eligible debt (Chapter 7) or a significant portion of it (Chapter 13). Spousal support, child support, student loans and taxes are not eligible for discharge, so these debts will remain.

Tuesday, October 28, 2008

How to Get a Bank Levy Removed

How to Get a Bank Levy Removed

A bank account levy gives the garnisheeing party the legal right to withdraw monies from your bank account to satisfy a debt you owe. The levy freezes your account: You can put money into it but cannot withdraw until the levy is removed. Creditors and debt collectors must obtain a judgment from a court to garnishee your bank account. However, the Internal Revenue Service, which uses the term "levy" when referring to a garnishment, does not need a court order to put a levy on your bank account. A bank levy is a last-resort method used to get you to pay your debt. In certain cases, you can remove it.

Instructions

    1

    Determine which agency imposed the levy. The IRS usually sends the debtor notice of the garnishment/levy. A creditor or debt collector must notify you of the lawsuit filed against you and the judgment obtained. Contact your bank if you changed your address and did not receive a levy notice. Ask the representative which institution issued the levy. The bank cannot remove a levy unless the issuing institution says to.

    2

    Review your financial statements to confirm that you actually owe the debt. If the bank levy was issued in error, file a claim with the court to recover all monies withdrawn, plus bank fees you incurred because of the levy. For an IRS bank levy, use IRS Form 8546 to apply for a reimbursement (see Resource).

    Upon receiving the levy notice, your bank holds funds deposited into your account, up to the total you owe, for 21 days. Contact the issuing agency immediately if the levy was issued in error so the levy can be released before the holding time expires.

    3

    Contact the garnisheeing party and inquire about a payment plan. The IRS, creditors and debt collectors have payment plans available that require you to pay off your balance in installments. A bank levy is good for one withdrawal. If the initial levy does not cover the entire balance owed, the garnisheeing party must obtain another levy to garnishee again.

    If you actually owe the debt, a payment plan does not reimburse you for monies already withdrawn. If you honor the payment arrangement, the garnisheeing party will not issue another bank levy against your account for the debt in question.

Reasons for Denying Credit

If you decide to apply for credit, you may wonder how a lender will determine whether you qualify for a loan, credit card or line of credit. Lenders commonly use consumer credit reports, which contain information about your loan, payment and money management history, as an essential tool for determining your creditworthiness. It may also use information on your application to evaluate you as a potential borrower. Each lender has its own set of criteria; however, there are several common reasons lenders deny credit.

Poor FICO Score

    A FICO score is a three-digit number that reflects your creditworthiness in the eyes of potential lenders. Scores can range from 300, which represents the worst mismanagement of credit possible, to 850, which represents a consumer with ample buying power, flawless payment history and a perfect balance of revolving and installment loan debt. However, scores above 750 and below 450 are rare. Each potential lender establishes minimum FICO scores necessary to qualify for credit. If your FICO score does not meet the lender's criteria, the lender may deny your credit application.

High Debt-to-Income Ratio

    Even if you have a perfect payment history, your debt-to-income ratio may affect your ability to obtain consumer credit. Debt-to-income ratio refers to the total amount of your existing loan, credit card and other debt payments each month, compared to your monthly income. If you have a high debt-to-income ratio, your lender may determine that extending additional credit may place a strain on your personal finances and cause you to fall behind on debt payments. Each lender determines debt-to-income ratios it will accept or deny.

Public Records

    Public records such as bankruptcies and judgments appear on your credit report, and they typically influence potential lender decisions. These entries indicate serious mismanagement of finances and credit, and they may cause even lenders that specialize in subprime lending to deny your credit application.

Incomplete Information

    When you apply for credit, your lender will require identification information, such as your name, address and Social Security number. It may also ask for other information, such as personal or professional references, contact information for present and past employers, household income and home ownership status. Although your lender cannot legally force you to provide this information on a credit application, it may deny you credit as long as the application discloses that the information is voluntary and tells you how the lender will use the information,

Monday, October 27, 2008

Problems With Free Credit Reports

It is wise to check your credit reports to verify you have not become a victim of fraudulent financial activity. Ironically, you will need to take steps to avoid becoming a victim of fraud when accessing free credit reports. Some websites promise free reports, but tack on paid services, and others seek to steal people's identities.

Paid Services

    The U.S. Federal Trade Commission website notes that by law, consumers can request one free credit report from each of the three major credit bureaus every year. However, the FTC warns that Annualcreditreport.com is the only website authorized to fill requests for those free reports. Other companies advertise that they provide free credit reports and free credit scores to consumers, but some of those products are part of paid services. In some cases, a website might offer you a free credit report in exchange for subscribing to a credit-monitoring service that tracks any changes made to your credit reports. Other companies offer free credit monitoring for a trial period that converts to a paid service if you don't cancel it before the trial expires.

Website Addresses

    The FTC also warns consumers about website addresses used to mislead them with misspellings of Annualcreditreport.com. According to the FTC, people who set up such sites hope to gain customers by mimicking the official site. If you sign on with one of these sites, you could end up paying for reports that should be free. Furthermore, you could have your identity stolen by sites that collect your personal information and use it to open credit accounts or take out loans in your name.

Proxy Sites

    The security policy published at Annualcreditreport.com also points to potential problems with requesting free credit reports. The site policy encourages users to type its official website address into their browser's address bar to ensure they haven't accessed a fraudulent site. The site also urges you not to access its free credit report service through links sent to you from other websites, to avoid potential problems with proxy sites. Some proxy sites seek to trick people into disclosing confidential information that could result in identity theft. That can occur through phishing, which involves sending emails that include false claims of affiliation with a legitimate organization. The senders direct people to fraudulent websites that collect personal information.

How to Attend College and Walk Away With Little Debt

How to Attend College and Walk Away With Little Debt

Although the best job opportunities are typically only open to those who've earned a college degree or a post-graduate degree, the costs of higher education are often difficult to afford. High levels of debt post-graduation may essentially negate the financial gains made by working a job that requires a college degree. However, by doing research, sticking to a budget and closely watching your debt, you can leave college with a lower level of debt than most students.

Instructions

    1

    Pay attention to tuition rates for the colleges you want to attend. Private colleges often have high tuition rates because they don't have as much government support as public universities. Additionally, the cost savings for attending in-state schools or schools in states with reciprocity with your home state may be significant. Don't feel as though you have to attend an inferior school simply to be able to afford college; however, if you shop around, you can likely find comparable levels of education in different tuition ranges.

    2

    Apply for as many scholarships and grants as possible. Individual scholarships may be worth thousands of dollars and significantly reduce your tuition burden. The best time to start looking for scholarship opportunities is when you begin high school. Colleges themselves also often offer substantial scholarships that may reduce or even eliminate a student's tuition obligation.

    3

    Take on only as much debt as you need. When looking at financial aid offers, it may be tempting to accept the entire amount offered. However, this isn't free money: You need to pay it back eventually. Take a realistic look at your budget and carefully think about how much financial aid you really need --- accept only that amount.

    4

    Live frugally. It may be frustrating while you're in college to forgo fun activities or nights out, but it's worth it if you can avoid taking on debt to pay for such expenses. Avoid eating out, for example, and cook your own meals. If your studies allow it, find a part-time job to earn extra money. Colleges and universities often provide opportunities for students to work on campus and be compensated in part in reduce tuition.

Laws About Bad Credit Accounts Placed Twice in a Credit Report

A person's credit report contains his past and present financial information, as well as personal information and public records. Any negative information on a credit report may go against the individual when applying for new credit, insurance or even certain jobs. The Fair Credit Reporting Act (FCRA) is a federal law that promotes accuracy of credit information collected and maintained by the national credit reporting agencies.

The Fair Credit Reporting Act

    The Fair Credit Reporting Act recognizes the importance of the information listed in a credit report and protects consumers against credit reporting violations, including duplicate information. The Federal Trade Commission enforces the Fair Credit Reporting Act, which ensures that credit bureaus (Experian, TransUnion and Equifax) maintain accuracy, fairness and privacy. Consumers gained additional rights through several amendments to FCRA, including the Fair Debt Collection Practices Act (FDCPA) and Fair and Accurate Credit Transactions Act (FACTA).

Fair and Accurate Credit Transaction Act

    FACTA allows consumers to receive a free credit report once a year from the three main credit reporting agencies. Consumers can obtain a credit report online or by requesting it by mail. FACTA contains provisions that address the accuracy of the information in credit reports by allowing consumers to monitor information in their credit files and address any inaccuracies immediately. The Federal Trade Commission (FTC) enforces FACTA and monitors the credit reporting agencies to ensure they follow the laws. The FTC encourages consumers to report any violations to it.

Disputing Inaccurate Information

    Under the Fair Credit Reporting Act, agencies and companies that provide and report inaccurate information are responsible for correcting it. If you see duplicate information, file a dispute. If disputing by mail, include a copy of your report and clearly mark the incorrect information. You may also want to write a letter stating why you think the information is inaccurate. Include copies of any supporting documents. You may file a dispute on the credit bureau's website after you receive a copy of your report. Credit reporting companies must investigate and respond within 30 days.

Consumer's Rights Following the Dispute

    A credit reporting agency must respond in writing and inform you about the results of the investigation. It must correct any information found inaccurate and inform the other national credit reporting agencies so they also correct information in your file. The agency may not put deleted or changed information back into the report unless the information provider certifies that it is correct. Agencies must also provide you with a free credit report to ensure errors were corrected and send a copy to any company that has requested your file in the past six months, as well as to any company that requested the information for employment purposes within the last two years.

Can You Buy a Home & Also Consolidate Your Credit Card Debt As Part of Your Mortgage?

In certain situations it is possible to consolidate credit card debt as part of a mortgage, although the Federal Trade Commission strongly warns against adding unnecessary debt onto your mortgage. Some lenders offer mortgage loans of up to 125 percent of the property's value, meaning you could take out a mortgage for $250,000 on a home selling for $200,000. That would leave plenty of money for consolidating credit card debt. However, as lenders adopt more conservative lending guidelines, they are not widely advertising first mortgage loans at 125 percent of a home's value, as of the first part of 2011.

Upside Down

    Consolidating credit card debt with a mortgage could immediately place you in an upside down position on the mortgage. Upside down means you owe more on the house than it is worth. With a 125-percent mortgage you are immediately in an upside down position and if property values decline you will be in an even more precarious situation.

Conservative Standards

    As of 2011, the 125-percent loans were more readily available for mortgage refinancing, especially for people who were seeking loan modification after their homes declined in value. But lenders make their own lending decisions and people with outstanding credit may qualify for a first mortgage that also offers credit card consolidation. Some mortgage lenders won't consider credit card consolidation with a mortgage and go a step further by requiring 20 percent down, although lower down payments are possible.

Second Mortgage

    Another option for credit card debt is taking out a second mortgage some time after the closing on the first mortgage. The benefits and risks are the same, but waiting awhile after the closing gives you some time to think about whether you should actually consolidate credit card debt by borrowing against the equity in your home.

Bankruptcy

    The Federal Trade Commission warns that excessive credit card debt can lead to bankruptcy. People who take out loans against their homes gamble that home values will continue to increase. Others figure they will be keeping the house long enough to ride out ups and downs in the economy. However, things could quickly change because of a job loss, illness or divorce, forcing the house to be placed on the market although the mortgage is upside down. That can make the house difficult or impossible to sell, leading to foreclosure or even bankruptcy.

Sunday, October 26, 2008

Laws on Getting Rid of Debt in Indiana

Indiana allows residents to eliminate their debts through credit counseling or bankruptcy. Credit counseling as well as Chapter 13 bankruptcy enable Hoosiers to partially repay their debts but negatively impact credit ratings for seven years. Some people may qualify for Chapter 7 bankruptcy, which allows permanent forgiveness of some pre-existing debts but impacts credit ratings for 10 years from the date of filing a case.

Asset Considerations

    Creditors can sue Indiana residents who do not pay their bills on time, unless they file bankruptcy. Lawsuits can lead to wage garnishments and liens against assets, such as real estate equity. Once a state resident files bankruptcy, creditors cannot sue him. But in some cases, the debtor must forfeit assets to offset creditor losses. As of 2011, state asset exemption laws protect up to $15,000 of homestead value and up to $8,000 of other personal property, according to Bankruptcy Action. Indiana residents also will not lose their retirement accounts as the result of being sued, entering credit counseling or filing bankruptcy.

Chapter 7 Qualification

    Not every Hoosier economically qualifies for Chapter 7, warns the U.S. Bankruptcy Court for the Southern District of Indiana. The usual eligibility measurement compares the debtor's income to that of the state annual median income level. As of 2011, the annual median income figure for a single Indiana resident was $40,683, while the level for a two-member household was $52,367, according to the U.S. Trustee Program. Families of three could earn up to $59,438 a year.

The Chapter 13 Option

    People with disposable income and steady jobs can file for partial debt relief under Chapter 13 as long as their secured debts do not exceed $1,081,400 and all unsecured obligations are less than $360,475. Secured debts are those backed by collateral, such as a house or an automobile. It takes three to five years to finish a Chapter 13 plan, during which time a Hoosier cannot get new credit without a bankruptcy judge's approval.

Credit Counseling

    Credit counseling services can sometimes negotiate debt management plans with creditors, helping people avoid bankruptcy, according to Consumer Credit Counseling Services of Northeastern Indiana. Some creditors will waive over-the-limit and late fees, reduce interest rates and cut the amount of minimum monthly payments. During a credit counseling plan, the debtor cannot get any new credit. Creditors will stop contacting the debtor as long as he pays his reduced debts on time. Debt management plans usually cost about $60 to set up.

Saturday, October 25, 2008

How to Get a Student Loan Deferment or Cancellation

The U.S. Department of Education grants new college graduates between six and nine months of student loan deferments after graduation. Unlike student loan forbearance, which compounds interest on the entire principle balance, the subsidized portion of a deferred student loan -- the part backed by the government -- remains interest-free, thus costing you less when you start making payments. The deferment gives students time to find jobs and work student loan payments into their budgets. You could, however, qualify for a longer payment deferment or even have your student loans canceled, depending on your employment and life circumstances.

Instructions

    1

    Apply for student loan deferment if you are enrolled in a college or university, unemployed or serving on active study in the military or peace corps. Fill out deferment forms online by logging into the DOE's student loan servicing website if USDOE provided your student loans. You can also request deferment forms from your non-USDOE lender.

    2

    Teach in a low-income, K-12 public school or teach shortage subject areas. The DOE indicates that your lender could cancel part of your Stafford loan and up to 100 percent of the Perkins loan, sometimes called the National Direct Student Loan, if you accept such teaching jobs on a full-time basis. You must remain in the teaching job for at least five years to receive the benefit. Teaching shortage subject areas vary by the state.

    3

    Accept a public service job. Nurses, police officers, peace corps workers, active duty military serving in combat zones and some social services workers qualify for student loan cancellation, depending on the type of loan borrowed. You must send official documents from your employing organization to your lender for cancellation consideration.

    4

    File for bankruptcy. The Department of Education says student loan discharges resulting from bankruptcy are possible, although rarely granted. You must prove to the bankruptcy court that repaying your student loan would cause financial hardship, even taking income-adjusted payments, deferments and forbearance options into consideration.

How to Get Government Assistance to Rent an Apartment With a Baby on the Way

Government assistance to rent an apartment with a baby on the way is available through local public housing agencies if you qualify under income guidelines. The federal government sponsors a "housing choice voucher program," which is also known as Section 8 housing. The vouchers allow some low-income families to qualify for apartments and other forms of rental housing at below-market rates. A woman or couple with a baby on the way could qualify for assistance if certain standards and qualifications are met.

Instructions

    1

    Contact a local public housing authority in your city to determine specific eligibility requirements for your area. Charitable organizations such as the United Way or the Salvation Army can provide contact information for local public housing authorities. According to the U.S. Department of Housing and Urban Development, in 2011 families seeking assistance must have income that does not exceed 50 percent of the median income for the county or metropolitan area in which they live

    2

    Apply for the housing choice voucher program if you meet income requirements and other requirements, such as U.S. citizenship or certain immigration status. Fill out paperwork offered by the public housing authority. The authority will ask for detailed information about family size and income. The housing authority will verify the information with your employer, bank and government agencies.

    3

    Accept placement on a waiting list, if necessary. Request a priority position on the waiting list because of the pending arrival of the baby. HUD reports that waiting lists are common for the program.

    4

    Use vouchers after final approval to rent an apartment. You must choose from apartment complexes and landlords participating in the program. Rental property managers, including real estate agents, may recommend available apartments. The local public housing authority may also help. The vouchers provide a direct payment to the landlord from the government, with the family also paying a portion of the rent.

Friday, October 24, 2008

Will a Debt Settlement Damage My Credit?

Debt settlements can be a viable option for people who are deeply in debt and want to avoid bankruptcy. Still, debt settlements do have a negative impact on credit ratings. The amount of damage caused by a settlement depends on a person's credit history. For instance, someone who previously had a good credit rating will likely see a bigger drop in his credit score by not paying his accounts in full through debt settlements than someone who has a poor credit history.

Function

    Debt settlements usually allow people to make a one-time payment to creditors for an agreed upon amount that is less than what's owed. A creditor may agree to settle an account for as little as 20 percent of the total balance. The account holders get some debt relief, but credit reports usually note when debts are settled for less than the full amount owed. Such notations will be viewed negatively by future creditors. Any delinquent account payments that preceded a settlement also will remain on a person's credit report even though the account has been closed.

Considerations

    Debt settlements also can affect people's tax liability, making their credit and debt problems worse. Debts that creditors forgive in excess of $600 are considered taxable income. As a result, someone who is already struggling to pay debts could end up deeper in debt by having to pay more in taxes due to settlements with creditors.

Effects

    Creditors usually have to stop efforts to collect debts if a person files for bankruptcy. Debt-settlement efforts don't have the same effect. Creditors can continue trying to collect debts even if their customers are seeking settlements. They also may turn an account over to a collection agency in the midst of a customer's settlement attempts. Collection accounts that appear on credit reports cause credit scores to drop.

Warning

    People can unwittingly damage their credit if they choose to work with a debt-settlement company instead of trying to settle their debts themselves. Some companies advise their clients to stop making payments to their creditors and to send the payments to them instead. The companies promise to hold the funds in an account until enough money is accumulated to offer a settlement to the clients' creditors. However, creditors will add late fees to the clients' accounts for every payment not received. Payments that are more than 30 days late will appear on credit reports and lower consumers' credit scores.

Prevention

    Working out a debt-management plan with a local credit-counseling agency is an alternative to seeking debt settlements. A person who has a debt-management plan agrees to make monthly payments to a credit-counseling agency that uses the money to pay that person's bills. Such agencies work with creditors to lower a client's interest rates, eliminate penalty fees and stop collection efforts. Consumers who fail to complete debt-management plans typically aren't worse off than when they started. Failure to complete an arrangement with a debt-settlement company can damage a person's credit if late payments and collection accounts have grown.

Thursday, October 23, 2008

Credit Repair for Credit Cards

Credit Repair for Credit Cards

While the ease and convenience of credit cards are unmatched by cash or checks, these positives these can also lead to significant problems. Using your credit cards irresponsibly can lead to a devastated credit score and damage your chances at getting new forms of credit. While you cannot change your past actions, you can begin repairing credit card problems today by taking the right steps.

Credit Card Problems

    Credit card users can fall prey to a variety of problems, though payment problems are probably the most common. In the worst-case scenarios, credit card users who fail to pay their bills can get sued by the credit card company, have their wages garnished and suffer significant damage to their credit scores. While the impact of your actions differs depending on several factors, such as how long you've gone without paying, any damage you cause will not permanently bar you from getting a better credit score.

Credit Report Information

    Every consumer who has ever used credit has a credit report that details their behavior as a credit user. When you experience problems with your credit cards, these too get recorded on your report. While you cannot remove truthful information of from your report, you can inspect your reports to ensure there are no errors and demand changes if you do find errors. All consumers can view their three credit reports every year without charge by going to annualcreditreport.com, the only FTC-authorized site.

Starting Over

    Your credit report keeps credit information on it for a limited amount of time, typically either seven or 10 years. While you cannot remove correct information, such as judgments a credit card company obtained against you for failure to pay your bills, this information has less of an impact as time goes by. Lenders want to know what your history is, but having a recent positive history can often impact your score more directly than a negative history that happened a long time ago.

Growing Stronger

    While you cannot go from bad credit to good credit overnight, you can have a great credit score no matter how poorly you've done in the past. Your credit score depends on several factors, including your bill payment history and how much money you owe. Simply by paying down your debt and making your payments on time every month you can see an immediate positive benefit.

Credit Repair Companies

    Consumers should be cautious about companies that offer "credit repair" services. These companies can often be scams, taking more of your money and often leaving you worse off than before. Carefully check out any such company by checking its history with your state's attorney general's office or through the Department of Justice.

Is My Husband Responsible for My Student Loan?

Student loans are a significant long-term financial obligation. At the end of your educational career, you may owe hundreds of thousands of dollars, and you must gradually pay back your loans. If you fail to do so, the federal government can take collection action against you. If you live in a community property state or your husband cosigned your student loan application, he can be held equally responsible for your student loan if you default.

Community Property State

    If you live in a community property state, both members of the marriage are considered responsible for all debts incurred during the course of the marriage. Thus, in community property states, your husband is equally responsible for your student loan debt if you take out the loan after you get married. As a result, your loan providers can take collection action against him if you do not pay your loan back as agreed.

Cosigned Loan

    Student loan companies usually ask for a cosigner if a borrower has poor credit so they can reduce the risk of losing their investment if you default on the loan. Cosigners are equally liable for the loan and usually have to have good credit. If your husband cosigns a loan application on your behalf, he is equally responsible for the loan and may face financial consequences if you default on the loan.

Executor of Estate

    If you die before paying off your student loans and your husband is the executor of your estate, he may have to use estate funds to pay off your student loans or a portion of them. However, your husband is not personally responsible for your student loans in this situation. If the estate does not have sufficient funds to pay off your loans in full, the student loan company must write off your loans as a bad debt.

Considerations

    Student loans are subject to different laws than most other debt. Among other things, the consequences of defaulting on student loans are more severe. Student loan companies can demand the entire loan payment at once, garnish your wages or put a lien on your property to collect the total amount you owe, and most student loans are not eligible for discharge via bankruptcy. Therefore, you should make every effort to pay student loans on time each month, including talking to your creditor immediately if you are having financial difficulties. Your husband should not cosign student loan applications unless he is sure both of you will be able to pay the loans back.

Wednesday, October 22, 2008

Will a New Cell Phone Plan Affect My Debt-to-income Ratio?

When it comes to applying for credit, your monthly bills may cost you more than you realize. Creditors consider the amount of money you owe on things such as auto, school and credit card loans and may reject your application if they think you owe too much. One thing they're likely to ignore, though, is your cell phone bill.

What Creditors Consider

    Creditors evaluate you as a borrower based on your past tendency to repay creditors and your ability to add more obligations to the payments you're making now. Your credit report helps them make this evaluation, as it lists your past and current credit accounts and any late or missing payments. Credit accounts include auto loans, mortgage loans, school loans and credit cards. They do not include your accounts for things such as electricity, cable, or cell phones, as these accounts do not reflect your tendency to repay creditors. Your credit report shows the amount you owe on your credit accounts, allowing potential creditors to determine how much money you owe to other creditors. If a potential creditor decides you should not take on additional debt, they will not approve you for a loan.

Calculating Your Debt-to-income Ratio

    Creditors don't just look at how much you owe creditors, they look at your debt relative to your income. Calculating your debt-to-income ratio yourself can save you time applying for new credit. To calculate, divide your monthly debt -- that is, the amount you owe on your credit accounts each month, which excludes your cell phone bill -- by your monthly income. If the answer is higher than 0.5 you may find it difficult, though not impossible, to obtain new credit.

Lowering Your Debt-to-Income Ratio

    You can lower your debt-to-income ratio in either of two ways: decreasing your debt or increasing your income. Since increasing your income requires working more hours or finding another stream of income, you may find it more practical to reduce your debt. To do so, lower your monthly expenses such as entertainment, restaurants and cell phone bills to increase the amount of money you have available. Put as much of this money as you can toward paying off your debts, focusing on one debt at a time. Once you pay off a debt, recalculate your debt-to-income ratio.

Lowering Your Cell Phone Bill

    While decreasing your entertainment and restaurant expenses can be as simple as forgoing a movie and cooking at home more often, lowering your cell phone bill may not be as straightforward. Contact your service provider to find out whether a less-expensive plan is available, or if you can save money by removing features you don't need from your current plan. When your current plan expires, opt for a pay-as-you go plan from your provider, or switch to a provider that offers prepaid cell phone plans. If you don't need a cell phone, but rather a low-cost phone plan, use a service that allows you to make calls for less than the average phone company charges.

Is My Wife Responsible for My Debt Under a Sole Proprietorship?

A sole proprietorship is the easiest form of business to create and also the most risky. This business type offers no protection for personal assets in the event the company fails and cannot pay its bills. Even the spouse of a sole proprietorship owner may lose money or real property as creditors attempt to seize assets to satisfy business debts.

No Limited Liability

    A sole proprietorship does not benefit from limited liability protection like a corporation or limited liability company. A business creditor may attempt to seize or place a lien on any of your personal assets, including real property like a home or automobile, regardless of whether or not your wife's name also appears on the title or deed. This means your wife is effectively responsible for the debts of your sole proprietorship, because assets she holds in common with you are on the line if your business fails to pay its creditors.

Non-Marital Assets

    Business creditors may not pursue your wife's assets for your sole proprietorship's debts if these assets are not in your name. The state you live in may also require your wife to have possession of these assets prior to the marriage to make them immune to the collection actions of business creditors. If a creditor can make the claim that you are in control of the assets or finances in question, regardless of the name on the deeds or titles, these assets may be in jeopardy if a business creditor obtains a judgment against you.

Qualified Joint Venture

    A qualified joint venture is a sole proprietorship where you and your spouse participate equally in the material operation of the company. You must file a joint tax return and the federal government considers each spouse a sole proprietor for tax and debt collection purposes. A qualified joint venture also opens all of your wife's marital and non-marital assets to collection practices if the business fails to meet its financial obligations. Only enter into a qualified joint venture if your business is successful and sustaining steady growth.

Community Property States

    Ten states across the country, including California, Texas, Wisconsin and Louisiana, are community property states for marital assets and debts. This means you and your spouse are equally responsible for all debts accumulated over the course of the marriage. In these states, business creditors of your sole proprietorship may move to seize your spouse's assets for the satisfaction of business debts. Your spouse may retain equal obligation to pay these debts even if you divorce.

Notification of Correction of a Credit File

Your credit file is one of the most important pieces of information in your life. Vigorous protection of your credit is necessary in order to receive the best interest rates and get the most for your money. Sometimes keeping a clean credit file includes correcting inaccurate information, which can only be done by a creditor or credit bureau.

Reviewing Your Credit Report

    You are allowed one free credit report from each of the three major credit bureaus--Experian, Equifax and TransUnion--per year as per the Fair Credit Reporting Act. Reviewing your reports from all three credit bureaus is essential because each report contains different information about your credit history. As you go through your credit reports, identify any information that is inaccurate, as this information can be disputed with the credit bureaus.

Preparing Your Dispute

    You can dispute erroneous information by contacting the creditor directly or you can file an official dispute with the credit bureau. In either case, the creditor and credit bureau must communicate to verify information or to potentially reverse false information. Disputing with the credit bureau is easiest because it can be done online and without submitting any supporting documentation. However, since it's impossible to provide proof of your innocence over the Internet, this lack of evidence can also work against you.

Receiving a Response

    After you file your dispute, the credit bureau has 30 days to respond to your inquiry. If you don't receive a response, the item in question should automatically be removed from your credit report. Regardless of the bureau's decision, or the creditor's decision if you filed your dispute with them, you will receive a written response detailing the results of the review. Note that if you filed your dispute online, you may receive an electronic summary of your dispute's results instead of a physical letter.

After the Dispute

    Once you've received your response, what happens next depends on how your dispute turned out. If the item came back as verified, you can contact the creditor to plead your case. If your appeal was successful, you should see the item removed from your credit report within 30 days. Since most companies only report to the credit bureaus once a month, the removal process might take a little longer than you might expect. You will also receive an updated credit report that no longer shows the item you disputed.

Steps to Get Out of Debt Faster

Getting out of debt will never happen unless you develop a plan of attack. Debt from credit cards can cause mental stress, especially if you're unable to keep up with the payments. Moreover, debt can have a negative impact on credit ratings, and make you less likely to attain future financing. However, you can fix debt problems and finally achieve a debt-free life.

Instructions

    1

    Organize your outstanding balances. On a sheet of paper write down the names of all your creditors, the amounts you owe and the interest rate on each credit card.

    2

    Deal with credit card interest rates. Convince creditors to reduce your interest rate by emphasizing your good history with the company. Mention rates that you've received from competitors, if applicable, and ask your company to offer a similar rate. A low rate reduces the amount you pay on interest each month.

    3

    Stick to cash. Under no circumstances pull out your credit card when paying off your debt. Paying down the card and reaccumulating debt continues the cycle. Place credit cards in a bowl of water, and then freeze the water to help control debt.

    4

    Use extra income to wipe out debt. Do a self-checkup of your finances and spending habits to see if you can reduce costs. Eat out less, do less shopping or get rid of unnecessary monthly services. Reducing spending may create an additional $100 or more a month.

    5

    Liquidize your personal savings. Tap into personal savings accounts, life insurance policies or retirement savings to wipe out credit card debt.

Tuesday, October 21, 2008

Laws on Judgements for Unsecured Credit Card Debt

Laws on Judgements for Unsecured Credit Card Debt

If you have unpaid credit card debt and you are unable to work things out with your credit credit card company, they may attempt to sue you. If they win their case, you will have a judgment against you for the amount that you owe, plus any court costs. If this occurs, a statute of limitations, credit reporting and repossession/garnishment laws can all come into play and determine how a judgment will affect you.

Credit Reporting

    A judgment is a matter of public record and can be noted on your credit report for up to seven years. If a judgment appears on your credit report more than seven years after it was entered, you have the right to have it removed. To do this, you need to contact the credit bureaus and request that the out-of-date information be deleted.

    If your judgment is later vacated or dismissed, you should check with all three credit bureaus six to eight weeks after the change to make sure that the information in your credit reports has been updated.

Statute of Limitations

    Creditors are bound by the statute of limitations in the state where they are trying to collect a debt. Statutes of limitations vary from state to state, but a creditor cannot legally try to collect a debt from you (and this includes trying to get a judgment against you in court) after the statute of limitations has passed.

    If a creditor does get a judgment against you, there is also a statute of limitations on how long they have to actually collect the judgment amount from you. However, the statute of limitations on collecting a debt can be for very long time (12 to 20 years), and in some cases can be renewed via court order.

Repossessions and Garnishments

    Because credit card debt is an "unsecured" debt, not backed by collateral, the credit card company cannot repossess anything that you bought with the credit card. The credit card company can, however, garnish your wages, seize money in your bank accounts, and possibly get a lien on your home in order to recoup the money you owe them.

Vacating or Dismissing a Judgment

    If you have a judgment against you and you feel that it was issued in error, you can ask the court to "vacate" the judgment and have it expunged from your record. You will need to prove in court that the judgment should not have been issued against you in the first place--for example, if the judgment was for a debt that was older than the statute of limitations allows to be collected.

    If you have the cash, you may also want to contact your creditor and offer to pay off the debt in exchange for the judgment being dismissed. If you go this route, get their agreement in writing, and be prepared to pay for any court costs involved in getting your case dismissed.

What to Do When You Are in Debt

What to Do When You Are in Debt

Debt hangs over your head, leading to many sleepless nights and worry-filled days. Debt has a tendency to grow and seem insurmountable, but it is possible to get out of debt and stay that way. Taking control of your finances and understanding the basics of becoming debt-free are skills that are simple to learn and can be implemented with discipline.

Organization

    Organization is key to getting out of debt. It is impossible to make any headway without first knowing exactly what is owed and to whom. It is also imperative to know about all available income.

    Verifying all debt amounts and creditors is most easily done by collecting bill stubs and requesting a credit report from AnnualCreditReport.com. The two most common ways to list debts is from lowest to highest amount owed or from highest interest rate to lowest interest rate.

    The benefits of listing from lowest to highest amount is that smaller amounts are easier to pay off, therefor freeing up more cash for higher debts later on. The benefits of listing by interest rate is that less money is spent on interest and more is spent on principal as debts are paid off.

Spending

    Credit cards need to be put away unless it is the direst of emergencies. One way to avoid emergency spending on credit is to set aside $1,000 as an emergency fund in a savings account that is easy to access. Bills, restaurant meals and other expenditures should only be made by cash, check or debit.

    Dropping all bill payments to the minimum amount due except for the one debt currently being repaid will free up some money, but fat will need to be trimmed in every budget category. Dinners out, new clothing purchases and other expenses need to be trimmed completely from the budget or curtailed extensively.

Making a Payment Schedule

    Calling creditors may be a necessity if the minimum payments are too high, and income is too low to meet them. New minimum payments can be negotiated, but everything should be in writing and copies of all correspondence kept.

    The basic tenet of getting and staying out of debt is to either spend less or make more. Spending less is often the easier choice, but both methods work best when implemented together. Spending less on groceries will free up a little money, and taking a part-time job delivering newspapers will earn a little. The saved and earned money will add up, making debt repayment that much easier.

Professional Help

    Debt consolidation companies will consolidate consumer debt payments into one, easy-to-manage sum. The benefits are that the consolidator ensures that payments are made and creditors will stop calling home and work. The negative is that using a consolidator will have a negative effect on a credit score, but this can be corrected by staying out of debt in the future.

    Consolidation companies should be thoroughly researched, as some scam companies do exist. The Better Business Bureau lists reputable consolidation companies. Banks and other financial institutions also will often refer their customers to reputable consolidators that they have worked with in the past.

Monday, October 20, 2008

Tricks to Earn Reward Points Faster

Reward points are offered by credit card companies as a loyalty scheme; spending a certain amount of money on the credit card earns points that can be redeemed for flights, gift cards and other products. There are a number of strategies you can follow to maximize your reward points and therefore maximize your benefits.

Consolidation

    One of the key strategies is to consolidate. If you have three credit cards with, for example, 100 points on each, this is significantly less helpful than one card with 300 or even 200 points. This is because reward points are nontransferable.

    So, what you need to do is focus on one credt card, or two at the most, for your reward point purchases. This should be the one with the best scheme, or the one whose rewards are most in line with what you want. If you have enough credit available, you can even pay one card's balance off with another card--the first card will be clear, while the second card will have its reward points.

Streamline

    Streamline all your purchases into your chosen credit card. This means essentially avoiding cash altogether; instead, you should make every purchase on credit, and then pay the balance at the end of the month.

    This does take some discipline; you should not spend more than you would spend in cash, since this will just put you in debt and render the rewards superfluous.

    You can expand on this by paying for other peoples' purchases that they would have spent cash on. So, if you're at a bar with a friend who intends on paying for his drinks in cash, you can have him give you the cash while you pay the tab on your credit card. This will give you the rewards points for both of your tabs and also make the closing out process that much easier.

Stay Informed

    Finally, you need to be aware of what is going on with your reward points. This is particularly relevant with regard to the expiration date. You need to know when your points expire and what you plan to do about that.

    You also need to stay aware of any deals, like double points schemes and the like. If you are aware of these, you can capitalize on them by increasing the rate at which you implement strategies to gain points.

Plans for Getting Out of Debt

Plans for Getting Out of Debt

Getting out of debt is like losing weight. Sometimes there's a magic solution, but usually it's a slow process requiring honest self-examination and self-discipline. Most people wind up in debt because of thought processes or habits they aren't even aware of. Changing those is the biggest challenge to getting out of debt.

How You See Money

    Maybe you grew up poor and can't stand to be without. Maybe you grew up believing discounted merchandise was inferior. Maybe you mentally spend two dollars for every one that comes in. Examine how your views on money and spending landed you in debt. Then chuck expensive thought patterns. If you shop to boost your mood on a bad day, for example, go to the dollar store instead of the mall.

Taking the Hard Look

    Take a deep breath, sit down with a nice snack, and record the real numbers on your income and expenses -- no fudging. Figure out what you actually need to live on, including rent or mortgage, food, insurance, health care and education. Money left over is your debt reduction stash. Then, write down exactly how much you owe, to whom, and their interest charges.

Trim the Fat

    Trimming the fat might mean cutting out premium cable and daily gourmet coffee shop runs. Or, if you have no cable and never can afford pricey coffee, it might mean planning meals around grocery store loss leaders -- items deeply discounted to draw customers. It might mean shaving dollars off your utility bill by turning off lights and lowering the thermostat. Whatever your financial situation, there's probably at least a little fat you could add to your debt-reduction stash.

Contact Creditors

    Once you have determined what you can reliably spend on debt reduction each month, call each creditor and tell them you are having trouble staying on top of your bills. Work out a payment arrangement with each one. This will keep them from sending the debt to collection agencies and may spare you extra fees. Many creditors prefer small payments to writing off big debts. Still, it is painful. Creditors may stop your future spending until you get your debt paid off. They may pressure or even try to shame you to pay more. Stick to your guns. When the painful phone call ends, you will have a livable plan for paying off debts. As you pay off one debt, roll the extra money into paying off the next.

No Silver Bullet

    Look for hidden money you could use to reduce debt. That could be something you own -- a boat you rarely use, for example. It could be spare time you could use for part-time work. It should be something easily converted to cash. Downsizing on a house may take too long. Additionally, most debt consolidation plans, while promising to be silver bullets, will actually shoot you in the foot, according to the FTC, Smartmoney.com and other sources.

Carefully Track Expenses

    Track where your money goes. Write down every item you spend money on for at least a month. Look at your balances daily and see if you're at risk of overextending.

Stay Motivated

    Write down items you will have when the debt is gone -- peace of mind, for example. Pay attention to how each debt shrinks each month. Read books and inspirational stories that pop up on the Internet, or watch movies about people who recovered from serious debt to help you stay inspired. How you think about getting out of debt will be the greatest factor in your success.

How to Apply for Credit After a Name Change

When you are applying for new credit, creditors will run your social security number to yield a credit report. The credit report will reflect your current name as well as any names that you have used in the past. For this reason, if you have legally changed your name, you must ensure that all databases have your new name on record. This will help requests for future credit go smoothly.

Instructions

    1

    Make a visit to your local social security administration to get your name changed on your social security card. This will ensure that your social security number is connected to your new name when the number is run for a credit check. You will have to provide the social security administration with a certified copy of the documentation that reflects your legal name change.

    2

    Contact current creditors that you may have. Advise the creditor of your legal name change. Request that the name on your account be changed to reflect your new name. The creditor may require you to fax or mail documentation to prove that your name change is legal. This will vary by creditor. By reporting your new name to current creditors, it will be reported on your credit report.

    3

    Write a letter to each of the three credit reporting bureaus: Experian, TransUnion, and Equifax, to advise them of your new name. Be sure to alert the bureaus of your previous name as well as your current name. Request that your name be changed in their reporting database to reflect your new name. Include with the letter a certified copy of your legal name change documentation. The bureaus should honor your request within 30 days.

    4

    Complete the application for a new credit account. Enter your social security number on the application. Use your new legal name in the primary name fields of the application. Enter your former name in the fields that are designated for previous names or aliases.

Sunday, October 19, 2008

Taking Ownership of Your Credit

What Improves Credit Scores?

What Improves Credit Scores?

Improving your credit score can save you money by helping you obtain a lower interest rate on a loan. It also can help you to obtain a line of credit, and it may help you get the job you want. Improving your credit score can be the result of developing good credit habits you develop over time, according to the Experian website.

Manage Your Credit

    When you demonstrate the ability to manage your credit on a consistent basis, your credit score improves, according to Liz Weston, writing on the MSN Money website. She notes that keeping your credit balances between 10 to 30 percent of your credit limit -- which is called the credit utilization ratio -- helps your credit score and makes you attractive to prospective lenders. Avoid maxing out credit cards (using 100 percent of available credit), but do not stop using your cards. Going to one extreme or the other will damage your score.

Pay on Time

    How you handle your credit debt is as important as how much credit you have when it comes to maintaining a good credit score. To improve your credit score, you need to pay your credit bills on time and pay at least the minimum payment each month, according to the MyFICO website. A payment that is two or three days late can have a significant negative effect on your personal credit score.

Keep Accounts Open

    Consumers may assume that closing old credit accounts is a way to increase their credit scores. The reality is that closing your old credit accounts stops the positive effect of a long-standing credit card account and can damage your credit score, according to Pat Curry, writing for the Bankrate website. Closing an account also decreases your overall available credit, which, in turn, increases your credit utlization ratio and damages your credit score. Not only should you leave your old accounts open, but you should use them from time to time to keep the history active. Only use the older cards for amounts that you can pay off in 30 days to prevent carrying a balance.

Consolidation

    When credit debt gets to be a problem, some consumers may turn to debt consolidation to help their situation. Moving debt around is not going to help your credit score, but paying down existing accounts will, according to the Experian website. It helps your credit score for you to keep your existing accounts intact and pay them down rather than moving your debt from credit cards to a loan or consolidation program.

Saturday, October 18, 2008

How to Fix Credit Fast to Buy a House

How to Fix Credit Fast to Buy a House

For most people, the purchase of a home will be their largest investment and their credit rating the most important factor in how much they can afford to spend on their new homes. If your credit is poor, you may not even be eligible for a loan until you "clean it up." The lower your credit score, the higher your interest rate, resulting in higher payments. Since the amount of your monthly payment can only be a certain percentage of your total monthly income, that means the higher payments to creditors will result in having to settle on a less expensive home.

Instructions

    1

    Obtain your credit report from Trans Union, Experian and Equifax. Check all three reports for accuracy. Call all companies which have listed information you believe is incorrect. Request the name of the person you are speaking with, explain that the information is incorrect and request he remove the information from your credit report. Document the name of the person and details of the conversation. Fill out a letter of dispute addressed to each credit reporting bureau listing the incorrect information, with details of how the information is incorrect, and mail it by certified mail to each bureau if the company refuses to correct the error. Send a copy of the letter to the involved company.

    2

    Call all remaining businesses listed on your credit report that show currently overdue, delinquent or unpaid accounts or liens. Make payment arrangements and ask how quickly they can show your account is current. Explain why the payment was late or unpaid and see if they are willing to remove the negative comments from your credit rating.

    3

    Check the balances on all your open credit card or revolving charge accounts. Pay them to below 50 percent of the credit limit. Resist applying for any new loans or credit, because to do this lenders and credit companies will run a credit check, and numerous inquiries on your credit report will lower your credit rating.

    4

    Keep all payments on any credit accounts and loans current. Pay all bills on time. Keep as much money as possible during this period in your bank account.

How to Close a Macy's Credit Card Account

How to Close a Macy's Credit Card Account

The Macy's credit card is issued by Citi, a major financial services company. Citi, also known as Citigroup, handles all payments, billings and customer service requests for the Macy's card through a subsidiary -- Department Stores National Bank. According to the Office of the Comptroller of the Currency, Department Stores National Bank does not have any employees or any branch banking offices. The company was created in 2005 for the express purpose of engaging in credit card operations that are directed by Citi.

Instructions

    1

    Find the balance on your Macy's account by checking your billing statement. Pay off your balance -- if any -- before closing the account. It is possible to close the account with a balance still showing, but you still will be liable for monthly finance charges and other fees, such as being over the limit.

    2

    Call the customer service number on the back of the card. Instruct the representative to cancel your account effective immediately. Provide the representative with any requested information to confirm your identity, such as your Social Security number and date of birth.

    3

    Send a letter as a follow-up. Mail the letter to the attention of the Macy's credit card customer service department, using the address on your billing card statement. Recap your telephone conversation in the letter. Include your name, address and account number.

Friday, October 17, 2008

How to Buy a Laptop Computer With Poor Credit

How to Buy a Laptop Computer With Poor Credit

Don't let poor credit stop you from buying a laptop. It is possible to buy a laptop on credit even if your credit score is low and you have negative marks on your credit report.

Finance Charges

    Financing a laptop with bad credit means you must be willing to accept one consequence of your poor credit: higher interest rates. Chances are you'll be forced to purchase your laptop computer from an electronics store or department store offering credit at 18 percent interest or even higher.

Rent To Own

    If your credit is really bad you can finance a laptop by buying from furniture rental stores that also offer electronics for the home. The stores will allow you to rent the laptops for a few months and then transfer to a rent-to-own program. Other companies advertise on television, touting that they will finance anyone for a laptop--without a credit check. Examine these offers closely to determine if they are right for you. The rent-to-own and no-credit-check options usually end up costing you much more than the actual value of the laptop.

Secured Loans

    A secured loan might be an option, especially if you already have money in a savings account at a bank or credit union. That money can serve as collateral for the loan, making approval easy even if you have really bad credit. Alternatively, you could apply for a secured credit card at your bank or credit union and use the card to purchase the laptop. You'll have to deposit money into a savings account as collateral, just as you would for a secured installment loan.

Can I Get Sued by a Credit Card Company if I Lost My Job and Can't Pay?

Can I Get Sued by a Credit Card Company if I Lost My Job and Can't Pay?

When you are employed, handling your credit card bills is manageable, provided your spending has been within your budget. When you lose your job, however, tackling your payments becomes harder. If you do not work with the credit card company right away in this situation, your financial problem quickly can turn into a legal one.

The Contract

    When you sign up for a credit card, you sign a contract with the credit card company. This contract details the terms of use for the card, but it also explains that the credit card company is a lender you repay. If you violate the terms of the contract, you are violating your lending agreement. The fact that the debt is associated with a credit card company is not the issue -- the fact you have a legal contract indicating you will pay is. The credit card company legally can hold you to this contract even if you lose employment.

Unsecured Vs. Secured Cards

    Secured credit cards require collateral and therefore usually are better for individuals with poor credit. Unsecured credit cards do not require collateral and usually have better interest rates. If you have a secured credit card, the credit card company probably won't sue you. Instead, they will probably just collect the collateral you provided. If the credit card is unsecured, however, it is more likely that the credit card company will sue. This is because suing provides a court judgment that very specifically indicates what the credit card company can and cannot take from your assets according to state laws. Credit card companies need this with unsecured debt because the contracts for these kinds of cards don't specify any collateral even though the company is entitled to payment.

Negotiation

    When you cannot make payments on your credit card balance due to job loss, the best thing to do is to approach the credit card company right away on your own and explain your situation. Depending on the terms of your contract and the company you use, you may be able to negotiate with the company to have your monthly payments temporarily deferred -- for a fee, of course. The company also may lower your minimum payment amount or interest rate if you ask, although the company is not obligated to do so. This won't guarantee the company won't sue later on if you really get behind, but the fact you communicate well with the company and take steps to try to improve your situation looks favorable to the company. This may buy you some time in which you can find new employment and catch up on your payments. In many cases the company would rather negotiate than lose a customer or go to court. Consolidating your debt also may help.

Statute of Limitations

    Sometimes credit card companies try to collect debt after the statute of limitations for collection has expired. The statute of limitations varies from state to state. However, regardless of where you live, if the statute of limitations expires during your job loss, you are not obligated to pay the debt, regardless of the amount. People often pay credit card companies money they legally no longer owe because they are not aware of this. Do not let the credit card company intimidate you with the threat of a lawsuit if the statute on the debt has expired. Instead, use the statute of limitations as your defense against having to pay.

Considerations

    Just because a credit card company can sue you does not mean that it will do so. Suing is a time-consuming and costly process, and in some cases, the credit card company may determine that suing is not in the company's financial best interests. In addition, different states handle credit card judgments differently. For instance, some states allow wages to be garnished. If you don't have a job or your state doesn't permit garnishment, the courts may seize bank accounts, or they may sell or put liens on non-exempt property.

Wednesday, October 15, 2008

How Long Before a Debt Is Written Off?

A debt that is written off is one that businesses will take on their tax return as a loss, meaning that the IRS will subtract the amount of that debt from any income that the business received during that tax year. It benefits the business to either write off an unpaid debt during the current tax year or sell the debt for pennies on the dollar to a collection agency, thus making some profit, but still retaining the ability to take a tax deduction on the remaining debt.

When Creditors Write Off Debt

    For any debt that is 30 days past due, a creditor will typically turn the debt over to the collections department to attempt to make the debtor become current with phone calls and letters. After 60 -90 days, and no payments, the account is then put into a "red flag" status. The likelihood of being able to collect the debt at this point decreases with each passing day. Most creditors will wait until a debt is over 120 days past due before they write the debt off as a loss. Some creditors (depending on the type of loan) will write off a debt once it is over 180 days old. The amount of time taken to write off a debt by an individual creditor will vary, but the "industry standard" is between the 120 and 180 day mark.

What Happens After Write Off

    When a creditor writes off a debt, it does not invalidate the debt or absolve the debtor from re-payment. The write-off is only beneficial to the creditor for tax purposes and cannot be taken as a deduction by the debtor. Once the debt is written off, the creditor can either refer the balance to an in-house collections department to attempt to collect on it, or sell it to an outside collection agency (typically for less than the balance) and let them attempt to recover the delinquent debt in an attempt to turn a profit for their own company.

    Many times, collection agencies will purchase debts written off by original creditors for pennies on the dollar. In these cases, the agency will approach consumers with an offer to settle the debt for less than the original balance. It will be pitched to the consumer as if the agency is doing them a favor by offering to settle for less, when in fact, they have purchased the debt for less than the amount they are willing to settle for. Many agencies will use fraud and illegal tactics to attempt to collect on a debt they have purchased. When communicating with any collection agency it is good advice to be cautious and not to trust what they tell you in most cases.

Know Your Rights

    Due to unethical practices by collection agencies, it is important to know the rights for consumers in each state. Every state has a posted statute of limitations for a debt to be collected. If the debt is not collected once the statute of limitations has expired, the consumer is no longer legally bound to pay that debt. The statute of limitations can range from 2 to 5 years, depending on the state that the debtor lives in.

    Regardless of the statue, laws of credit reporting allow delinquent, unpaid debts to stay on consumer reports for as long as seven years. Having derogatory information on credit reports can make it difficult to obtain preferred loan terms or qualify for better rates of interest.

Can a Judge Grab Your Checking Account for a Civil Judgment?

Can a Judge Grab Your Checking Account for a Civil Judgment?

The legal system is complex and can be difficult to understand. It has a vocabulary all its own, and people usually don't use legal terms such as "judgment," "garnishment" and "levy" in their everyday language. If you've been sued, however, and a court has entered a civil judgment against you, you need to understand the legal terms associated with debt collection practices: The collection process can have a significant impact on your personal finances.

Entry of Judgment

    There are various ways in which a court can enter a civil judgment against you. If you defend yourself in a civil lawsuit but a judge or jury nevertheless finds you liable for damages, the clerk of the court enter a judgment against you for the amount of damages. If you fail to appear in a civil case, a judge may enter a default judgment against you, and the clerk of the court enters judgment against you for the amount of the plaintiff's damages. Once the clerk enters judgment against you, your creditor can take various courses of action to enforce the judgment.

Enforcement of Judgment

    The process for enforcing a civil judgment against you varies from state to state. Generally speaking, a creditor can garnish your wages or levy your assets. That means the creditor can "grab" funds in your checking account. In California, for example, a creditor must obtain a writ of execution from the court, prepare a notice of levy and prepare written instructions for the sheriff, marshal or process server to follow in serving the notice of levy. In California, if a creditor properly serves a notice of levy on the branch of your bank where your checking account is located, your bank must withhold funds from your checking account.

Exemptions

    Your bank must send you a copy of any notice of levy it receives that affects your checking account. Again, the procedure for notifying you of the levy and the property you can claim as exempt from the levy varies depending on where you live. In California, for example, as of the time of publication, a debtor may ask the court to protect up to $6,075 if the debtor needs the money to operate a business that's her primary source of income. If you don't file a claim of exemption or if the judge denies your claim, your bank must pay the judgment from the money in your checking account, and your creditor receives the money.

Costs

    Your judgment creditor can recover interest and costs in addition to the amount of the judgment. In California, as of the time of publication, interest accrued at 10 percent per year. The creditor may also collect costs such as the fee to issue the writ of execution and the fees the sheriff or process server charges to serve the notice of levy on your bank. The creditor is entitled to add these costs to the amount levied and to collect them from you.

Legal Advice

    If a court has entered a civil judgment against you and you're concerned about protecting your assets from enforcement actions, you should consult a local attorney for advice specific to your state and your circumstances. You may be able to take other action, such as filing for bankruptcy, to protect your assets from creditors.

Tuesday, October 14, 2008

The Best Ways to Consolidate Credit Card Debt

Credit card debt afflicts millions of Americans and, if left unchecked, can cause permanent damage to one's financial status. Getting out of debt often starts with consolidating your credit card payments so you have one monthly bill to keep track of. That allows you to plan for the future more readily and pay down your credit card debt in a timely fashion. When coupled with common sense, steps such as paying more than you owe each month and cutting down on credit card expenditures, make for a simple solution to eliminating debt.

One Card

    If you have several credit cards with outstanding debt, try to transfer the amounts to one card. Find out which one has the lowest interest rate and whether you can transfer the whole debt to it, or look for a new card with a low introductory rate that won't expire before you can pay off the debt. Many credit card companies offer balance transfer specials, making it easier to consolidate your debt with them. Once you've transferred your debt, cancel the other cards and cut them up; that will prevent you from generating new debt as you work to pay off the existing debt.

Another Loan

    When credit card companies won't help, consider taking out a loan from another source. These sources often offer lower rates than those of the credit card companies, and fixed payments every month mean you can plan for the future more confidently. Common loans for dealing with credit card debt include home equity loans from a bank (which borrow against the value of your house), loans from credit unions and personal loans from family and friends. When considering such loans, be sure to borrow enough to cover your entire credit card debt, and get a loan with a fixed interest rate, if possible, so you know how much you still owe on it.

Tapping Other Resources

    If you have any other resources that you can use to consolidate your debt, they may be the most preferable option. The most obvious sources are pieces of property such as boats or vacation homes, or existing bank accounts such as savings accounts. You may also be able to borrow against a 401k plan, a life insurance policy, or funds planned for your retirement. While you won't have access to those resources in the future, neither are you losing money on the interest payments to your credit cards, which is the principle purpose of credit card debt consolidation.

How to Get Out of Debt on a Shoestring Budget

How to Get Out of Debt on a Shoestring Budget

Perhaps your credit card bills are getting higher each month, or you received a large bill from an unexpected repair. Each day more and more people are becoming overwhelmed with debt. Finding ways to get out of debt is especially hard when you are on a shoestring budget. Even though your finances may be limited, there are ways to become debt free. The key to lowering debt on a shoestring budget is to find practical ways to reduce what you owe and to increase the income in your budget.

Instructions

    1
    Stop using credit cards.
    Stop using credit cards.

    Stop using credit cards immediately. Put your credit cards in a secured place or cut them up so that you are not tempted to use them. Eliminate new charges on your credit card accounts by using cash or a debit card linked to your checking account.

    2
    Call to ask for a lower interest rate on your credit card
    Call to ask for a lower interest rate on your credit card

    Call your credit card company and ask them to lower the interest rate on your account. Ask for a supervisor if the first person denies your request. Continue to ask for a higher supervisor until you get a lower rate assigned to your account. Do this for each of your credit cards.

    3
    Sell scrap metal for a profit
    Sell scrap metal for a profit

    Collect unwanted scrap metal and sell it to your local scrap yard. Offer to pick up unwanted metal bed frames, used appliances, and other metal items from people. Haul it to the local scrap yard and sell it for a profit. Collect the money from the scrap yard and use it to pay off any existing bills.

    4
    Build an emergency fund to help get out of debt.
    Build an emergency fund to help get out of debt.

    Contribute 10 percent of the money from your paycheck each month to build an emergency fund. Use the emergency fund to pay for unexpected bills outright instead of increasing your debt balances. Fund your emergency account automatically with direct deposit to help you curb your spending habits.

    5
    Sell unwanted items to make extra cash
    Sell unwanted items to make extra cash

    Sell unwanted personal items at a yard sale or on an online auction site. Factor in any supply costs or listing fees when determining a price for your items. Use the money collected from these endeavors to help pay off debt you incurred.

Who Is Responsible for Debt After Death?

Who Is Responsible for Debt After Death?

What Are the Laws in Texas Concerning Unpaid Credit Debt?

The Office of the Consumer Credit Consumer oversees laws for unpaid credit debt in Texas. These regulations pertain to the pursuit of credit debts owed and the statute of limitations involving these credit debts. Creditors and collection agencies not in compliance with these regulations risk fines and the loss of licenses to operate in Texas.

Debt Statute of Limitations

    The statute of limitations for debt collection involving credit accounts in Texas is four years. A creditor or debt collection company has this amount of time to compel a debtor repay a credit debt before the creditor loses the right to pursue the debtor in court. If a creditor or debt collection company attempts to sue a debtor after this statute expires, the court may dismiss the lawsuit sighting the time-barred status of the debt. The court may also bar the creditor or debt collection agency from suing the debtor for this particular credit debt ever again.

Fair Debt Collection

    Texas law follows federal guidelines established by the Fair Debt Collection Practices Act regarding the proper treatment of consumers by creditors and debt collection agencies. Under these regulations it is illegal for creditors and debt collection companies to harass debtors, threaten debtors with legal action when such action is not possible, impersonate law enforcement or publish a list of debtors who refuse to pay on credit accounts or other consumer debts.

Wage Garnishments/Property Lien

    Wage garnishment is illegal for most credit account debts in Texas. Wage garnishment is only legal for tax debts, alimony payments, back child support and federally secured student loan debt. In these cases, wage garnishment is limited to either 25 percent of the debtor's disposable weekly income or up to 30 times the minimum wage in weekly earnings -- whichever is lower. A creditor of collection agency may attempt to win a judgment to place a lien on property a debtor owns. A property lien entitles a creditor to a share of the profits from the sale of the attached property.

Truth in Debt Reporting

    It is illegal in Texas and other states across the country for a creditor or debt collection agency to report false information to a credit reporting bureau. It is also illegal for a creditor or debt collection agency to misrepresent the total amount a debtor owes or to pursue a debtor for more than the original amount of the delinquent credit account in question. If a debtor makes payment to a creditor in the form of a post-dated check, a creditor or collection agency may not deposit that payment before the date on the check.

Monday, October 13, 2008

Steps to Figure Child Support in Alabama

Steps to Figure Child Support in Alabama

Figuring out your child support obligation in Alabama helps you plan your finances accordingly. Child support in Alabama is financial contributions for your child's monetary needs. Alabama bases the child support amount on the income of both you and the other parent involved in the proceedings. The needs of the child are considered, and additional amounts may be added for child care, medical expenses and other special needs.

Instructions

    1

    Collect current proof all of your sources of income. Include all items that are considered in Alabama child support calculation, like employment wages and disability payments. All sources of money you receive are generally used as a basis for child support, except child support you receive for other children and benefits from state welfare programs, like food stamps.

    2

    Calculate the monthly amount for each income item. Add the items together. Label the total as "gross income." Write down all of the exclusion amounts from gross income Alabama allows that apply to you, generally child support payments for other children and alimony payments. Add the exclusions together and subtract the total from your gross income. Mark the result as "adjusted gross income."

    3

    List the monthly income amounts for the other parent in the support case. Estimate where needed. Add the figures together and label the total as the "other gross income." Subtract any exclusions that apply to the other parent and mark the resulting figure as "other adjusted gross income."

    4

    Add your adjusted gross income and the other gross income together. Mark the result as the "combined adjusted gross income."

    5

    Get a copy of the Alabama child support guidelines. Visit the official website of the Alabama Judicial System. Select "Administrative Office of the Courts" near the top of the webpage. Scroll over "Child Support" from the Quick Menu to the left and select "Child Support Information." Scroll down the webpage to "Schedule of Basic Support Obligations" that applies to the age of your case for a copy of the support table. Print the table out or leave the webpage open for reference. Visit your local Child Support Enforecement Office and request a copy of the guidelines if you cannot view the information online.

    6

    Review the Alabama support guidelines. Locate the income range your combined adjusted gross income falls under on the left of the guidelines. Move right on the line of your income range to the column with the correct number of children on top. Write down the figure shown and mark as "support obligation."

    7

    Calculate your percentage of the combined adjusted gross income. Divide your adjusted gross income by the combined adjusted gross income. Multiply the answer by 100 and label as the "percentage."

    8

    Multiply your percentage by the support obligation. The answer is your basic support obligation per Alabama laws.