March 2009 ~ Credit And Debt Management

Tuesday, March 31, 2009

Foundations to Help With Medical Bills

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Even with insurance, medical bills certainly add up. A variety of organizations assist those in medical debt. From government assistance to charities, these organizations offer those in debt a means of putting a dent in their growing pile of bills.

Request and go through the itemized bill from the hospital or doctor's office. Bills commonly contain errors that you can have removed. If poring over your bill feels like an overwhelming task, hire a medical billing advocate---a professional who specializes in analyzing bills and negotiating with the hospital to ensure that it charges you fairly.

Contact the billing department at the hospital or doctor's office where you obtained the services, and inquire about financial assistance. Many hospitals have a budget or grant for this scenario and can provide you with a form to determine whether you qualify for aid. Keep in mind that hospitals will base your potential qualification upon your income and ability to pay.

Visit www.ssa.gov to research the variety of government programs for certain groups of people. For example, Medicaid, or Title 19, targets low-income families and the disabled, the disabled and the elderly can qualify for Medicare. For nondisabled single adults who fall below the poverty line, State Administered General Assistance, or SAGA, provides assistance. Healthcare for Uninsured Kids and Youth, better known as HUSKY, offers insurance for anyone under the age of 19 and covers most medical services regardless of income.

Contact your local community and state governments, which may also offer additional programs for medical debt grants.

If you cannot get assistance or reduce your debt, consolidate with a professional organization. Many companies will not only work to consolidate your debt but will negotiate your bills as well. Try companies such as Debt Relief USA (www.debtreliefusa.org) or Franklin Debt Relief (www.franklindebtrelief.com).

Many charities offer assistance to those struggling with medical bills due to certain conditions. For example, Livestrong, the Lance Armstrong Foundation, provides grant programs to those living with cancer. Visit www.livestrong.org for more information.

Seek out organizations focused on your affliction and research any benefits or programs they offer to sufferers.

Can More Than One Company Garnish Your Wages at Once?

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In general, creditors look to wage garnishment as a debt collection method as a last resort. Even so, creditors can and do get writs of garnishment against those who have no other available assets by which to pay their debts. Sometimes, consumers fall behind on multiple debts, in which case it is possible for multiple creditors to seek garnishment orders against the consumer at the same time.

Multiple creditors can file lawsuits against you that may result in the creditors filing writs of garnishment. However, as explained by Bills.com, because state and federal limitations exist on how much can be garnisheed from your wages, creditors may have to agree with each other to garnishee less than the maximum allowed, or wait for one debt to be resolved before they can start receiving some of your wages.

The primary federal law dealing with wage garnishment is the Consumer Credit Protection Act. Title III of this act limits the amount of money creditors can take from your wages to 25 percent of your disposable earnings. Alternately, creditors may take up to the amount by which your disposable income is greater than 30 times the current federal minimum wage. Different rules apply if your wages are being garnished for child support, bankruptcy or tax payments. Usually, the limit for these payments is 50 percent, but with child support, the amount can be up to 65 percent, depending on how delinquent you are on the child support and whether you're already supporting another child.

Each state has its own limits on how much creditors can take from your wages. In many cases, these limits mirror the federal guidelines, but some states have limits below those stipulated in Title III. This means that it may take multiple creditors longer to settle your delinquent accounts in some states than in others.

If two or more creditors get a writ of garnishment against you, typically, creditors are paid via garnishment according to the order in which the writs were issued. This way, one creditor can get up to the maximum amount allowed by state laws and Title III. However, creditors also may agree to split the maximum allowed. For instance, if using Title III guidelines, each creditor may garnishee 12.5 percent. The method you select doesn't necessarily change how fast you eliminate the total debt, depending on the amount of the debts and the interest rates involved, but with sequential payment, because you throw the total amount allowed at a single creditor, that account will show as closed on your credit report sooner than if you split the maximum. The elimination of a debt sometimes looks better to creditors than paying on multiple debts that are still active.

An important consideration regarding multiple wage garnishments is that your employer cannot fire you for a single garnishment order. This protection does not apply to you if you have multiple garnishment orders, however. Thus, it's beneficial to contact creditors with whom you have subsequent delinquent accounts and arrange payment plans outside of the court.

What is the Responsible Debt Relief Algorithm?

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The Debt Relief Algorithm is a formula designed to analyze a household's income-to-debt ratio and lead the household to the best solution to its debts.

Robert Manning invented the Responsible Debt Relief Algorithm as part of the InCharge Debt Solutions program that he is involved with. Manning is a former research professor at the Rochester Institute of Technology.

The algorithm is designed to analyze a household's debt and income, and then recommend a repayment plan so the household can eventually be free of debt. Generally the program is formulated so that the debt will be paid off in three to five years.

The algorithm has been converted into a computer program so that almost anyone can utilize the technology. The Responsible Debt Relief software breaks down the debt repayment into one of three possible outcomes.

One of three possible outcomes is recommended depending on the ratio of household debt to household income. These options are partial repayment, bankruptcy, and full repayment.

Can a Business Lawsuit for Debt Collection Go After Your Personal Assets?

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When a business takes on a large amount of debt and becomes delinquent in its repayment, creditors will often file suit in court seeking repayment. While the creditor will usually seek payment from the business, if the business is unable or unwilling to pay, the creditor may file suit against the business' owner and collect from his personal assets. Whether a creditor can legally do this depends on the structure of the business and how the debt was secured.

If a business is structured as a sole proprietorship, meaning it is owned and operated by a single person, then the owner is securely tied to the debts of his business. A legal judgment against the business is, in effect, a judgment against the individual himself and creditors are allowed to treat the individual's assets as they would the business'. Similarly, partners in a partnership are liable for all business debt, although they share this liability.

Owners of corporations, as well as owners of limited liability partnerships (LLPs) and limited liability companies (LLCs), generally cannot be personally sued for debts incurred by the company. For example, the shareholders and top management of Ford Motor Company, a corporation, cannot be sued by creditors for the company's outstanding debts. However, if an owner of a corporation, LLC or LLP personally secured or guaranteed payment of the debt, then the owner may be sued and his personal assets seized.

According to Yahoo! Finance, many businesses, particularly small businesses, do not have good enough credit ratings that they can receive loans at reasonable rates. To receive these loans, a business' owner must personally vouch for the loan, taking it out in his name or agreeing to secure it with his own collateral. In such a case, if the loan defaults, creditors can go after the owner's assets, as the loan is essentially his.

Generally, before a creditor can go after the personal assets of a business owner, he will attempt to extract payment from the business itself, regardless of who underwrote the loan. It is only when the business does not pay that the creditor will file suit against an individual. To seize personal assets, a creditor can resort to a number of different practices, including wage garnishment, bank account freezing and the levying of liens against personal property.

About Debt Consolidation Mortgage

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If you are a homeowner with a significant amount of equity in your home and a growing amount of debt, you may have a distinct advantage over non-homeowners. If you have sufficient equity in your home, you may be eligible for a debt consolidation mortgage through your current mortgage holder or a different lender. A debt consolidation mortgage can reduce your stress levels and high interest charges by combining all your debt payments into one monthly mortgage payment.

If you have built up substantial equity in your home and plan to stay for another 10 to 15 years, a debt consolidation mortgage may be the ideal solution for your debt woes. If you currently have five or more monthly credit card bills and school or car loans, consolidating may be an effective financial move. It could be worth the peace of mind and the savings in interest charges to leverage the money you have already invested in your home.

A home equity loan (HEL) and home equity line of credit (HELOC) each utilize the equity in your home to allow you to obtain a secured (with collateral) loan. The equity in your home is calculated by subtracting all mortgages and other loans attached to the property from the home's current market value to arrive at the available amount of equity. For example, if you have a balance of $180,000 on your first mortgage, and the current market value for your home is $275,000, you have $95,000 of equity available. Typically, most lenders will allow you to borrow up to 80 percent of your property's equity, so you could potentially borrow up to $76,000, and the interest would be less than you would be paying on a credit card.

Another option for debt consolidation is a second mortgage, which is also secured by the equity in your home. Second mortgages are available as fixed-rate loans or adjustable-rate mortgages (ARMs) and typically the maximum loan for a second mortgage is 80 percent of the original cost for your property. Two advantages of a second mortgage include a lower interest rate that could reduce monthly debt payments significantly, and chances are you will be able to deduct the interest -- on balances of $100,000 or less -- for tax savings as well.

A cash-out refinance is definitely worth considering when you can get a new fixed-rate loan with an interest rate of one or more percentage points below your current rate. If you have a home valued at $250,000, with $100,000 remaining on an original mortgage of $150,000, you could refinance your home with a new $175,000 loan and take the remaining $25,000 as cash to pay your debts. Refinancing, however, means paying all the fees and closing costs associated with any new mortgage and starting a new term of, say, 30 years when you may only have had 15 or 20 left on your mortgage. So, ideally, you'll want to refinance with a shorter term, if possible, for substantial savings over the life of the loan.

Consumer Information on Credit Reporting Agencies

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One of the best ways to find information on credit reporting agencies is by looking over the websites of the three largest companies that compile consumer credit files: Equifax, Experian and TransUnion. Through their sites you can find out how credit file disputes are handled, how long negative information remains on a credit report and how to remove your name from credit and insurance marketing lists.

The Experian website helps explain how consumer credit information is compiled and how often it's updated. Experian says that creditors and lenders send information on consumer accounts to credit reporting companies every month. However, the information is sent at various times throughout the month, which is why consumers' credit files can go through frequent changes several times in the same month.

The U.S. Federal Reserve Board, or FRB, website notes that credit bureaus also get information about consumers through public records, which may include data on property liens and bankruptcy. According to the FRB, credit bureaus get information from different sources, so credit files at each bureau include different data on the same consumer and result in different credit scores.

TransUnion describes on its website how consumers can dispute any errors they find in their TransUnion credit files. The process includes pointing out inaccurate information to the company online, by phone or through the mail. TransUnion contacts the creditor or lender who reported the disputed information to verify it and then notifies the consumer about the outcome. A creditor or lender may report that the disputed information is accurate, so it won't be changed or removed. Consumers who disagree with such outcomes can add a short statement to their credit files stating their side of the issue.

TransUnion also provides a consumer report expiration guide on its website. The guide provides details on how long negative information can legally remain in a credit file. For instance, closed accounts that show late payments or collection actions against a consumer can remain in a credit file for seven years; information on bankruptcies remain in credit files for 10 years. TransUnion notes, however, that when a person files for bankruptcy, all the accounts included in the bankruptcy should be marked "included in BK"; each associated account remains on the credit report for seven years.

The FRB alerts people to the fact that credit reporting agencies may sell consumers' credit information, including their names and addresses. The information is sold to creditors or insurers who want to market their products and services to people who fit certain credit profiles. Consumers have the right to opt out of such marketing efforts through credit reporting company websites, by phone and through the mail. Equifax asserts on its site that prescreened offers may be more favorable than others. The company says that certain credit card and insurance products are only available through prescreened offers.

How to Get a Free Credit Card With Bad Credit

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Bad credit limits your options when shopping for a new credit card. Although you may need a credit card to make online purchases, hotel reservations or just in case of an emergency, your poor credit score may place free credit cards out of your reach. Secured credit cards are often the only option for individuals with bad credit and these credit cards require a cash deposit. If you cannot afford to make a cash deposit on a secured credit card, you can get a credit card with no cash deposit and no annual fee through a process known as "piggybacking" (See References 1).

Instructions

Talk to friends and family members who have good credit. Ask if they are willing to add you on to their credit card accounts as an authorized user. Authorized users have all the benefits of a credit card account--including being able to build their credit score--without the responsibility of paying any fees that the card carries (See References 1).

Ask your loved one to call his credit card company and request that the company add you on to his account as an authorized user.

Fill out the necessary paperwork. Some credit card companies, such as Discover, do not require new authorized users to fill out paperwork before being added to a credit card account (See References 2). Some companies, however, do (See References 3). If the credit card company does not require a signature from you, you must still provide your loved one with your Social Security number before the company can add you to the account.

Wait for your new credit card to arrive. Use your new free credit card to make purchases and reservations. Pay your loved one for the purchases that you make on his credit card so that he may then apply the payments to his account.

What to Do If a Collection Agency Sues?

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Dealing with a collection agency can be stressful. When contacted by a collection agency, consumers should gather information on the collection process in order to determine the proper course of action. The good news is that while collection agencies typically can sue, agencies generally only use lawsuits as a last resort due to the costs and uncertainty of success.

When a collection agency mentions lawsuit, consumers often panic. In response to the threat of a lawsuit, consumers should not take any action that will make their financial situation worse, such as skipping house payments to pay the debt. Though collectors may threaten a consumer with a lawsuit, this typically does not mean that a collection agency is actually going to sue. While threatening to sue without intent to do so is a violation of the Fair Debt Collections Act, it is still a common practice, as it is often difficult to prove.

If the collection agency is suing or threatening to sue, the consumer and the collection agency can still reach an agreement on the debt. Consumers should try to work out a payment arrangement on the debt with the agency. Collection agencies will likely accept a settlement offer of 50 percent or less on many debts. Collection agencies may also allow the debtor to make payments toward the settlement amount over a period of months. Debtors should document all conversations and insist on having the terms of a settlement in writing before making payment.

If a collection agency does file a lawsuit, the consumer must receive notice of the hearing. Laws on proper service delivery vary by state, but the consumer may receive notice via hand delivery, certified mail or First Class mail. When receiving a notice of hearing, the consumer should respond to the notice and plan to attend the hearing. Collection agencies must prove that the consumer owes the debt, but if the consumer does not attend the hearing, the court may grant a default judgment.

Consumers facing a lawsuit over a debt or simply requiring assistance in dealing with the debt have access to assistance. A credit counselor can help negotiate with the collection agency to work out a payment plan. The consumer can also contact an attorney to determine what legal recourse may be available. Consumers receiving notice of a lawsuit should strongly consider hiring an attorney to represent their interests. Consumers who feel that the collection agency is violating their rights should file a complaint with the Attorney General's office in their state as well as the Federal Trade Commission. Consumers may also sue the collection agency.

How Can I Refinance My Auto Loan?

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Most people associate refinancing with home loans, but some banks also allow auto loan refinancing. If you're not satisfied with the terms of your current auto loan, even if you've had the car for years, it may be possible to refinance that loan today.

Refinancing a car loan is similar to refinancing a home loan. The lender pays off your existing car loan and initiates a new loan for the existing balance. In some cases, you may also take cash out, depending on the lender and the value of the car.

The main purpose for refinancing a car loan is to reduce your interest rate. If you had a poor credit score at the time of securing your initial loan but have made improvements, you may qualify for a better interest rate now. Another reason for refinancing is to lower your payment. Some borrowers feel trapped into expensive car payments with no relief for years. The lender can extend the term of the remaining loan balance due, which effectively reduces the monthly payment amount. However, in some cases you will pay more interest over time by extending the loan term.

To refinance an auto loan, you must have a solid credit score. The minimum varies by lender, but in general a score of 720 or above is safe territory for getting a new loan approval at a favorable rate. Some lenders may extend a refinancing offer if you have a low credit score, but you may not achieve a better interest rate than your current loan. Lenders also look at your payment history and your debt-to-income ratio -- total monthly debt payments divided by gross monthly income -- when deciding whether you qualify for refinancing.

Contact your bank or a reputable online lending website to apply for a refinanced car loan. If you pass a credit check, the next step for the lender is to evaluate the car' value. You must provide the vehicle identification number, make, model and year, as well as the initial purchase price and amount of any down payment. You must have a steady and verifiable source of income. The lender may require you to pay additional closing costs and paperwork processing fees, which the bank commonly adds to the new loan balance.

Unsecured Creditors Rights

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If you have unsecured debt that is delinquent, such as credit card debt, your creditors have certain rights they can execute for the collection of the debt. These collection activities are normally performed by a third-party debt collector. When you fall past due, contact your creditors immediately to make arrangements. This will stop your creditors in most cases from taking action against you. Sometimes you can negotiate favorable arrangements that fit your budget. You may be able t negotiate a settlement for less than your balance.

When your debts fall past due your unsecured creditors can seek legal action. They can file a claim with the court and have a trial date set. You will receive a notice in the mail, called a writ of summons, information you of the date, location and time of the trial. If the creditor receives judgment against you they will begin to actively pursue efforts to collect your past-due account.

Your creditor can report this information on your credit report as a collection account, which remains in place for seven years. This will lower your credit score and make it more difficult to get approved by other creditors. If you are able to get approved, you will have to pay higher interest rates for credit products.

An unsecured creditor can have a lien placed on your real estate property. When the lien is filed with the court it must be paid off if you decide to refinance your mortgage balance or decide to sell your home. The lien will be paid from the proceeds of the sale. This process can vary from state to state.

After a judgment is received an unsecured creditor can attach your bank account with a levy. A levy will freeze all or a portion of the funds in your account. The funds will then be applied to your outstanding balance. If you share this account with another account holder they will not be able to access the funds.

An unsecured creditor can have your wages garnished. The amount of money taken varies, but it is usually about 25 percent of your disposable income. They can continue to take money out of your paycheck until the debt is paid.

Free Debt Consolidation Information

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Debt consolidation describes many ways of taking several debts and packaging them into one debt with one interest charge and one monthly payment. One payment is easier to remember and budget for than several, but often it doesn't save consumers money, despite advertisements to the contrary. If a consumer decides he needs to consolidate debt, there are wiser ways and riskier ways to do so.

Debt consolidation companies promise to take an unwieldy stack of debt, reduce it to one payment that is lower than what you are currently paying and end harassing phone calls from creditors. What they don't advertise is that they charge a monthly fee of about 10 percent of the money they pay your creditors monthly. In addition, lower payment often comes with an interest rate of 21 or 22 percent, so you wind up paying more in the long run than if you had simply paid your bills. Sometimes much more.

There are ways to consolidate debt and save yourself money, but it takes more legwork. If you qualify for a personal installment loan, you can take out a loan from a bank or credit union, pay off other debts and have only the one loan. The interest rate is likely to be lower than the one on a credit card that's had a payment skipped. Credit agencies look more kindly on installment loans than a raft of credit card balances.

If your credit is in rough shape, you may be tempted to go for a loan that's easier because you can secure it with your house or your car. If you have equity in your car, you may be able to refinance your car loan and get cash back to pay other loans. You may be able to get a home equity line of credit, which is borrowing what you already paid on your mortgage and paying it back. You can borrow again from a line of credit, or you could get a second mortgage. All these consolidation moves, however, could make you lose your home or car.

Some people transfer balances from a higher rate card to a low or no interest rate card with the idea that they will pay off the card while escaping the interest and get debt free that way. The trouble is that most people with this strategy have already discovered they are not particularly self disciplined when it comes to credit. Statistically, most wind up racking up a balance on both cards. If you do protect yourself against the inherent danger by canceling cards, make sure it says canceled at the card holder's request. Either way, canceling cards can look bad on credit reports, too.

One smart approach to debt consolidation is to talk to a consumer credit counselor recommended by the Association for Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling (see Resources). These counselors offer free advice on paying off debts. They might help a consumer set up a self-managed plan for taking care of debt for no cost. They will, if requested, consolidate unsecured debt and negotiate lower fees and interest rates with creditors. The advice is free; managing the debt usually costs around 8 percent or $35, whichever is less. They won't tack on an exorbitant interest rate.

The first step in figuring out the wisdom of debt consolidation might be figuring out what you will likely pay in fees and interest on each debt, adding up the cost and seeing what you can expect to pay out-of-pocket. This will help you determine which debt management approach would work best for you.

Is it Better to Pay Off Your Credit Cards With a Debt Consolidation or Just Pay it Off Yourself?

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If you are having trouble making ends meet, you are not alone; the average American has $8,000 in credit card debt. Whether the issue is a job loss, emergency or overspending, a financial crisis happen to everyone at some point. When this happens, credit cards are frequently there to pick up the slack, at least for a while. The question is when you get back on your feet: do you pay off your credit cards with a debt consolidation or just pay it off yourself?

When it comes to paying off your credit card debt, it is important to understand your options so you can make an informed decision about which option will work best for you. Credit card debt consolidation is one way to go. Consolidating credit card debt involves transferring all of your credit card debt to one credit card or taking out a loan of some sort, such as a home equity loan, to pay off all your credit card debt.

Credit card debt consolidation allows you to save on interest in that the interest rate you get by taking a loan or transferring your debt to one credit card is typically much lower than what you are paying before consolidation. Moreover, the lower interest rate combined with a single payment means that your monthly payment obligation is commonly less after consolidation or, if it remains the same, allows you to pay more on the principal each month, meaning you can be free of your debt sooner.

While credit card debt consolidation carries many benefits, there are also several disadvantages. Keep in mind that if you transfer all your debt to one credit card, your credit utilization for that card will be high and your credit score negatively impacted as a result; when your credit utilization is over 35 percent, your credit score will take a hit and if you are close to your spending limit, that impact will be even greater. If you take out a home loan or other personal loan, be aware that, in 70 percent of cases, the borrower ends up having just as much if not more debt two years after consolidation.

Of course, you do not have to use debt consolidation to pay off your credit card debt. You could try and settle your debt, ask your credit card company to work with you to set up a payment plan you can manage or apply for a personal loan from your bank, credit union or other lender to pay off the balance of the card. You could also try and pay off the cards yourself over time. The latter option can be difficult, especially at first, but working to pay off your credit card debt yourself can make you debt free in less time. Not only do you have the option of paying as much as you are able each month (above the minimum payments) but, when your credit card balance is high, it prevents you from charging more. Start by developing a budget you can live with. If your income just isn't stretching far enough, contact your credit card providers: they may be willing to offer a modified payment plan, settle your debt or give you extra time to pay.

Can Landlords Forgive Debt?

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Debt between two private parties can be forgiven at any time. Landlords can legally forgive the debt of their tenants, provided that they are the sole owner of the property. The motivation for such debt forgiveness may be to increase the probability of full payment of future rent or a barter where services or improvement to the property are exchanged for rent payments.

Debt between two private parties, whether the parties involved are individuals or corporations, can be forgiven at any time. Just as there is no law prohibiting you from handing cash to someone as gift, there is no legal reason the landlord cannot forgive the debt of tenants. The debt may be due to unpaid rent, damage done to the property or any other reason.

A prerequisite for such forgiveness, however, is that the debt is written of by the landlord and not an agent of the landlord who lacks such authority. If you pay your rent to third party, such as an accountant, who merely acts as an agent, such individuals or companies cannot forgive the debt without express consent of the landlord.

There can be many reasons a landlord may wish to forgive debt. If the landlord is convinced that the tenant genuinely lacks the ability to pay the outstanding debt in full, he or she may forgive some of the outstanding balance in exchange for a more realistic payment plan. A tenant who feels that eviction is inevitable may stop making payments even though it is within his or her ability to pay some of the outstanding debt. If given assurance that partial payments will eliminate legal proceedings, however, tenants are often much more motivated to cooperate.

Landlords may also forgive some or all outstanding debt in exchange for services performed by the tenant. A skilled tenant could paint the house or perform repairs or landscaping services at several properties owned by the landlord, for instance. Technically speaking, such an exchange is not really forgiveness, but a barter. However, in many cases an element of forgiveness is involved if the services provided by the tenant are valued less than the amount of debt forgiven. The landlord may believe that the legal costs and effort involved in legal proceedings make such partial forgiveness feasible.

Any debt that is forgiven is taxed as income by the Internal Revenue Service. Therefore, the tenant's net gain as a result of forgiven debt may be smaller than anticipated. If, however, a barter is involved, the debt that was written off will not be taxed. To prove that the debt written off by the landlord was in exchange of services performed, obtain a written statement, which you can later present to the IRS. If a partial trade was performed, document how much of the loan amount was forgiven versus bartered.

Georgia Payday Lending Law

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A payday loan provides a cash advance to a borrower until their next payday. According to the Consumer's Union, payday loans have extremely high interest rates that can trap low-income residents into a cycle of debt. The state of Georgia has legally banned payday loans for over 100 years. Because some payday lenders circumvented the ban, the state legislature added to the Georgia Code Chapter 17 (Payday Lending) Title 16 (Crimes and Offenses), which clearly defines what activities are considered payday lending and legislates criminal and civil penalties for offenders.

Under 16-17-2 of the Georgia Code, payday loans are small loans underwritten within the state in the amount of $3,000 or less. The state allows businesses to issue loans of less than $3,000 if such companies operate under the rules of the Credit Card and Credit Card Banking Act, have residential mortgage statues or are a licensed state or federally chartered credit union or bank. Even with legal lending, the state prohibits the annual simple interest rate on loans from exceeding 16 percent per annum, according to Section 7-4-2 of the Georgia State Code.

Under Section 16-17-1 of the Georgia Code, the state does not prohibit interstate payday loans. Georgia residents may obtain a payday loan in another state. State law allows short-term loans in the form of car title loans, retail installment plans and pawnshop loans. These types of loans are backed by real property which the lender will collect if the borrower doesn't make payments. Under Section 16-17-2(a)(4), refund anticipation loans do not count as payday loans, but the loan cannot total more than the amount of a filer's anticipated tax refund.

Per Section 16-17-4(a), the Attorney General of Georgia or any district attorney within the state will hold a payday lender civilly liable in the form of a penalty adding up to three times the amount of any interest that the borrower paid in an unlawful transaction. The state receives half this money and the district attorney receives the other half. In addition, the state will tax any illegally made payday loans at a rate of 50 percent, an amount added onto existing penalties. According to Section 16-17-7 of the Georgia Code, an interstate financial corporation will be barred from doing any business in Georgia and will have its existing corporate certificate revoked if it is caught making payday loans.

Per Section 16-17-2 of the Georgia Code, the Attorney General or a district attorney will hold any person who issues a payday loan in the state criminally liable. The penalty for issuing a payday loan is an aggravated misdemeanor with imprisonment of not more than one year and a fine of up to $5,000 per violation. Each payday loan counts as one offense under Georgia law. Any person convicted of violating payday loan laws on three previous occasions will receive a fine of $10,000 and five years imprisonment.

How to Stop a Wage Garnishment in Pennsylvania From PHEA

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Stopping a wage garnishment from the Pennsylvania Higher Education Assistance Agency is extremely difficult if the agency has already sent you a 30-day wage garnishment notice but it is possible. Stopping the collections process before garnishment is the ideal solution but if it is already too late for that, you do have the right to appeal the garnishment if you cannot pay your debt. American Education Services is the loan-servicing department for PHEAA and is the branch of the company that you will contact to negotiate a wage garnishment.

Instructions

Read your garnishment notice. The notice from PHEAA informs you of your right to appeal the garnishment, information regarding repaying the debt and reasons you may have to stop the garnishment but you must follow the instructions in the letter.

Contact PHEAA to arrange to pay your debt. If you have no grounds for stopping the garnishment, PHEAA must agree to a repayment plan to stop the garnishment.

Complete the hearing requested included with the notice. Requesting a hearing enables a hearing examiner to look over all of your loan documents and documents supporting your inability to pay. The hearing examiner also rules on any challenges that you make as to PHEAA's right to collect the loan.

File your hearing request within 30 days of receiving the notice. If you do not respond to the notice in time, the garnishment will begin. You can still have the hearing and the garnishment will cease if the examiner rules in your favor.

Attend the hearing. You can hire an attorney to represent you who will cross-examine any witnesses for PHEAA. PHEAA must provide the stenographic services for any telephone or in-person hearings.

Wisconsin Laws on Credit Card Debt and Being Sued

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In August 2010, Minnesota Public Radio reported that Wisconsin had the nation's fifth-lowest average credit card debt, at $4,160. This figure is down 12 percent from the second quarter of 2009. However, it doesn't matter how much debt you have. If you're delinquent in paying your credit cards, you can be sued. Knowing Wisconsin's laws on credit card debt and being sued allows you to be prepared before you're summoned to court.

Every state has limits on how long a creditor may collect credit card debt. This is known as the statute of limitations. Technically, the statute of limitations cannot prevent you from being sued by a creditor. However, the statute of limitations will amount to a defense once you go to court. Credit cards --- known as "open accounts" in law --- have a statute of limitations of six years in Wisconsin. Judgments set in court have a far longer statute of limitations: Judgments last 20 years in Wisconsin, whether they're levied in Wisconsin or another state.

Once you have a judgment entered in court, you may then be taken to court again for your creditor to obtain a writ of garnishment. This means that the creditor has the right to have a portion of your wages automatically deducted for the purpose of repaying debt. You may not have more than 20 percent of your net after-tax earnings garnished under Wisconsin state law. You can also only have your wages garnished by one creditor at a time. The law also allows you to cite a number of exemptions to income garnishment, including child support payments, income below the federal poverty line and eligibility for food stamps, that alter what you may be required to pay.

Generally, in Wisconsin interest rates are capped at 5 percent. However, the interest rate on a judgment passed against you in court may amount to as much as 12 percent.

Under Wisconsin state law, you have 30 days after being informed of your debt to demand that the collection agency or creditor prove that you owe the debt in question. In this time, the creditor or collection agency must cease all activity related to collecting the debt. If the creditor or collection agency cannot document the debt, including proof of ownership, this means that it has no right to collect on the debt, including bringing you to court for it.

How to Make a Water Bill Payment Online

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Many water utilities and banks offer the ability to make water bill payments via the Internet. Online payments are secure and convenient, and they're processed at least as quickly as making a payment in person or by mail. Once you're enrolled in the online payment program, you'll be able to complete transactions with just a few clicks. In many cases, you can set up electronic billing and recurring automatic payments to save both you and the water company time and money.

Instructions

Visit your water utility's website. It's probably written on your water bill. If not, call their customer service number and ask.

Select the website's option to pay your bill online. Enter your personal information and account number and create a password to enroll in the online payment program. Frequently, payees will send you a confirmation email with a URL that you'll need to click on to validate that you wished to create the account.

Follow the instructions in the confirmation email and log onto the website again to make your payment.

Sample check with routing number and account number indicated.

Enter the amount you wish to pay when prompted. Select a payment method---debit/credit card or checking account---and provide the account information.

Submit the payment after you've entered all the required information. You'll be given a confirmation number after the transaction is complete. Record the number or print the screen to save it.

Visit your bank or credit union's website to find out if they offer a bill paying service. If so, enroll in their program.

Select the account you wish to pay your water bill from.

List the water utility as a payee by entering their name, address, and your account number.

Enter the amount you wish to pay and select the date that the bank should send the payment.

Submit the payment and record the confirmation number. The bank will make the payment and debit your account on the date you selected.

Should I Give a Collection Agency a Voided Check to Pay Off a Debt?

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When you cannot afford to pay off your debt with a creditor, your account may be turned over to a collections agency. If you work out a plan with the agency to pay off the debt, a representative may ask you to send a voided check to initiate the payment process. While this can be a legitimate process, you need to be careful.

A collection agency may ask for a voided check so it can set up an automated payment plan for you. The collection agency uses the account number and routing number on your check to debit the funds from your checking account on a periodic basis. The agency keeps the voided check as documentation for the payment plan. The check proves the company was authorized by you to take money out of your bank account if the question ever arises.

Although sending in a voided check can be a legitimate step in the process of paying off your debt, you need to get the terms of the agreement in writing first. If a collection agency tells you that you can make payments, you need to get this in a letter or contract before you send anything. Unscrupulous collection agencies sometimes charge more than they were supposed to, and you need a document to prove what the appropriate amount is.

Before you send a collection agency any money or a voided check, make sure you are dealing with a legitimate company. Scams may occur in which a company claims be a collection agency, when, in fact, it is not. If you send a voided check to one of these agencies, you risk having a large amount of money taken out of your account. Check with the Better Business Bureau to determine whether the company is legitimate.

If you do not feel comfortable giving a voided check to a collection agency, you may have other payment options. For example, you could use a credit card or debit card to make a payment with the collection agency. You could also obtain a money order and send it to the collection agency. The collection agency may allow you to write a personal check and send that form of payment on a regular basis.

Can My Social Security Disability Money Be Garnished for a Small Claims Win?

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When a person is sued in small claims court and loses, the judge will generally grant a judgment in favor of the plaintiff (the suing party). The individual will then be legally required to pay the other party a certain amount in damages. This judgment is legally enforceable and, in most states, can be collected through garnishment. However, a person's Social Security disability money cannot be garnished by private creditors seeking the collection of legal judgments.

When a person wins in small claims court, he is awarded a legally enforceable judgment against the other party. This means that he can take all of the collection actions available to private creditors in his states. While not all states allow creditors to attempt to garnish the wages of a debtor if the debtor's payment of a debt is not forthcoming, most do. This includes judgments for small claims court.

Judges must approve garnishments. Garnishments will generally not be issued immediately after a person has been awarded money in small claims court, but only if the debtor is postponing paying the money he owes, in violation of the judge's terms.

Certain types of income cannot be garnished by private creditors. This includes most types of federal benefits, including Social Security disability benefits. A judge is not legally allowed to serve an order of garnishment on federal benefits. Even if he did, the Social Security Administration would likely not honor it, meaning the money could not be garnished.

The only party allowed to garnish Social Security disability benefits is the federal government. A person may owe the federal government for a number of reasons, foremost among them for back taxes and child support. The federal government seldom, if ever, files suit in small claims court. Therefore, it seems all but inconceivable that a person could have his Social Security benefits garnished because of a judgment awarded in small claims court.

Does College Tuition Have to Go to a Collection Agency Before They Garnish Your Income Tax?

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Many students must take out student loans to finance the often expensive tuition required to attend college. When a student takes out these loans, he is obligated to pay back this money according to the terms set by the government -- the primary issuer of student loans. If you are late paying your loans, the government may hire a collection agency to help collect your debt, but it doesn't have to before it garnishes your wages.

When a person takes out a student loan, it will, in most cases, be from the federal government, which sponsors the vast majority of student loans in the country. However, in some cases, a person may take out a private student loan from a group other than the government. In either case, if you don't pay what you owe, then the loan will go into default and can be treated like any other bad debt.

As with other loans issued by private firms, the government may choose to hire a collection agency that specializes in the collection of overdue debts to help it collect on a debt that has not been paid off. If the government does so, it will only be because you were late on making your payments. While usually the government will attempt to collect the money through an agency before suing you in court, this is not an obligation.

Before the government can garnish your income tax, you have to be in technical default on your loans. This means that you go 60 days without any payments made on the loan. Only after you have gone these two months can you face garnishment. Also, only the government can garnish your income tax payments. A private lender is not allowed to garnish your income tax payments, even for a defaulted student loan.

There is no law that demands that the government agency to which you owe money -- be it for a student loan or for another type of debt -- go to a collection agency before taking out money from your income taxes. However, you will likely receive ample warning before the government attempts to garnish money owed to you in your income tax refunds, so it shouldn't come as a surprise.

How to Rack Up Points on Your Credit Score

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A high credit score gives you borrowing power because lenders see you as a good risk. Your score is determined by a proprietary formula by FICO, the oldest scoring company, and the Equifax, Experian and TransUnion credit bureaus. There are certain factors known to affect the number. You can rack up points fast if focus on improving your records in the most important areas.

Your payment history accounts for 35 percent of your credit score. Catching up any late bills and paying all of your accounts on time racks up points on your score because of this area's heavy influence. Pay all of your accounts by the due date, even if you only send the minimum amount due. Set up an automatic withdrawal from your checking account to ensure you pay by the proper date or mail payments as early as possible to offset postal delays.

High account balances hurt your credit score, especially if most or all of your credit limits are maxed out. MyFICO recommends paying down your accounts so you have a more equal balance of owed money and available spending power. Create a strict budget that cuts out as much discretionary spending as possible so you can pay more on your bills. Your score goes up as the balances drop. Channel most of your extra funds toward your highest interest accounts, as that reduces the balances more quickly because more money goes onto the principal.

Part of your credit score is based on the overall length of your credit history, and long-term accounts that have always been paid promptly raise your score. Keep older credit cards open, even if you do not need all of them. Consumer advocate Clark Howard recommends using those cards twice per year to show recent transactions on your credit report. Keep purchases low enough to be paid off immediately.

Dayana Yochim, a writer for the Motley Fool money management website, warns that up to 80 percent of credit reports have mistakes hurt your credit score. You have a right to find and dispute them, and you add points to your credit report for each negative entry you eliminate. The Federal Trade Commission website explains that you can order free Equifax, Experian and TransUnion credit reports yearly through annualcreditreport.com. The bureaus are obligated to process any disputes you submit in 30 days and correct or erase errors.

What Is an Assignment of a Deed?

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If you or someone you know has been having trouble paying his financial obligations, the creditors may have arranged for an assignment of deed. The assignment does not go directly to the creditors, but rather through a trustee, perhaps assigned by bankruptcy court. Creditors use this process with debtors who owe significantly more than their assets. Developers sometimes use deeds of assignment to transfer ownership of an unfinished home.

A deed of assignment transfers ownership of either land or non-real estate property. When the owner is financially insolvent, the bankruptcy court may order the sale of her home or other property. The deed of assignment gives authority to a trustee to sell the property and distribute the proceeds to creditors. When a potential homeowner makes a deposit on a partially constructed home, the real estate developer issues an assignment of deed to the prospective home buyer.

An assignment of a deed must state the date that the transfer of ownership will occur. Additionally, if a homeowner sells a piece of property before the clerk of the court has issued the title, he uses an assignment of deed to act as a temporary title for the buyer. When the transfer involves real estate or other immovable property, full rights automatically transfer.

You can assign ownership of property other than real estate with a deed of assignment. For example, you may sell copyright to artistic works, such as a play or song you have written, using such a deed. You are not obligated to give full copyright for movable property with deeds of assignment. You may transfer first rights or some other restricted form of ownership.

Each state has its own laws regulating the provisions that must be included in deeds of assignment. Consult a legal professional in your area to help you draft or review a potential legal transfer of ownership to protect your rights as either buyer or seller.

Is Debt Settlement the Best Option?

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Debt settlements are used to pay off a credit card debt or any type of debt by paying less than the total debt. This is usually done through the art of negotiation, sometimes by using companies that deal in debt settlements. But you have to be careful using a debt settlement company. It has potential to do more harm than good to your financial future.

Debt settlement companies are sometimes a scam, says Bankrate.com. They frequently find business by contacting people on the phone and may not always reveal what they do with the money you send them. In many cases, a debt settlement company will ask you for an upfront fee that might continue for indefinite amount of months. This money will accrue and then be used to pay off your debt after the organization negotiates with your creditors. Be careful, though, and avoid them if the fees are overly large and if the company doesn't properly explain what they'll do with your money.

A common tactic used by debt settlement companies is their request for you to stop all communication with your creditor. Simpledebtfreefinance.com says that this will cause interest to increase and also bring on more late fees that could make your debt even worse in the interim. Once this happens, your creditors will report your delinquent payments to the credit bureaus. This, in turn, will considerably lower your credit score.

Despite drawbacks, many debt settlement companies can successfully negotiate a lower settlement offer for you. Legalcreditcardsettlement.com says that 40 to 60 percent of your debt could be reduced using these companies. But they also remind that you'll still have to pay income taxes on the amount written off, despite the taxes being less than if you kept the debt. Simply fill out a 1099-C form (or Cancellation of Debt) to report the settlement (see Resources). Keep in mind, however, that because you only paid part of the debt, creditors could still go after you if not even sue you to pay off the rest of the debt. Contact your creditors and ask for a document in writing proving your settlement.

In order to avoid the pitfalls of debt settlement companies, it's sometimes best to just negotiate with your creditors yourself. Bankrate also points out that debt settlement companies can charge you several thousands dollars in fees. By contacting your creditors on your own, many of them are willing to negotiate with you to work out a time payment system---or, occasionally, complete debt settlement. If this isn't doable, then consult with a bankruptcy attorney about the possibly of filing for bankruptcy. Assuming you do make a settlement, be sure to contact all three credit bureaus and list your debt as "Paid" so your credit score won't continue to suffer.

Is it Wise to Go Through Debt Consolidation?

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Debt consolidation combines your various debts into one debt. This simplifies your debt management, may reduce your regular payment amount and may reduce your total cost of debt. However, it may also increase your debt burden. Whether debt consolidation is a wise decision depends on your personal financial situation and the particular debt consolidation product you choose.

Consolidating your debt turns your many regular debt payments into just one, making it easier to manage. Instead of paying several different bills with different interest rates at various times of the month, you only have to pay one debt each month. Depending on your debt consolidation product, you may also end up with a lower payment amount, making your debt more affordable. If so, it may be wise for you to go through debt consolidation.

Depending on your financial situation and the debt consolidation product you choose, you may get a lower interest rate on your debt, easing your debt burden. However, if you consolidate your loan due to financial difficulties, you may not be able to qualify for the lowest interest rate available from the lender, according to Bankrate.com. Check with several lenders to determine the lowest interest rate you can get before deciding on one product.

If debt consolidation extends the period of your loan, you may end up paying more in total over the life of the loan, even if the interest rate is lower. Lenders who are trying to get your business may try to hide this fact from you. In this case, you may benefit more from not consolidating your debt. You can also find another debt consolidation product that will cost you less.

The lender may require you to put up an asset to secure the loan. This means that in case you don't pay your debt, the lender has the right to seize the asset, such as your home or your vehicle. If the lender can't negotiate with all your creditors, you may have to talk to them yourself. If your new lender doesn't pay your creditors promptly, you may end up with a lower credit score.

The Disadvantages of a Bank Loan

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Taking out a loan from a bank provides you with immediate funds, which you can then repay over a certain period of time. However, it also comes with several disadvantages. Whether a bank loan is suitable for you depends on many factors, including your own personal financial circumstances.

If you borrow funds from a bank, you have to pay it bank with interest. The interest rate that applies to you depends on your lender, your credit rating and the loan product you choose. If you have poor credit, the lender may view you as a risky borrower and charge you a high interest rate, increasing your cost of debt. Interest rates may also fluctuate over time so your interest expense may go up and down. Other loan expenses include other charges, such as administrative charges and late payment charges.

A bank loan usually requires that you make regular repayments toward the borrowed amount. You can't change the schedule of the payment, and you may face serious consequences if you don't follow it. If you want to pay off the loan before the end of the loan term, the lender may charge you a prepayment penalty. If you take a large loan for a business, you may also have to comply with the loan's terms and conditions. For example, you may have to provide quarterly management information to the lender.

If you fail to meet your loan obligations, the bank can report this to the credit reporting agencies, lowering your credit score. A low credit score makes it difficult for you to get lenders to extend funds to you in the future. Because landlords often check credit scores, a low credit score may also make it difficult for you to secure a rental property. Your credit score also determines the amount of deposit you need to pay for telephone, electricity and natural gas service.

In some cases, the lender may require that you secure the bank loan against a personal or business asset. This means that the lender can take possession of the asset if you fail to meet your loan obligations. Lenders usually charge a lower interest rate on secured loans, but you risk losing your asset if you face financial difficulties that make the loan payments unaffordable.

What Is the Fundamental Issue With Having Too Much Debt?

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Most Americans are in debt, either with house payments, car payments, credit cards, medical bills or a combination, according to the American Debt Advisor website. About half of credit card carriers have a balance of at least $1,000, and about 10 percent have a balance of $10,000 or more. The fundamental issue about being in too much debt is that you are spending a lot of your money paying for goods or services you have already received, rather than saving or investing that money for the future.

If your debt payments are too much for handle, you likely do not have enough money leftover to pay your regular bills and expenses, like utility bills or housing costs. If you are late or miss making payments, your credit score can take a hit, and you can fall deeper in debt with past due bills and late fees. Also, if you miss a few mortgage or rent payments, you are at risk to lose your home to foreclosure or getting evicted for non-payment. Too much debt can have severe ramifications on your personal and financial life.

Too much debt also affects your ability to save and plan for the future. Retirement may seem like a long way away, but you need to start planning and saving for retirement as early as possible to have the most money and security when you are older. Also, you should save for your kid's college education or for unexpected emergencies like home or car repairs or medical issues. However, if your debt payments are sucking up all your money each month, you have little or nothing left to save. How much you save depends on your age and situation. According to Monster, if you are 25, you need to save about $3,600 a year to reach $1 million by age 65 with an 8 percent return on investment. But, if you are 50, you need to save $34,000 a year to reach the same $1 million mark.

Besides affecting your ability to save and invest, too much debt causes other financial problems. A high amount of debt reduces your credit score, which in turn affects your ability to get approved to buy a house or a car. If you wish to make home improvements or refinance your home for a better interest rate, you will have a harder chance of getting approved for a personal loan or refinance because of your debt.

Too much debt also causes health issues for many people. You might have lower self esteem due to your debt, which affects your personal appearance, lifestyle and daily attitude. Also, too much debt causes stress, which in turn can lead to physical illness or even a heart attack. You might find it harder to sleep because you are so worried about the effects of your debt, which is also bad or your health. Finally, too much debt can lead to issues with your personal relationships. You might fight with your spouse more, or stress out in social situations because you cannot afford to have dinner or drinks with friends.

Components of Debt

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The word "debt" is tossed around so much when finances are brought up that it can be difficult to understand exactly what debt is. Debt is made up of different components, such as loans or credit. Buying groceries or paying for gas are not components of debt. A mortgage, however, is considered a component of debt.

Mortgage debt is the biggest component of debt in the United States. According to the Federal Reserve, mortgage debt in the third quarter of 2010 totaled $13.9 trillion. Mortgage debt is also typically the largest component of debt in households. A healthy debt-to-income ratio is 36 percent or below, according to lendingtree.com. A mortgage payment will typically take up a large percentage of the debt-to-income ratio. For example, if a person makes $4,000 a month and has an $850 mortgage, $300 car loan and $200 per month in credit card payments, his debt-to-income ratio is 33 percent. His mortgage would take up 64 percent of the total debt.

Credit card debt is the second largest component of debt in the United States. The total credit card debt in the United States in the third quarter of 2010 was $2.4 trillion, according to the Federal Reserve. Credit card debt can easily spiral out of control if people do not exercise financial discipline. Unlike mortgage debt, which comes at a fixed price and sometimes a fixed rate, credit card debt is completely self-inflicted and gets worse as a person accumulates more debt. The biggest reason for credit card debt is credit card interest rates, which were an average of 14.7 percent in the second quarter of 2010, according to CNNMoney.com.

Auto loans are another major component of debt. According to the Federal Reserve, the average amount financed for a car was $28,081 in the third quarter of 2010. Interest rates vary dramatically, and have an enormous effect on the final amount paid. For example, an auto loan amount of $28,000 at an interest rate of 5 percent for a term of 60 months costs the buyer $528 per month.

Tax debt may not be as large of a component to debt as mortgages, credit cards and auto loans, but it's still a component of debt. There are no hard recent figures as of 2011 on the average tax debt per family or person, but tax debt, like credit card debt, can spiral out of control fast. The IRS levies a 3 percent interest rate plus the federal short-term rate on anyone who does not pay their taxes on time.

All loans are considered components of debt, and there are a lot of different types of loans. For example, payday advance loans, home equity loans and personal loans all count as components of debt. Some loans, such as home equity loans, are secured and come with a low interest rate, while other loans, such as payday advance loans, are unsecured and come with a higher interest rate.

How to Calculate Monthly Interest on Credit Card Debt

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Being aware of just how much you pay out in credit card interest each month can become a strong impetus for paying off those credit cards. When you see just how much goes to cover the interest on your revolving debts, it's often both shocking and motivating. Here's an easy way to calculate the monthly interest paid on credit card debt.

Instructions

To begin, you need to look at your credit card statement and determine what your annual interest percentage rate is for your credit card account. This percent is often abbreviated as APR. Credit card interest rates usually range from 4.9% to 29.9% depending upon the borrowers credit and the state laws where you live.

Next, take the annual percentage rate of interest (APR) and convert it to a decimal amount. This sounds difficult, but it's really pretty straightforward. You usually just need to add a decimal point, and a zero in the case of lower interest rates, to the percentage number either one or two places to the left. Here are some examples:

4.9% interest = .049 when expressed in decimal form (A zero was added as a placeholder for the tens place in this example).

9.9% interest = .099 when expressed in decimal form (A zero was added as a placeholder for the tens place in this example).

12.9% interest = .129 when expressed in decimal form (No zero was needed, the decimal was simply moved two places to the left).

22.75% interest = .2275 when expressed in decimal form (No zero was needed, the decimal was simply moved two places to the left).

29.0% interest = .29 when expressed in decimal form (No zero was needed, the decimal was simply moved two places to the left).

Then, the next step is to take the decimal form of your current credit card interest rate (12.9% = .129) and divide it by the number of months in a year, which is 12. Here are some examples:

4.9% = .049 divided by 12 = 0.004083 (number rounded to the sixth place)

9.9% = .099 divided by 12 = 0.00825

12.9% = .129 divided by 12 = 0.01075

22.75% = .2275 divided by 12 = 0.018958 (number rounded to the sixth place)

29% = .29 divided by 12 = 0.024166 (number rounded to the sixth place)

Finally, to calculate the dollar amount of monthly interest paid on a credit card balance, multiply the decimal value you calculated in step three with the dollar balance of your credit card debt. Here are a few examples:

These examples all assume a credit card balance of $5000.00.

4.9% = .049 divided by 12 = 0.004083 x $5000 = $20.41 in interest per month

9.9% = .099 divided by 12 = 0.00825 x $5000 = $41.25 in interest per month

12.9% = .129 divided by 12 = 0.01075 x $5000 = $53.75 in interest per month

22.75% = .2275 divided by 12 = 0.018958 x $5000 = $94.79 in interest per month

29% = .29 divided by 12 = 0.024166 x $5000 = $120.83 in interest per month

How to Get Out of Debt With Secure & Unsecured Bills

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Debt is a large part of most American lives. Nearly anything can be financed on credit and big-ticket items like homes, boats and cars are almost exclusively purchased with the help of long-term debt. If not controlled correctly, debt can quickly become an overwhelming and stressful problem. If you are struggling with both unsecured and secured debt, you must first make a commitment to repay the debt and then devise a strategy to attack it with vigor.

Instructions

Access your credit report. This will give you a candid overview of your total debt picture. You can find a free copy of your credit report at Annual Credit Report (see Resources). Review all open trade lines. Add up all balances and payments to determine your total monthly payment and total outstanding debt. This could be humbling.

Review your expenditures from the last three months. This should show you a picture of your spending habits. Look for areas to cut back. Think about your essential and non-essential payments. Non-essential bills, like entertainment expenses, clothing purchases and dining out, must be cut drastically. Remember to save a small budget for fun, though. Without some relief each month you may end up resenting your strict budgeting.

Calculate your debt-to-income ratio (DIR) and disposable income (DI) after you redesign your budget. To calculate DIR, divide the sum of all monthly payments by your gross monthly income. Multiply this figure by 100. To keep your finances on track, you must keep your DIR below 50 percent. To find your DI, subtract the sum of all monthly payments from your net monthly income.

Decide how much of your disposable income you can commit to debt elimination. Make sure to keep a small amount each month for fun expenses and emergencies. The vast majority of your disposable income, though, should be allocated for debt repayment.

Find out the interest rates on all credit accounts. The best strategy is to begin by attacking your highest-interest account first. Make minimum payments on all other debts. Use the remaining funds in your disposable income budget to make large payments against your high-interest account.

Repeat this strategy once you repay the first debt. Attack the account with the next highest interest rate. This is called "snowballing," because as you eliminate debt, you end up with more money to repay other debts. You'll ultimately end up with a much larger disposable income budget.

How to Avoid Penalties From Defaulted Payday Loans

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Payday loans are short-term, high-interest loans issued to individuals. Some payday lenders charge as much as 400 percent in interest, in addition to service fees, according to the State of New York Banking Department. These service fees are attached to both the initial loan and any subsequent default. Payday loans are typically small in size, but if a borrower defaults, he can end up paying more in interest and penalties than in the repayment of principal. Borrowers can take several steps to make sure they do not trigger a default.

Instructions

Provide the lender with a bank account number. Many payday lenders will require borrowers to give a number for a checking or savings account that the lender can deposit money into and then, when the loan comes due, draw money out of. Even if the lender does not require this, it is a good idea to provide one as a backup plan in case you cannot repay the loan.

Get overdraft protection on your checking account. After giving the payday lender a bank account number, make sure the account is secured with overdraft protection. This means that if not enough money in the account is available to cover a charge, money from another account is automatically made available to cover the difference.

Develop a backup plan. Although you may have a primary means by which you intend to pay off the payday loan, such as a regular paycheck, have a backup plan in case something goes wrong. This can include a short-term loan from friends or family or even taking out a second payday loan if no other loan options are available.

Pay back the loan early. Most payday loan companies allow borrowers to pay back the loan before the date is due. To be sure that nothing goes wrong, pay back the loan as early as possible. If possible, pay in person rather than by mail to be certain the payment goes through.

Contest any assessed penalties. If a payday loan company attempts to assess fees or penalties that you did not agree to, it is violating the law and is obligated to return the money to you. Consult an attorney on taking legal action against the company.

Can a Third Party Sue Me for Debt They Purchased?

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Banks, credit unions and other lenders sometimes sell delinquent debt for as little as cents on the dollar. They sell debt after deciding they cannot collect on the accounts. So-called "junk debt buyers" often purchase debt in bulk, meaning they pay a flat fee for hundreds or even thousands of delinquent loan accounts. After the purchase, the debt buyers become legal owners of the individual accounts, and and can file lawsuits to collect the entire amount due on each account.

Although third-party debt collectors can file lawsuits, they may lack the documentation necessary to win in court. To win a debt lawsuit, debt collectors must show proof of the debt -- if the debtor shows up in court to challenge the suit. Debtors contesting a debt lawsuit can demand that the debt collector show proof of the debt such as copies of billing statements or the original credit application. In some instances, third-party debt collectors simply don't have the information. Original lenders may lose or misplace important documents related to old debt, or fail to properly transfer the information during the sale of the debt. Judges in debt lawsuits usually dismiss cases if the debt collector cannot verify the debt.

Some third-party debt collectors sometimes file lawsuits soon after purchasing debts. Their primary goal, in some instances, is to win default judgments in court and then proceed to bank or wage garnishment. The third-party debt collectors know that a percentage of debtors will not show up in court to contest lawsuits, resulting in easy default judgments.

Debt collectors purchasing a debt must send a written notice to the debtor before filing a lawsuit or beginning other collection effort. The notice announces that the debt collector is the new owner of the debt and is demanding payment in full. However, the Fair Debt Collection Practices Act, a federal law, allows the debtor to challenge the notice by writing back to demand that the debt collector provide proof of the debt. Federal law prohibits the debt collector from continuing collection efforts or filing a lawsuit until sending the debtor verification of the debt.

Debtors dealing with third-party debt collectors should not make payments until the debt collector provides proof of the debt. Even then, the debtor should consider consulting with a consumer affairs attorney for a legal opinion. For example, some debts are too old for consideration by courts under state laws. An attorney can advise about state statute of limitation laws that regulate how long debt collectors have to pursue a debt in court.

How to Get Tanning Beds on Poor Credit

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According to the Federal Trade Commission, having poor credit does not necessarily mean that you cannot get financing for certain items. Because creditors set their own financing standards, it is possible to purchase items such as tanning beds even if you have poor or no credit. In order to get tanning beds with poor credit you simply need to find a company willing to finance your purchase and meet the payment requirements of that purchase.

Instructions

Find a tanning bed company that offers financing for those with poor or no credit. Many companies, such as Wolff Tanning Beds, offer financing for those with poor credit. But because the standards are different for every company, you should first locate the company from which you wish to purchase the tanning beds in order to ask about their credit policy.

Apply for financing with the tanning bed company or store selling the tanning beds. While there are many wholesale tanning bed companies online advertising tanning bed sales to those with poor credit, it may be better to go to a store in person, speak with a financing associate, and apply for credit in person. Keep in mind that every time an inquiry is placed on your credit history, your credit score could be negatively affected. Therefore, apply only at stores from which you really want to purchase tanning beds. Avoid applying to multiple stores or websites, as this many ultimately hurt your chances.

Meet all of the requirements of the financed loan. While many companies will allow you to finance a tanning bed with poor credit, they will have strict rules for loan repayment. This may include set payment dates and high interest rates. In order to keep your tanning beds and improve your credit score, make sure that you follow all of the repayment requirements.

How to Make a Budget with Mint.com

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One good thing about debit cards is their convenience. One bad thing about debit cards is their convenience. If you use your debit card for most of your purchases, it is easy to let your spending spiral out of control. Mint.com is an easy-to-use, free web application that makes the creation of an online budget easy and also helps you to practice frugal living even when you rely heavily on a debit card.

Instructions

Make a list of all of your online accounts, noting your username and password for each one. While Mint.com will do all the math for you, it needs a starting point. Include your cash accounts (checking and savings), credit, loans, and retirement and investment accounts.

Sign up for a Mint.com account and get started by entering your username and passwords for each account. You will immediately be able to see your spending, balances and even monthly payments and due dates for credit card accounts.

Add your property information and values. This will help you see your net worth in contrast with your debt and will provide the information necessary to set goals.

Personalize your spending categories. Edit your spending categories to match your current financial lifestyle or the lifestyle you seek. To do this, go under the transaction tab and view your transaction list for the last 90 days. Go under each merchant and manually edit the category. For example, some online service subscriptions may be marked as a bank fee. You can change this to say something like, "Website hosting fee" or something more specific.

Add your budgets. Under the overview tab, go to the "your budget" section and begin adding budgets. This is spelled out for you and easy to manage. Simply choose a category and fill in the budget amount per month. Mint.com will display your over-budget or under-budget amount as well as send email notifications with the figures.

Edit your notifications to establish if you want to be notified by email of a due date or when you are getting close to your spending limit.

Set up Mint.com mobile to keep track of your finances on the go.

Options for Extreme Debt

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When you find yourself in extreme debt, it can feel as if you are trapped in a prison. In this situation, it is important to figure out a way to get the debt under control so that you can improve your credit scores and free up more of your money every month. There are a number of debt solutions to consider in this scenario.

When you need to pay off a large amount of debt in a short amount of time, you may want to consider drastically cutting your expenses. For example, you may be paying more than you should for housing or for an expensive car. If you want to save more money so that you can pay down your debt, you might need to move or sell the car. Look for ways that you can cut back on your monthly expenses so that you can devote more money to paying down your debt.

If you have a large amount of debt, you may also want to consider using debt settlement. Debt settlement is a process in which you agree to pay less than what you owe to your creditors and they agree to close out your accounts. In some cases, you can settle your debt for less than half of what you owe. While this can help you eliminate the debt very quickly, it can also hurt your credit score.

Signing up for a debt management plan can also give you an advantage when it comes to trying to pay off a large amount of debt. A debt management plan is a plan that is administered by a credit counseling agency. The agency negotiates with your creditors to get much lower interest rates on your credit accounts. Then you make a single payment to your debt management plan every month and your creditors are paid out of it.

When you have an extreme amount of debt, bankruptcy might be the best option for you to consider. Filing bankruptcy can allow you to completely eliminate most of your debts and start over with a clean slate. You can use Chapter 7 bankruptcy for this or you could file Chapter 13 and set up a repayment plan with your creditors. Your income and the amount of debt that you have will play a role in what you qualify for.

Bursting the Credit Card Myths: Putting a Statement In Your Credit File Can Help Your Score

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According to the Federal Trade Commission, which enforces consumer credit rights laws, no one has the right to remove factually accurate information from his credit report. Placing a statement in your file will not help your credit score if it is low because of accurately reported information. You may, however, dispute inaccurate items in your report. You are also your best resource for fixing your own credit.

Under federal law, you have the right to receive one free credit report each year from each of the major credit reporting agencies. Actually taking advantage of this right and checking your credit report at least once a year is crucial to ensuring the accuracy of your credit report. Your credit scores drop every time you miss a payment or add to your total debt. You may order your free credit report online, over the phone or by mail.

You may send a statement to a credit reporting agency if there is an error in your credit report. An error might include any inaccurate information, such as your outstanding balance or delinquency of payment. To dispute an error, send a letter to the reporting agency clearly explaining the nature of the error. Include copies of any documentation that supports your contention that the report is in error. Also send a letter to the entity that reported the erroneous information. Once the reporting agency receives your letter, it is required to investigate and remove erroneous information from your report. If the agency finds no error, however, nothing will be changed.

If the investigation does not resolve the dispute in your favor, you can ask the reporting agency to keep in your file a copy of your statement disputing an item on your report. The fact that the item is disputed should be reflected in future reports. You can also request that any future potential creditor who requests a copy of your credit report receive a copy of your statement. In this way the potential creditor can evaluate for themselves how to weigh the disputed item.

Negative items can appear on your credit report for up to seven years from the date of the incident. Items left disputed should eventually drop off your report after this period expires. You should monitor your credit report periodically, nevertheless, because it may be necessary to notify the reporting agency that the seven years has expired and remind it that an item should be removed. The major exception to the seven-year rule is bankruptcy, which appears on your record for 10 years.

Credit Card Charge-Off Advice

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Many Americans believe they are out of the clear when credit card companies suddenly stop calling in order to collect on a debt. Unfortunately, this couldn't be further from the truth. Whether it takes one year or five years, credit card companies always collect on their debt. Luckily for you, credit card charge-offs can be avoided and removed from your credit report once you choose to actively investigate and resolve the debt.

Credit card charge-offs are the result of credit card companies declaring your debt (or outstanding balance) as a loss. If you have failed to pay your outstanding balance with a creditor for a few consecutive months, in most cases three to six months, your lender will note the account as charged off.

A charge-off is not a license to forget about the outstanding balance you owe a creditor. Just because your lender wipes their hands clean of trying to recover your unpaid balance at the moment doesn't mean you are in the clear. Instead, you still owe the balance due and creditors will still continue to come after you for the debt.

Having a charge-off on your credit report is detrimental to your credit score and overall credit worthiness. In fact, these types of negative marks on your credit report have a seven-year staying power and can prevent you from obtaining future credit as lenders will view you as a credit risk.

Even after your account has been charged off, credit card companies operate within their legal right to obtain the monies due them. In most cases your debt is sold to a collection agency for sometimes pennies on the dollar--despite whatever your balance may be. Collection agencies then become the owner of your debt and will seek to recover as much of the unpaid balance as possible.

In order to avoid a credit card charge-off or seek to have it removed from your credit report, you'll need to understand how to effectively deal with creditors.

There are ways in which you can avoid a charge-off altogether if you find yourself unable to pay your bills. The worst thing you can do is ignore the situation by screening your calls and not leaving the lines of communication open between yourself and your lender.

Creditors are willing to work with you if you explain the reasons for your inability to pay your account balance. Many times you can work out what is known as a payment plan where your lender will allow you to make reduced payments in order to meet your financial obligations. While this may increase the amount of time you'll have to carry your balance, it also helps you avoid a negative reporting on your credit report.

If you find yourself already past this stage, all hope is not lost as you still have the option to work with creditors or debt buyers to remove the charge-off from your credit report. In most cases your lender or new owner of your debt is seeking to settle the matter anyway possible, usually in the form of a reduced payoff balance. You can negotiate with collection agencies in order to have the debt reported as "Paid" on your credit report. For information on how to remove charge-offs from your credit report. While this step will take quite a bit of persistence and paperwork, it will help you and your credit report in the end.

Do Collections Fall Off a Credit Report?

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Your credit report continually changes as creditors add new information and the credit bureaus remove outdated information. Because collection accounts eventually fall off consumer credit reports, your unpaid debts will not haunt your credit history forever. However, evidence of unpaid debts can linger in your report for longer than a collection account.

Under the Fair Credit Reporting Act (FCRA), collection accounts only appear on your credit report for 7.5 years from your original default date. Because most creditors do not turn unpaid debts over to collection agencies until the accounts remain delinquent for 180 days, collection accounts will typically appear on your credit files for no more than seven years. If you notice outdated collection accounts when reviewing your credit history, you can ask the credit bureaus to remove these obsolete debts from your files.

When filing reports with the credit bureaus, all information providers must report the date on which the original creditor initially classified the debt as delinquent. This allows the credit bureaus to remove the account at the proper time. Unethical collection agencies sometimes intentionally modify account dates, which prevents the derogatory accounts from falling off a consumer's credit report within the appropriate time frame. This practice is known as "re-aging." The Federal Trade Commission encourages consumers to report incidents of re-aging, as it reserves the right to fine or even revoke the business licenses of collection agencies who participate in this practice.

If a collection agency cannot recover a debt, it will eventually sell the unpaid account to another agency. If a debt collector purchases a debt on which the federal reporting period has already expired, it cannot make a fresh report to the credit bureaus without altering the account dates. However, it can make a subsequent report in addition to the original collection agency's notation. Provided the reporting period is still in effect, this can result in a consumer's credit record displaying two collection accounts for the same debt. This skews the credit-scoring formula by indicating that you allowed two debts to fall into delinquency rather than one. Fortunately, you can dispute a multiple collection record, and ask the credit bureaus remove it.

Although collection accounts have a maximum reporting period of 7.5 years, debt collection judgments can appear for ten years or longer depending on the judgment enforcement period in your state. For example, if a collection agency seeks a judgment against you in court, the resulting judgment on your credit report will appear as evidence of the collection debt long after the credit bureaus have removed the collection agency's original report.

Welcome to our website credit and debt managementr.

Tuesday, March 31, 2009

Examine Your Bills

Request Hospital Financial Assistance

Seek Government Aid

Debt Relief Agencies

Charitable Organizations

General Rule

Consumer Credit Protection Act, Title III

State Laws

The Two Scenarios

Loss of Employment

Monday, March 30, 2009

Robert Manning

What the Algorithm does

Software Program

Possible Outcomes

Sole Proprietorships and Partnerships

Corporations

Debt Securement

Collection

Sunday, March 29, 2009

Debt Consolidation

Home Equity Loan

Second Mortgage

Cash-Out Refinance

Saturday, March 28, 2009

Credit Data

Errors

File Expirations

Prescreened Offers

Instructions

Friday, March 27, 2009

Threat of Lawsuit

Negotiation

Respond to Notice

Seek Assistance

Refinancing an Auto Loan

Why Refinance?

Credit Requirements

Applying

Judgment

Credit Report

Lien

Bank Levy

Wage Garnishment

Thursday, March 26, 2009

Debt Consolidation Companies

Best Debt Consolidation Moves

Risking Home or Car

Playing the Credit Card Shell Game

Consumer Credit Counseling

Doing the Math

Wednesday, March 25, 2009

Credit Card Debt Consolidation

Advantages of Consolidation

Disadvantages of Consolidation

Consolidation Alternatives

Debt Forgiveness

Payment Plans

Barter

Tax Consequences

Tuesday, March 24, 2009

Regulations

Considerations

Civil Penalties

Criminal Penalties

Sunday, March 22, 2009

Instructions

Statute of Limitations

Garnishments

Interest Rates

Disputing Debt

Instructions

Making an Online Payment Through the Utility's Website

Making a Water Bill Payment Through Your Bank's Website

Saturday, March 21, 2009

Why a Voided Check?

Contract in Writing

Scams