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

Friday, April 30, 2010

How Many Creditors Can Garnish Someone's Wages at One Time?

Both federal and state laws protect debtors who are the target of multiple wage garnishments. In addition to limitations on the percentage of a debtor's paycheck that can be garnished each week, you can also seek relief from garnishment by filing for bankruptcy.

Multiple Wage Garnishments

    When a creditor wins a lawsuit against you, most states give it the option of garnishing your wages to collect the amount you owe. If you are the target of more than one lawsuit, you can be the target of more than one garnishment order. There is no limit on the number of garnishments that can be filed, though the ability of those creditors to collect the debt may be restricted by law.

Percentage Limitations

    Federal law restricts the amount that can be garnished to satisfy most debts to either 25 percent of your weekly paycheck after taxes or the amount your wages are greater than 30 times the federal minimum hourly wage, whichever is less. Some states allow you to keep more of your wages. However, if you owe child support or back taxes, that percentage can rise to 50 percent of your weekly paycheck. These limits apply to the total amount of all garnishments together: Creditors will have to be repaid one at a time if their claims exceed the required limit.

Employment Law

    It is a violation of federal and sometimes state law for an employer to fire an employee for a single wage garnishment. Multiple garnishments, on the other hand, can threaten your employment. If you suspect you may be subject to a multiple wage garnishment, it's a good idea to talk to your lawyer about your options.

Avoiding Garnishment

    Some creditors are open to working out a payment plan. If they are, you can avoid garnishment and keep your employer out of your financial affairs. Another option is to file for bankruptcy: The "automatic stay" stops garnishments. You may even be able to eliminate the debt during the bankruptcy process.

How to Check Whether a Visa Debit Card Is Valid

How to Check Whether a Visa Debit Card Is Valid

Visa debit cards are similar to credit cards, except that payments made with the card are deducted directly from your bank account. Any purchase made with a debit card will not incur interest payments since your own dollars are used to make the purchase. If you found or have an old debit card in your possession, you must first verify that the card is active and has funds behind it before you use it. Fortunately this is a simple process.

Instructions

    1

    Look first at the front of the debit card. All Visa credit and debit cards have an expiration date on the front. Check to see if the expiration date has passed. Even if the card is still connected to an open bank account, the card itself must be valid.

    2

    Review your bank account statements. Pull out recent statements for all open bank accounts. While the 16-digit debit card number is often not your bank account number, the debit card number may be listed on your bank account statements. Locate this number.

    3

    Contact the customer service number listed on the back of the debit card. In order to gain access to the debit card account information, you'll be prompted to provide a series of passwords. Continue to hit zero so you can speak to a representative. It will be easier to confirm your identity with a customer service representative.

    4

    Provide any current passwords or security codes for the debit card. You may also be asked to confirm recent history on the account (last transactions, when the account was opened, etc.). Make sure you have this information before speaking with a representative.

    5

    Ask about the status of the account. If the debit card is attached to any open bank account in your name and the card is not expired, you will be able to use it as you normally would. If the card is expired, ask the representative to send a new card to your home address.

The Right to Run a Credit Report on a Borrower

Whenever you apply for a loan, even if it's only for a $300 credit card, your creditor has the right to check your credit history before approving the loan. It's important not only to pay your bills on time, but to avoid applying for too many credit cards at once -- every serious inquiry into your credit history can lower your score by as much as five points.

Written Permission

    Employers and lenders must get written permission before they can run a credit report on a borrower. State in writing that you intend to run the borrower's credit report as part of his job or loan application and have the borrower sign the statement. The borrower's signature indicates that he consents to you running the report. The credit bureaus must have this written notice on file before they can release the borrower's credit report to you.

Permissible Purposes

    Equifax states that it will only release a credit report if the person inquiring has a permissible purpose for the inquiry. Permissible purposes include evaluating the applicant's creditworthiness for a loan, as a condition of employment, or to collect a debt. Equifax also releases credit reports to law enforcement with a court order or subpoena requiring the release of the credit report as part of an ongoing investigation or lawsuit.

Free Credit Report

    Borrowers have the right to request a free credit report on themselves once every 12 months from each of the three credit bureaus. Some borrowers get all three credit reports at once, while other borrowers get one report every four months so that they can monitor their credit history throughout the year. Borrowers also have the right to request a free credit report if any creditor declines their application.

Considerations

    Every time a creditor checks your credit for the purpose of determining your eligibility for a loan, it negatively affects your credit score. Lending Tree reports that these types of checks, called hard pulls, lower your score about five points; the effect lasts about six months. Thus, if you want to get a loan for a house or be approved for an apartment, you should refrain from applying for other credit until your loan is approved so that you don't risk being declined due to too many hard pulls on your recent history. If an employer checks your credit, it does not affect your credit score.

Thursday, April 29, 2010

Do Debt Consolidations Really Work?

Do Debt Consolidations Really Work?

Debt consolidation is a process of taking many debts and combining them into a single debt. Usually, the debt being consolidated is unsecured, high-interest credit card debt. The advantages of consolidating debt are psychological and financial relief.

Psychological Relief

    When people get over their heads in debt, it can cause psychological distress. Some of the tell-tale signs include avoiding looking at your bills and receiving phone calls about overdue accounts. People who have too much debt may be using advances from one credit card to pay off another. The psychological toll this takes should not be underestimated, and it can impede you from taking necessary steps to reduce debt.

Financial Relief

    Financially, the problem is that avoiding or ignoring the issue won't reduce the debt burden. If, however, one consolidates debt, then the question of "How do I pay the next bill?" falls away, as the consolidation loan is typically a single, affordable monthly payment.

Lower Interest Rates

    Consolidation loans usually offer a lower interest rate than the rate the credit card company is charging you. A lower interest rate means that the monthly payment may be lower, or the time to pay off all of your debt will be shorter. At the very least, the scramble to pay the next bill will no longer be a part of your daily life, and the phone calls from the collectors should stop.

The Pitfall of Debt Consolidation

    Debt consolidation can save you money and reduce the stress in your life, but it is critical to understand how you got to the point of needing a consolidation loan in the first place. Most people get there because they spend too much, as compared to their income. In order for a debt consolidation loan to work, your spending habits have to change. Otherwise, in very short order, you will find that in addition to a consolidation loan, you're back to where you started with credit cards bills. One of the best things to do once a consolidation loan is in place is to close all credit card accounts, except perhaps one, and even then significantly lower the credit limit on that card.

Steps to Take

    If you have a good relationship with your bank or credit union, you might approach it for a consolidation loan. In some cases it can be worthwhile to refinance your mortgage and consolidate your debt into your mortgage. There are not-for-profit organizations that offer advice and consolidation loans. Recognizing a problem exists is key, and then reaching out for help will lead to financial and psychological relief.

Consolidating Credit With Low Interest Rate

When a person owes money to multiple creditors, he may consider consolidating his debts into a single debt. This can be done by approaching a finance company that offers consolidation loans. Under consolidation loans, the finance company will buy off an individual's current debts and issue him a new, larger debt. Taking on a single debt, particularly one with a low interest rate, can be financially advantageous to the debtor, as long as he understands the new loan's terms.

Debt Consolidation

    When a finance company consolidates a person's debts, it is essentially allowing the person to exchange his current debts for a single new loan. When negotiating the consolidation, the person agrees to take out this new loan under specific terms. The person will agree to pay a specific rate of interest on the loan and pay back the loan over a certain period of time. Often, consolidation loans will last longer but be structured so the payment sizes are smaller.

Interest Rates

    Often a person will be able to get a consolidation loan with a lower rate of interest than his current loans. This does not necessarily mean that the person will be paying less money over the long term. In fact, in exchange for lowering the person's interest rates, the lending company will likely increase the overall size of the borrower's debt burden. So while individual payments are less, the total payment on the loan is more.

Payment Sizes

    Finance companies are able to offer smaller payment sizes on the loan by lengthening the total life of the loan. So several loans, each of which is designed to be paid back over five years, may be consolidated by the finance company into a single loan that will be paid back over 10 years. The borrower will be paying less per month but will paying back the loan for a longer period of time, meaning he will ultimately pay more money that he would had be not consolidated his debts.

Considerations

    Unless a consolidation loan is being issued by a nonprofit company, the borrower can expect to end up paying more on this loan than he would were he to pay each of his outstanding loans separately, as his new lender is seeking to make a profit. If the borrower is falling behind on his current loan obligations and chalking up late fees, however, it may behoove him to consolidate his loan into one with smaller payments.

Tuesday, April 27, 2010

How Credit Cards Collect on Judgments in New Jersey

If you don't pay your credit card bills, the charges don't just go away. The credit card company will attempt to collect its debt, and may even sue you. In New Jersey, after a credit card company successfully sues a debtor, it must attempt to collect the judgment on its own before asking the court to take further action against the debtor.

Contact Debtor

    After the court enters a judgment, the plaintiff must contact the debtor to attempt to collect the debt. The creditor must inform the debtor of the amount of the judgment and attempt to make payment arrangements. If the debtor cannot pay back all the debt at once but is willing to pay it off in installments, the creditor may accept installment payments. If the debtor refuses to make arrangements or the creditor cannot reach him, the creditor may then go back to court to ask for help.

Wage Garnishment

    The court may issue an order of wage garnishment against the debtor's wages from her current employer. The creditor sends a form to the employer that the employer must return, confirming that the individual works there and listing the employee's gross income per pay period. The court will then order the employer to withhold a portion of the employee's post-tax pay to pay the debt. As of 2011, New Jersey limits wage garnishments to 25 percent of the employee's income or 250 percent of the federal poverty guideline for that employee, whichever is smaller.

Bank Levy

    If the creditor knows the name, address and account number of a savings or checking account where the debtor has funds, she can request that the court levy the bank account. If the court agrees to this, it contacts the bank with an order to freeze funds. This means the bank must not make funds equivalent to the amount of the judgment available for the debtor's use. Once the bank freezes the funds, the creditor must file a motion to turn over funds with the court and give a copy to the debtor and the bank. Once the court signs this order, the bank must give the creditor the frozen funds.

Exempt Funds

    When levying a debtor's bank account, creditors must leave certain funds alone. Creditors may not seize child support, welfare or Social Security benefits. They also may not touch veteran's benefits or unemployment benefits.

Payments and Fees

    As of 2011, the fee for court collection activity in New Jersey is $5 plus mileage for each trip a court officer makes in conjunction with the attempt to collect a debt. In addition, the court must receive 10 percent of any payments it collects on the creditor's behalf. Even if the creditor and debtor settle out of court after court action begins, the court still must receive 10 percent of payments. Most judgments add the 10 percent commission to the total the debtor must pay, which covers this fee.

How to Report to the Texas Credit Bureaus

How to Report to the Texas Credit Bureaus

Texas credit bureaus follow the Federal Trade Commission's Fair Credit Reporting Act (FCRA). This act requires them to report credit information with accuracy and fairness. Consumers and businesses can report information to the Texas credit bureaus. This can include missing account information, accounts placed for collection and judgments. Many of the nationwide credit bureaus like Experian, Equifax and TransUnion operate within the state of Texas by reporting information to its consumers and businesses. You can contact them to have credit information added to a credit report or credit file.

Instructions

    1

    Compile the credit information you would like to report to the Texas credit bureau. This can include missing credit information or information that may be inaccurate or incomplete on a credit report. Businesses should gather customer credit information that may include accounts placed for collection, bad debt writeoffs or chargeoffs and judgments. The credit bureau will also need information that includes a consumer's or debtor's name, address and phone number.

    2

    Contact a credit bureau. Call a Texas credit bureau or a credit bureau that operates or reports within the state. Examples include Experian, Equifax and TransUnion (see Resources). Tell the credit bureau you would like to add or correct information contained in a credit report or credit file. Provide them with the necessary details. The credit bureau may ask you to fax or mail the information to them.

    3

    Receive confirmation. If you are a consumer reporting information on yourself, you may be entitled to written confirmation from the credit bureau. Any changes made to a credit report relating to a consumer dispute require the credit bureau to provide written notice. You are also entitled to receive a free credit report under these circumstances. Businesses reporting credit information on a customer or debtor can request the credit bureau provide them with written confirmation the information was added.

Sunday, April 25, 2010

How to Remove Negatives on a Credit Report

Maintaining a good credit report and high credit score mean a lot in today's world. Oftentimes it is impossible to buy a home, a car or even rent an apartment without good credit.If your credit reports have negatives on them that are keeping your score low, removing them may help your score jump into a higher category. The process of removing them can be done by oneself, instead of paying a firm to remove them for you.

Instructions

    1

    Order your credit reports from all three credit bureaus. If you have not obtained one in the past year, you can get one at no cost. Also, if you have applied for credit and were denied in the past 60 days, you can also obtain one at no cost. Otherwise, you may have to pay a small fee to receive your credit report.

    2

    WIth a highlighter, go over each credit report and highlight each and every account that is having a negative impact on your credit report. Items such as late pays, collections and currently past dues are the most damaging.

    3

    Write a letter to each individual credit bureau, outlining the negatives on your report. Explain why they should not be on there, such as, "The account is not mine," "I was never late," or "The account is past the statute of limitations." The statute of limitations is the length of time a negative is allowed to stay on your report. Each state is different.

    4

    Include a copy of your driver's license with your letter. This is to help speed up the process of identification.

    5

    Mail the letters by certified mail. This step is important because this is your receipt of the date you mailed the letter. By law, the credit bureaus must respond to your letter within 45 days, by either verifying the data, or removing it from your report.

    6

    If the data is verified, try again. You can repeatedly try this process every 30 days. Keep a detailed log of the dates of all your mailings. With each response from each bureau, you should receive a new credit report, as well.

The Best Programs for Reducing Credit Card Debt

If you've made a budget but can't stick to it or if you find that your expendable income doesn't begin to cover your debt, you may consider looking into programs for reducing credit card debt. Reputable agencies can assist you in determining which debt reduction option is appropriate for your financial situation. However, the Federal Trade Commission warns that certain programs and services have inherent risks attached--and some programs might cause you to pay more in the end than you would had you handled debt yourself.

What Are Options?

    When credit card debt becomes overwhelming, often the consumer's knee-jerk reaction is to capitulate to a company that offers a specific service, such as debt consolidation, debt negotiation or bankruptcy. However, the Federal Trade Commission urges consumers to first see if they can take financial matters into their own hands by developing a monthly budget. First, list all sources and amounts of monthly income. Then itemize your necessary expenses, such as rent or house payments, utility bills, medical expenses and grocery bills. Then write down your other expenditures, such as those for clothing and entertainment. See where you can cut back on unnecessary expenses and how much you can save each month that can be applied to credit card debt.

    You might not be able to stick to your budget, or your credit card debt may surpass your basic living expenses. In this case, the FTC notes that a reputable credit counseling organization can be of assistance. These services can provide you with a wide array of options and programs to reduce overall debt, not just credit card debt. To find a reputable credit counseling service, make sure it's member organization of the National Foundation for Credit Counseling (See Resources).

Debt Management Plans

    For those with a large amount of credit card debt, one option offered by credit counseling organization is the debt management plan (DMP). This helps you pay back your creditors by way of a repayment plan established by your credit counselor. A DMP may offer you lower monthly payments, fees and interest rates. Those who stick with these slow-but-sure programs emerge debt-free with credit reports unscathed.

    Enrolling in this type of program requires you to make regular deposits with the credit counseling organization each month, which is then used to pay your credit card debt. One hundred percent of what you pay to a credit counseling agency that's a member of the NFCC will be applied to your credit card debt.

    According to the FTC, a successful DMP makes payments to the organization on a timely and regular basis a requisite. It may take two years or longer to pay off your credit card debt, although this is something that you should discuss with your credit counselor.

Caveat Emptor

    Other companies offer a debt settlement program, which on first blush seem similar to a DMP, although they are quite different. If you procure these services, a party other than yourself negotiates a sum with your credit card companies that is less than the balance owed. In a manner similar to a DMP, the consumer gives the debt settlement company a deposit each month that is applied toward the settled accounts. The consumer also pays the debt settlement company a fee based on the percentage of the amount of debt negotiated.

    While a debt settlement program may seem like an optimal situation, the NFCC points out that this is something that each consumer can do for himself. Credit card companies don't give particular difference to "professional" debt negotiators and will offer the same settlement to the consumer who contacts them directly.

Saturday, April 24, 2010

Connecticut Homestead Exemption Statute

Connecticut is one of many states that gives debtors protection from losing everything to a creditor. Even if a creditor obtains a judgment -- a court ruling that the money is owed to her -- Connecticut statutes protect some of the debtor's property, including his homestead, from seizure and sale. Connecticut defines a homestead as owner-occupied real estate that serves as the owner's primary residence.

Money Judgments

    If a debtor refuses to pay, a creditor can go to court to obtain a judgment against him. Using the judgment, the debtor can file a lien on any nonexempt property, then execute the lien -- having a state marshal seize property for sale or collecting the debt from the debtor's bank account. The creditor has to work through a marshal rather than taking the property himself. If the property sells for more than the debt owed, any excess goes back to the debtor.

Exemption

    Connecticut wrote a homestead exemption into its laws in 1993. As of 2011, the amount remains the same as in 1993 -- $75,000 in exempt equity. The state amended the exemption in 2003 to exempt $125,000 if the creditor is a hospital. If the home is jointly owned by a married couple, the exemptions double in value. A creditor can only execute a lien against a home if the home's value is greater than the mortgage debt plus the exemption.

Considerations

    The Connecticut homestead exemption doesn't protect homeowners from all liens. Mortgages, for example, are voluntary liens on a home; if a homeowner defaults on the mortgage, the exemption statute doesn't protect him from foreclosure. The same applies if the homeowner took out a home equity loan or home equity line of credit. If a lender or other third party makes a claim on a home that would preclude the judgment creditor taking it, the creditor can ask a judge to decide between their claims.

Bankruptcy

    Connecticut extends the same protection to homeowners facing Chapter 7 bankruptcy. In Chapter 7, a court-appointed trustee can seize and sell the bankruptcy petitioner's assets, then use the money to settle some of the petitioner's debts; only after the sale will the court discharge the remaining debts. The federal government and many states exempt some property from Chapter 7 sale. In Connecticut, the trustee can't touch a home with less than $75,000 equity, or $150,000 for couples.

What Happens When a Deceased's Unsecured Debts Are Not Paid by the Estate?

What Happens When a Deceased's Unsecured Debts Are Not Paid by the Estate?

Collection calls can be difficult to deal with, especially when they are not for your own debts, but those of a deceased relative. If a loved one recently died, you may be unsure about how to handle the debts and how to settle them. You are not responsible for the debts of another person, even if you were related.

Settling the Estate

    When someone dies, both debts and assets they leave behind become their estate. If the person made a valid will, it names an executor, who becomes responsible for settling the debts and passing on remaining assets to the heirs, or as otherwise instructed in the will. For estates of some value, which varies by state, this process is supervised by a probate court. When a will is absent, then the court appoints an administrator. The executor or administrator use any assets, including real estate, car, stocks and savings, to discharge the debts. Probate courts in most states dictate that burial costs, medical bills, taxes, lawyer costs and court fees have priority over other unsecured debts. When all the debts have been paid off, the executor will report this to the court and divide any remaining assets as instructed by the will and approved by the court.

Insolvent Estate

    If the the estate runs out of money before all debts are paid, then the estate is insolvent. Once the assets have been used up, companies must forgive any unsecured debts. Generally, the executor tries to divide the remaining assets equally between the unsecured debts, so each company gets a portion of the money.

Debt Collectors and Decedent's Relatives

    Even though the debts must be forgiven by law and do not transfer to relatives upon death, many debt collectors try to contact the nearest living relative to secure payment. You do not need to pay these, as you are in no way responsible, as long as you were not a cosigner for the debts. You can request that the company stop contacting you and file a complaint if they do not.

Life Insurance and Beneficiary Assets

    Life insurance and other financial instruments, like retirement savings, are not considered a part of the estate, if the deceased named beneficiaries for them. They do not need to be applied to the debts if the beneficiaries do not wish to do so. The beneficiary listed on an insurance policy or other asset is the only person who receives money from them. For example, if a life insurance policy names only one child as beneficiary, he does not need to contribute the money to the estate or share it with other siblings. However, if you are both a beneficiary and an heir, you may wish to have the executor pay off debts with this money, if you want to keep another asset in the estate, the family home, for example.

Friday, April 23, 2010

How to Buy a Computer With No Credit Checks

There are many ways to obtain financing to buy a new computer with no credit checks. Be wary of the terms of the contract to ensure you are not paying too much in interest or fees and make sure the products you do buy are warrantied for at least a year and are of good quality. Any one of the steps below can provide you with a computer without the hassle of a credit check.

Instructions

    1

    Start an account with Blue Hippo. After you make roughly 10 payments on a computer that is in layaway, they will finance the rest of it and sent it out to you. There are no credit checks and one can't be turned down due to credit history. Once you have established a credit history with them, you can get your computer. You can also call their toll-free number to start the process if you do not have Internet access.

    2

    Log onto 123computerfinancing.com or MyComputerClub.com and start an account with them. They have more than 10 different computers to choose from and once you have paid your deposit and membership fee, they will build a custom computer for you that you will receive in as little as 14 days.

    3

    Obtain a payday or cash advance loan online or at a local check-cashing store. This will enable you to use the money to buy a new computer without the hassle of a credit check. You can pay the loan back with your next paycheck or roll the loan over for a longer time if necessary.

    4

    Buy a computer from Bowsprit Computer Leasing. They offer a lease-to-own program that includes no credit check and the computer can be paid off in 12 or 24 months. They do have credit checks if you wish, but with a no credit-check lease you just need to provide a pay stub and sign a lease agreement.

    5

    Borrow money from a family member. There will be no formal credit check and you can pay your relative back in any fashion she is comfortable with, including a lump sum payment down the road when you accumulate the cash. This is the best way to get a computer with no credit check as long as you are comfortable borrowing from your family.

Thursday, April 22, 2010

How Long Can a Company Try to Collect a Bounced Check?

Writing a bad check can happen through a simple math error or mix-up at the bank. A bad check can also be a serious criminal offense depending on the intent of the check writer. A business owner or creditor has a varying amount of time to collect a debt resulting from a bad check, depending on the state. This statute of limitations may not be as important in a case involving criminal activity.

Statute of Limitations

    The statute of limitations on debt collection for a bad check varies but usually falls in the two- to three-year range, according to the Fair Debt Collection website. A creditor has this length of time to sue you in civil court to obtain a judgment against you for the debt. Your creditor may choose to report the delinquency your bad check causes to a credit reporting bureau. A negative notation remains on your credit report for seven years and makes it more difficult for you to obtain new lines of credit and personal loans.

Caps on Fees

    It is legal for a business owner or creditor in receipt of your bad check to charge you a fee for writing the bad check. This fee provides compensation for the creditor or business owner in recovering the penalty suffered from processing a bad check. Each state places a varying limit on the bad check fee a business owner or creditor may charge. This can either be a fixed dollar amount or a percentage of the total debt owed.

Limits on Lawsuits

    You may be liable for a lot more money than simply the amount of your bad check depending on the state you live in. For example, according to credit information website BSC Alliance, if you live in California, a creditor or business owner may pursue you in civil court for up to three times the amount of your bad check, up to a maximum of $1,500. A New York resident may owe up to double the amount of the check plus $400 for insufficient funds or $750 if the check is from a nonexistent account.

Intent to Defraud

    Intentionally writing bad checks is a serious criminal offense. Attempting to defraud a creditor or business owner by knowingly writing bad checks could land you in prison for at least three years. You could also end up owing a criminal penalty of up to $5,000 plus any costs incurred by those you attempted to defraud. There won't be an easy way to get out of paying these fines and costs as the court supervises your repayment and can use a variety of methods to force you to pay, including wage garnishment and seizure of income tax refunds.

Can I Be Sued for Unsecured Credit Card Debt?

Falling behind on credit card payments is frustrating and frightening. Credit card companies can sue debtors to recover unsecured credit card debt. Fortunately, debtors can do things to minimize the risk of litigation and laws to protect debtors against unscrupulous collection practices.

Lawsuit Frequency

    The number of debt collection lawsuits is increasing, according to the Debt Collection Answers website. The site reports that "12,000 debt collection suits are expected to be filed in 2010, up from 9.300 in 2009 and 4.400 in 2007." Still, Superior Debt Relief Services and other debt management services continue to maintain that most creditors would rather settle a debt by accepting less than the full amount owed than take on the added expense of going to court. The best way to avoid a lawsuit is to simply keep talking to your creditors and trying to make good on the debt.

Wage Garnishment

    Wage garnishment is a possibility if a credit card company does sue a debtor. In order for wage garnishment to occur, however, the credit card company must file a lawsuit and win a judgment in that suit. Creditors can not garnish wages without a court order.

Time Frame

    In the U.S., time limits are placed on how long a credit card company or other creditor may sue a debtor. The statute of limitations varies from state to state and can range from two to 15 years, according to BCS Alliance. Debtors must be very careful, however, when speaking to debt collectors after the statute of limitations has run out. In some states, admitting to owing the debt starts the statute of limitations clock all over again.

Wednesday, April 21, 2010

What Happens to the Interest Rate When a Credit Card Account Is Charged Off?

What Happens to the Interest Rate When a Credit Card Account Is Charged Off?

A charge off of your credit card account is issued by the creditor when you don't pay your debt in time. A charge off is a declaration of the creditor that your debt is counted as a loss for their company. You will no longer be able to buy anything using that credit card account but you are still responsible for paying off the debt. It is very advisable to avoid charge offs by making payments on time.

Time for Payment

    The duration before your account gets charged off differs from bank to bank. The time allotted for you to make your payments can be anything from three to six months. You should use this time to make your payments on time and avoid bad credit reports. Charge offs will appear on your credit report for a duration of seven years. Even if you make your payments after this your credit report will still have this black mark. The only way you can remove the charge off from your report is to wait for the full seven-year duration to expire.

Getting a Charge Off

    When a company charges off your credit card account, it does not mean it gives up on the money you owe them. You still owe the company the same amount of money. The charge off is just a bookkeeping formality to declare a loss where they can't expect to get their money back in time. It does not in any way excuse you of the debt or being forced into paying. You still owe the money, and the bank can use a collection agency to enforce it. You will also be held accountable for any fees associated with collecting the debt.

The Interest Rate

    The interest rates will continue to accrue on your debt. These interest rates can be transferred to the collection agency. The collection agency will have the same rights as the bank had in the original agreement you made with the bank. This means they can enforce the recuperation of the money, interest rate and the fees you owe the bank. The law of the state you live in decides the interest rate and fees and not the bank.

Additional Fees

    You will have to pay any additional fees that are necessary for collecting the debt you owe. These fees are set by your state jurisdiction and can be enforced by the bank you owe money to or the collection agency. Just like interest rates, the fees will have to be paid by you to settle your charge off. It is in your best interest to remove charges from your credit report.

How to Make Payments on a Defaulted Student Loan

When you fail to make payments on a student loan, it eventually goes into default status, which means that you are seriously delinquent on payments. This appears on your credit report and damages your credit score. Plus, you might start to owe additional fees on your student loan. Unfortunately, a defaulted student loan will not go away on its own, and getting a student loan discharged in bankruptcy is rare. Therefore, the only way to remedy a defaulted loan is to begin making payments on it again.

Instructions

    1

    Look up the lender's name and phone number. You can find this on your most recent bill or by visiting the lender's website. If you do not know who your lender is, obtain a copy of your credit report through AnnualCreditReport.com. The report should list your student loan and the name of the lender.

    2

    Gather your financial information. This includes your recent pay stubs, bills for basic living expenses -- such as housing, food, transportation and childcare -- and your other student loan monthly payment amounts or the amounts you owe if you are in default on those as well. The lender will need this information to determine a reasonable and affordable monthly payment amount.

    3

    Call the lender, and ask to speak with a representative about starting to make payments on your defaulted student loan.

    4

    Ask about arranging a reasonable and affordable payment plan for getting your student loan out of default. When prompted, provide your financial information to help the lender determine a fair payment amount. The lender might ask you to enter this information on a form to submit online or by mail.

    5

    Ask the representative how to go about making payments. Each lender's policy is different. You can always send a check to the lender's billing department, and some lenders also process bank transfers, automatic monthly payments from bank accounts or even credit card payments.

    6

    Pay your agreed monthly payment amount by your preferred method each month. Your loan will generally be out of default after you have made nine monthly payments. At this point, you might be able to switch to a different payment plan and potentially lower your monthly payments.

How to Build a Good Credit Line

Establishing a long, good credit history involves acquiring lines of credit with credit cards and loans, and keeping these accounts in good standing. Poor credit habits can quickly lower your rating. Once you have a bad rating, it takes time to undo or fix the damage. But you don't have to accept a bad rating, you can build better credit and qualify for other types of financing.

Instructions

    1

    Read your credit report for accuracy. Monitor your personal credit report once a year to check for fraudulent activity and accuracy. Request removal of inaccurate information to help add points to your rating.

    2

    Make minimum payments promptly . Never pay less than your minimum payment on credit cards, and always pay before or on the due date to help build a good credit rating.

    3

    Manage debts carefully. Keep debts to a minimum. Pay off new charges on your credit card, and do not go over your credit limit. High credit card balances will reduce your score and hurt your credit history.

    4

    Keep credit accounts opened. Regardless of whether you use credit cards, do not close older accounts. Closing a line of credit can shorten the length of your credit history, and since a long credit history contributes to a higher rating, closing accounts can reduce your credit score.

Fast Ways to Build Credit

Fast Ways to Build Credit

Many items are bought on credit today such as vacations, mortgages and other minor expenses. Building credit provides a history to show that you are responsible and reliable. It can influence if you get approved for a mortgage, a car loan and even a rental apartment. Learn how to build credit fast and you will open doors to opportunities not previously available to you.

Secured Credit Card

    Sign up for a secured credit card. When you apply for a secured card, you make a deposit that provides a credit line for the amount of your deposit. The deposited amount establishes your credit limit for the next 12 to 18 months. A secured credit card issuer will not be concerned that you don't have a credit history because he has your deposit as a guarantee that he will be paid.

Subprime Credit Card

    Consider a subprime card. A subprime card charges a higher interest rate to compensate for the potential risk of not getting paid should the cardholder default on payments. Subprime card companies are more likely to provide their card to someone with little or no credit line. If you sign up for a subprime card, make sure you pay the full amount due every month so that you don't pay the high interest charges.

Store Cards

    Sign up for a local retailer's credit card. Retailers have less stringent credit terms than national credit card companies so it is more likely you will get an approved credit line from them.

Add On

    Ask a relative with good credit history if she will add you as an additional signer on one of her credit cards. You get the benefit of her good credit history in building your credit.

Bill Management

    Always pay your bill on time. On-time payments will make it easier for you to build additional credit. Keep your balances low because the ratio of available credit to balances is considered when you want more credit.

Balance Transfers

    If you have a credit card balance and don't have the money to pay it down right away, transfer the balance to your spouse's card. This builds up your available credit. When your available credit grows, you can pay back the money you owe.

Annual Credit Review

    Order a credit report showing your credit score and payment history once a year so you can monitor how quickly and effectively you are building credit.

Credit Card Consolidation Vs. Debt Payment Business

Credit Card Consolidation Vs. Debt Payment Business

When you are being overwhelmed with debt, you may look to either a credit card consolidation service or debt payment business to help you. There are distinct differences between the two services.

Function: Credit Card Consolidation

    Credit card consolidation is the act of getting a loan to consolidate all of your credit card debt into one loan. This can be done through a personal loan or using home equity.

Function: Debt Payment Business

    Debt payment businesses, also known as credit counselors, specialize in eliminating your debt by working with credit card and other debt companies to lower interest rates, payments and fees.

Benefits: Credit Card Consolidation

    With credit card consolidation, you are eliminating the debt to multiple cards with high interest rates in exchange for one loan with a better rate and lower monthly payments.

Benefits: Debt Payment Business

    A debt payment business allows you to make a single payment that will be distributed to all your debtors through the company.

Warning

    If you use a home equity loan to consolidate your credit card debt, then you should be aware that since it is connected to your home, the bank has the right to go after your home if you default.

Tuesday, April 20, 2010

How to Obtain a License to Become an Ordained Minister in Kentucky

Although the Commonwealth of Kentucky once required a formal minister's license of clergymen to officiate at weddings, funerals and other similar functions, the state legislature rescinded those requirements in the mid-1990s. However, to officiate at, or "solemnize" a wedding in Kentucky, you must be a duly ordained priest, minister, rabbi or other leader in regular communion with your religious order. This will grant you the authority to sign and certify marriage certificates.

Instructions

Wedding Officiants

    1

    Discuss your plans to enter the ministry with your pastor, rabbi, priest or other religious leader. They can give you valuable advice about whether the calling of religious and spiritual leadership is for you. Typically, major religious ordersoften require the recommendation of a religious leader within your tradition prior to ordination.

    2

    Enroll in theology courses. Most major religions require the equivalent of a bachelor's degree, or even a master's degree, in the theology and religious literature specific to your traditions. There are a number of theological and seminary institutions within Kentucky that are dedicated to training members of the clergy, but your religion may require you to attend school out of state prior to ordination.

    3

    Complete a period of apprentice leadership within your church, temple or synagogue. Specific requirements vary, but most religious orders require their ordination candidates to act in leadership positions within their communities prior to ordination.

Monday, April 19, 2010

Can a Debt Collector Find Out Where You Work?

If you've fallen into debt, you might fear a debt collector will show up at your workplace and embarrass you in front of your coworkers. This could affect your job or chances of promotion. Dealing with a debt collector may prove challenging, but the Fair Debt Collection Practices Act imposes limits on what a debt collector can do.

Debt Collector Rights

    A debt collector can find out where you work. She can also contact your employer to find out more information about you, such as where you live and your home phone number, if she is having difficulty finding you. The debt collector can call you at work unless you tell her not to, and she could show up in person, although this is less likely. If you don't cooperate with the debt collector, she can sue you. If she wins, she could have your wages garnished, meaning your employer withholds a portion of your earnings to pay the debt. To do so, she must contact the human rights department at your workplace.

What Debt Collectors Can't Do

    Debt collectors cannot call you at work if you have told them you're not allowed to receive calls on the job. They cannot harass your employer. They cannot pretend they're someone else in an attempt to gain more information about you, either. Additionally, they cannot claim they can take particular actions against you unless legally allowed to do so. They cannot claim you will be arrested or give you false court or government documents. Furthermore, they cannot give other people false information about you. You can write a letter to the agency telling it that collectors must stop contacting you, and by law they have to stop, except to inform you in writing of what legal action they will take. You can also write a letter to the agency prior to receiving any contact at work, letting collectors know you are not allowed to have any contact from them at work. This will help to keep your professional reputation safe, and you can take legal recourse if the collector ignores your letter.

Taking Recourse

    Keep a copy of the letter you send to the debt collector and any communications from yourself or the agency. If you feel a debt collector has illegally harassed you, you have the right to sue the debt collector for one year after the illegal action took place. Contact your state attorney general to find out your rights in your state. Also, report the problem to the Federal Trade Commission.

Working with Debt Collectors

    Cooperating with debt collectors may keep them from harassing you. Keep conversations brief and to-the-point, so you don't provide information that can harm you. Tell the debt collector you will review your finances and call back later in the month. Stick with that promise, negotiating a payment schedule that you can follow. If you know the debt isn't yours and believe someone else used your identity to gain credit, contact a lawyer and explain this to the debt collector. If you seek help to resolve your credit, contact an agency that belongs to the National Foundation for Consumer Credit.

Software for Managing Credit Card Debt

Software for Managing Credit Card Debt

Credit card debt can be stressful and difficult to manage. Thankfully, there are a number of different software programs to help you manage your credit card debt. These programs often can connect to your credit card accounts to give you the latest balances, transactions, payment information and other important information you need to manage the debt. Some of the software is free; other programs cost you money.

Quicken

    Quicken is a personal money management software tool. It connects to all your credit card accounts and other accounts so you can see the most current information all on one screen. Quicken also allows you to stay organized with your bills and upcoming credit card payments by showing you when income is coming in and when your payments are due. You can use the software to create a frugal budget to help you live on the cheap and dedicate the money you save toward paying off your credit card debt faster. You can purchase the Quicken software or use the online version for free.

Mint

    Mint is a free online software tool that also helps you manage your credit card debt. You can enter your credit and bank account information, and Mint will automatically connect to your accounts to keep them updated. The software lets you create financial goals, like paying off credit card debt by a certain date, then helps you create a budget to meet those goals. Mint also displays financial information in a number of easy to read charts and graphs, and alerts you when balances are low or when payments are coming up.

Simple Joe

    Simple Joe makes a variety of different personal finance software programs. One of the software tools, Debt Eraser, is designed to help you create a plan to get our of credit card debt and other debt as fast as possible. The software helps you decide which credit card to pay off first and creates a detailed plan that advises you how much and when to pay each card to get out of debt faster based on interest rates, the amount owed and other personal financial details. The software costs about $20 as of March 2011.

ZilchWorks

    ZilchWorks makes a software tool that focuses primarily on getting you out of credit card debt and other debt as quickly as possible. The software is easy to use; you simply fill in the requested information, such as credit card account balances and interest rates, and the software will automatically create a plan for the fastest way out of debt. The software costs around $40 as of March 2011.

What Happens If a Credit Card Company Gets a Judgment Against Me?

What Happens If a Credit Card Company Gets a Judgment Against Me?

If a credit card debt becomes very delinquent, your credit card company, or the collection agency that bought the debt, may take you to court. If they win their lawsuit, they then can use the judgment to collect the debt, which may include asset seizure and wage garnishment.

Asset Seizure and Garnishment

    State laws vary on what property and income a creditor can take to pay off a court judgment. In many states, the creditor can garnish up to 25 percent of your wages and seize money in your bank and investment accounts. It may also be able to seize other assets of value, such as cars, jewelry, boats and property.

Property Lien

    If you own a home, it may be protected under your state's homestead exemption, which means that a creditor cannot force you to sell it or seize it outright. The creditor can get a lien on your property, however, which means that if you sold or refinanced your home, it would have a claim on the proceeds.

Credit Report

    Judgments are a matter of public record, and credit reporting companies regularly add this information to your credit report. A judgment can remain on your report for seven years.

Statute of Limitations

    If a creditor gets a judgment against you, they will likely have a long time to try and get their money. In many states, the statute of limitations on collecting a judgment is much longer than it is for collecting other debts. In fact, in some states, it is possible to renew the statute of limitations on judgment collection.

Saturday, April 17, 2010

Is the Wife Responsible for Bills After a Husband's Death?

Is the Wife Responsible for Bills After a Husband's Death?

A husband's death is sad enough, but the widow's grief and stress may be compounded if creditors come after her for money owed by her late spouse. In some cases, such as community property states or joint accounts, the wife must pay the outstanding debt. There are exceptions, however, including accounts solely in the husband's name. Laws vary by state, so check with a certified accountant if you are unsure about your responsibilities.

Individual vs. Joint Accounts

    With joint accounts, both spouses are equally responsible for paying off the debt. After a husband's death, the wife still has a legal obligation to the entire remaining balance. This includes debt such as co-signed mortgages and joint credit cards where both spouses are listed as account holders.

    With individual accounts, however, only the person who signed the paperwork is generally responsible for the outstanding balance. This means that even if the wife was an authorized user of a credit card, she likely will not have the pay the remaining balance after his death. However, in some states, credit card companies are allowed to demand payment from the wife on family support expenses, such as food, utilities and so on.

Community Property States

    Community property laws means that all income and debt either spouse generates is shared equally. Any account your husband opened is considered your debt as well, even if you never signed paperwork, in a community property state. You are therefore responsible for his bills after he dies.

    Nine U.S. states -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin -- have community property laws as of 2010. Couples in Alaska can opt into a community property arrangement.

Secured Loans

    Secured loans are loans granted with collateral. For example, a car loan or mortgage are secured by the tangible object the loan is applied to. If your husband had an individual secured loan, you may not be responsible for his debt. However, the lending institution can take action such as foreclosure or repossession to recoup its losses.

Probating the Will

    After a death, the deceased's will be probated -- a process of authentication, determining assets and paying off debts. Bills that must be paid will come from the assets, so a widow will not necessarily have to pay out-of-pocket for her late husband's expenses. If the estate runs out of money before all lenders are repaid, the wife generally is not responsible unless she co-signed the account or lives in a community property state.

Can Collection Agencies Continue to Charge Interest After Buying a Debt?

Many companies that regularly sell to their clients on credit are not well equipped to collect what they are owed. In such instances, the company may choose to hire a collection agency, a company that specializes in the collection of debts, to get paid what it is owed. In some cases, the company may even sell the debt outright to the agency. Agencies, however, can only charge the debtor the interest called for in the debt contract.

Debt Contracts

    All legal debts are secured by an agreement, usually a written one, that specifies the terms under which the money that is being loaned out will be paid back. Whether made verbally or written out, these agreements constitute a legal contract that both the debtor and the creditor must abide by. Interest can only be assessed on the debt according to the terms laid out by the two parties in this contract.

Collection Agencies

    When a debt is transferred to a collection agency, whether the collection agency has bought it or whether it is just working at the behest of the creditor, the terms of the debt contract do not change. The collection agency fully supplants the original creditor and takes on all of its rights and obligations. Although the debtor will be making payments to a different party, he will pay the exact same amount as before.

Paying Interest

    If a debt contract calls for interest to be paid on a loan, then the collection agency is legally allowed to collect it according to the terms of the debt contract. Just because the contract has been transferred or the creditor has hired a proxy does not mean that the debtor does not have to keep paying interest. However, the collection agency cannot assess any additional interest not called for in the original debt contract.

Considerations

    If a collection agency attempts to assess the person fees that are not called for in the original contract -- for example, if the collection agency attempts to pass on the cost of collection to the debtor through the assessment of additional interest -- it is in violation of federal law. The debtor may file suit against the creditor and may even receive financial compensation for the creditor's actions.

Friday, April 16, 2010

How to Avoid Bankruptcy Loans

How to Avoid Bankruptcy Loans

Life events, such as serious illness or unemployment, often leave people struggling with serious financial issues and considering bankruptcy. There are several options if you want to avoid bankruptcy. Negotiating cash settlements with lenders, securing a loan modification on a mortgage and creating a strategy for paying down debt obligations will assist in avoiding bankruptcy.

Instructions

    1

    Consolidate debt with a secured personal loan. For people with credit challenges, interest rates are very high. This drives up the cost of financing debt. Apply for secured personal loans with banks or credit unions. With these loans, the debt is secured by an asset, such as a vehicle that is paid off. The interest rate is much lower, which makes payments more affordable.

    2

    Negotiate cash settlements with lenders. Once loans have reached collection status, companies are willing to accept cash settlements. With a cash settlement, you pay a lump sum (less than the debt amount) to pay off the loan in full.

    3

    Request lower payments on a mortgage. If you have a mortgage, you might be able to lower monthly payments. Loan modification is a program offered by lenders to assist borrowers struggling financially. If you have debt that exceeds 55 percent of your family's total income, you will likely qualify, according to CNN Money. Once payments are lowered, funds are freed up to pay for other debt obligations.

    4

    Create a plan for paying off your remaining debt. Make a list of debt obligations. Put the highest interest debt at the top. Focus on paying off a single obligation with the highest interest rate. Once the debt is paid, move on to the next highest obligation.

Debit & Credit Rules of Accounting

Debit & Credit Rules of Accounting

Debit and credit are two accounting concepts that balance each other, similar to addition and subtraction. Although they are commonly used to describe consumer options at the checkout counter, debit and credit are actual industry terms in the field of accounting. Three types of accounts are ruled by the principles of credit and debit: real accounts, personal accounts and nominal accounts.

Credit and Debit Introductory Rules

    A simple rule governs most credit and debit transactions: with the exception of nominal accounts, credit describes assets going out; debit describes assets coming in. Every accounting transaction is a result of either credit or debit, and the degree to which one occurs equally affects the degree to which the other will occur. Whether an accounting transaction will be considered credit or debit is contingent on the kind of account in question and the rules governing that particular account. Debit transactions increase expenses, dividends and assets, and decrease revenues, equity and liability. Credit transactions perform the opposite actions; they increase revenues, equity and liability, and decrease expenses dividends and assets.

Real Account Rules

    Business Dictionary describes real accounts as asset, liability, reserve and capital accounts that appear on the balance sheet of a business. Real account balances are permanent; at the end of the accounting period they are transferred into the next accounting period. A real account transaction is considered debit if the transaction is bringing assets into the business; the transaction is considered credit if the assets are going out of the business. For example, if Jane buys steaks to cook at her restaurant, this is considered a debit transaction. When she cooks those steaks and sells them to hungry customers, the transaction will be considered a credit.

Personal Account Rules

    Business Dictionary says personal accounts are ledger accounts where the individuals performing the transactions are recorded as debtors or creditors. The debtor is the individual, business or organization that receives the assets. The creditor is the individual, business or organization that pays the assets. For example, if Bill buys a magazine from a newsstand, Bill is being debited the magazine. If he were to return the magazine, the newsstand would credit his payment.

Nominal Account Rules

    Nominal accounts, also known as temporary accounts, begin all accounting periods containing a zero balance, accrue a balance during the statement period and then close out the statement period with a zero balance. Nominal accounts operate under the reverse debit/credit rules of real and personal accounts; losses (costs/expenses) are considered debit transactions, while gains (income/assets) are considered credit transactions.

Marital Debt in Divorce

Marital Debt in Divorce

Unfortunately for a separating couple, the emotional trauma of a broken marriage is only magnified by the business of separating not only a pair of personal lives but also economic ones. Figuring out how to turn what used to be a partnership into two separate estates can be difficult. In separation, you have to decide what to do not only with your marital property but also your marital debt.

Property and Debt Division Systems

    States divide marital property and debt under the laws of either community property (CP) or equitable distribution (ED). The main difference is that CP states seek to divide a marital estate equally, whereas ED states seek to divide it equitably, or fairly. As "equitable" and "fair" don't always mean the same thing, ED laws typically incorporate a list of factors allowing you to seek an unequal distribution in some cases. As a general rule, a 50/50 division will be presumed equitable in an ED state, but if the other side can show the existence of enough distributional factors, you may find yourself getting more debt and less property than she does.

Marital Vs. Separate Debt

    CP and ED systems are alike in that both focus on dividing marital debt and leave separate debt alone. In general, marital debt consists of all debt acquired by either party between date of marriage and either date of separation or some other date set forth in state law. Whatever you carried into the marriage, or whatever you racked up after the marital debt estate stopped accruing, is yours. Marital debt, though, can be distributed to either one of you, depending upon the makeup of your estate. As with marital property, the name on a marital debt isn't important; the focus is on whether you acquired it during marriage.

Debt Distribution

    Once you and your attorneys figure out what debt is separate and what debt is marital, you have to distribute the marital items. In court, judges try to satisfy a desired division of the total estate by distributing property and debt to each party until the target balance is reached. Typically, courts prefer an in-kind division, which means satisfying that balance by distributing property and debt in each party's name to that party without selling it or having to refinance it. If an in-kind distribution turns out lopsided, a court may order that payments be made from one of you to the other in order to even it out.

Bankruptcy

    If your marital estate consists of little more than debt, understand how bankruptcy could interact with your divorce case. At the end of your plan, a Chapter 13 bankruptcy will let you discharge many debts distributed to you in a separation agreement or court order. Chapter 7 bankruptcies typically don't allow the discharge of liability to your former spouse for joint debts, but you can get out of your liability to the creditors directly. This means that while your ex could come after you for a joint credit card you were supposed to pay, the credit card company can't.

How Do Debt Solution Companies Work?

Debt solution companies attempt to provide assistance to debtors who fall behind on multiple debt payments and cannot fulfill obligations with their current income. Without a debt solution, the result may be a legal action to seize money or assets from the debtor to make the payment. This is beneficial neither to the lender, which still loses money, nor to the debtor, who suffers severe damage to credit and loses collateral. A debt solution is an attempt to negotiate an alternative form of payment that is more satisfactory, although debtors should be wary of debt solution companies that make claims that seem too good to be true.

Debt Settlement Programs

    Debt solution companies offer various debt settlement programs. The goal of these programs usually is to reduce the amount of debt people owe to their creditors. Through a settlement program, debtors can pay off part of their debt and have their lenders forgive the remaining amount. The key to settlement is the negotiation with the lender. Lenders must agree to a specific settlement amount and often require a sizable lump sum in return for forgiving part of the debt and closing the account.

Debt Solution Company Profit

    Debt solution companies make their profits through fees they charge customers. The company presumably provides experience and fully developed plans for settling debt in exchanges for payment. Many debt companies ask that debtors transfer their funds into an account overseen by the company. The company also may charge a fee for managing the account and making timely payments to creditors so that debtors do not have to worry about payments themselves.

Debt Solution Scams

    Debt solution scams are common, and some organizations try to take advantage of customers by attracting them with unattainable promises and "required" fees. Debtors legally do not have to pay debt settlement companies or relief companies any fees before debt is settled or reduced. Many companies require illegal upfront fees before work is performed. A debtor can seek a debt reduction or settlement plan on his own directly with a lender if a solution company is not a viable option.

DMP

    Debt management plans (DMPs) are related to the services debt solution companies offer, but DMPs deal more with debt counseling. Rather than helping you get rid of debts or reduce payments, DMPs try to organize debtor finances to deal with current debt. Lenders may waive fees or reduce interest rates, but the key is creating a workable debt schedule and sticking with it to pay off current debts without incurring more.

Thursday, April 15, 2010

Can Unemployment Be Garnished in Nebraska?

Federal and state laws impose limitations on garnishment of wages after a civil judgment. Certain types of income are exempt and cannot be garnished to pay a debt. In Nebraska, unemployment payments are considered public benefits and therefore are exempt from garnishment.

Garnishment: Defined

    Garnishment of wages is a legal process that allows a creditor to recover unpaid debt from the debtor's employer. The third-party employer is the garnishee and is issued a court order to turn over a certain amount of wages directly to the creditor until the debt is satisfied.

Nebraska: Garnishment Exemptions Include Unemployment Benefits

    In Nebraska, certain non-wage, non-salary income is protected from garnishment. These types of income include unemployment benefits, as well as other types of public benefits, such as worker's compensation and Aid to Families with Dependent Children. In Nebraska, like other states, other categories of income are also exempt from garnishment, including pensions and retirement benefits, insurance and annuities and fraternal society benefits up to $100,000. Compared to other states, Nebraska has fewer protections for public assistance-related or insurance-related income.

Nebraska Maximum Threshold

    In Nebraska, limits apply on the amount a creditor may garnishee from a debtor's income. Nebraska law takes the lesser of two calculations and sets it as the threshold. The first calculation is 25 percent of the debtor's disposable income (or, if the debtor is the head of a household, 15 percent). The second calculation is the amount, if any, over which the debtor's weekly income exceeds 30 times the minimum wage. Certain types of debts, including child support arrears and tax bills, have separate rules that allow for a higher ceiling.

Nebraska Time Limit

    Time limits exist in Nebraska within which a creditor can pursue garnishment. To obtain a judgment, a creditor must commence an action within four years for credit accounts and oral contracts and within five years for written contracts or those involving promissory notes. Then, after a judgment that states the debt is owed, the creditor has another five years or more to seek garnishment or other means of enforcing payment.

The Sources of Financial Debt

Financial debt comes about when individuals and businesses borrow money from lenders. The lenders charge interest during the repayment of the borrowed money and make money on the transaction. People end up with debt from many sources as they borrow money from different types of lenders to use for a variety of purposes.

Consumer Spending

    Credit card debt, auto loan debt and sometimes home equity debt fall under the broad category of debt due to personal spending. This is when people borrow money to pay for the purchase of an item that loses value over time. For example, paying for clothing on a credit card is personal spending debt. Home equity loans that are used to consolidate other types of consumer debt or to purchase items that will not gain value are also consumer spending.

Investment

    Some people get into debt through an investment in the purchase of an asset that the borrower hopes will gain value over time. Mortgages are a prime example of investment debt because homeowners intend for their homes to increase in value, or at least hold their value, in the future. Student loans are also investment debt because borrowing for education increases the graduate's earning potential in the future.

Business

    Especially in their early years, businesses borrow money to establish themselves and pay for business expenses while the income is low or nonexistent. The entrepreneur starting the business might have to take on debt as a personal loan at first, but once the business establishes its own credit, the business can apply for loans or get credit cards that are not tied to the credit of the business owner.

Other Classifications

    Debts can be classified according to many schemes. For example, the categories of consumer spending debt and investment debt are sometimes referred to as bad debt and good debt. In another scheme, secured debts are tied to a particular asset, such as a house or a car, that the lender can sell to pay back the debt if the borrower does not make payments. Unsecured debts are those, such as credit cards and personal loans, that do not give the lender any right to the items purchased. Unsecured debts typically have higher interest rates than secured debts.

Lenders

    The money for all of these types of debt has to come from somewhere, and this is where lenders come into the picture. Banks and credit unions make money on the deposits they hold by lending to individuals and businesses. Individual investors also finance debt by purchasing bonds and securities that are backed by different types of loans.

Wednesday, April 14, 2010

Do You Write the Check to the Collection Agency or the Company?

When a person runs up a sizable debt with a creditor, the creditor may not even try to collect the debt itself. Instead, it will send the debt to a collection agency. The agency will either be paid a portion of the money it recovers or it will buy the debt outright. Therefore, in some cases, the debtor will make payments to the creditor, while in other cases he'll pay the collection agency.

Collection Notices

    In many cases, a collection agency will inform a person that it is seeking repayment of her debt by contacting her through e-mail or a written letter. Often, these collection notices will include an address to which the person can make payment. Before the debtor attempts to send a check in, she should check these notices for the appropriate address.

Paying the Collection Agency

    Many times, a debtor will be asked to make payment to the collection agency. This will always be the case if the collection agency has purchased the debt from the creditor. Generally, the older the debt, the more likely that a collection agency has purchased it outright -- usually at a price much smaller than the debt. Always contact the collection agency before sending it a check.

Contacting the Company

    Before a person sends a check to the collection agency, he should first contact the company to whom he originally incurred the debt. Although he may have to make payment to the company, he will want to make sure he can send it to the right department. Many companies will have a billing, accounts receivable or collections department, which should be able to provide a correct address.

Following Up

    Before a debtor sends in a check, she should always make a copy of it. After sending in the check, she should allow some time for the company to cash the check, and then she should check her credit report to make sure that it reflects payment of the debt. If it does not, she should contact the party to whom she sent the check, whether it is the company or the collection agency.

What Is the Type of Credit on Credit Reports?

The types of credit that appear on all three of your credit reports -- from Experian, Equifax and TransUnion -- are installment loans, revolving loans such as credit cards and certain household bills. Civil judgments against you regarding a debt also appear under the public records section of your credit reports.

Credit Account Reporting

    Information for all types of credit that appear on your credit report include the total loan amount, total amount outstanding, payment amounts, the date you opened the account and the name of the creditor. Creditors also report whether you make timely payments on your credit accounts. If you make on-time payments, the creditor will note that you are paying or paid as agreed on your credit report. If you make late payments, the creditor will note the month in which you were late for each occurrence.

Installment Loans

    Installment loans are loans in which you make payments in regular installments, usually monthly, such as a mortgage, student loan or auto loan. This category includes any type of secured or unsecured loans. The high credit limit of the loan is the amount of the loan the day you received it. This amount does not generally change. The amount outstanding or low credit limit is the amount you still owe on the loan. Creditors for your installment loans will also report your monthly payment amount on your credit report.

Revolving Loans

    Like installment loans, revolving loans are loans in which you make regular payments, but the payment amounts can change. Common types of revolving loans are credit cards and home equity lines of credit. These types of credit accounts report your high and low credit limits as well as monthly payment amounts. The high credit limit is usually the amount of the credit limit on each account. The low credit limit that appears on your credit report is the amount you still owe to the creditor. High limits for revolving lines of credit can change if your creditor increases or decreases your credit limits or if you go over your credit limit. The low limit or amounts still owing changes as you make payments.

Household Bills and Civil Judgments

    How household bills such as utility bills appear on your credit report varies. Some utility companies only report to the credit reporting bureaus if you are late on your payments or have your service shut off and still owe a final balance. Cellphone companies for which you have a contract often report your account and payments regularly to credit reporting agencies. Public records on your credit report are those in which any creditor sues you for an outstanding debt and the judge finds in favor of the creditor.

Tuesday, April 13, 2010

Does Debt Settlement Affect Financial Aid?

Debt settlement programs helps you pay your debts, including medical bills and credit cards, for less than you owe creditors. This strategy can save you money in the short-term, but may have negative effect on your credit score, tax liability and your ability to secure new lines of credit. Debt settlement can also reduce your chances of securing federal financial aid and private student loans to attend college.

Federal Student Loans

    The federal government doesn't include credit history or credit score in eligibility requirements for government financial aid and loans, such as Stafford and Perkins loans. This means you retain the ability to receive financial aid from the government to attend a qualified institution, even if you are on a debt consolidation or debt settlement program. Once exception is when you have an unsettled default on a federal student loan. You cannot receive federal student until you resolve the default by bringing the loan current.

Federal Need-Based Aid

    The government determines eligibility for need-based aid programs, including Pell grants, based on your annual income and your expected family contribution to your education as determined by your federal application for financial aid, or FAFSA. Participating in a debt settlement program can have negative consequences for eligibility for federal need-based aid since you must claim all forgiven debt more than $600 as income on your federal tax return. This could push you out of eligibility for need-based aid if have a high amount of forgiven debt through a debt settlement program.

Private Student Loans

    Unlike student loans from the federal government, private student loan agencies may use credit score and history as an integral component in determining your eligibility for aid. Debt settlement can lower your credit score because you essentially pay off a date for less than owe. This may lower your credit score below a lender's minimum requirement for extending you a private student loan. A debt settlement notation on your credit report remains for up to seven years from the date you settle the account.

Continuing Collection Calls

    Participating in a debt settlement may not have a measurable affect on your ability to secure financial aid for school, but it may not sufficiently satisfy your creditors to prevent continued collection practices. Creditors may even attempt to sue you to collect debts even as you're attempting to negotiate your debt settlements. The company you choose to negotiate debt settlements for you may also charge you excessive fees for negotiation services, which can eat into money set aside to help you pay for your education.

How to Prevent Fraud With Safe Debit Cards

How to Prevent Fraud With Safe Debit Cards

Debit cards work electronically like credit cards, but are less secure since they automatically transfer money from your bank account. Debit card charges are completed quickly and you are not given the opportunity to review the charges before money is taken from your account. It is important to be extremely careful when using your debit card.

Instructions

    1

    Monitor your bank account. If you notice someone is using your card fraudulently and you notify your debit card company within two days of missing your card, the Electronic Fund Transfer Act limits your losses to $50, according to Sandra Block, of "USA Today." If you wait until your bank statement is mailed to notice and report the theft, you could lose up to $500. You lose all legal protection if you wait longer than 60 days after your statement is mailed. Keep a close eye on your account and be sure that you know where your card is.

    2

    Use a PIN-only card. Sandra Block also recommends using a card that requires you to give your PIN number every time you use it. Even if you lose a PIN-only card, potential thieves would have to know the number to use the card. Thieves could fake the signature necessary to use a signature-based card. You should also avoid keeping your PIN number anywhere in you wallet or purse. Even if you do not write the number directly on the card, a thief could easily deduce that the four-digit number was your PIN.

    3

    Do not respond to emails asking for your debit card information. Potential identity thieves often send emails that look like they come from banks, stores or other institutions that may need your billing information. Sandra Block points out that legitimate financial institutions will not send emails requesting sensitive information. If you are unsure, call your bank or visit in person to make certain that you are giving your information to the correct people.

    4

    Be careful when using your debit card online. Only provide your debit card information to sites that you trust and decline if the site offers to save your payment information. Make sure that your computer's anti-virus and firewall programs are up to date and working. If spyware is allowed to stay on your computer, it could record the information you input and send it to potential identity thieves. Instead of the debit card, use a credit card for online purchases because of the enhanced security they offer.

How to Obtain a Credit Report on a Judgment Creditor

When doing business with a company, you have a right to understand its financial history in order to protect yourself and your interests from potential financial harm. A credit report provides you with information on an entity necessary to make informed business decisions. The report includes judgments made against the company, tax liens, collections and payments details, credit scores, bankruptcies, leasing, insurance, and corporate financial records.

Instructions

    1

    Decide on what information you need to know in order to make informed business decisions and make a list to use as a guideline for selecting your report. You may need only a credit score or a full financial history.

    2

    Research credit report agencies. Business credit reporting web sites offer partial or complete credit reports on a business. Partial reports are usually very limited but can be greatly expanded depending on the investigation package you purchase. Expect prices to range from free for small details to upwards of $1,500 a year for access to multiple companies multiple times per month.

    3

    Enter the name of the business about which you are inquiring into the credit agency's search engine, noting the address and any other information that will limit the search. When your business choices appear, select the correct one.

    4

    Choose the report that will contain information relevant to you based on the criteria specified in your list, and if applicable, click purchase report.

    5

    Enter your credit card information and make the payment. Print and keep the receipt for your records and make note of how long delivery of the information may take.

Monday, April 12, 2010

How to Remove a Mortgage From a Credit Report

How to Remove a Mortgage From a Credit Report

Your credit report provides lenders with information pertaining to your credit history. This includes previous and current loans, such as home mortgages. While positive credit information can remain in your credit report forever, you can remove inaccurate and negative credit information. This includes mortgage information that is incorrect or in error. You can remove a mortgage from your credit report as long as it is invalid or does not apply to you.

Instructions

    1

    Contact the information provider. This is the party who provided the mortgage information to the credit bureaus. The name of the provider is in the credit report. Notify the company that the mortgage information reported is inaccurate and should be removed from your credit report.

    2

    Write the major credit bureaus. Draft letters to Experian, Equifax and TransUnion (see Resources). State that you are disputing mortgage information contained in your credit report. Provide the details regarding the inaccurate information and ask that it be removed from your report. Include your name and address in the letters.

    3

    Mail your letters to the credit bureaus certified, return receipt. This provides you with proof of receipt and the date they were received.

    4

    Await the investigation results. The credit bureaus have 30 days to conduct an investigation after receiving your dispute letters. They are required to furnish the results of the investigations to you in writing. If any changes are made to your credit report, you are entitled to free copies.

What Is the Average Debt Load of Americans?

What Is the Average Debt Load of Americans?

The Federal Reserve reported in March 2010 that total U.S. household debt, including mortgages and credit cards, was at $13.5 trillion. Although it's a staggering amount, the total actually represented the first drop in household debt since records began in 1945; it was down just under 2 percent from the previous year.

Average

    Dividing that $13.5 trillion among every U.S. resident--man, woman and child--the average debt load across the nation is $43,874 per person. That's certainly a lot, but it becomes a little more understandable if you remember that it includes mortgage debt, which for most people is the single biggest financial obligation they'll take on in their lives.

As a Percentage of Income

    Taking a look at how much each household earns, total household debt is at more than 122 percent of disposable income. Most experts say that debt of 100 percent of your disposable income is the highest level you can sustain over a long period.

What Kind of Debt?

    Slightly more than $1 trillion of the debt--more than 70 percent--is mortgage debt. The other $2,481 billion is what's known as consumer debt; that includes both credit cards and other types of debt such as auto loans and student loans.

Net Worth

    Your net worth is the total amount of your assets--real estate, stock holdings, savings and personal property--minus the amount of debt you hold. If you subtract that huge U.S. household debt from the combined total assets of each American, the average U.S. resident's net worth in 2009 was $175,600.

Savings Rate

    If you're servicing a big debt load, often you don't have dollars left over to save, and that's certainly been the evidence of recent years. Over most of the last 5 years, Americans have saved less than 3 percent of their income each year. In 2005, the savings rate actually dipped below zero percent. As of late 2009, it stood at around 4 percent.

How to Establish Credit & Repair Bad Credit

Good credit is essential to achieving financial stability. Your credit can affect your ability to obtain loans and determines your interest rate. Establishing credit takes time. Consumers with no credit and bad credit are usually grouped into the same category. The process for repairing credit is similar to the steps you would need to take to establish credit. With patience and discipline, you can establish or repair your credit.

Instructions

    1

    Obtain your credit report to access your credit situation. Under the Fair Credit Reporting Act, you are entitled to a free copy of your credit each year. Visit Annual Credit Report to order your report from Equifax, Experian and Trans Union.

    2

    Check your credit report for inaccuracies. If there are any errors or discrepancies, you will need to file a dispute with the credit bureau. Monitoring your credit report can help you maintain your credit.

    3

    Settle debt directly with the creditors. If you want to clean up your credit report, you can negotiate a settlement with the creditor. Avoid paying third parties or collection agencies. Request the creditor send a letter agreeing to remove the debt from your report once paid as agreed.

    4

    Apply for a credit card. Avoid applying for multiple credit cards at once. Too many inquiries will lower your score. There are credit cards specifically for people with no credit or bad credit. You can expect to start with a lower credit limit and higher interest rate.

    5

    Ask someone to co-sign if you cannot get approved for a credit card or other line of credit. Sometimes creditors are not willing to risk extending credit to someone with no credit or bad credit. Having a co-signer with adequate credit back your credit account secures the lender and helps you build your credit.

    6

    Make all credit card payments on time. Your payment history accounts for 35 percent of your credit score, according to My FICO. If you want to avoid costly interest charges, pay your balance in full each month. By paying the total balance you will show good credit utilization, which is 30 percent of your score.

    7

    Apply for an additional line of credit. Your credit score is also affected by the type of credit you have. Too many credit cards may lower a score. Aim for a mixture of credit cards, installment loans and revolving accounts. Continue making timely payments on all accounts. Older accounts appear better on a credit report than newer lines of credit. Consistency is important.

Unsecured Credit Card Guide

Using an unsecured credit card is a way to pay for things even when you do not have the money you need. This gives you a great deal of financial flexibility, but it also comes with a great deal of responsibility. When choosing and using an unsecured credit card, you have factors to consider.

Responsible Use

    Before you get an unsecured credit card, think about how you will be using it. This type of card should be used only occasionally and in cases of emergency. An unsecured credit card should not be used for random purchases or for building up card balances. Many people have misused unsecured credit cards, which can lead to a large debt they cannot pay.

Making Payments

    When you use an unsecured credit card, make your payment by or before the due date. If you do not make your payments on time, this seriously impairs your credit. The credit bureaus look at your payment history as one of the most important factors in determining your credit score. If you habitually pay your bill late or not at all, you can expect to earn a very low credit score.

Costs

    Think about how much your purchases are actually costing you with an unsecured credit card. You are charged a rate of interest on your balance and If you do not pay off your balance at the end of each month, you will be charged that rate. Also, you may have to pay an annual fee and will be charged a fee for missed payments.

Rewards

    Using an unsecured credit card can give you access to attractive rewards. Most credit cards today offer rewards packages for making purchases. You should be able to get a certain amount of points for each dollar you spend with the card. You can then redeem these rewards for things like airline tickets and hotel accommodations. These rewards give you more incentive to spend with your card, but you should never spend more than you need to just to get rewards points.