January 2011 ~ Credit And Debt Management

Monday, January 31, 2011

How to Get Off a Cosigned Loan

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A loan contract is a legally binding agreement. If either you, as cosigner, the borrower or the lender breaks the terms of the agreement, the other party can sue. Therefore, once you sign up to be a cosigner on someone else's loan, you are normally on the hook for the life of the loan. In some rare cases you can remove yourself from the obligation, but it is difficult.

Instructions

Calculate the payoff figure on the loan. The easiest way to relieve yourself of either the mental anguish of cosigning or the financial burden is to pay the loan yourself. Scrape together all the funds you can: retirement loans, savings and investments. While this may not fit into your long-term plan, it may save your credit score.

Refinance the loan just under your name (perhaps with more favorable credit terms) if you cannot pay it in full. Check with your local credit union and bank for personal loan rates and payments.

Pull a current credit report for free at annualcreditreport.com. Look at the full payment history of the account in question. If--and only if--the payment history is perfect, consider contacting the lender about potentially removing your name from the loan.

Devise an argument to use when you contact the lender. You must reference the perfect payment history. Other factors to consider are the remaining balance on the account and canceling the credit line.

Visit the lender in person, if possible, to discuss removing your name. If approved, you'll likely need the primary signer to agree to this as well.

How to Get Bank of America Foreclosure Help

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Because of the recent recession, Bank of America, like other national lenders, offers several private and government foreclosure prevention programs to customers who are unable to repay their loans and risk losing their homes to foreclosure. Homeowners who are in the midst of a pending foreclosure sale may be able to modify their home loans under the federal Making Home Affordable Modification Program, or HAMP. Homeowners qualify under the HAMP program, available until Dec. 31, 2012, if they financed their homes on or before Jan. 1, 2009. Bank of America customers can find foreclosure help by submitting a HAMP application through the bank's foreclosure center.

Instructions

Visit Bank of America's website at "homeloanhelp.bankofamerica.com." Bank of America offers specific instructions about what you need to do after you have received a foreclosure notice.

Contact Bank of America's Foreclosure Center by calling its toll-free number. The company offers private and government foreclosure programs to customers who are unable to repay their loans.

Speak with a foreclosure specialist. Discuss your options. Although Bank of America offers private foreclosure programs, most homeowners in the midst of foreclosure benefit from the federal government's HAMP program. HAMP prohibits lenders from proceeding with foreclosure during the modification process.

Request a HAMP application from the representative. If you decide that you would like to pursue a loan modification, you will need to complete a financial hardship affidavit and provide proof of financial hardship by submitting tax documents, pay stubs and bank statements. You will also need to complete an official application.

Credit Card Debt Judgement Help

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If you have a credit card that you have not been keeping up with your payments, it is typically only a matter of time before the credit card company sends your account to collections. Eventually, the credit card company can get a judgment against you to collect the debt. If you are faced with a credit card judgment, it can be a difficult time, but there are ways to deal with it.

Typically, the process of getting a judgment takes some time on the part of the credit card company. They will first turn your account over to a collections agency to try to get the money. If that does not work, they will then file a lawsuit against you. On the court date, the court can issue a judgment against you. Once the credit card company has this judgment, they have the legal right to try to collect from you in several different ways.

Once the credit card company has the judgment, getting the money from you can still be difficult. In some states, you could simply still refuse to pay and the credit card company will not be able to make you pay without taking further action. In some states, the credit card company can take further action to get a writ of execution against you. At that point, they can enforce the judgment by garnishing your wages or levying your bank account.

If you know that the creditor has filed a lawsuit against you, it is generally in your best interest to go to the court date. Skipping the court date will make it look like you do not care about repaying the debt. When you go to the court date, you can generally set up a payment plan with the help of the court to eliminate your debt. Even after the court issues the judgment, you can work with the credit card company to set up a repayment plan that will work for you and them.

When you fail to show up to court date or fail to set up a repayment plan, the credit card company might move towards garnishing your wages. Once they get the writ of execution from the court, they can work with your employer to set up a plan in which part of your paycheck is sent directly to them. State laws govern how much of your pay can be taken through a garnishment, but this can seriously affect how much money you have to live on.

Can the Head of Household Be Garnished in Florida?

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In addition to earning federal Earned Income Tax Credit eligibility, claiming head of household in Florida comes with the added benefit of wage and bank account garnishment exemptions. Under Florida law, the head of household's disposable income, the amount left after federal, state and local taxes, is wholly or partially exempt from garnishment. However, circumstances do exist where even the head of household exemption will not protect you from garnishment.

According to the Florida Senate, residents who supply more than 50 percent of the financial support for household dependents are considered head of household. To qualify as a dependent, according to the IRS's definition of qualifying dependents, the household member must be under the age of 19 to 24 for full-time college students --- at the end of the tax season. You may only claim your biological, adopted or foster children, step-children, siblings or stepsiblings as dependents. Other household members, including your spouse, do not qualify as dependents, unless they are completely disabled and depend on you for the majority of their financial support.

In the past, Florida's head of family garnishment exemption automatically protected head of households who had $500 or less per week in disposable income from garnishment. Effective October 2010, Florida's House of Representatives increased the disposable income limit from $500 to $750. Additionally, earnings held in a bank account fall under this protection for a maximum of six months, even if these earnings are combined with cash from other sources, according to the Florida Bar. Heads of household who earn more than the disposable income limit are only liable for garnishment if they agree so in writing.

According to the Florida Bar, Florida residents do not receive a notice of garnishment prior to a judgment order, so you may only become aware of a garnishment judgment when your wages are withheld or your bank account is frozen. The creditor will send you a copy of the writ of garnishment, the answers filed by your bank and employer and a notice informing you of your rights stop garnishment. You must then file an affidavit with the court describing your right to head of household exemption, along with proof of your income, assets and expenses to prove head of household status and stop garnishment. The creditor must also return any wages are funds garnished prior to claiming your garnishment exemption.

Child support or back taxes hold priority over the head of household garnishment exemption. You must comply with child support or back tax garnishments, but the state is only able to withhold the federal limit of your income for garnishment. Under the Consumer Credit Protection Act, up to 50 percent of your income can be garnished if you support your spouse or another child and up to 60 percent can be garnished if you only support yourself. After back taxes or child support garnishments are subtracted from your disposable income, the remaining amount may still fall under the head of household garnishment exemption, according to the Complete Guide to Federal and State Garnishment.

How to Adjust Debt

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Certain situations will determine if you need to adjust your debt. If you are experiencing a financial hardship or you have too much debt to manage, adjusting your debt could help solve your problems. Debt adjustment means you are changing the term and conditions of the original contract. Adjusting your debt may consist of changing the interest rate. Many types of debt can be adjusted including an automobile loan, mortgage, credit card and personal loans.

Instructions

Review all of your debt to determine which parts need to be adjusted. Write a list of all debts including the name of the creditor, account balance, interest rate and monthly payment. Add up all of the payments and balances.

Decide how your accounts can be adjusted. An adjustment to your debt can be made by lowering the interest rate, refinancing your loan or even asking for a debt settlement. A mortgage loan can be refinanced or you could receive a loan modification which lowers the interest rate and, in some cases, will extend the term. A balance transfer is another way to get your debt adjusted. You may be able to receive a low promotional rate.

Contact your creditors to discuss debt adjustment. You can negotiate a lower interest rate with your credit card companies. There is no paperwork to sign. Call the credit card company using the toll-free number on the back of your credit card. When your rate is lowered, more of your payment is applied toward the principal balance. Ask your mortgage company about refinancing options as well as loan modifications. You will be responsible for costs if you decide to refinance but there are no fees with a loan modification.

Take the necessary steps to get your debt adjusted. The lender will guide you through the process to get your debt adjusted. When the process is complete, add up your payments to make sure they are now affordable.

How Do Debt Consolidation Loans Work?

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Debt consolidation takes into account all of your debt with the exception of your mortgage. This can be credit cards, car loans or personal loans. You may have bought furniture on credit or a boat or camper. You can take all of these loans and combine them into one, with a lower interest rate than you are paying on each one separately and usually for a longer term, creating one lower payment. You can put all or some of the loans into a debt consolidation loan. There are times when it doesn't make sense to put a debt in--if it has a lower interest rate than the consolidation loan or you don't have much longer to pay on it.

There are many types of debt consolidation loans, most of which are mortgages and will attach to your home. Depending on the equity in your home, you can refinance your first mortgage and add all the debt into it. If you are paying an average of 19 percent on your loans and can get a first mortgage with an interest rate of 7 percent, you can make the payment more manageable. You can also apply for a second mortgage or a home equity line of credit, called a HELOC. There are some personal loans out there for debt consolidation, but without collateral you will pay a much higher interest rate.

You can apply to the bank that already holds your first mortgage. If your credit rating is good and you've kept up with your mortgage payments, it may be easiest to go through them as they have already done your qualifying. They will update everything from when you first got a mortgage with them, but it will move a little faster. You can apply at any bank or mortgage company. A mortgage broker works with several different companies and can put you with the one that best fits your needs. Some of the larger credit card issuers, such as Capital One, will do loans and consolidate other debt into it if you have a good record with them. If you deal with a local savings and loan on a regular basis, they may consider making you a personal loan.

The biggest reason for people getting a debt consolidation loan is that it has become difficult to make all the payments on their loans. By putting them all into one loan and amortizing it for 15, 20 or 30 years, they have a lower payment that they can easily pay every month. This does not mean you will save money. You may have a higher interest rate on a credit card, but by paying extra every month you can pay it off in 6 months. If you put that balance into a debt consolidation loan, you will be paying on it for years. Even at a lower interest rate, that can add up to much more money. The best thing to do is keep out anything you know you can pay off quickly. Take as much extra money from your monthly savings with your new debt consolidation loan and pay on the equity. You can cut the time it takes to pay it off in half and save yourself thousands of dollars.

Can Anybody Garnish Lump Sums From Social Security?

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Social Security payments go to elderly and disabled people, many of whom have no other sources of income. The government gives Social Security income special treatment, recognizing that many recipients depend on it to keep them fed and housed. As a result, the Social Security Act limits garnishment of Social Security income to only a few circumstances.

Creditors can use garnishment as a last resort measure in collecting debts. Creditors ask a judge for a court order for garnishment, and the sheriff then delivers the order to the debtor's employer, who must then send a percentage of the employee's wages to the creditor. Other sources of funds, such as bank accounts or self-employment income, can also be garnished. Garnishments can be one-time actions (lump sums) or repeating. Labor laws limit the amount that creditors can garnish; creditors cannot push weekly take-home pay below the poverty line and cannot garnish more than 25 percent of a person's income (50 percent for child support).

Section 207 of the Social Security Act clearly states that "...none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law." This means that your Social Security cannot be garnished for things like credit card debt or on as a part of bankruptcy proceedings. However, Section 459 lays out a few cases where Social Security benefits can be garnished.

Federal entities can garnish up to 15 percent of Social Security benefits. The IRS garnishes Social Security and other income much more often than other entities, due to the prevalence of tax debt. Federal entities can only garnish disposable income, which the Department of Labor defines as after tax income. Fresh Start Taxes notes that some Social Security Disability payments are exempt from garnishment; talk to a caseworker at the Social Security Administration to see if you may be exempt.

The only time any individual can garnish Social Security funds is when collecting child support or alimony. If a person succeeds in getting a court order to garnish Social Security from a former spouse or child's parent, the garnishment cannot push the Social Security recipient below the poverty line or exceed 50 percent of his total income. In the case of child support, a parent can garnish up to 60 percent if the Social Security recipient is not caring for another spouse or child, plus 5 percent for overdue child support.

How Long Do Debts Remain on Your Credit Reports?

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Your credit report serves as a record of your financial history for potential lenders and creditors. Debts will remain on your credit record for years after they are paid off to demonstrate your ability to manage money and what level of lending risk you may present to a creditor.

A debt can have either a positive or negative effect on your credit rating. Debts that have gone delinquent or demonstrate a history of late payments will negatively impact your score. Debts that have a positive payment history and a low balance, however, will boost your credit rating.

Old collection accounts will only appear on your credit report for seven years and six months. Positive closed accounts can report for seven to 10 years, depending on the credit bureau. Positive debts that are still open, such as credit cards, can appear on your credit report indefinitely.

If you discover debts on your credit report that do not belong to you, the Fair Credit Reporting Act (FCRA) gives you the right to dispute those debts with the credit reporting agencies in order to have them removed as soon as possible.

Tax debts do not follow the same reporting period as most other derogatory debts. A paid tax debt will be removed from your credit report in seven years. If the debt is left unpaid, however, it can appear within your credit file indefinitely.

Some collection agencies will intentionally alter the dates an account is scheduled to be removed by the credit bureaus. This results in the account appearing on your credit report for a longer period of time than is allowed by the FCRA. Review your credit reports regularly and report any obsolete debts to the credit bureaus.

How to Redeposit a Bounced Check

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If you receive a nonsufficient funds (NSF) notice from your bank for a check you either wrote or received, it means that the bank refuses to honor the check because the issuing party's bank account does not have sufficient funds to cover the payment. Checks written from accounts with insufficient covering funds "bounce." The process for redepositing a bounced check depends on the banks involved, and usually incurs costs to the recipient of between $5 and $50 per occurrence.

Instructions

Reverse the check deposit and recalculate your bank balance.

Reverse the original check deposit from your bank ledger so that your account accurately reflects your current balance.

Call your bank to determine the redeposit process and fees.

Call your bank to ask how much it charges for redepositing a bounced check, and whether the redeposit process is automatic. If the bank does not automatically redeposit bounced checks, you may request that it wait until you contact the check's issuer.

Contact the person who wrote the bounced check to let him know your intention to redeposit the check and to ask him for reimbursement of any fees you incur as a result.

Notify the bank that it should redeposit the bounced check, and then enter the deposit amount in your bank ledger, less any redeposit fees.

Inaccurate Credit Report Information

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In 2010, credit reports are used by a variety of industries as decision-making tools. In the workplace, having substantial debt can prevent you from getting a job or even a promotion. The banking industry uses credit reports to set interest rates on loans and may deny you a bank account if your credit is poor. Insurance companies use them to set your rates to counter the potential that your debt may result in fraudulent claims.

Credit reporting agencies use four broad areas to predict future credit performance; payment history, consumer indebtedness, acquisition of new credit and length of credit history. Your payment history is important because it shows your ability to repay debts in a timely fashion. Considered is the amount you are in arrears, the lateness of your payment and how recent the late payment was. In evaluating indebtedness, they review your revolving accounts to see how much of the available credit you used, and for loans, such as cars or mortgages, the amount of the remaining balance.

The length of your credit history is important because years of paying on debt reveals a credit pattern. Timely payments, a period of late payments and a resumption of timely payments, can reveal a temporary setback such as job loss. The final area is only a problem if you attempt to acquire a lot of new credit in a short period of time. Your credit score is derived from these four areas.

Since your credit report is so important, you should know that no one is required to report your credit habits to reporting agencies. It is a voluntary act. This, according to a 2004 Federal Reserve study, is where the inaccuracies begin. Many companies don't report at all, and though you have an account and pay on time, it is not reported. Some creditors report only late payments, though it may be the only late payment in 10 years. Credit card companies don't always report an increase in your credit limit, so it may appear as though you reached you spending limit.

Credit scores are a simple method potential creditors use to calculate your creditworthiness. An example of the impact is revealed in the Federal Reserve study which showed that in 2004, the average interest rate for a 30-year fixed rate mortgage was 5.75 percent if you had a FICO score of 720 or above. The interest rate rose to 9.29 percent, if your score was below 560.

Though correcting inaccurate credit records is a sound practice, it can also result in additional inaccuracy. It is only corrected with the reporting agency with whom you disputed it. Be sure correct the inaccuracy with all three reporting agencies, Trans Union, Equifax and Experian. You can update your report at any time.

Unused accounts can lower your score, as it could appear you have debt you don't have. For example, if your mortgage is sold to another lender, and is not reported, it would appear that you have two loans outstanding. Always ensure a closed or transferred account is reported closed.

Can I Be Reported to the Credit Bureaus for the Same Debt by Different Collection Agencies?

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If you owe a debt, the original issuer of the debt may sell it to a collection agency. If the debt remains unresolved for several months or years, the account remains open and a string of collection agencies may purchase the debt from one another. If this occurs, you may find that the debt appears on your credit report more than once, but you can take steps to have the multiple listings removed.

Several situations can cause a debt to appear on your credit report more than once. The original issuer of your debt will typically report the debt to the credit bureaus. If the issuer sells the debt to a collection agency, the collection agency may report the debt to the credit bureaus again. Debts may also appear multiple times on your credit report because of a clerical error, or because the same entity reported the debt more than once.

Different collection agencies can legally report you to the credit bureau for the same debt. However, the credit bureaus will typically treat the subsequent reports as a continuation of the same debt, rather than different debts. The first report of the debt will appear as an account, while the other reports will appear under collections. Having a long history of collections for a debt will harm your credit score, but it won't be as detrimental as having separate debts.

If the same debt appears as two different accounts, you can typically ask the credit bureau to remove one of the listings. To file a dispute, you can contact the credit bureau via telephone, by mail or on its website. You must typically provide your personal information, such as your name, address and social security number. You must also describe the error and provide supporting documentation.

After you submit a dispute, the credit bureau must investigate the issue. The creditor who reported the duplicate accounts will have 30 days to prove that both listings are accurate. If the creditor can't prove that the debts aren't the same, the credit bureau must remove the duplicate listing from your report. When the investigation is complete, the credit bureau will send you a written report detailing the results.

Use a Credit Card to Buy a Car From a Dealership

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Ever since the financial crisis of 2008, credit cards have been looked at as the devil. However, for a chosen few, there may still be some benefits to buying a car with a credit card. If you have the credit available, you are disciplined about making payments over your minimum and your interest rate is lower than what you're being offered by car loan companies, you may want to seriously consider this strategy.

Instructions

Call your credit card company to verify your available balance. Once you know how much money you have available on your card, you'll have an idea of the price range of cars you should be looking at and where to go shopping. For example, if you have $10,000 available you might be able to look at new or gently used cars at dealerships. If you only have about $500 available on your credit card, you may have to visit a small car dealership that specializes in used cars that are over 10 years old (be sure to get a CarFax vehicle history report before buying a used car on your credit card--see Resources).

Verify your interest rate on purchases, or if you plan on writing a check from your credit card account, see if there are any balance transfer deals that your credit card company is offering. You may be lucky enough to get a temporary 0 percent balance transfer offer so that you will only be paying back the principal for the car purchase for a while. (Determine what the APR will be after the promotional period as well.)

Visit the dealership and browse options in your price range. Find the car that you are interested in and discuss the total cost with the salesperson. Determine how much sales tax you are going to have pay for the car in addition to the sales price. If the sales tax and other fees will bring you above your credit card limit, you are going to have to negotiate the price down with your salesman. If you let him know that you are prepared with a certain amount of money on your credit card to pay immediately, and only a matter of a few hundred dollars is standing in your way, he may be more willing to come down on the price.

Verify the total amount that is going on your card and make sure that it is less than the available balance on your credit card. Sign the paperwork for the sale and your credit card receipt. The dealer will probably require at least two forms of identification to confirm that you are in fact the credit card owner since this is a very expensive transaction.

What Does Judgement Debtor Mean?

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The legal field is notorious for using archaic and strange-sounding words and terminology. "Judgment debtor" sounds overly serious. In truth, it refers to a defendant who has been ordered to pay a creditor by the court but has failed to do so. The implications of being a judgment debtor can be serious; however; a creditor may be able to garnish a judgment debtor's wages to satisfy a debt.

A person does not automatically become a judgment debtor. That title is reserved to describe a person who owes a debt to a creditor and has not paid the debt. Before a person can become a judgment debtor, the creditor must follow the applicable laws and regulations regarding debt collection and have a judge find in favor of the creditor. After being declared a judgment debtor, the creditor can take additional collection steps for recovering the debt.

When a person borrows money, she becomes a "debtor." The person or entity owed the debt is the "creditor." Often, a promissory note or other written document describes the rights and obligations of the parties, including what the debtor must pay and what interest applies. If the debtor fails to repay the debt, she is in default. The creditor can then begin to make collection efforts. The efforts may involve a collection agency or the creditor simply contacting the debtor to repay the debt. If the debtor still fails to repay, a lawsuit may be required.

A creditor can seek the court's help in enforcing a debt by filing a debt collection lawsuit. The creditor names the debtor as the defendant, and has the burden of proving that a valid agreement existed between the debtor and creditor and that the debtor failed to repay the debt. The debtor may raise defenses. If the creditor prevails, the debtor is ordered to pay the debt back. If the debtor fails to repay the debt pursuant to the judge's order, she becomes a judgment debtor.

The creditor can seek further court assistance to collect from a judgment debtor. The debt has already been proven, and the creditor must allege and support that the debtor has failed to repay the debt. The court may order the judgment debtor's property and assets be garnished to satisfy the debt.

What are the Benefits of a UBL Wiz Prepaid Visa Debit Card?

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The Wiz Prepaid VISA Debit Card is offered by United Bank Limited (UBL) in the country of Pakistan. The card is the first of its kind to be available in the country, and offers significant advantages over both cash and traditional credit card options. The UBL Debit Card offers cardholders convenience and security in an easy-to-budget service.

The UBL Wiz debit card allows the cardholder to deposit or "load" only the exact amount of money that is needed for spending. This allows for easy budgeting and help prevent overspending. If a person is going out for a night with friends, for example, he can load the UBL Wiz with his budgeted amount and use the card for all purchases that night. While a traditional credit card allows for spending beyond a budgeted amount, the Wiz card helps keep users within their preset budget constraints.

Because the UBL Wiz is linked to an electronic account, record keeping for budget purposes is simple and straightforward. Instead of manually recording every transaction, as with a checkbook ledger, the holder of a Wiz debit card can easily view all previous transactions online. These expenditures can be exported and printed for simple budget record keeping.

The UBL Wiz debit card offers several security benefits compared to cash. When a large amount of cash is lost or stolen, it is nearly impossible to track and difficult to recover. With the Wiz, however, a stolen card can be deactivated with a quick phone call to the issuing company, or from any computer online. This way, users can "freeze" their accounts, preventing unauthorized withdrawals.

UBL Wiz cards are simple to replace if they are ever lost. The United Bank is able to issue replacement cards to account holders who verify their identity. Replacement cards provide access to the frozen assets within the account, but they use a new debit card number in order to prevent fraud. These features help make the Wiz card very secure.

The UBL Wiz debit card is part of the VISA network. This means that it can be used anywhere VISA is accepted. Additionally, the United Bank operates over 400 of its own ATMs throughout 86 different cities in Pakistan. At these ATMs, Wiz cardholders do not have to pay any surcharges for withdrawals.

Locations such as banks, retailers and gas stations commonly have debit card readers that allow users to complete transactions using only the card and a personal PIN number. This allows people to make purchases quickly and securely. Purchases made on a Wiz debit card are completed electronically, eliminating the need to carry cumbersome currency and large amounts of loose change.

The UBL Wiz card offers flexibility for making purchases even outside of Pakistan. The card can be used over the Internet from any country in the world, and can be used to make online purchases with any website that accepts VISA.

Additionally, the UBL Wiz can be used to access funds from international ATMs. This is a major benefit for travelers, as it automatically converts funds on the card to local currency. For example, a citizen of Pakistan with a UBL Wiz card can travel to the United States, access an ATM and access cash in American currency. Conversions between currencies are calculated electronically based on the current exchange rate, eliminating the need for a traveler to visit a bank.

Collection Laws on Calling a Workplace

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A debt collector who calls a consumer's place of employment can cause embarrassment and annoyance to the consumer. More importantly, repeated calls to a place of employment may cause a consumer's work to suffer and could result in the consumer losing her job. However, the Fair Debt Collections Practices Act allows a consumer to act to stop debt collectors from calling her workplace.

Under the Fair Debt Collection Practices Act, a debt collector can call a consumer at his place of employment unless the consumer informs the collector that the employer does not allow the consumer to accept personal phone calls. Also, debt collectors can call employers to find a consumer who owes money, but the collector can only ask whether or not a consumer works there and for the consumer's home phone number and address. The collector can not disclose information about the debt to the employer, unless the collector has a judgment and is providing information to the employer for the purposes of placing a wage withholding.

When a consumer informs a debt collector that she cannot take phone calls at work, the consumer should follow up this verbal statement with a written letter. Though a collector should stop making these calls after a consumer verbally tells the collector to stop, having documentation of mailing a letter to the collector can help the consumer to prove that she notified the collector to stop calling her workplace. A consumer should also document when a collector calls her place of employment.

A consumer may take legal action against a debt collector who violates the FDCPA by calling a workplace after the consumer requests the calls to stop. Under the FDCPA, a consumer may sue the collector and receive up to $1,000 as well as reimbursement of legal costs for each violation, regardless of whether or not the consumer suffered actual damages as a result of the calls. A consumer should also report violations of the FDCPA to the attorney general in his state or the Federal Trade Commission.

In addition to federal laws regarding debt collection calls, many states also have debt collection laws that provide consumers even more protection from workplace phone calls and other debt collection practices. For example, in the state of Washington a collector may only make three collection calls in a week and only one of these calls can be to the consumer's place of employment. A consumer can obtain information on specific consumer protection laws regarding debt collections by contacting the attorney general's office in her state.

The Best Way to Pay Off Past Due Items on My Credit Report

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Your credit report says a lot about you. It provides a history of your credit payments, where you've lived and even legal information regarding bankruptcy and other financial hardships. Lenders, insurance agents and possible employers will look at your credit report to get an idea of what type of consumer you are and how responsible you are with credit. Having past due items on your report can lower your credit score and make it difficult for you to obtain future credit. It is important to catch up on your payments and pay them off if possible.

Instructions

Contact your lender regarding past due items on your credit report. Many lenders offer financial hardship programs, which may help you catch up on your payments. If your credit card company knows that you are working hard to make your payments, it should be willing to work with you.

Negotiate your balances on your credit report by speaking with the collection agency associated with the overdue payments. Find out if they will settle the account for a lower amount. Collection agency representatives have the authority to settle for much less than the balance since they purchase the overdue accounts at pennies on the dollar. This should help you to finally pay off past due items on your credit report.

Call a nonprofit consumer credit counseling company for assistance with past due items. They may be able to put you on a debt management program, which can lower your interest rates and help you catch up with your payments.

Get in touch with a lawyer to help you file bankruptcy if you are struggling to make ends meet. If you have large amounts of debt and can't make payments, a lawyer can tell you whether or not you qualify for bankruptcy. This should be a last option when you are trying to pay off past due items on your credit report.

Make more money to pay off your past due items on your credit report. Get a second job or donate plasma for cash. You can also earn extra money by having a garage sale, selling unwanted items on eBay or even babysitting. Apply the extra money to your bills and eventually you will see an end to your late payments.

What Is Debt to Income?

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To experience the American dream of owning your own home, you must first put yourself in a solid financial position. Many know the importance of having a high credit rating when seeking credit, but lenders often value a respectable debt-to-income ratio over many other factors of credit worthiness. Your debt-to-income ratio provides a snapshot of your current financial situation. Knowing your debt-to-income ratio and improving it could be the ticket to getting the loan you need or securing a lower interest rate. Lenders only care about whether you can pay them back, and borrowers with a low debt-to-income ratio have more income available to repay their loans.

Your debt, expressed as a percentage of your overall income, is your debt-to-income ratio. Lenders give a lot of weight to this because it shows how much of your monthly income remains after your current liabilities. Since your payment on a potential loan comes from what remains, lenders prefer this debt percentage to be as low as possible.

Your front-end ratio is the monthly cost of your home expressed as a percentage of your gross monthly income. This cost includes your mortgage, insurance, interest and taxes. Lenders generally feel comfortable loaning to you if your front-end ratio remains at or below 28 percent. This means you spend 28 percent or less of your gross monthly income on the cost of your home.

Your back-end ratio is the monthly cost of all your debts expressed as a percentage of your gross monthly income. This cost includes your home, credit cards, student loans, child support and any other debts. Lenders prefer a back-end debt-to-income ratio below 36 percent. This means that 36 percent or less of your gross monthly income goes to paying debt.

To calculate your debt-to-income ratio, gather all your monthly bills. Put aside regular expenses like electricity, phone and cable television. What remain should be your debts. This includes your mortgage, car payments, credit card payments, student loans and other debts. Add the payments for each of these to find your monthly debt amount. Divide your total monthly debts by your monthly income to determine your debt-to-income ratio.

How to Protect a 401K Under California Bankruptcy Law

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Filing for bankruptcy in the state of California wipes your credit slate clean from credit card debt, personal loans and medical bills. Before you get to the point of filing bankruptcy, you have probably had a slew of calls from creditors threatening leans on any and all assets including retirement plans. The fact is that in bankruptcy, the federal and state governments realize that an individual must have a certain set of assets available to move forward; your retirement assets are one of them.

Instructions

Hire a bankruptcy attorney. Review the benefits of the various forms of bankruptcy: Chapter 7 or 13.

Chapter 7 liquidates personal nonexempt property to pay creditors.
Chapter 13 allows the debtor to retain assets and pay creditors over three to five years.

Review the benefits of choosing either the Uniform Federal exemptions in bankruptcy or the California Civil Procedure Code Section 704. California allows bankruptcy filers to choose and gain certain exemptions for properties such as cars or special assets. For those concerned only about preserving 401k assets, either set of laws do so upon election.

Declare your 401k as an asset exempt under either the federal or state provisions.

Is It Easy for a Collection Company to Garinsh Wages for a Small Amount?

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Many people responsibly try to use debt reduction and elimination methods such as refinancing and settlement to get back on their feet financially, but not everyone who does this is successful. Other people purposely avoid their debts. As a result, collection agencies sometimes have to use wage garnishment to get the money people owe. The amount you owe has little bearing on how easy it is for the collection agency to rectify your debt through your pay.

Regardless of how much a collection agency seeks to garnishee from your wages, the wage garnishment process remains the same. The collection agency must file a formal complaint with the court. After the agency files the complaint, you should receive a notification alerting you of the complaint. The next step is a hearing at which a judge hears evidence from both you and the collection agency. If the judge finds in favor of the collection agency, he issues a Writ of Garnishment, which the collection agency files with the court clerk and sends to your employer to show they are legally authorized to garnishee your pay. Collection agencies have a harder time collecting on any debt after the statute of limitations on the debt expires, because they lose the legal right to file a complaint after this happens.

Due process applies to all case of wage garnishment no matter what amount a collection agency seeks. Due process means the collection agency has to prove you owe the debt and make a reasonable attempt to contact you to rectify the account delinquency outside of garnishment. It also means you have the right to defend yourself and that the collection agency can't take your money without your knowledge. Forcing collection agencies to file formal complaints to obtain garnishments is one way the government protects your consumer and credit rights.

The requirements indicated via due process law and collection methodology mean that courts are not concerned with the amount the creditor seeks to garnishee, except to ensure the garnisheed amount does not exceed stipulated maximums. A creditor would need to go through the same procedure to garnishee a very small amount as they would to garnishee the allowed maximum. Courts worry more about verifying the creditor's right to collect than the owed amount.

It is not any easier for a collection agency to garnishee a small amount than it is for the agency to garnishee a small amount. However, a collection agency may determine that pursuing wage garnishment is not worth the hassle and legal expense if the amount you owe is low. A low debt amount puts you in a better position to negotiate as a result, which may allow you to avoid wage garnishment altogether.

How to Get Debt Under Control

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Getting debt under control helps you regain control of your personal finances. Carrying excess debt harms your credit score and often increases your debt-to-income ratio. This increase affects buying power when financing a car or mortgage. But with self-control, you can get debt under control. The key is learning how to live on less and fighting the urge for instant gratification.

Instructions

Develop a plan and determine how much you need to earn, recommends Bankrate. Paying bills without establishing a payoff goal is not efficient. Add up all your debts, decide when you want to be debt-free and work toward this goal. For example, if you want to pay off $5,000 within 12 months, you will need to provide an additional $416 a month.

Talk to creditors about your interest rate. Review the interest rate on your credit cards and work to get these percentages reduced, reports The Motley Fool. Reducing your rate can save you money on interest charges each month and help bring down the debt faster. If a creditor is unwilling to negotiate, shop around for a low-rate card and transfer your balances if the transfer fee does not negate the interest savings you would gain.

Pay lump sums on your balances to eliminate the debt quicker. Making $10 payments on a credit card with a $2,000 balance can take 200 months, or nearly 16 years, to pay off, assuming you don't add new debt. Pay more than the minimum if possible, reports The Motley Fool. Review your budget to determine how much you can spend on debt each month. For example, if you can make monthly payments of $200, you might be able to pay off the same debt balance in less than a year and save money on interest charges.

Take out a home equity loan to consolidate debt. Consolidating debt and paying a lower interest rate with a home equity loan can help get debt under control, states Key Bank. Talk with your lender to determine whether you're eligible to borrow money from your home's equity to pay off balances. Consider whether the closing costs of the home equity loan will offset the savings.

Get help. Professional services can help get debt under control. According to Key Bank, credit and debt counselors can consolidate your outstanding balances and renegotiate your rate and monthly payment with creditors and lenders. They may place a freeze on your accounts to stop the accumulation of debt, and they can create a payoff plan to help you pay down balances faster.

How to Get Late Charges Off Credit Reports

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A person's credit score is a rating of her creditworthiness, based on information collected by credit reporting agencies. This information appears in a file called a credit report, and provides a measurement of the likelihood that an individual will pay back a loan. When a person pays a debt late, the creditor will often notify a credit reporting agency. This late payment will lower the individual's credit score. A lower score generally requires a borrower to pay higher interest rates on loans. Fortunately, it's possible to remove these late charges.

Instructions

Get a copy of your credit report in order to find out which late charges are affecting your credit rating. According to U.S. federal law, you can access your credit report for free once a year. You can do this by visiting AnnualCreditReport.com (see Resources). You can examine the report online, or have a copy mailed to you.

Identity any errors in the report. Examine all sections of the report and make sure that the information they contain is correct. Note that only certain information will affect your credit score. For example, if a former address is incorrect, the information is not worth correcting, as it will have no effect on your credit score. However, if the report says a payment was late even though you made it on time, you should take steps to correct it.

Contact creditors and credit reporting bureaus. To fix each incorrect late charge, you will need to contact both the credit bureau that recorded the late charge, and the creditor that reported it. Each of the three credit bureaus --- Equifax, Experian and TransUnion --- have different methods by which an individual can report errors. Contact the appropriate bureau and ask for the proper procedure. Also, ask the creditor to notify the credit bureau that you made your payment on time.

Ask creditors for a break. You may have some late charges on your account that are in fact correct. In this case, the only means of them removing them --- short of allowing seven years for them to expire --- is to ask the creditor to remove the charge. Some creditors may refuse --- after all, you were late in making the payment --- but those with whom you have a good relationship may be willing to give you a break.

Non-Bankruptcy Options for Debt Relief With No Income

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Carrying substantial debt is stressful for anyone, and having no income can make the feeling of helplessness even worse. Bankruptcy proceedings are not only lengthy and emotionally tumultuous but also expensive; it costs about $300 to file and even more to pay a lawyer. Without an income, such expenses may be beyond your reach. The silver lining is that if you really have no income or assets, the process of bankruptcy may be unnecessary to achieve debt relief.

If at all possible, the best option is to get some money coming in so you can pay off your debts. Consider why you are not working and wiegh your options. If you can no longer work due to disability or age, apply for Social Security or disability. If you have been unemployed long enough to run out of unemployment assistance, then it may be time take a job at a lower pay rate than you are accustomed to while you continue your job search. Any option in which you don't pay your bills will have a detrimental effect on your credit history; it's better to pay the debts if you can.

A temporary lack of income, or unexpected expenses, can get the best of even the fiscally responsible. Lenders to whom you owe unsecured debt don't want you to enter bankruptcy, because they aren't likely to get anything. Therefore, they may be willing to negotiate with you if there is a legitimate fear that you will declare bankruptcy in the future. Offering a lesser cash payoff is the option most likely to be accepted, but offer what you can. The worst that can happen is your lender will refuse to negotiate and you will be no worse off then you are now. If you do reach an agreement, be sure to get a copy in writing.

Having no substantial assets or income can be actually be beneficial when dealing with debt because you have nothing to lose. The next step in collection for a creditor is sue you in court and have a judgment rendered against you. Such a judgment could authorize the creditor to seize assets or garnish your wages. However, if there is nothing for them to take then you are "judgment proof," meaning that even if creditors win a case they will get no money. The judge will see that you cannot pay anything, and the creditors will have to walk away. Hire an attorney now to look at your assets and income and determine if you are indeed judgment proof. Your attorney will then contact your creditors and explain the situation. The creditors will likely give up on the debts as uncollectable rather than go to the expense of taking you to court.

This will save you the trip to court but does have some negatives. First, the debts will remain on your credit history as "charge-offs" for seven years, severely damaging your credit score. Second, if you do gain an income in the future, you run the risk of being taken to court then. Creditors usually have six to seven years, depending your state's laws, from the date an account first becomes delinquent to pursue a court case.

Credit Report Laws on Late Payments

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A late payment entry on your credit report harms your credit history and score. Late payment entries are negative citations from your creditor shown on your credit report for an account you did not pay on time. The Fair Credit Report Act, a set of federal laws regarding credit reporting practices, dictates how credit bureaus report late payments.

The Fair Credit Reporting Act governs the way credit bureaus report all information on your credit report, including how long negative accounts and past due payments can be shown. Consumers were also granted rights in regard to the credit report and the information it contains. A person who denies you credit or employment based on your credit report information must notify you of the action. You must receive the name and contact information of the bureau the information came from, and you have the legal right to know what your credit report contains.

Your creditor can report a late payment one week after the due date, but creditors commonly post late payment citations at 30-day intervals. Once a payment is overdue by three months, the account is posted as "past 90 days." Accounts more than three months overdue are usually sent to a collection agency and reported as "charged off" by the creditor, but the creditor can continue to report the past due status if the account is not put into collection.

Overdue accounts you are still not paying stay on your report for seven years after the bill first became late, with your late payment history shown on the report for the same length of time.

An account you are current on with a late payment history remains on your report as long as the account is open -- or for 10 years after you close the account yourself -- but the late payment history falls off after seven years.

You have the right to dispute information on your credit report, including a late payment entry. You must use the steps given by the credit bureau to dispute the item, and you may be asked to give supporting documentation.

A credit bureau generally cannot report information on accounts that are more than seven years old, or 10 years old if the debts were discharged in a bankruptcy. Sometimes creditors "redate" debt to enter the negative information on your report in an attempt to get payment. Redated debt is commonly referred to as "zombie debt," and the practice is illegal under the FCRA.

The late payment history from a bankruptcy account typically does not show up on your report, as the account is listed as "included in bankruptcy" with limited information showing.

How to Talk to a Credit Card Company

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The response you get from a phone representative at a credit card company has a lot to do with why you're calling and what the status of your account it. More importantly, however, is the manner in which you speak to the representative. This is definitely one scenario where the old saying, "You catch more flies with sugar than vinegar" is true. Remain calm and pleasant and you'll probably receive the same tone back from the credit card representative.

Instructions

Stay cheerful. Credit card representatives are much more likely to respond in a cheerful way if you are cheerful as well. Remember that many representatives spend a lot of time on the phone throughout the day, so it makes sense that you should try to remain friendly when possible. This isn't to say that you should be exceedingly cheerful when met by an incredibly rude representative, but if you begin your conversation politely and with a friendly voice you are more likely to get a polite response.

Stay factual. If you're calling to dispute a charge on your credit card statement, know for sure that you didn't authorize the purchase. If you're calling because you want a lower interest rate, know what other credit card companies are offering for comparable credit products. If your call is concerning a problem with your account that is your fault, such as a late payment or a fee for exceeding the credit limit, don't act as though it's the credit card company's fault. Acknowledge your fault and ask for the company to waive the fees associated with the mistake.

Be proactive. For example, if you know that your payment is going to be late--but it isn't yet late--call beforehand and see if there is a way to extend the due date or at least notate in your account that you called beforehand. Be sure to tell the representative that you are calling in an effort to be proactive because many representatives will appreciate this. So many credit card representatives spend a lot of time talking to people who are already behind in payments, so if you call before the problem arises then you may encounter a grateful representative.

Keep records of the conversations. Be sure to tell the representative you speak with that you are keeping records of all the conversations you have regarding your credit card inquiry. This will also enable you to refer back to these records at a later time if necessary, which allows you to back up any claims with historical information. Don't be snide when informing the representative about your records, but do be sure to demonstrate your efficiency.

Ask to speak to a manager. If the representative can't help you with your request--or is excessively rude--don't give up there. In a polite manner, request to speak to a supervisor. This will give you a better chance of getting whatever it is you are requesting and will also let the credit card company know that you mean business. After all, there are some things that representatives can't do, but managers can accomplish quite quickly. Don't be apprehensive about asking to speak to a manager when you're not getting a positive response to your reasonable request.

Online Debt Advice

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The Internet is a valuable resource for research, but oftentimes it's difficult to tell the good information from the bad, particularly when it comes to advice about how to deal with your debt. Frustrated by conflicting information, sales pitches and schemes, you may end up going around in circles. However, a few legitimate resources exist to help point you in the right direction to begin digging yourself out of debt legally. By starting off your mission with the right resources, you'll put yourself ahead of the game and avoid costly pitfalls.

Before you begin working on your debt, you need to get a grasp on where you stand by taking a good look at your credit report. The Annual Credit Report website is set up through the three major credit bureaus -- Experian, Equifax and TransUnion -- and is the only credit reporting website recognized by the Federal Trade Commission. Each year, you are entitled to a complimentary credit report from each of the credit bureaus. Once you receive your credit reports, you will have a foundation on which to base your decisions for getting out of debt.

The Federal Trade Commission's website provides articles and resources to help people get out of debt legally and safely. Their article database includes information on debt consolidation, budgeting, credit counseling and bankruptcy. The articles also point out potential pitfalls and scams so that you may avoid being taken advantage of and falling further into debt. In particular, "Knee Deep in Debt" provides information on the options available for freeing yourself from debt, while weighing the pros and cons of each.

Bankrate provides a wealth of useful information on overcoming debt, budget creation and general finance management. The website is successful in breaking down complicated processes into manageable language so that you see each option from all sides. Whether you want to know how to negotiate lower interest rates on your credit card, get statistics on the success rate of consolidation loans or thoroughly understand the different methodologies for digging yourself out of debt, Bankrate has an article to answer your questions.

With the massive quantities of misinformation circulating about debt relief, it's important to find a reputable credit counseling company if you need professional help to get out of debt. The National Foundation for Credit Counseling provides a list of companies that offer their services through phone, online and in-person consultations.

How to Change a False Credit Report

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Your credit report is a critical part of maintaining your financial integrity. Verifying that the information in your report is accurate and factual is an important step in making sure that you're able to take advantage of the best interest rates on mortgages, automobile loans, credit cards and private loans. If you find that information contained in your credit report is false, you can file a simple dispute with the credit bureau through the mail or on the Internet. The process is simple and straightforward, and in most cases it can be done in just a few minutes.

Instructions

Find all false items on your credit report. Carefully note anything that is reported with the wrong balance or account status, collections that have since been paid off, and accounts with which you are unfamiliar.

File your dispute online. Each of the three credit reporting bureaus, Equifax, Experian and TransUnion, offers online dispute applications that can streamline the effectiveness and convenience of your case.

Visit the credit bureau's website (listed in this article) and click the "dispute" tab on the home page. This application will allow you to send disputes, on one or more false items that appear on your report, to the credit bureau directly so that it can investigate each item. If the credit bureau verifies that an item is indeed incorrect, it can remove or update it on your credit report. Include as much information as you can about the false items: account numbers, name of the creditor or debt collector, amount of the debt, and why the debt is invalid or incorrect.

The credit reporting bureau will email you updates as your disputes are processed, and you will be able to view the results of the dispute investigation online when it is complete.

Or file your dispute by sending a letter of dispute and supporting documentation by mail to the address(es) listed in this article. Your letter of dispute should be neatly written or typed and should include your full name, address, telephone number and information regarding disputed report items (account name, account balance, account number and the reason the item is incorrect).

Also include a brief note identifying the letter as a dispute letter. At the bottom of the letter, include a list of enclosures that you've sent along with the letter. Enclosures should be supporting documentation that proves that the items in question are incorrect. Examples of enclosures are copies of bank statements showing the account was paid, credit card statements, a letter from the creditor, bill payment receipts, or canceled checks made out to the creditor. Enclosures are not required for filing a dispute claim, but they are helpful in assuring the timeliness and accuracy of the dispute.

Contact information: Equifax, P.O. Box 740256, Atlanta, GA 30374; (800) 865-1111; www.equifax.com.

Experian, P.O. Box 2014, Allen, TX 75013;(888) 397-3742; www.experian.com.

TransUnion, P.O. Box 2000, Springfield, PA 19022; (800) 888-4213; www.transunion.com.

Wait 30 to 45 days to receive a response from the credit bureau. Online disputes can take up to 45 days to process, while mailed-in disputes take up to 30 days from the date that the bureau receives your dispute request.

If you mailed the dispute letter, you will receive a response in the mail. Information on disputes that were filed online can be viewed online once the investigations are complete.

Check your credit reports from the other credit bureaus as well. If you find that information in those reports is also incorrect, those disputes will need to be filed separately, in the same manner.

How to Find Outstanding Debt

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Your credit report is the best resource for tracking down most of your outstanding debt. Virtually all of your standard credit card and loan information will be listed on your report, including your payment history and current balance. Tracking down your outstanding debt may be necessary if you are considering eliminating your debt through bankruptcy or you have experienced a financial windfall and want to pay off as much as your debt as possible.

Instructions

Order a free copy of your credit report by calling Annual Credit Report at 877-322-8228. Or visit the website (see Resources) to get the report online. The website was setup by the credit bureaus to offer free credit reports as required by the Fair Credit Reporting Act. The law entitles you to three free reports every 12 months, including one from each of the bureaus--TransUnion, Equifax and Experian.

Review the credit report to find all accounts with balances. Make a list of all the accounts and total the balances for an accurate list of all outstanding debt listed on your credit report.

Search your personal files for other debt that may not appear on your credit reports, such as an installment agreement with the Internal Revenue Service, loans from retirement accounts, or loans from family or friends. Add these loans to the list of outstanding debt from your credit report for a complete picture.

How to find Grants for Debt

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Grants can bring you relief from debt. Before taking drastic measures like filing for bankruptcy, consider applying for debt relief through the government, which is coming to the aid of thousands of Americans through various kinds of grants. Pinpointing all the grants available to you will involve some research and paperwork, but the end result may help ease your burdensome debt.

Instructions

Assess your debt and build your debt relief plan. If you find yourself struggling to pay off credit card debt, loan consolidation may be an option. Grants are not readily available to pay credit card debt. If you have difficulty paying student loans, speak directly to the lender or financial aid department. You may be eligible for deferment or forbearance. When your mortgage is the source of your debt, try contacting the lending institution. There are programs designed to assist in extreme cases. The Department of Social Services in your state may offer an emergency grant to qualified applicants.

Determine your qualifications. In order to receive a grant, you must qualify. There are a variety of grants designed to help those in a specific situation. The majority of grants are available to assist single mothers, elderly, minorities, business owners, and students. Once you determine your category, you can narrow down the search.

Search for grant programs. Finding a grant will involve some research. Look for federal and state grants. Grants.gov is a good starting point. You can filter grants by keyword or agency. When searching for grants, you may come across a number of websites marketing secrets or tips to get free grants. Avoid any company that charges a fee for finding grants. Visit you the local Chamber of Commerce and ask for a publication which lists available resources. Also, visit your local Social Security Branch Office to learn more. Often these agencies will have pamphlets available in their lobbies which list government programs in the area.

Apply for the grant. When you find a grant and meet the qualifications, apply immediately. Funding is limited. The government sets aside a certain amount for aid. Grants are awarded on a first come, first served basis. The application process is not instantaneous. After submitting an application, expect to wait before receiving a response.

Does Paying Off Old Debt Help Your Credit?

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About 43 percent of Americans spent more than they made in 2004, according to the MSN website, and the average American family had about $8,000 in credit card debt that year. Other debts include student loans or personal loans from banks or individuals. "Old" debt typically refers to charged off debts, which are debts not paid before being written off by the creditor and often sent to collection agencies. The charged off debt appears on your credit report twice: The original debt to the creditor and the new charged off debt to the collection agency both show up on your credit report, according to MSN.

The first step in improving your credit score is to check your credit report. Your credit report shows your current credit status, and it indicates which accounts are delinquent or past due and which are negatively affecting your overall credit score. It also may remind you of a debt you had forgotten that is becoming more delinquent each month. You can obtain a free copy of your credit report every year through the AnnualCreditReport.com website. A score above 660 is considered a good score, according to the Moolanomy website, although it may depend on the type of credit you are seeking.

It is beneficial to pay off a charged off debt, because your credit report will no longer indicate that it is in collections. However, by law, creditors can only take legal action in collecting a debt for a certain amount of time. This policy is known as the statute of limitations. Statute of limitations vary by states, and it can be anywhere from three years to 15 years before creditors can no longer take legal action to collect debts. However, even after the statute of limitations for a debt expires, the debt still shows up on your credit report as unpaid in many cases, because a charge-off remains on your report for seven years, which negatively affects your score.

Missed or late payments hurt your credit score. Past due bills or high balances on credit cards or other debt also hurt your credit score. Therefore, it is beneficial to pay down old credit card debt and catch up on any late or missed payments. Once payments on accounts are current and debt is reduced, your credit score will improve. You should start with the accounts that are most delinquent, then focus on paying down balances that are near your credit limit or have the highest interest rate.

Sometimes you can negotiate with a credit card company or other lender to reach an agreement to pay less than you owe. This is called a settlement. While settlements might help you get out of debt faster, they can hurt your credit score, because they add a new element to the debt on your credit report. It updates the debt, making the delinquency more recent, which hurts your score. However, once the debt is paid off and the creditor reports the debt as paid in full, that reflects positively on your score.

Some debt, such as mortgages or investments, can be helpful. "Good" debt essentially earns you regular returns, even though you may pay interest. "Bad" debt, such as credit card debt, costs you money on high interest payments and zero return. Good debt has less impact on your credit score as long as you make timely payments. You can carry a mortgage for 30 years, but a smaller credit card debt will hurt your credit score more, because it is bad debt. Therefore, focus on paying off your bad debt first to improve your credit score.

How to Deal With Delinquent Credit Card Accounts

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If you carry multiple credit cards, or if you're having trouble making ends meet, it can be easy to fall behind on your credit card payments. Delinquent credit card accounts can have a serious impact on your credit, making it more difficult to secure credit in the future. Being proactive in dealing with your past due credit accounts can help you to get out of the hole and simultaneously protect your credit score.

Instructions

Call your credit card company if you're behind on your payments, or even if you're in danger of falling behind. While dealing with creditors and collectors can be intimidating, the first step to getting back on track is to deal directly with the credit card company.

Work with your credit card company to come up with a solution. Though your credit card company won't report you unless you're at least 30 days past due, it can still charge you a penalty interest rate as high as 29.99 percent. You may be able to avoid this if you honestly explain your situation and, more importantly, if you don't make a habit out of making late payments.

Stick to the plan you come up with in conjunction with your credit card company. It might not be an ideal solution, but it allows you to get back on track. Failure to comply with the terms of your agreement means you're back to square one, which can lead to late fees, harassment from creditors and damage to your credit.

Modify your spending behavior so that you don't fall behind in the future. Look at your budget and see if there are items you can pay for with cash instead of with your credit card. If not, utilize your credit card's automatic payment feature so that your minimum payment comes out of your checking account each month. This won't get your balance paid down by itself, but at least it keeps you from making a late payment.

The Effects of Credit Score Investigations on Your Status

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A person's credit report can be checked by many different parties beyond simply lenders. While a credit score is not public information, individuals and organizations with a valid interest in the score, such as prospective employers and landlords, may review it. However, like the old scientific axiom says, "You can't observe a system without changing it," some of these investigations will in fact shift an individual's score, generally moving it down a few points.

There are two main kinds of credit report inquiries: hard inquiries and soft inquiries. A soft inquiry is an inquiry made by a party checking an individual's credit score for reasons other than to quote him terms on a loan for which he applied. For example, an inquiry by a landlord deciding whether to offer an apartment to a tenant would be considered a soft inquiry. Soft inquiries, while listed on a credit report, do not affect an individual's credit score.

A hard inquiry is an inquiry made by a creditor whom the individual has asked to quote terms on a loan. Unlike soft inquiries, which can made for many reasons, hard inquiries positively signal that an individual is seriously considering taking out new credit. As with soft inquiries, hard inquiries are noted on a credit report. However, unlike soft inquiries, each hard inquiry will cause an individual's score to drop by several points.

Hard inquiries cause a person's credit score to drop because, to credit rating agencies, they represent compelling evidence that the individual is considering taking on more debt. This suggests to the agencies that the individual may be short of funds or approaching default on one of his outstanding loans. By being perceived as more of a credit risk, his score drops slightly. Yet, because this is relatively weak evidence, the drop is only moderate.

The prospect of shopping for a loan and having half a dozen lenders checking your credit score may seem to raise the possibility that all these hard inquiries will do considerable damage to your credit score. However, credit reporting agencies generally classify multiple inquiries made in a short time period, particular by lenders who issue similar types of loans, to be indicative that the individual is shopping for a single loan. These inquiries therefore will only be counted as a single inquiry.

Medical Debt Laws

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Medical debts are unsecured debts and are treated as other unsecured debts, such as credit cards. Medical debts, especially for the uninsured can be extremely large, and can lead to extreme financial difficulties. The Fair Debt Collection Practices Act governs the behavior of debt collectors as they try to recover medical debts.

Federal law allows you to address medical debt through bankruptcy. Chapter 7 bankruptcy allows you to eliminate medical debt and other unsecured debt just a few months after filing the paperwork. Chapter 13 bankruptcy, which usually attracts people with higher incomes and real estate to protect, allows you to set up a five-year repayment plan, with the bankruptcy trustee deciding how much you can afford to pay each month on your medical debts and other debts. After the five-year period, the remainder of your medical debt and other unsecured debt is discharged. According to the website BCS Alliance, more than 50 percent of all personal bankruptcies in 2003 and 2004 were filed because of medical debt.

Medical debt collectors can pursue you in court. According to BCS Alliance, some of the debt collectors will sue for debts for as small as $100, although that is unusual. You could face bank or wage garnishment if a medical debt collector wins a judgment against you in court.

Most medical debt collectors would rather work something out than take you to court. Repayment plans are almost always an option, and sometimes debt collectors will settle for less than the full amount owed if you can pay in a lump sum.

Claims of Exemption on Wage Garnishment Laws in California

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If a debtor doesn't pay back his debts, the creditor can take him to court. After winning a judgment, the creditor can ask the court to garnish the debtor's wages or require the debtor's employer to withhold a certain amount of wages each pay period to repay the debt. California law allows the debtor to request an exemption from wage garnishment if he needs his entire paycheck to support himself and his family.

California adheres to federal limitations on wage garnishment. Creditors may not garnish more than the smaller of 25 percent of the garnishee's disposable earnings for that week or 30 times the federal minimum wage. Disposable earnings are the amount of income the garnishee receives after his employer withholds payroll taxes and other pretax deductions.

Any debtor can request an exemption in California. The debtor fills out a form requesting that she keep some or all of her wages despite a judgment against her. The debtor must demonstrate financial necessity by attaching a form detailing her finances to the request. If the creditor agrees, the court accepts the revised garnishment plan. If the creditor objects, the court schedules a hearing to determine whether there's adequate cause for an exemption.

Debtors in California can claim exemptions if they need the money to support themselves and their families. However, debtors can't qualify for exemptions if they owe money for medical care, housing, food or clothing. In addition, a debtor doesn't qualify for an exemption if he owes money to a former employee or uses his earnings to buy unnecessary items. Finally, debtors can't get an exemption if they owe money for child support or alimony.

Obtain a copy of the claim of exemption and financial statement forms. Fill out each form. Indicate how much of your money you're requesting an exemption on and provide details of your financial situation. Sign and date the forms. Make two copies of each form. Give the original and one copy to the levying officer and keep one for your records. If the creditor doesn't object to the exemption, the levying officer orders the garnishment to be modified within 10 days. If the creditor objects, you receive a notice of opposition and a hearing date and time. Bring proof of your financial situation, such as pay stubs, to the hearing.

How to Make Creditors Erase Debt

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Creditors are obligated to provide accurate information to the credit bureaus under the Fair Credit Reporting Act (FCRA). Those creditors, however, are not required to actually report that information. This makes it possible for debtors to erase negative entries from their credit report by coming to negotiated settlements with their creditors. Although there are professional credit repair services, it's entirely possible for the average person to successfully conduct debt settlements.

Instructions

Organize and make copies of all documentation related to the debts that you would like to delete. This includes the original agreement that established the debt, any bills paid, any written communications with creditors and collections agencies, and all correspondence with credit bureaus related to the debt. It may not be necessary to use it all, but it may prove useful as you go through the negotiation process.

Request copies of your credit reports from the three major credit bureaus (Equifax, Experian and TransUnion). Every U.S. citizen is entitled to one free credit report per year from each of the bureaus. If you need more reports than that, you'll need to pay a fee. You can view your reports online or order hard copies. Review your reports for detailed information regarding your debts. You'll also find information about the creditor or collections agency that now possesses that debt. To delete an entry from your credit report, you'll have to deal directly with the creditor that maintains it.

Draft a letter requesting a "pay for delete" agreement in return for a cash settlement to the creditor that you would like to delete from your credit report. If the account is current, you will likely have to offer full repayment to get the debt wiped from your report. If you are delinquent on the account by 60 days or more, you will likely be able to settle the debt for much less. Start with an offer of 10 percent of the total amount owed for delinquent debts in return for the deletion of the entry from your report. Request that the entry be deleted within 21 days of the creditor receiving your payment. Keep copies of all agreements with creditors for your records in case you need them.

Order new copies of your credit report to ensure that your creditor has fulfilled the agreement. If the creditor fails to do so, dispute the account with the credit bureaus. You may use the online disputation form that each company provides or contact them directly by mail or telephone. If they request it, include a copy of your pay for delete agreement along with bank records indicating that you made the payment when requested.

Credit Cards and Bad Credit Programs

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If you have bad credit, you usually face difficulties trying to obtain loans, including credit cards. If you use credit cards wisely and make your payments on time, credit cards can help you build credit. Acquire a secured credit card and use it as part of your bad credit program.

If your credit score is poor, lenders see you as a risky borrower. A regular credit card is usually unsecured, which means that the holder doesn't provide any asset for the lender to seize in case she doesn't make her payments. Some lenders are willing to provide you with a secured credit card. With a secured credit card, you deposit money into a savings account. If you miss any payments, the lender uses the money in the account to cover the unpaid balance.

If you make prompt payments with your secured credit card, you can slowly build your credit. The lender reports your good financial behavior to the credit bureaus, and your credit score rises. Eventually you will be able to qualify for regular credit cards and other loans again. Using a secured credit card also allows you to train yourself to be more disciplined with credit. It provides convenience because some retailers only accept credit cards.

A secured credit card has several disadvantages compared to an unsecured credit card. You usually have to pay high application and processing fees. The interest rate on an unsecured credit card is also higher compared to an unsecured credit card. These charges reflect the premium that your lender charges for the added risk of taking on a risky borrower. It may take a few years of paying your bills on time before you qualify for an unsecured credit card.

The Federal Trade Commission warns against firms that make misleading claims in their advertisements to attract individuals with bad credit. These advertisements make it seem like you can get a credit card simply by calling a number. The firms leave out information like the cost of calling, various fees and eligibility criteria.

Be wary of advertisements promising easy credit, because legitimate credit companies always examine credit scores. Also avoid credit repair companies that promise to fix your credit history for a fee. Nobody can instantly repair your credit worthiness.

How Do I Get My Credit Card Company to Forgive Half My Balance?

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The weight of overdue and rapidly climbing credit card balances can overwhelm even the strongest constitution. When a credit card becomes overdue, late payment penalties and escalating interest can make a bill once difficult to pay, now impossible. While the outlook may appear bleak, there is something you can do: have the bill reduced. Most credit card companies will work with a financially burdened customer, so the answer to "How do I get my credit card company to forgive half my balance" becomes "Just Ask!"

Evaluate the situation. Determine whether a credit card company will consider you a serious candidate for balance reduction. Create a plan for repaying the remaining balance. Get all these things before picking up the telephone and increase your chance of success.

Credit card companies base their decision on your request to settle on numerous factors. The most important of these are the date you made your last payment, the balance on the account and your current financial situation. An account must be in default before the credit card company will consider settling. The general rule is a minimum of 90 days. Your current financial situation must indicate that you are not capable of paying the entire balance. For example, if your account is 90 days past due, you owe $4,000 and are unemployed.

Order a copy of your credit report from credit reporting agencies. This is especially important when trying to settle with multiple credit card firms. You are entitled to one free credit report each year from each of the major reporting firms (Equifax, Experian and TransUnion). All three are available through websites, such as FreeCreditReport. List every detail about every credit card, including the date of last payment.

Create a monthly financial plan and calculate how much you can commit per month to a repayment plan on the remaining balance.

Negotiating with a credit card company is a process. Do not expect to accomplish everything in one conversation. Start with a phone call to the customer service department of the credit card company. Present yourself in a professional manner; explain your situation clearly, logically, and unemotionally. Remember that while your purpose is to reduce your balance, the company's is to collect on the money you owe.

Always negotiate fairly. Do not expect to have the entire balance forgiven and do not suggest a settlement of less than 50 percent of the total amount due. Credit card companies do not have to negotiate with you, so be reasonable in your expectations.

Follow up the phone conversation by sending a debt negotiation letter by certified, return receipt mail. If the company denied your offer, restate your situation and the offer you made via the phone. If you are still negotiating, state the terms you talked about, and agree to them or make another settlement offer. Call again after receiving the return receipt. Repeat this process until negotiations are complete.

Any final agreement should always be in writing.

While the prospect of speaking directly with a representative of the credit card company can be daunting, this is something you can accomplish yourself. There is no need to pay a debt settlement company or anyone else to make arrangements on your behalf.

Settling with a credit card company can have a negative impact on your credit rating. An idea is to include in your agreement a promise that in return for your full and on-time payment of the remaining balance, the credit card company marks your account as "Paid in full."

How Much Can You Save on Debt With Credit Counseling?

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When it comes to finding out how much a person can save on debt with credit counseling, there's no one definitive answer. Each individual case has variables that make it unique. One client might have gone into debt because of poor money skills, while another might have suffered a medical setback. However, regardless of the circumstances, credit counselors assist in lowering debt with a variety of tools.

Credit counselors often provide advice to individuals seeking to lower their debt. This advice usually consists of such things as having the client realistically look at monthly expenses and eliminate any unnecessary spending. Often they advise selling any luxury items that can bring in cash, which can be used to lower the debt. Individuals who possess solid budgeting skills tend to have fewer problems with debt than those who don't credit counseling seeks to shore up those skills in the client. By devising a solid budget, an individual can help to reduce debt on a monthly basis, applying the money that's being saved to lowering the debt.

Credit counseling shouldn't be confused with debt consolidation: Credit counseling isn't the same as a debt management program (DMP). A credit counselor works with individuals to help them make educated decisions about their personal finances, while a DMP combines all of the outstanding debt into one monthly payment. It should be noted that with certain terms found in debt management programs, the savings might not be as large as expected.

Credit counselors may help an individual contact lenders to try to work out lower payments. This may result in big savings, depending upon the individual creditor. According to Franklin Debt Relief, Capital One and Discover are two such creditors that shy away from helping those in debt find relief. Credit counselors often caution against contacting creditors if there have been any major extravagant purchases recently made, as the lender may be reluctant to work with someone who should have been working on paying off a debt rather than on spending even more money.

Credit counselors work with individuals to help them become more self-reliant. By giving an individual the right tools to assist with his finances, it can help him reduce his debt. Depending on how aggressively the debt is attacked, a client can reduce his amount of debt almost immediately.

Before entering into any agreement with either a credit counselor or a debt consolidator, ensure that all relevant information has been documented. Any financial negotiations or terms discussed should be presented in writing. Agencies may appear to be operating in the best interest of the client but are actually trying to earn a profit. An individual should seek out credit counseling agencies that are nonprofit organizations, such as the National Foundation for Credit Counseling.

Welcome to our website credit and debt managementr.

Monday, January 31, 2011

Instructions

Instructions

Sunday, January 30, 2011

Credit Card Judgment

Enforcing the Judgment

Payment Plan

Garnishment

Saturday, January 29, 2011

Head of Household Definition

Head of Household Exemption

Claiming the Head of Household Exemption

Considerations

Instructions

What Debt Consolidation Does

The Types of Debt Consolidation Loans

Where You Can Get a Debt Consolidation Loan

Why Should You Get a Debt Consolidation Loan

Garnishment

Social Security Act

Federal Debts

Alimony and Child Support

Friday, January 28, 2011

The Facts

Time Frame

Inaccuracies

Considerations

Warning

Instructions

Thursday, January 27, 2011

Types

Inconsistent Reporting

Credit Scores

Correcting Your Record

Unused Accounts

Duplicate Debts

Different Agencies

Incorrect Duplicate Reports

Investigations

Instructions

Tuesday, January 25, 2011

Judgment Debtor

Incurring Debt and Default

Debt Collection Efforts and Lawsuit

Further Collection Efforts

Budgeting

Security

Convenience

Flexibility

Workplace Calls

Documentation

Violations

State Laws

Monday, January 24, 2011

Instructions

Sunday, January 23, 2011

Definition

Front-end Debt to Income

Back-end Debt to Income

Calculation

Instructions

Saturday, January 22, 2011

How Wage Garnishment Works

Due Process

What Due Process and Collection Requirements Mean

The Bottom Line

Instructions

Friday, January 21, 2011

Instructions

Get an Income Source

Negotiate With Lenders

Be Judgment Proof

Function

Effects

Considerations

Misconceptions

Thursday, January 20, 2011

Instructions

Annual Credit Report