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

Friday, November 30, 2012

Does a Credit Card Settlement Affect Credit History?

When you can't make payments on your credit card debt and you're considering bankruptcy, negotiating a debt settlement with your credit card company can help you avoid a chapter 7 or chapter 13. But before beginning the negotiating phase, understand debt settlements and recognize how settlements affect your credit history.

What is a Settlement?

    A settlement is an agreement or contract between you and your credit card company that permits you to satisfy your outstanding credit card balance for less than the amount due. The savings realized by a debt settlement vary and depend on what your credit card company will accept. Reaching a settlement agreement can take time, and your credit card company will likely counter your initial offer and agree to settle for a different amount.

Purpose of Settlement

    Debt settlements are effective financial moves if you owe several creditors and can't keep up with your payments. Rather than risk default or bankruptcy, you can ask creditors to forgive a percentage of what you owe. They obtain the amount of your settlement and agree to collect no more on the account. By agreeing to a settlement, credit card companies agree not to sue you for any remaining balance.

Settlement and Credit History

    Debt settlements are advantageous because they provide debt relief. But settling a debt can have a negative impact on your credit history and score. Credit card companies rarely accept a debt settlement and then report an account as "paid in full." You can expect your credit card company to send a notification to the bureaus stating that you settled the account. The problem with this type of update is that future creditors and lenders will check your report and see that you didn't fulfill past financial obligations. With knowledge of this, these creditors and lenders can reject your application, or charge a higher interest rate because of the increased risk that you will not pay your debts.

Considerations

    Before discussing debt settlement, make sure you have enough cash to settle the account, as settlements are typically paid in a lump sum. Since credit card companies may attempt to collect money or file a lawsuit after a debt settlement, get an agreement in writing before giving them your money to settle the account. Retain a copy in your files.

Foreclosure & Bank Options

Foreclosure & Bank Options

You can avoid losing your home to foreclosure by reaching a compromise with your bank. The Federal Trade Commission says lenders can offer several programs to end foreclosure proceedings and keep you in your house. The FTC says the key is to contact the bank as soon as you realize you are about to start missing payments. It is even more important to contact the bank right away if you have already missed a payment.

Forbearance

    The FTC says most lenders have forbearance programs, which allow your payments to be reduced or even suspended while you work through a temporary setback, such as a short-term disability. The FTC stresses that not everyone will qualify for forbearance, and that the program will not help if you are in a home that you cannot afford. Your bank will conduct a review of your finances and your temporary hardship before determining if forbearance is right for you.

Reinstatement

    Reinstatement is an option if you have the money to pay your past-due amount in full -- or you can convince the bank to give you time to raise the money. For example, you may be expecting a tax return within a few weeks, or a large bonus from your company. Your bank may agree to suspend the foreclosure proceedings if you can prove that you will be receiving the money and that the amount is enough to bring your account current. Your mortgage account will be reinstated as current once you meet the deadline for paying the past due balance. If you miss the deadline the foreclosure proceedings could be resumed.

Loan Modification

    Loan modification allows the bank to permanently change key terms in your loan to make it more affordable for you. The bank can reduce the interest rate, extend the term of the loan, or even cancel a portion of the balance due, according to the FTC. The agency says loan modifications are usually sought by people who are facing a long-term reduction in their income. For example, a spouse may have become permanently disabled, dramatically reducing a couple's income. Other candidates for loan modification include people who are struggling to pay their mortgage after the interest rate increased.

HUD-Approved Counseling

    The U.S. Department of Housing and Urban Development does not directly offer foreclosure prevention programs, but the agency does provide trained housing counselors who can contact your lender on your behalf. The counselors know all the foreclosure prevention options available from banks, and a counselor in your community can participate in a three-way discussion with you and your bank as you seek to avoid foreclosure.

How Much Your Credit Drops in Bankruptcy

How Much Your Credit Drops in Bankruptcy

If your bills, debts and other obligations have become financially crippling, it may be time to file for bankruptcy. Filing for bankruptcy is a complex legal process that has lasting effects on your finances and could cause major damage to your credit history for years. The credit score point-drop following bankruptcy varies depending on an individual's financial history and current credit score.

Credit Scores

    Lenders use your credit history to evaluate the riskiness associated with doing business with you. If you have an outstanding track record of maintaining low debt balances, making on-time payments and accumulating a variety of credit account types (including installment loans such as home mortgages or student loans and revolving credit such as credit cards) this results in a high credit score. Low credit scores can be attributed to missed payments, late payments, high debt-to-income ratios or applying for multiple credit accounts at once, since this signals to lenders that you might be scurrying to amass funds. Filing for bankruptcy can devastate your credit if you previously held a high credit score; if your score tanked months ago because of accounts turned over to collection agencies or defaulted loans, this could mean a less significant tumble.

Bankruptcy

    The two main bankruptcy types are the Chapter 13 bankruptcy and the Chapter 7 bankruptcy. In a Chapter 13 bankruptcy filing, known as an "individual debt adjustment" or "wage earner's plan," credit consumers negotiate with debtors to repay financial obligations within three to five years. Creditors may not begin or continue debt collection efforts during this time. The Chapter 7 bankruptcy filing involves liquidating all debtor assets and redistributing the proceeds to creditors. These two bankruptcy options have different effects on your credit score.

Effects

    The first factor to take into consideration is current credit score. Those with higher credit scores will notice a more significant drop than those who've already lost points because of maxing out a revolving line of credit, making 30-day to 60-day late payments, foreclosing on a loan or entering debt settlement or debt consolidation agreements. These items alone can shave between 10 and 160 points from a person's credit score if he was in the 680 range on the 900-point scale. These same items can slash between 25 and 200 points for a credit consumer with a credit score of 750. Consumers with a 680 credit score may lose between 120 and 150 points in a Chapter 13 bankruptcy or between 130 and 170 points in a Chapter 7 bankruptcy. Consumers with a 750 score may lose between 150 to 210 points in a Chapter 13 bankruptcy or between 200 and 250 points in a Chapter 7 bankruptcy.

Action Steps

    To help your credit recuperate after filing for bankruptcy, check your credit report for any errors that may be corrected to improve your score. Reign in spending and make regular on-time payments on remaining debts in excess of the minimum required. Apply for a secured credit card; creditors issue cards to riskier consumers by requiring them to deposit an amount equal to their balance limit with their bank. After seven to 10 years, request that all bankruptcy-related items be cleared from your credit history.

How Does a Short Payoff Refinance Affect Credit?

How Does a Short Payoff Refinance Affect Credit?

A short payoff or debt settlement is a type of debt-negotiation. The process allows the lender and debt holder to re-negotiate the terms of the debt. Through mutual agreement, the amount due may be reduced, fees and penalties waived, payment time extended, or interest charges reduced. The debtor may deal directly with the lender or through a debt settlement agency or a lawyer. Ideally, the refinanced deal enables the customer to gain control of his finances. In some cases, the deal negotiated may have an adverse affect on your credit score.

Credit Score Components

    Credit scores use consumer debt and payment history to create a three digit score. Experian, one of the USA's three credit bureaus, lists the key elements as number and severity of late payments; type, number and age of accounts; total debt; and public records. The credit bureaus maintain the information for up to ten years after a positively maintained account is closed or for seven years after an account enters delinquency.

Impact

    Lenders, auto insurance agents, and even employers use this score to assess credit worthiness. According to the New York Times, "Generally speaking, the higher your score, the more money you can borrow and the less you'll pay for the loan."

Considerations

    A short payoff can have a multi-pronged negative impact on your credit score. Since accounts must be delinquent before companies will negotiate a payoff, the delinquencies will drop credit scores. When the lender writes off part of the balance due, Leslie McFadden at Bankrate.com points out, "the notation on your credit report that the account is settled (rather than paid in full) could further depress your credit score and look bad to future lenders. After all, you made a partial payment in lieu of the whole amount." Finally, in the case of credit cards, most banks' will close the account - further harming credit scores.

Prevention/Solution

    Discuss impacts to your credit score directly with the lender when negotiating your payoff. Ask the lender how to reduce the negative impact to your score. According to Equifax.com, one of the most common causes of negative impacts on credit scores is late payments. Banks may honor a request to re-age the account - a process that wipes late payments off your record. Ask how the account closure will be notated. The bank may allow you to close the account, which does not harm credit scores.

Warnings

    The IRS counts the amount of the debt reduction as taxable income. The amount written off must be claimed at tax time.

Tuesday, November 27, 2012

Unsecured Debt & Survivor Liability in Florida

When a family member or loved one passes away, there are generally many legal and financial details for the survivors to handle. One concern with many families is whether they are liable for debts left by the decedent. In Florida, as in all other states in the country, a deceased person's relatives and surviving family members are not legally responsible for paying outstanding debts unless they are joint signers on the debt or they take over the debt at the time of death.

Probate

    Florida requires estates valued at $75,000 or more to go through a formal probate court process so that all assets and liabilities can be accounted for. Assets are things of value that the deceased person owned, such as real estate, vehicles, bank accounts and retirement or investment funds. Liabilities are all outstanding debts, such as an unpaid mortgage and credit card bills.

Estate Administrator

    The Florida probate judge will assign a personal administrator if there was not one named in the deceased person's will. Personal administrators, or estate executors, are responsible for notifying all creditors of the decedent's death, taking asset and liability inventories, arranging the funeral and arranging creditor payments in the state order of priority.

Estate Liquidation

    When a person dies, his existing assets are used to pay off any outstanding debt balances. If necessary, the estate executor sells assets to generate the funds needed to pay off debt balances. Debts that the estate must cover include burial fees, administration costs, and outstanding secured and unsecured debts, such as a real estate mortgage or a credit card balance.

Survivor Liability

    A decedent's survivors are not responsible for his outstanding debt at the time of his death. If a survivor was a co-owner or joint account holder on a debt, however, that joint account holder could still be held liable for the debt since she accepted joint liability when the account was opened. Likewise, if an heir takes over a home with an existing mortgage, he must continue making mortgage payments, otherwise the home can be repossessed by the bank. The mortgage company cannot sue the heir for the balance of the mortgage, however, and survivors cannot be held liable for other types of debt, including unpaid taxes and personal loans.

How to Stop Reposession

How to Stop Reposession

Your lender has the option to repossess your home or vehicle if you fall behind on your payments. You can also be on the hook to lenders and may have to provide your possessions as collateral. Your possessions will be put up for sale at an auction and you can still be liable for repaying the balance of the loan. When making payment arrangements with the creditor isn't enough, bankruptcy is the only option. Bankruptcy will damage your credit rating for seven years in North America. Repossession also damages your credit score for seven years.

Instructions

    1

    Contact a bankruptcy lawyer to begin filing for Chapter 7 bankruptcy. Bring a list of all your liabilities and assets to your lawyer. You will be assigned a case number when bankruptcy has been filed. This number corresponds to your file in court documents.

    2

    Call your creditors to ensure they are aware that you filed for Chapter 7 bankruptcy. The court is responsible for notifying all your of your filing. A Stay will be issued by the court, prohibiting creditors from repossessing your items. Any phone calls, legal action, written correspondence or repossessions are not allowed.

    3

    Give your lender all the information about your bankruptcy. Your lender will need to contact your attorney. Be ready to provide the phone number. The lender is responsible for contacting the repossession company to cancel the seizure.

    4

    Figure out how you will pay the loan. You still have to pay for your home or vehicle, unless you turn it over to the lender, in which case they will sell it and take the money that you owe. You can strike a reaffirmation agreement with the lender, which will keep the home or car in your possession if both parties can agree on a repayment schedule.

How to Decrease the Amount Owed on Credit Cards

If looking at your credit card statement each month causes you to panic, then it is time to decrease the amount you owe on your credit cards. Credit card debt is a revolving debt that increases because of the interest payment added. It also reduces your monthly disposable income because you are paying off items bought in the past. By taking drastic steps now and following them until the credit cards are paid off, you can build a solid financial future for yourself.

Instructions

    1

    Stop charging items on your credit card. Remove all credit cards from your wallet and put them into a plastic container. Fill the container with water and place it in the freezer.

    2

    Call the credit card company. Find the number on your statement. Ask for a supervisor and request a reduction on your interest rate. Point out the long history you have with the company and the on-time payments. Accept any reduction that is offered. Repeat for each credit card you own.

    3

    Review your credit card statements. Find out which card has the highest interest payment per month. List the cards by the highest to the lowest interest payments.

    4

    Increase the amount of the monthly payment you send on the highest interest credit card. Double up on your minimum payments or send two minimum payments per month on this card. Pay the minimum on the other cards until the highest interest card is paid in full. Repeat the procedure down the list, always paying more on the highest interest credit card.

    5

    Transfer all extra money toward your credit card debts. Put birthday and holiday cash gifts toward paying the highest interest credit card bills.

Monday, November 26, 2012

What Is the Difference Between a Finance Charge & an Annual Percentage Rate?

Loans are often necessary to help cover unexpected expenses or to purchase particularly expensive items, such as cars and homes. When a consumer borrows money, he may not understand all the charges associated with the loan. Most lenders charge annual interest rates, or APRs. Lenders may also impose additional charges, which constitute finance charges.

Finance Charge vs. Annual Interest

    Lenders want to provide some incentive to the borrower to repay the loan in a timely fashion. Finance charges and interest rates impose additional monetary obligations on the principal balance of the loan. Finance charges include all charges associated with the loan, including interest and commitment fees. The annual percentage rate is the amount of interest that compounds daily.

Usury Laws

    Usury laws protect consumers from "predatory" lending. A usurious loan is one that charges an interest rate greater than that allowed by law. There is no federal usury limit. Usury limits also vary by state; not every state imposes a usury limit. State laws vary on the penalties for usurious loans. In general, the lender is not entitled to recover costs or interest on the judgment.

Usury and Finance Charges

    In general, usury only applies to illegal interest rates. A lender in a state with a 12 percent usury rate may not charge an APR greater than 12 percent. However, the agreement between the lender and borrower may require the borrower to pay additional charges classified as finance charges. In total, the entire obligation may result in payments that technically exceed the usury rate. The loan is only usurious if the APR exceeds the state limit.

Other Issues

    Usury laws have relatively limited application and, as of the date of publication, have several loopholes. Complications arise when lenders operate in multiple states. The law of the state where the business has its principal location governs the lender's behavior. A credit card company may incorporate in a state that has no usury limit. If that same company opened a branch in a different state, it could charge an otherwise illegal interest rate in that state, because the state of its principal location has no usury limit.

How to Pay Off Debt in a Short Time

Paying off your debt in a short amount of time is a goal that will not only help you save more of your money in the long run, but will help your credit score and your peace of mind. Paying off your debt in a short time will take discipline and hard work. The higher your debt balance is, the more difficult this task can be. With a plan, anyone can pay off his debt, regardless of the balance.

Instructions

    1

    Add up all your debt. This can be any debt that you are desiring to pay off in a short time, such as credit cards, car loans or personal loans. Begin a ledger book with this balance at the top.

    2

    Decide how soon you want to pay it off. Set a realistic goal, but one that is going to push you to work harder at paying off your debt. Remember, the sooner you pay it all off, the more money that can go into your pocket.

    3

    Divide your debt by the number of months you have to pay it off. For example, if you have $5,000 in debt, and want to pay it off in 9 months, divide $5000 by 9. The result is you must pay $555 a month to pay off your debt. Look at your budget to determine if this is a realistic option for you.

    4

    Renegotiate terms with your lenders. This can possibly earn you a lower interest rate, which can speed up the process of paying off your debt. Some lenders will offer settlements of a one-time payment, while others may be willing to lower your interest rate, at least temporarily. Every little bit helps.

    5

    Cut back on extra expenses while you pay off your debt. This could include eating out, cable, long distance, or evenings on the town. Be strict with yourself and you will accomplish your goal. Put any extra money you can "find" towards your debt. Diligently record every penny paid toward debt in your ledger book.

    6

    Pick up a second job. If you only want this to be temporary, visit an employment agency to sign up for temporary work. Agencies often have positions for all shifts, full and part time. Then you need not feel guilty for leaving when you no longer need the extra income. Put all this extra money towards your debt.

    7

    Make payments on your debt as soon as you receive any money. You do not need to wait for the monthly statement. If you get paid weekly from your second job, immediately pay a debt bill the day you get your check. Many bills can be paid online at no charge. This will help to ensure that the payments get made, and you will be suprised at how fast little payments can add up.

Sunday, November 25, 2012

Easy Ways to Fix Your Credit

Easy Ways to Fix Your Credit

A low credit score can have many negative effects on your life, including higher insurance rates, higher interest rates and being denied for auto, home and personal loans. Having a low credit score can also have adverse effects on your well-being, as you may feel stressed and overwhelmed. Fixing your credit to obtain a higher credit score can be an easier process than you think.

Pay Your Bills On Time

    Paying your bills even a day late can negatively impact your credit score. Transitioning into paying all of your bills on or before their due date will help raise your credit score and reflect positively on you to credit card and loan companies. When it comes time to apply for a home or auto loan, lenders are more likely to give higher amounts with lower interest rates to individuals who consistently pay all of their bills on time.

Close Out Accounts

    Having multiple credit card accounts that are delinquent or behind in payments reflects badly on your credit score. Slowly work on closing out newer accounts over the course of several months by paying more than the amount due when possible. It is best to keep your older accounts open as you have a longer credit history built with them than through an account you have only had several months. The fewer accounts you have to manage, the more likely you will be to pay on time.

Avoid Revolving Balances

    A revolving balance from an expensive transaction will only continue to accumulate interest as the months go by. One of the easiest ways to improve your credit score and keep your credit in check is to never spend more on your credit card than you can afford to pay in one lump sum. For example, if you need to pay for gas in your car and have the money to do so, charge the purchase to your credit card and immediately pay it off in full. This will build a strong line of credit without ever accumulating interest or revolving balances.

Deny Credit Line Increases

    Oftentimes, credit card companies will offer you an increase in your allowed spending limit every few months. These credit line increases are entirely optional and you have every right to deny them. By keeping your credit limit as low as possible, you avoid the risk of overspending on the card and accumulating more debt than you can feasibly afford to pay off.

Can a Collection Find Out If You Have a Bank Account Without You Telling Them?

If you are behind on debt payments, and a collection agency believes that you are not willing to cooperate in repaying your debts, the collection may file a lawsuit for judgment in the county where you reside. If the court grants judgment, the collection agency may freeze your bank account in accordance with your state's laws. The collection agency typically relies on you to provide bank account information; however, it may also use other means to locate your bank account.

Public Records

    Certain legal matters, such as personal bankruptcies and divorces, are public record. This means that anyone can view documents related to these matters. A collection agency that has secured a judgment against you may review these documents to obtain information to recover money you owe. If documents related to a divorce settlement, personal bankruptcy or other matter of public record contain your bank account information, the collection agency may use this information to freeze your account.

Past Account Activity

    A collection agency can locate your bank account if you ever made a payment to the agency using the account. This include both paper checks and e-checks, also known as "checks by phone" or ACH payments. The agency may also be able to locate your bank account information from the records of the original creditor if you ever used the account to make a payment to the creditor.

Spousal Cooperation

    In some states, a collection agency may divulge your debt and request information from your spouse. If your spouse has your bank account information, and the account is held jointly with your spouse, she may provide this information to the collection agency without your knowledge.

Considerations

    Although a collection agency may have means of locating your bank account if it wins a judgment against you, it may also petition the court to require you to complete a financial disclosure form. This form asks for information, including account numbers, of any bank accounts you own. In some states, failure to complete a financial disclosure form may result in imprisonment or additional fines.

What Forms Do I File if I Settle on a Credit Card?

What Forms Do I File if I Settle on a Credit Card?

Settling a credit card is an option once you are behind on your debt. When you settle a credit card you pay less than you currently owe, in a lump sum, and the credit card company agrees to forgive the remaining amount of the debt. Settling a credit card does negatively affect your credit score, but it is better than having outstanding bad debt on your credit report. Settling a credit card debt requires filing certain tax forms and keeping certain documentation on hand to prove your settlement.

Settling a Credit Card

    You can settle a credit card using a debt settlement company or you can do it yourself. If you are doing it yourself you should contact the company once you have between 25 to 50 percent of the total amount you owe saved up. You can offer to settle the debt by paying a lump sum. Start by offering less than you actually have so you can negotiate up. If the company agrees to accept the money as settlement and consider the card paid off, ask them to mail you a letter that states the payment will count as settlement in full before you mail them a cashier's check as payment.

Information to Keep on File

    You should keep a copy of the cashier's check and the letter stating that the debt has been paid off in your files. You will need to keep this on file indefinitely, because it is not uncommon for the company to contact you again, even though they have agreed the debt is paid in full. Pull a copy of your credit report in a few months to check to see if the debt reads settled. If it is still outstanding on your credit report, you will need to contact the company to have them report to the credit bureaus that it is has been settled. If you worked with a debt settlement company, you need to keep a copy of all the paperwork they give to you.

Tax Forms to File

    When you have a debt forgiven, the IRS considers the amount forgiven to be income. This is the only official form that you will need to file once you settle debt. The creditor will send you a 1099-C form and you will need to use that form when you file your taxes. You will need to pay taxes on the forgiven amount according to your tax rate. This means you should set aside extra money after you settle to cover your taxes at the end of the year.

Alternatives to Settling Debt

    Settling debt does reduce your credit score, though it is better than bankruptcy. You can try to pay off your debts yourself or use a credit counseling agency to get control of your debts. The agency will help you create a budget and work with your creditors to reduce monthly payment amounts and lower your interest rates. A credit counseling service will not affect your credit core as dramatically as a debt settlement company will.

Saturday, November 24, 2012

Can Hospital Bills Go on Your Credit Report?

Can Hospital Bills Go on Your Credit Report?

Even if you are insured, an unexpected trip to the hospital can leave you responsible for steep hospital bills. Unfortunately, ignoring your medical debts can not only damage your credit rating, it can leave you subject to a lawsuit from the hospital or collection agency that purchases your account.

Facts

    Unlike credit card companies or mortgage lenders, hospitals do not report the debts you incur to the credit bureaus. Thus, your initial hospital debt will not appear on your credit report. Pay it off quickly and you can prevent credit damage from occurring.

    If you fail to pay your hospital debt, the hospital will turn your account over to a collection agency. Most collection agencies report consumer debts to the credit bureaus. Your unpaid hospital debt will then show up on your credit report as a collection account. Collection accounts are derogatory and hurt your credit score.

Features

    According to the New York Neighborhood Economic Development Advocacy Project, hospitals typically turn debts over to collection agencies more quickly than other creditors. Credit card companies, for example, wait an average of 180 days before charging off and selling unpaid debts. A hospital, however, may only wait 30 days before turning your account over to a collection agency. Hospital policies regarding when unpaid accounts go to collections differ depending on the hospital.

Time Frame

    Once a collection account appears on your credit report, the Fair Credit Reporting Act notes that it can remain there for seven years from the date your original debt became 180 days delinquent. For example, if your hospital visit occurred in May 2010, the standard seven-year reporting period would not begin until November of the same year. The credit bureaus would then remove the collection account in November 2017.

Warning

    If the collection agency decides to sue you for your medical debt and wins a court judgment against you, the court judgment will remain on your credit report for seven years from the date the judgment was awarded -- marring your credit rating for much longer than the original collection account. In addition, if you file bankruptcy to avoid paying overwhelming medical bills, the bankruptcy can remain a part of your credit record for up to 10 years from the date you filed your case.

Considerations

    MSN Money notes that, unlike many other forms of unpaid debt, unpaid medical bills on your credit report do not necessarily indicate that you present a greater risk to lenders. Because you did not intentionally incur the debt and then leave it unpaid, such as with a credit card debt, not all lenders view medical collection accounts as a red flag suggesting that you pose a higher than normal financial risk to the company.

Friday, November 23, 2012

What Is Asset Acceptance LLC?

Asset Acceptance LLC is a subsidiary company of Asset Acceptance Capital Corp., which buys charged-off accounts from credit card and loan companies and then attempts to collect on the past-due debts.

Purpose

    Asset Acceptance LLC helps companies create cash for charged-off accounts. For example, if you owe a credit card company for an outstanding balance and it writes off the amount you owe, Asset Acceptance LLC pays cash for the outstanding balance and then attempts to collect from you.

Structure

    Asset Acceptance Capital Corp., the parent company, is a public company that has a board of directors and corporate officers. The company also has audit, compensation, and nominating and corporate governance committees in operation.

History

    The company was originally founded in 1962 as debt buyer and collection agency. In 2002, Asset Acceptance LLC merged into the parent company, Asset Acceptance Capital Corp. In 2004, the company offered stock to the general public, becoming a publicly held corporation.

Professional Membership

    Asset Acceptance LLC is a member of the Association of Credit and Collection Professionals, which holds the company and its employees responsible for certain professional standards.

Community Support

    The parent company and its subsidiaries participate in community and charitable organizations such as the American Red Cross, ACA International Education Foundation, Habitat for Humanity and Make-A-Wish Foundation.

How to Collect a Bad Debt Pre Judgment

Without a court judgment, a creditor's debt collection abilities are limited,

because it cannot legally seize the debtor's assets. The creditor can only demand that the debtor voluntarily pay what he owes. If a debtor knows that she is likely to lose her assets to a creditor, she can dispose of those assets prior to the court rendering a judgment against her. Pre-judgment attachment freezes the debtor's assets until the judge renders a decision. Creditors can sometimes utilize pre-judgment attachment to procure payment from the debtor before the hearing date.

Instructions

    1

    Visit the court with which you plan to file your lawsuit and request a summons and complaint form. Fill out both forms. Submit the completed summons and complaint to the court clerk. The court clerk will then file the case with the court and provide you with a hearing date for your lawsuit.

    2

    Serve the debtor with a copy of the complaint and the court summons. You can hire the sheriff's office to hand deliver the summons and complaint to the debtor or, if your state allows the process, send the summons and complaint via certified mail to the debtor's last known address.

    3

    Write a petition for pre-judgment attachment. Your petition must include both your name and the name of the defendant, the details of the case so far, and which assets you want the court to take temporary possession of. A plaintiff can request a pre-judgment attachment for such assets as bank accounts, real estate and motor vehicles.

    4

    Visit the courthouse. Give your petition for pre-judgment attachment to the court clerk, who will file your petition and then set a date for an application hearing. Unlike the hearing for the lawsuit itself, the application hearing usually takes place fairly quickly, sometimes within a few days.

    5

    Attend the application hearing. This hearing is solely for the judge to review your petition and ensure that the pre-judgment attachment you requested falls within the state's legal limitations. If your pre-judgment attachment request meets your state's guidelines, the judge will approve it.

    6

    Post bond for the asset. The required bond amount varies by state, but your bond must meet or exceed the value of the asset. After posting bond, the court takes temporary possession of the asset until the lawsuit hearing.

    7

    Request payment from the debtor. By paying the debt before the hearing date, the debtor can both reclaim his asset and have the case against him dropped.

What Are Financial Solutions for Debt Collection?

The best financial solutions for dealing with debt collectors depends on your situation. People who have the money to pay all or most of what they owe will have more prospects for negotiating with collectors to settle their debt. However, people who can't pay their debt in full can still try to negotiate a settlement they can afford.

Settlement

    It's debatable whether a consumer should pay a debt in full that's already been sent to a collector. Some consumers note their moral obligation to pay their total debt, but others also consider the damage that's already been done to their credit files because of a debt they haven't paid. In any case, Bankrate.com notes that negotiating a settlement with a collector can prevent a lawsuit and avert further credit-report damage.

Negotiating

    Examine your budget and determine what you truly can afford to pay before you contact a collection company about settling your debt. You likely won't have more room for negotiating if you promise to settle a debt for more than you can pay and then fail to meet the terms of the agreement. Settling a debt for less than you owe is counted as negative information in your credit files, but it also indicates you took some responsibility for paying your debt. A collector may agree to give you a considerable discount on what you owe in exchange for a large, lump-sum payment as opposed to a series of payments. Get any agreement you make in writing from the collection company before sending money to settle your debt.

Creditors

    Sometimes debt-collection companies refuse to negotiate with people who try to settle an account for less than they owe. In such cases, contact the creditor who sent the account to collections and attempt to work out a compromise. If you're successful in your negotiations, you may have to pay more in federal income taxes. Any amount of debt that's forgiven by collectors and creditors is reported to the Internal Revenue Service as income. Nevertheless, you won't owe additional taxes if the IRS determines that you don't have the finances to pay them.

Considerations

    If you don't have the means to make payments on a collection account, you can send the collector a letter stating that and request that the company stops contacting you. The U.S. Fair Debt Collection Practices Act requires collectors to cease contact with consumers after receiving a written request to do so. However, that won't prevent a lawsuit against you if a company files one. Consult with a lawyer if you're sued, and quickly reply to the suit to protect your rights. You may be able to get advice from the Legal Aid Society if you can't afford a lawyer.

Do Medical Bills Affect Your Credit Score?

Medical bills can affect your credit history and your credit score. The extent to which they have an impact on your credit score will depend on several circumstances. If your credit score is lowered, you may be charged a higher rate of interest on other credit products. Ultimately, you will pay more in finance charges.

Misconceptions

    When you receive a medical bill, it is not usually reported to the credit bureau. Once you become past due, then the hospital will report your account as past due.

Significance

    When medical bills are reported to the credit bureau, they can affect your credit score by decreasing it. Medical bills will show up as a collection account or as a bad debt.

Considerations

    The amount that your credit score is decreased will depend on other circumstances. If your credit file is 10 or 15 years old and you have a lot of other credit that is paid on time, the medical bill will not lower your score by much.

Effects

    The exact amount that your score is lowered will vary from consumer to consumer. Other things that are considered are the type of credit accounts you have and how much debt you have.

Time Frame

    If medical bills are reported to the credit bureau, they will remain on your file for seven years. The longer they are on your file, the less of an impact they have on your credit score.

Prevention/Solution

    If you have no other credit except a medical bill collection, your credit score will be seriously affected. The reduction could be significant.

Thursday, November 22, 2012

About Gasoline Credit Cards

About Gasoline Credit Cards

Gasoline credit cards work in a similar manner as other bank-issued credit cards in that they allow the user to charge purchases and repay at an agreed upon interest rate. Gasoline credit cards, however, are more likely than other consumer credit cards to offer rewards and incentives. The key to getting the best value in a gas card is to do your research and choose a card that works best for you.

Definition

    A gasoline credit card is a bank-issued card that allows you to charge purchases at a specific gasoline retailer and repay them under agreed upon terms. Most major gas station chains offer credit cards, and this type of card is more likely to offer a reward or customer loyalty program. Some cards give the consumer a grace period in which there is no accrual of interest provided that the balance is paid in full by the date specified on each month.

Benefits

    Judicious use of a gasoline credit card can offer many benefits to the consumer. Using a card to pay for gas purchases allows one to track expenditures and eliminates the need to carry cash. Additionally, most gasoline credit cards offer rewards or incentives for its use. Cash back bonuses for gas purchases are, on average, 3 to 5 percent. Most companies send out a check when your rebate amount reaches a given level, often $50 or $100.

Considerations

    Before applying for a gasoline credit card, you should research the options to find the card that best suits your spending habits, needs and lifestyle. There are numerous websites that can help you sort through the various offers. Some even offer a search utility that allows you to plug in the features that you would like in a card to help you find the best option. You should consider the interest rate, the grace period (if any), additional terms and rewards and incentives structure when choosing a card. Most importantly, get a card for a gas retailer that has numerous locations in your area, or you may find yourself driving around looking for a certain gas station all the time.

Warning

    As with any type of credit account, read the fine print and be certain that you understand and agree with the terms before you apply. Be aware that creditors can change the terms of the agreement, including interest rates at any time and for any reason. This means that an introductory rate can turn into a very high interest rate overnight. When you are choosing a card in part because of a rewards program, consider whether or not the cash-back percentage is enough to justify your use of the card. Watch for introductory offers. Many cards begin the term with a 6% cash back offer that quickly drops to 3% or less.

Types

    There are several different types of gasoline rebate cards available, including cards that are issued by a single retailer (such as Exxon) that can be used only at that particular chain or bank-issued credit cards that can be used at any retailer but offer rewards that include rebates on gas purchases. In some cases, a credit card will offer cash-back rebates with higher rates of return on gasoline purchases.

How to Avoid Garnishment

Both your wages and bank accounts are subject to garnishment if a creditor sues you for debts you left unpaid and obtains a civil judgment against you. Naturally, the best way to avoid garnishment is paying all of your bills on time as they come due. If a creditor files a lawsuit against you for an old debt or a debt you do not recognize, however, responding to the court summons in a timely manner and presenting a solid defense in court can help you avoid having your wages or bank accounts seized by the creditor.

Instructions

    1

    Read the complaint that the creditor sends to you. It will arrive in conjunction with the formal court summons notifying you of the lawsuit. The complaint should list the reason why the creditor is suing you and the amount it demands. Choose the grounds for your defense based on the complaint. If, for example, you don't recognize the debt, your defense may be that the debt does not belong to you.

    2

    Fill out the attached response form. Include your name, the date and the details of your defense. Submit the response form to the court within the allotted time frame. The amount of time you have to submit a response varies by district, but usually spans 15 to 30 days.

    3

    Appear in court on the date listed on the summons. Bring with you any paperwork you have that supports your defense. State your case to the judge and provide as much detail as possible.

    4

    Propose a settlement to the creditor if you don't win the case and the judge awards it a civil judgment. Sometimes creditors would rather accept an immediate settlement for less than the amount you owe rather than endure the added paperwork of filing a garnishment order against you.

    5

    Contest the judge's ruling by requesting a Motion to Vacate from the court clerk. Submit the request to the court that originally issued the judgment. You can appeal any court ruling provided you have a basis for doing so. Most states have a time frame limiting the amount of time you have to contest and vacate a civil judgment.

    6

    Make payment arrangements with the creditor if you lose the case, the creditor refuses your settlement offer and you cannot have the judgment overturned. After exhausting your legal options, paying the debt voluntarily is the only way to avoid a garnishment order from a judgment creditor.

Wednesday, November 21, 2012

Steps to Take When Sued by a Creditor

Court cases on television portray high drama and interesting situations, but this is rarely the way that it really is when a creditor sues a debtor for nonpayment of a debt. The process is very mechanical, and emotionless. Knowing this in advance can help a debtor deal with the matter objectively, and keep the emotional response to a minimum. Taking proactive steps can help stave off a judgment or garnishment before it happens.

Respond

    When you receive an official court summons, it will have the date of the hearing and the location of the court. The summons will also have the person you must respond to as well as the date that the response is due. You should respond to the summons in writing to preserve your legal rights. If you do not respond, the court could issue a judgment against you by default. Call the court to verify that you are being sued because collection agencies sometimes send letters that look like official court documents to scare consumers.

Hearing Attendance

    If the debt is not yours, or is not valid, you need to attend the court hearing to contest the debt. If you miss the hearing, you will probably lose the case by default, and have a judgment entered for a debt that is not yours. If you legitimately owe the debt, you may want to go to the hearing, but you will probably lose the lawsuit anyway. Staying away in this case would probably not affect the outcome of the case.

Negotiate

    When a debtor first receives a summons to court, there is still time to negotiate a settlement with the creditor. In fact, it may be easier to negotiate at this time. Save up cash to offer a lump-sum settlement with the creditor and begin negotiating. When you and the creditor come to a deal, make sure that you get the agreement in writing that the amount that you settle for is settlement in full for the debt. Then, send a money order or bank check in to the creditor. Never give them access to your checking account electronically.

After the Judgment

    After the judgment, many creditors still will not move to enforce their judgment quickly. If you live in a state that permits garnishment of wages, the creditor may seek an order allowing them to do this. A debtor's goal after the judgment should be to save up cash, and still attempt to settle the debt for less than what he owes, particularly on an older debt. If the creditor moves toward garnishment for collection of the judgment, and the debtor is unable to settle, bankruptcy may be the only choice to stop the creditor from taking a large percentage of the debtor's income.

Will I Take on My New Husband's Debt?

While debt incurred before marriage can affect your household budget and finances, you are not responsible for paying any debt incurred by your spouse before marriage. To avoid unwittingly taking responsibility for his debt, do not take out a joint consolidation loan and keep your own money and property separate and in your own name.

Debt Before Marriage

    You and your husband are each solely responsible for your own debts taken out before you got married. Unless either one of you co-signed for a debt, or you jointly took out a consolidation loan to pay off these debts, neither of you is responsible for the other's premarital debt.

Debt After Marriage

    In most states, spouses are only responsible for debt that they take out on their own or jointly with their spouse. If your husband were to take on additional debt after marriage, and you did not agree to the debt, did not sign for the debt and did not benefit from the debt, you are generally not responsible for repaying the debt. An exception to this exists in states that have community property rules. In a community property state, spouses can be responsible for the repayment for any debt taken on by either spouse during the marriage. There are some exceptions to this rule that vary by state law, the nature of the debt and whether you and your spouse both benefitted from the debt. A lawyer can help you sort out whether or not you are responsible for a spouse's debt in a community property state.

Commingled Funds and Assets

    Although you are not responsible for paying your husband's premarital debt, your funds may be at risk if a creditor sues your husband. After a creditor wins a lawsuit, it can garnish your husband's bank accounts in order to satisfy the judgment. If you and your husband have joint accounts or assets, a creditor could potentially take your money or property. To prevent this from happening, open a bank account in your name only and keep your property, such as your home, in your own name.

Credit Reporting

    Even after marriage, each spouse's credit report remains separate from the other. Creditors only report your debts to your credit report and your husband's debts to his credit report. However, if you and your husband take out debt together, the debt will show up on both reports.

    If you and your husband apply for a joint loan, such as a mortgage, lenders examine both reports before making a decision. If your husband has a lot of debt, lenders turn down your loan application or may charge a higher interest rate, even if your report shows little or no debt.

Credit Watch Information

Credit Watch Information

Credit Watch is a credit monitoring product sold by Equifax, one of the three major credit bureaus. Credit Watch is a paid subscription service that can be used to detect identity theft.

Features

    Credit Watch monitors your Equifax, Experian, and TransUnion credit reports and sends either email or text alerts whenever there are changes to your credit reports.

Benefits

    Credit Watch places automatic fraud alerts on your credit report every 90 days. The service comes with up to $25,000 identity theft insurance to help offset the costs of dealing with identity theft.

Considerations

    Since Credit Watch is a subscription service, you'll be charged $12.95 each month you have the service. You'll need a credit card to enroll in the service.

Insight

    Credit Watch gives a summary snapshot of your credit report to give you insight into how lenders view your credit report. The snapshot shows a chart of your debt and summarizes how much of your available credit is being used.

Function

    You can use Credit Watch as an alternative to ordering your annual free credit reports and contacting the credit bureaus individually to place free fraud alerts on your credit report.

Tuesday, November 20, 2012

How to Pay a Collection Agency by Check

How to Pay a Collection Agency by Check

When creditors call and mail you in attempts to collect debts, you want to make good on the money you owe. Collection agencies typically make it easy for you to make payments. You can pay a collection by check over the phone or by mail; just gather some contact information from the collection agency and understand what information the agency needs.

Instructions

By Phone

    1

    Call the number found on the collection agency letter and speak to a representative.

    2

    Tell the representative your name, address and phone number, and find out how much you owe on your account.

    3

    Indicate to the representative that you would like to pay for the debt using a check over the phone.

    4

    Provide the representative with the check number, routing number and account number from your check. The check number is found in the upper-right corner of your check. The routing and account numbers are found on the MICR line on the bottom of your check, with the routing number being nine digits and listed before your account number.

    5

    Confirm with the representative that you are authorizing the payment for the amount due to the collection agency against your checking account.

By Mail

    6

    Call the collection agency at the phone number listed on the letter you received from the organization. Speak to a customer service representative.

    7

    Provide the representative with your name, address and phone number, so she may access your account. Ask for the amount that you owe, your account number with the collection agency and an address to which you may mail a check. Write down this information.

    8

    Write a check for the amount you owe to the collection agency. Make the check out to the collection agency, write your account number with the collection agency on the "Memo" line, and sign the check.

    9

    Draft a brief letter to the collection agency, indicating that the check is to be used toward your account and that you are paying off your debt to the organization. Indicate your account number with the collection agency in this letter.

    10

    Address an envelope with a stamp to the collection agency at the address the representative provided you to mail your payment. Place your letter to the agency and the check in the envelope, seal the letter, and drop it in the nearest mailbox.

Monday, November 19, 2012

How to Get a Name Off a Credit Card

Adding someone's name to your credit card as an authorized user can help this person establish his own credit history. The person could be your child or spouse. This credit card account appears on your credit report and the other person's as well. You can call a credit card company to add someone's name to the account, but if you want to remove someone's name from the credit card, you need to follow specific steps.

Instructions

    1

    Contact your credit card company for specifics. Credit card companies vary, and some may not remove an authorized user if you're past due on the account.

    2

    Draft a letter stating that you want to remove a name from the credit card account. Include your name, address, Social Security number and account number in the letter. Next, include the personal information of the authorized user you want removed from the credit card account -- name and Social Security number.

    3

    Submit your request using certified mail. Certified mail includes a return receipt as proof that the credit card company received your written request. Keep a copy of your letter and the return receipt in your files. Contact the credit card company after a few days to confirm that it removed the person's name from the account.

    4

    Follow up with the credit bureaus. It can take up to one month for a credit card company to notify the bureaus, and the bureaus to remove the credit card account off the authorized user's report. This individual can check his report after 30 days to confirm the update.

Why Is Debt Important?

While most people have some debt, typically the importance of that debt is in direct proportion to the amount of debt they have. As the amount of debt that you have grows, you can find that your debt permeates every aspect of your life. While some debt, such as a mortgage, business or automobile loan, can show stability and maturity, having more debt than you can pay can affect your health, relationships and your employment.

Home Ownership

    Typically, you will have to go into debt to afford a home. Aside from being the so-called American Dream, home ownership can show that you are ready to settle down and begin a family. Owning a home can also be an investment and show that you are considering your future. You will have to build your credit history to obtain a mortgage. High credit scores are dependent on proper management of debt, including a low debt to income ratio and making timely payments.

Education

    As of 2009, the average cost of tuition and fees at public universities was $6,319; room and board added another $7,938 to the cost, according to the National Center for Education Statistics. Debt, or the ability to obtain loans, is important if you plan to pay for college. The federal government provides financial assistance to individuals who need help paying college expenses. The Free Application for Federal Student Aid allows you to apply for grants and loans in one application.

Too Much Debt

    Too much debt can lead to health issues. Not only can your physical health suffer, but the health of your relationships with you spouse and children, as well. Too much debt can cause stress, which can lead to insomnia, fatigue, depression and heart disease, according to research from Dartmouth College. Taking advantage of counseling agencies to learn strategies to reduce your debt can ease your stress and help your health and relationships.

Considerations

    Only you can decide if your debt level enhances or harms your life. Finding a middle ground between the two can be difficult but it is not impossible. Various agencies and organizations provide services that will help you learn to control your debt. If you are having problems paying your existing debts, early intervention can prevent judgments, liens and possible bankruptcy.

Sunday, November 18, 2012

How to Save Money at Kohls

If you walk into a Kohls store these days, you may discover it is possible to save money. However, you may feel the merchandise Kohls sells is not worth the money. But what if you could save money at Kohls and get more for your hard earned dollar.

Instructions

    1

    Show your driver's license at the checkout and save money if you are shopping on Kohls senior day. This is usually a Wednesday. Call your local Kohls store to find out more. The discount is around 15%. If you are not shopping on Wednesday, place items on hold until Wednesday at the Customer Service Desk.

    2

    Open a Kohls credit card account. You will get discounts and coupons mailed to you about every other month. Most of the time, you must use your Kohls credit card to be able to take advantage of the money saving offer you received in the mail.

    3

    Spend over a certain dollar amount on your Kohls credit card annually. This will get you a rewards type credit card from Kohls where you will save money on any purchase as well as a percentage off the total. This is in addition to the money saving offers you receive from the regular Kohls charge card account.

    4

    Shop Kohls at the end of seasons in the clearance rack or holiday clearance. These are anywhere for 60 to 80% off savings in every department. They are located in the back of the department on a rack or at the end of the aisles.

    5

    Spend $50 or more in the Kohls cash sale. You will get $10 for each $50 you spend for a return shopping trip to the store in the following weeks.

    6

    Take a job at Kohls either part or full time. You will receive an associate discount every day of the year. You need to pay with your Kohls credit card and the discount will be taken automatically. This is in addition to Kohls discount coupons. Comes in handy for your shopping or holiday spending.

    7

    Use the Kohls kiosk to order a certain size, color or pattern of merchandise not found in the Kohls store you are shopping at. This merchandise will ship free directly to your home in a matter of days. This will save you time and gas money because you will not have to drive to another Kohls.

    8

    Shop right after holidays for the following year. You will save some serious cash doing this and have great holiday gifts or items needed for next year.

How to Stop Debt Collection Calls and Letters

Debt collectors must adhere to the Fair Debt Collection Practices Act (FDCPA) which ensures fair treatment and approved debt collection practices. Under this act, the debt collector must stop calling or writing if you send the company a letter requesting an end to these practices. With the exception of contacting you to warn you about any legal action taken against you, debt collectors must stop contacting you upon receipt of this letter. Writing the letter is straightforward and only takes a few minutes.

Instructions

    1

    Speak to the debt collection agency at least once before resorting to writing the letter to see if you can resolve the issue over the telephone. Write the letter asking the creditor to stop contacting you if an agreement is impossible to reach over the telephone first.

    2

    Include your name and address at the top of the letter followed by the debt collection company name and address. Begin the letter with a specific salutation such as "Dear Mr./Ms. (debt collector's name)" or a general salutation, such as "To Whom It May Concern."

    3

    State the purpose of the letter in clear, concise language: "I am writing to you in response to your persistent telephone calls and letters," for example, in the first paragraph.

    4

    State the action you want taken in the second paragraph, for instance: "I demand you cease all contact with me at all locations including my home and workplace."

    5

    State any contact exceptions you might have in the next paragraph, such as to inform you about specific legal action or remedy efforts.

    6

    In the final paragraph, inform the debt collector that you plan to record all future contact in detail, and that you will pursue available legal action if any contact violates the FDCPA. End the letter with your signature above your printed name.

    7

    Make a photocopy of your signed letter and keep the copy for your own records. Send the original copy of the letter via certified mail and request a "return receipt," so you'll receive notice when the debt collector gets the letter.

Saturday, November 17, 2012

How Can I Get Out of Debt Quickly?

How Can I Get Out of Debt Quickly?

Getting out of debt and staying out is beneficial to both your financial profile and your mental health. The interest charges associated with excessive debt keep your bank balance lower than it could be, and worrying about creditors can interfere with your enjoyment of life. Taking action to reduce your debt is a valuable investment in your own future.

Socialize at Home

    If a substantial portion of your debt has been incurred through spending on expensive recreation such as vacations, traveling and expensive entertainment, cultivating a taste for socializing at home can cut down on these expenses substantially, and free up money to pay off debt. If you have friends with whom you socialize in expensive ways and they are also in debt, you can support each other in decreasing your spending by participating in stay-at-home potluck parties and other activities that don't cost much money.

Grow Food

    Starting a garden can reduce your grocery bills, although, given the amount of time and work that is involved, this may not be sufficient reason in and of itself to do it. The more valuable aspects of gardening come from the new perspective it can give you on your own life priorities. Gaining fulfillment from producing food rather than from spending money can help to change your priorities and reduce your dependence on money for your own emotional fulfillment. The physical exercise involved in gardening can also help to keep you in good shape, allowing you to cancel your gym membership and save more money.

Visualize Financial Freedom

    Maintaining a vision of your goal of being debt-free can motivate you to keep working toward that state. If you have been in debt for years, you may have become accustomed to your condition and resigned yourself to spending a lot of your money on carrying costs. Train your mind to believe that it is possible to be debt-free, and this will keep you focused on your goal and motivated to achieve it.

Keep Comprehensive Records

    An important element of the process of gaining control of your finances is understanding where your money goes. Get into the habit of writing down the place, item and price every time you buy something. Keep track of these things in an organized way and over time you will develop a profile of your own spending habits. This can help you to become more aware of areas where you might be spending more than you thought. This doesn't necessarily mean that you have to eliminate these things, but it will allow you to more consciously consider whether they are worth what you are spending on them.

Debt Relief Law in Washington

Failure to pay your debts as promised can lead to a number of financial consequences including lawsuits, auto repossessions, home foreclosures and wage garnishments. Washington state and federal laws enable you and your creditors to negotiate debt relief either privately, through a credit counseling company or through the bankruptcy process.

Debt Management Plans

    You can request help in communicating with your creditors through a nonprofit agency such as Consumer Credit Counseling Service of Seattle. Once you give a representative of your local credit counseling company permission, he will negotiate the amount of your debts with your creditors. Some creditors will reduce minimum monthly payments, cease late and over-the-limit fees and even reduce the balances owed. You will pay one monthly payment to your selected credit counseling agency and it will be distributed to your creditors. However, the fact that you settled your obligations under a debt management plan will negatively impact your credit rating for seven years.

The Chapter 7 Option

    If you earn less than Washington's annual median income and can't pay your bills as agreed, you can opt to file Chapter 7 bankruptcy. Chapter 7 bankruptcy permanently liquidates your obligations to pay bills like credit cards, most types of loans, medical bills and taxes older than three years old. A single Washington state resident qualifies to file Chapter 7 if he earned no more than $51,344 annually, according to the U.S. Trustee Program. The median income level for a family of four is $82,716. People who earn more money must either prove they cannot repay creditors and care for their families or partially repay creditors in Chapter 13.

The Chapter 13 Option

    Chapter 13 plans allow Washington state residents with regular income to partially repay creditors over a three-to-five year time frame. Also, the fact that someone filed Chapter 13 only negatively impacts credit ratings for seven years as opposed to ten years for a Chapter 7 case. In most Chapter 13 cases, Washington residents get to keep most if not all of their assets. Chapter 13 also can help cure mortgage defaults, according to the United States Bankruptcy Court.

Debt Negotiation

    Legally you can try to negotiate your debt relief needs with your creditors, but you may not necessarily be successful. But sometimes mortgage companies, credit card issuers, student loan issuers, auto lenders and even the Internal Revenue Service will approve partial debt repayment plans. The success of your mission really depends upon your creditors as well as your bill-paying history before you ran into financial trouble.

Revolving Credit Versus a Line of Credit

Lines of credit and revolving debt are quite similar. These loan products are especially helpful for those building homes, remodeling, and paying off other debts. While the terms on these products can be quite varied, there are general principles that apply to both. In general, these loans should not be considered long-term financial solutions, but rather bridge loans that carry you to the next product.

Similarities

    The term "revolving credit" and "line of credit" can be interchangeable. For example, a credit card is both a line of credit--one can take advances off the loan, repay it, then re-access it again--and a revolving loan. Revolving loan essentially means that the payments are recalculated each month based on the outstanding balance. The payments on each loan product can vary from month to month based on the amount of debt on the account.

Dissimilarities

    One example of these two loans being dissimilar is the difference between HELOCs (Home Equity Lines of Credit) and credit cards. While both are calculated in very similar ways, a HELOC uses the security of real estate as collateral. Credit card debt, while the bane of some Americans' existence, will never result in foreclosure.

Benefits

    The benefits of each of these products is this: flexibility. A standard closed-end loan provides a term (time in which the loan is repaid) and a standard monthly payment. At the end of the term, the loan expires and the debt is repaid. In revolving debt and lines of credit, consumers can choose to borrow the amount they need, and choose to repay the sum when they see fit. Most of these loans come with minimum payments that cover mostly interest.

Features

    Each month the lender calculates the amount of interest to charge on revolving debt and lines of credit. These calculations are based on the interest rate on the loan and the amount of debt currently charged on the credit line. Therefore, from month to month, payments can fluctuate wildly.

Warning

    Lines of credit and revolving debt can be dangerous for those who struggle with fiscal responsibility. Paying minimum payments on a HELOC or a credit card can result in many, many years of interest payments, with little principle reduction. While closed-end loans offer zero flexibility, they do offer lower risk as there is a fixed payment and fixed termination date.

How to Determine an Interest Rate With a Calculator

How to Determine an Interest Rate With a Calculator

The interest rate on a loan or credit is the amount the funds you borrow will cost you in the long run. The rate is usually a percentage of the principle, or amount borrowed, calculated over time. You can determine what your interest will be if you know the rate, and a calculator will speed this process considerably. It is always a good idea to keep up with your interest payments, especially if the interest you owe is compounded (added to the principle)--causing you pay a whole lot more over time.

Instructions

    1

    Determine the amount of the loan or credit extended.

    2

    Multiply the amount of the loan by the interest rate using the calculator. The percentage should be entered as a decimal (i.e. 5 percent is .05). If you borrow $10,000 at 5 percent interest per year, the interest is $500 annually.

    3

    Calculate simple interest over time by multiplying the amount of the interest for a given period by the total number of these periods in the term of the loan. For instance, if you have a $10,000 loan at 5 percent annually for five years, this would come out to $500 annually times five years, or $2,500.

Why Does the Debt Consolidation Program Work?

Why Does the Debt Consolidation Program Work?

Debt consolidation is the act of combining all of your credit accounts under a single loan payment, according to Lending Tree. The point of a debt consolidation plan is to reduce your debt and lower your monthly obligation to free up more cash. To understand why debt consolidation works, you need to understand what it does for a consumer.

Interest

    A debt consolidation program is created by a low-interest loan that is used to replace high-interest credit card debt. Your various credit card accounts are charging you interest in different payment cycles and at different rates, according to Jenny McCune on Bankrate.com. The lower interest rate of the loan will reduce how much interest debt you take on, and the fact that your debt is all on a single cycle will also save you interest. By lowering your interest obligation, debt consolidation accomplishes part of its goal of reducing your overall debt.

Service Charges

    When you have multiple credit accounts, you also have multiple service charges and fees each month. If your payment is late on any of your accounts, you can then add a penalty fee to your debt as well. Consolidation works because it reduces all of your various service charges down to just one loan charge. It eliminates all of your other service charges and leaves you only responsible for the loan charge. It also helps you to reduce late fees by making you responsible for only one payment as opposed to getting hit for late fees on a variety of accounts.

Monthly Payment

    One of the goals of a debt consolidation program is to reduce your monthly payments. There is a combination of factors that allow a debt consolidation plan to accomplish this goal. The lower interest rate reduces how much you pay per month as your monthly payments are based on your balance compounded by your interest rate. The reduction in the number of service charges also contributes to lowering your monthly payments.

Convenience

    Trying to maintain a portfolio of multiple credit account payments can lead to problems. If you forget to make a payment because you lost your bill or you were unable to keep accurate track of your payments, then you will start to incur late charges and penalties. A debt consolidation plan reduces your stress and introduces convenience to your bill paying process by bringing your debt under a single payment.

Friday, November 16, 2012

How to Write a Letter to Your Credit Card Company to Negotiate a Settlement Debt You Owe

How to Write a Letter to Your Credit Card Company to Negotiate a Settlement Debt You Owe

Writing a letter to your credit card company to negotiate a debt settlement can help you pay off your balances for less than what's owed. Not every creditor is opened to the idea of a debt settlement, though. Before approving your request, creditors examine details of your current financial standing.

Instructions

    1

    Provide account information. Begin your letter by introducing yourself and including your account number and balance owed.

    2

    State your reason for writing the letter. Credit card companies receive letters regarding negotiations and credit disputes daily. Mention early in the letter that you're writing to negotiate a debt settlement in order to pay off your balance for less than what you owe.

    3

    Discuss how much you can afford to pay. Don't let your creditors decide the settlement amount. This can result in agreeing to a settlement that's beyond your price point. Look at your income first, and then determine what's affordable. Offer this settlement amount in your letter.

    4

    Explain reasons for needing a debt settlement. Credit card companies will not settle your debt if you have the ability to pay the money. For this reason, explain your situation in your debt settlement letter. Include a listing of your debts and other monthly expenses, and make copies of your income statements. Highlight any changes to your income, such as loss of employment, reduced hours or illness.

    5

    Write honestly. If you're contemplating bankruptcy to remedy your outstanding balances, state this information in your debt settlement letter. A bankruptcy discharge can erase your debt, wherein you owe nothing to your creditors. Creditors may willingly negotiate in order to avoid having the debt erased in a bankruptcy.

    6

    Get the settlement agreement in writing before sending the money. Your creditor may offer a countersettlement. Once you both agree to a settlement amount, ask the creditor to put the agreement in writing and send you a copy. Keep this copy for your personal records.

Comparing Debt Relief Programs

Comparing Debt Relief Programs

Legitimate debt relief and credit counseling services do exist. Unfortunately, unscrupulous companies targeting cash-strapped consumers also exist. Protect your finances and credit by comparing services and pricing from several companies before choosing a debt relief plan.

Types

    Debt consolidation companies offer lower interest rate loans to pay off multiple high interest rate debts. With debt negotiation, a debt relief company negotiates with your creditors to lower interest rates and reduce debt.

Identification

    Check for complaints and company histories with the Better Business Bureau (BBB). Additionally, your state attorney general's office has information on both legitimate and fraudulent debt relief companies.

Considerations

    Reputable debt relief companies offer credit counseling and debt relief. The Federal Trade Commission recommends using debt companies that offer budgeting advice as well as debt relief solutions.

Warning

    Be wary of debt relief companies that make claims that sound too good to be true. Offering instant credit repair or complete debt elimination may be a sign of a deceptive or fraudulent company. Additionally, legitimate companies explain all fees up front and in writing.

Are Judgments Public Record?

Are Judgments Public Record?

By definition a judgment is a final decision made by a judge based on material evidence during a case in a court of law. There are different types of judgments, including financial, family and criminal, all of which the general public can access.

Public Record Definition

    A public record is any legal document that is ordered, created and maintained by the government. These documents are available for the public to review and obtain a copy of. A judgment falls within this category of public record and anyone can view it.

Financial Judgments

    A judgment goes on your public record once a judge has ruled in favor of the company, or person, who has taken you to court over a debt. This can include non-payment of a debt, small claims court rulings and other legal issues involving the payment of money. All liens on personal property are also a matter of public record.

Family Court

    The family court hands down many different judgments including divorce. When the divorce is finalized all information pertaining to it, including division of property, children involved and reasons, are a matter of public record. An injunction such as an order of protection is also considered a judgment that is public record.

Criminal Courts

    All criminal rulings, including burglary and sex crimes, are considered a matter of public record. Searchable judgements in the public records include criminal misdemeanors, felonies and DUI rulings and can include pleas which are referred to as judgment by confession.

Thursday, November 15, 2012

Can a Money Judgment Be Negotiated?

Can a Money Judgment Be Negotiated?

Consumers who hold debt without paying can be sued, and typically are by credit card companies and mortgage lenders. When a creditor takes a debtor to court and receives a favorable verdict, the result is called a "money judgment." The money judgment is how the court tells the debtor to pay and tells how much is to be paid to the creditor. The judgment is typically in the amount of the debt, but the debtor is free to make attempts at resolution, which include negotiating the actual debt. Agreeing to pay the debt and making arrangements that are satisfactory to both parties is called "voluntary compliance," and will stop further legal proceedings against you.

Debtor Obligation

    Once a money judgment has been entered against you, you are compelled by the law to resolve the judgment. If you do not comply, the judgment creditor can pursue you with the full support of the law, including a lien against any property assets you have and a levy against any cash assets and/or wage garnishments.

Resolution

    Resolution of the money judgment is not limited to simple payment of the amount ordered. Resolution simply means that a financial arrangement was made and satisfied. The arrangement can be in the form of monthly payments or a smaller amount than ordered.

Financial Offer

    An offer can be made by contacting the judgment creditor and laying out details of what your financial situation is, what you are able to pay and what your plan of payment is. If you make it clear that you have limited finances, the debtor is more likely to accept monthly payments or a smaller amount which he knows he will get, as opposed to the money judgment that he may have to go to great lengths to enforce.

Secure An Agreement

    Once an offer has been accepted, the offer and its terms should be spelled out in a letter from the judgment debtor. That way, if he tries to enforce the full amount of the money judgment later, you have proof that a negotiation was made and accepted by both parties.

Pay the Offer

    When the offer has been made, accepted and placed in writing, it is important that the agreement be adhered to. If you agree to make monthly payments and fail to do so, the judgment debtor can pursue you for the full amount of the money judgment as if no payment agreement was ever made.

Wednesday, November 14, 2012

About Consumer Debt Relief Programs

Consumer debt is debt individuals accept as a means of purchasing something for personal use without immediately paying the full price. They may do so by securing a loan or using a credit card. Many Americans manage to keep their consumer debt within manageable levels, but some, either due to negligence or catastrophic events, lose control of their ability to pay their debts. In these cases, consumer debt relief programs can help.

Types of Consumer Debt Relief Organizations

    The main distinction between consumer debt-relief organizations is whether they are nonprofit or for-profit. Nonprofit organizations provide counseling and resources for the purpose of helping people in need without generating a profit for company owners. For-profit organizations are companies that provide similar services for a fee, paying substantial salaries to counselors and sales professionals and earning profits for owners. Both types of organizations can sometimes help people with debt problems.

Debt Relief Methods

    The first thing a legitimate debt-relief counselor will do is look at a consumer's income, debt burden and necessary expenses and determine whether he is able to pay off his debts by carefully budgeting his money and reorganizing his priorities. If this proves ineffective, either the counselor or the consumer may be able to renegotiate the interest rates for various outstanding debts, thus lowering debt payments. If both of these fail, consumers may be able to benefit by getting a debt consolidation loan, which pools their debts into one account with a low minimum payment.

Business Ethics of Debt Relief Programs

    According to the Federal Trade Commission, a significant number of consumer debt-relief programs are scams that take money from needy people and give them little or no actual help with their debts. If you are considering getting help from such a company, remember a company can never guarantee that it will lower your interest rates by consulting with your creditors. Also remember that you are just as capable of making a deal with your creditors as a debt counselor is. Before paying anyone to help you with your debts, research the company through the Better Business Bureau and other third-party review organizations to determine how often they satisfy their clients' needs. Do this even if the organization claims to be nonprofit.

Debt Consolidation

    Whether or not you consult a consumer debt-relief program, debt consolidation may be something that can help you with your debt burden. By getting a debt-consolidation loan, you may be able to get a third party to pay off various debts and start a new payment plan. With a legitimate debt-consolidation program, this new payment plan will consist of lower recurring payments. However, you will probably have to make more total recurring payments, thus increasing the total amount of money you pay in interest. Many debt-consolidation firms can offer legitimate help, but they do make a considerable long-term profit by doing so.

Effects of Debt Counseling on a Credit Report

Joining a debt counseling service does not necessarily have a negative effect on your credit report. However, in order to make your debt more manageable, your credit counselor may implement certain techniques which could affect your credit report negatively. It's important to know the consequences before signing up for a debt counseling service.

Missed Payments

    Your debt counselor might advise you to miss payments in order to get a credit card company to accept a settlement, or less than what you actually owe. Credit card companies do not negotiate or accept settlement offers unless you're at least 90 days behind on your payments. Accepting such advice will likely affect your credit report, as it will lower your credit score and you will have a negative payment history.

Debt Settlements

    A debt settlement occurs when a debtor, normally credit card companies, accept less than the balance on your account. Debt services, or credit services, normally negotiate with your debtors. You make monthly payments to the debt agency. The payments are placed in an account. Once you have enough in your account to pay a creditor, your credit counselor sends in the settlement amount. This has a negative effect on your payment history on your credit report. In addition, when a debtor reports a debt as settled, the forgiven amount also appears on your credit report. Future creditors will see that you did not pay your debt in full, which could cause them to view you as high risk.

New Credit

    While some creditors might view joining a debt-counseling service as a responsible decision, others might decide that you cannot handle additional debt. However, many creditors look at your credit score when determining your credit worthiness. In such cases, your participation in a debt-management plan may not affect their decision to grant you credit.

Can a Creditor Put a Lien on Property in the State of Florida?

The process to get a lien is similar in all states. Typically, a creditor files a lawsuit against a debtor for repayment, and if the court validates the debt, then the creditor is awarded a judgment. After filing additional paperwork with the local sheriff, the creditor can enforce the judgment by placing a lien against the debtor's property. While the process is the same in Florida, certain property, including a home, may be exempt from most creditor liens.

Florida Lien Process

    After obtaining a judgment in the state of Florida, a creditor must get a certified copy of the court judgment and record it with the county clerk. This allows the creditor to get a writ of execution, which authorizes the county sheriff to satisfy the terms of the judgment by seizing the property of the debtor. If the debtor does not lodge any objections to the seizure, the property will eventually be sold at public auction with proceeds used to pay off the judgment.

Homestead Exemption

    Florida has homestead protections for resident debtors that can prevent a judgment creditor from seizing a home. According to the Florida Constitution, a debtor's home cannot generally be subject to any lien, judgment, or forced sale. Notable exceptions include tax liens, mortgage liens, or debts incurred for the improvement of the home, such as a home improvement loan. What this essentially means is that as a resident of Florida you are exempt from most judgment liens if your only property is your home.

Wage Garnishment

    A creditor with an judgment has the power to not only file a lien against property but also to garnish wages. Federal law typically allows a judgment creditor to garnish as much as 25 percent of a debtor's disposable income, defined as the amount in excess of 30 times the minimum hourly wage per week. However, if you are the head of a household in Florida, you cannot have your wages garnished unless you agree to the garnishment in writing.

Bankruptcy

    Even in the face of a bankruptcy discharge, a creditor can enforce a lien against property in Florida. A bankruptcy discharge doesn't have the power to eliminate existing liens. While the debt that triggered the original lawsuit and judgment may indeed by dischargeable in bankruptcy, a lien attached to property must still be paid off in order to dismiss it.

Does Bankruptcy Wipe Out Judgments?

Bankruptcy eliminates judgments more effectively than any form of debt management. Judgments are wiped out in just months through Chapter 7 bankruptcy and over three to five years in Chapter 13 bankruptcy. Filing for bankruptcy offers immediate protection from judgments while your debts are reorganized with the help of a federal bankruptcy court. Debt collectors must immediately stop all collection efforts, including garnishment of your bank account or wages.

Pros and Cons

    The Federal Trade Commission indicates that bankruptcy is the most powerful tool available for eliminating judgments and other debt, but warns that it presents disadvantages for consumers. Filing for bankruptcy ruins your credit for at least a few years, making it difficult to qualify for new credit at reasonable interest rates. Bankruptcy is listed on your credit report for up to 10 years, and could hurt your chances for employment in certain professions. People with bankruptcy information on their credit reports may not qualify for jobs in accounting, banking, insurance and similar professions related to financial management.

Bank Garnishment

    A judgment is a legal decision reached in court by a judge and can lead to garnishment of your bank account or wages. The judge reaches his decision on a judgment after hearing testimony in a lawsuit over an unpaid debt. Illinois Legal Aid reports that debt collectors almost always win in court if they prove that you owe the debt and failed to pay it. The judgment allows the debt collector to immediately request garnishment of your bank account or wages to satisfy the debt. Garnishment can be a traumatic experience, as it allows for your bank account to be frozen by the debt collector. You'll have no access to the account except to deposit money, while the debt collector is allowed to make a lump sum or multiple withdrawals from the account to pay off the judgment.

The Automatic Stay

    Once you file for bankruptcy a judge will sign a court order called an "automatic stay." The automatic stay puts all collection efforts on hold---including garnishment---while the court reviews your bankruptcy petition. The automatic stay is so powerful that some people file for bankruptcy within days of their accounts being garnished.

Eliminating the Judgment

    Receiving protection under the automatic stay is just the first step in wiping out a judgment. The bankruptcy must be successfully completed for the debt to be eliminated. Bankruptcy cases can be dismissed because of procedural errors, failure to comply with a payment plan or providing misleading or inaccurate information to the courts. If the bankruptcy is dismissed, the automatic stay is also wiped out and debt collectors are allowed to immediately resume collection efforts, including garnishment. On the other hand, all judgments will be wiped out, or discharged, once the bankruptcy is officially completed.