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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..

Tuesday, April 30, 2013

Judgment Consequences of a Garnishment and a Bank Lien

The judgment consequences of a garnishment and a bank lien are that both appear in the public records section of your credit report for 7 to 10 years. A civil judgment also can cause your credit score to decrease significantly. Depending on your current credit score, a judgment can cause a significant enough drop to prevent you from obtaining new lines of credit.

Civil Judgments

    When you have a debt like a loan or credit card and you stop making payments, the lender considers you in default of your credit or loan agreement. Usually, lenders will exhaust every other option, such as making payment arrangements with you, before they will file a civil suit against you. If the court awards in favor of the creditor, which they usually do unless you can prove the debt is not yours, the court enters the judgment into public record.

Garnishment Judgment Consequences

    When a judge finds in the creditor's favor, your wages are subject to garnishment at a maximum of 25 percent of your after-tax earnings per pay period. The judgment date and the amount outstanding will appear on the public records portion of your credit report for seven years from the day it was entered into public record. The judgment remains on your credit report even after you pay it off. Unpaid judgments can remain on your credit report for up to 10 years from the date it was entered into public record.

Bank Lien Judgment Consequences

    A bank lien garnishment occurs when a judge grants a creditor the ability to place a lien on your bank account. Neither a judge nor the creditor will notify you of a bank lien, they will however, notify your bank. Once your bank receives a notice of a lien against your account, it will freeze your account for the lien judgment amount. When your account is frozen, you cannot access the funds. If you have a credit card that is issued by your bank that you default on, the bank does not need a judgment order to seize the money in your account.

Credit Score Consequences

    Credit-reporting agencies do not make their equations for calculating credit scores public, so there is no way of knowing exactly how much your score decreases when you have a judgment on your credit report. For your Fair Isaac Corporation score, your payment history on your lines of credit and your total amount of credit outstanding, including judgments, affects a combined 65 percent of your credit score. That means that the delinquencies on your credit accounts and the judgment will both decrease your score. FICO scores are the credit scores that most lenders use.

Monday, April 29, 2013

Debt Consolidation Guide to Canada

Are you suffering with debt and struggling to keep your head above water? Well, if you are, you are not the only one. Thousands of Canadian families like you are in desperate need of consolidation services. These families are looking to financial experts to help negotiate, on their behalf, for creditors and lenders to lower interest rates and consolidate or bundle multiple lines of credit. Read on to learn how you can get the debt consolidation help you need.

Instructions

    1

    Contact Credit Solutions (see Resources). A licensed, bonded, independent credit counseling agency, Credit Solutions helps thousands of Canadian families though credit and debt management counseling and education programs. Contact by phone at (877) 588-9491 or (877) 913-2008 to schedule a free consultation with one of the company's leading financial experts.
    Credit Solutions offers the following services: free debt counseling, debtors Assistance--learn how to increase your cash flow; simple, sound, credit and debt management advice tailored to your needs; Debt Managment Programs (DMPs); orderly repayment of debts; elimination of collection calls from creditors and debt collectors; structured repayment programs (DMPs) and no-fee bankruptcy referrals; financial literacy workshops and seminars and Bankruptcy Insolvency Act (BIA) insolvency counseling.

    2

    Contact the Debt Consolidation Canada organization. If you have suffered high interest credit cards and would like to consolidate or bundle these multiple lines of credit, contact Debt Consolidation Canada, a leader in debt consolidation in Canada. The organization works with consumers to take advantage of lower interest rates. With percentage reductions as low as 5.2 percent, the organization will work to secure a new lower interest rate for consolidated lines of credit. Visit the official website (see Resources) or email at: financial@m-3.ca.

    3

    Contact Canada Debt Assistance (see Resources). Canada Debt Assistance uses assessment tools to record and measure a person's financial standing to determine the most effective and immediate form of action to take before and after a consolidation has taken place. The company works on behalf of consumers to help stir near-bankruptcy cases back in the other direction, offering consumers alternative options to a weakened or bleak financial record. Log online for a free consultation or contact by mail at 4310 Macleod Trail SW, Suite 201, Calgary, Alberta T2G 0A4 or call at (403) 244-9022.

How to Remove Debt From My Credit Report

The debt found in your credit report can turn you into a prisoner. The reason for this analogy is when you have debt, you do not have the freedom to use your money the way you would like, so essentially, you are being held captive by your credit obligations. However, the restrictions that debt imposes on your finances were created by you. In order to reduce the restrictions put forth by your credit obligations, you need to rid your credit report of outstanding debt.

Instructions

    1

    Determine the amount of debt on your credit report. Before you can remove debt from your credit report, you need to determine the amount of debt that you have. To do so, you need to order your actual credit report. Under the Free Disclosure Rule of the Fair and Accurate Credit Transactions Act, which is more commonly called the FACT Act, you have the right to view a copy of your credit report from all three of the major credit reporting bureaus, TransUnion, Experian and Equifax, for free every year. See resources for the direct link to the website where you can obtain your credit report.

    2

    Dispute any mistakes on your credit report. If you find any debt-related errors on your credit report, you need to dispute the erroneous information so the information can be removed. For example, if there is debt on your credit report that does not belong to you, or if you have satisfied a particular debt but it still appears on your credit report as unpaid, you can dispute the inaccurate information. The credit dispute must be done in writing and sent to the credit reporting bureau that has the inaccurate information. The addresses to each credit reporting bureau and a sample copy of a dispute letter can be found on the Federal Trade Commission website.

    3

    Pay off any remaining debt. After you have correctly identified the correct amount of all your debt, you need to pay the debt off. The amount of money you owe creditors is more commonly referred to as your "credit utilization ratio." Your credit utilization ratio accounts for 30% of your credit score so if you pay off all of your outstanding debt, your credit score will increase.

    4

    Negotiate the removal of any negative information. If you pay off a delinquent account that appears on your credit report, the creditor is not obligated to remove the negative information. However, in most cases, delinquent accounts are handled through a third-party debt collection agency. You may be able to negotiate with the third-party collection agency to have the negative information removed from your credit report if you pay the outstanding debt.

    5

    Do not create any new debt. Once you have paid off all of the debt on your credit report, you may be tempted to use your credit again; however, in order to keep your credit report free of debt, you should refrain from creating any new debt.

Sunday, April 28, 2013

Requirements of Credit Collection Pleadings in New York

If you default on your debts, your creditors can sue you to recover the amount you owe as well as attorney's costs. However, creditors and debt collectors don't have the absolute right to sue -- they must follow state and federal laws and procedures. New York requires creditors to sue within a certain period of time and to send appropriate notices prior to filing a lawsuit.

Statute of Limitations

    As of June 2011, New York has a statute of limitations of six years on consumer debts such as credit card debts. Thus, creditors must file their lawsuits within this period of time. Sometimes creditors will file a lawsuit after the statute of limitations expires; if a creditor does so, you or your attorney can object on these grounds and the court must throw out the lawsuit.

Notification Requirement

    Debt collectors must notify you in writing within five days of first contacting you about a debt. The notice must inform you that this is an attempt to collect a debt, the name of the original creditor and the amount of the debt that you owe. It must also inform you that you have 30 days to dispute the debt. If the debt collector does not send you this notice and later sues you, New York allows you to challenge the lawsuit on the basis that you did not receive the proper notification of the debt.

Cease-And-Desist Letters

    If you would prefer that debt collectors not contact you, you can write a cease and desist letter demanding that they stop. Send the letter via certified mail. Once the debt collector receives the letter, all attempts to contact you must stop, with the exception of giving you a summons in the evenut of a lawsuit.

Court Summons

    The creditor or debt collector must provide a written summons to you if he files a lawsuit against you. The summons tells you the date and time of your court hearing. You need to attend the hearing; if you fail to appear in court, the creditor automatically wins the lawsuit and you may face wage garnishment or other serious collection activity.

Saturday, April 27, 2013

How Does Debt Stacking Work?

How Does Debt Stacking Work?

Debt has become a way of life for most Americans, it seems. The Federal Reserve reports that as of October 2010, Americans carried nearly $2.4 trillion in debt. About $800 billion of that is revolving debt, which is primarily carried on credit cards. Total revolving debt has decreased from $957.5 billion in 2008, suggesting Americans may be making a concentrated effort to pay off their debt.

Debt Stacking Principles

    Debt stacking is a method to pay off debt that can shave years and dollars off of your debt repayment plan. With debt stacking, your prioritize the order in which you want to pay off your debts. Each time you pay off a debt, you apply the amount you were paying on that debt toward the next debt on your list, while paying the minimum on your other debts. The more debts you pay off, the larger your enhanced payment and the faster you pay off each debt.

Arranging Your Debt Stack

    List all of your debts, along with the current balance, the credit limit and the interest rate. The order in which you pay off your debts will depend on your goals. If your primary goal is to get rid of your debt quickly and stop paying interest, sort your debts by interest rate and pay them off from highest to lowest. If you want to get rid of debt but need to see progress to stay motivated, pay off your debts in order of balance, from lowest to highest. If you're concerned about your credit score and you have cards that are close to the limit, pay down the cards with the highest utilization first. If you don't have a specific goal other than getting out of debt, combine these approaches. Pay down cards that are within a few hundred dollars of the limit, to perhaps 70 percent utilization, then pay off a small balance, then stack the debts by interest rate.

Debt Stacking vs. Debt Snowballing

    You may have heard or read advice to "snowball" your debt. Some people refer to debt stacking as debt snowballing, likening the enhanced payment to a snowball that gains size and speed as it rolls downhill. Others only consider it debt snowballing when your pay off your debts in order of lowest to highest balance, and only debt stacking when you pay off your debts in order of highest to lowest interest rate. Whichever moniker you use, the underlying principles are the same: pay off your debts in a specific order, and apply the payment from a cleared debt to the next one on the list.

Monthly Payments

    When you begin your debt stacking program, add up the minimum payments for all of your cards and set that as your constant monthly payment amount. As you pay off your debt, the minimum monthly payment amounts will decrease; by keeping a constant monthly payment amount, you will pay more each month toward the debt at the top of your list and pay your total debt off faster. Pay more than the constant amount whenever possible, but never less.

How to Keep Your Credit Safe From Fraud

Managing your credit isn't limited to making your payments on time and keeping debts low. Monitoring your credit activity and preventing fraud is also key to good credit management. Leaving credit card numbers and statements lying around puts you at risk of identity theft. But by following a few simple tips, you can keep your information safe.

Instructions

    1

    Review credit activity. Don't get into a habit of paying bills and not reviewing your statements. Open credit card statements as soon as they arrive and review the activity to ensure accuracy. Report unknown activity to your creditor immediately.

    2

    Accept paperless statements. Thieves can remove credit card statements from your mailbox and use your account number. Forward mail to a P.O. Box or stop paper statements altogether and review your statements online.

    3

    Use a paper shredder to get rid of sensitive documents. Run all documents through a paper shredder before discarding to avoid having your statements stolen.

    4

    Keep credit cards in a private location. Store a credit card in your wallet for emergencies, and then place remaining cards in a locked drawer. Placing cards in view of others increases the risk of fraud.

    5

    Alert your card company if you do not receive a statement. Lost credit card statements can indicate a problem. The post office may deliver the statement to the wrong address, which increases the chances of credit fraud. Check your statements carefully or ask your card company for a new account number.

Friday, April 26, 2013

Credit Scores & Closing a Bank Account

Credit Scores & Closing a Bank Account

Your credit score plays a vital role in your ability to obtain and use credit, but it is not affected by deposit accounts such checking or savings accounts. Credit scores are based on your credit transactions, such as using credit cards or obtaining a car loan, and closing or opening a bank account doesn't count.

Credit Score

    When you apply for a loan, creditors want to know if you are a reliable borrower. They look at your credit report and credit score. Your credit report contains information about how you have used credit in the past, and a credit score is a numerical representation of your history calculated to determine your creditworthiness.

Bank Accounts

    If you have a checking or savings account, your lending institution does not report your activity to the credit reporting agencies who compile credit reports. Bank accounts are not credit instruments. When you open bank account, you do not ask the lending institution to loan you money or extend credit in any way. Whenever you use, open or close any kind of bank account this information is not taken into consideration for calculating the credit score.

Banking Report

    While closing a bank account doesn't affect your credit score, it may affect your consumer banking report. A consumer banking report, according to Bankrate, is similar to a credit report, but instead of detailing your activity as a credit user, it details your banking history. If, for example, you have a history of opening and closing accounts in order to take advantage of rewards programs offered by banks, this will be reflected in your banking history.

Banking and Credit

    While your banking behavior doesn't show up on your credit report, that does not mean creditors ignore your banking behavior. Lenders often ask potential borrowers to include information about their bank accounts so the creditor can inspect your banking report. If you have a negative banking history, a creditor may use that information to deny you credit even though that information won't appear on your credit report or impact your credit score.

Thursday, April 25, 2013

How to Collect a Commercial International Debt

How to Collect a Commercial International Debt

Due to the recent economic downturn, an increasing amount of people and businesses have defaulted on their international debt obligations. As a result, many creditors are seeking ways in which to collect international debts. Collecting a debt internationally, however, must satisfy international laws and agreements regarding debt collection. Not all countries have mutual agreements for the collection of debts in the other country.

Instructions

    1

    Check the laws and agreements that exist between the United States and the country in which you wish to collect the debt. The United States currently has debt collection agreements between most European countries, Canada, and some Asian countries. A lawyer who specializes in international business law might help.

    2

    Sell the debt to a collection agency in the country where the debtor is located. This is often a preferred option when dealing with smaller debts. The debt collection agency will buy your debt for a percentage of the total outstanding, and will then continue to seek out the debt settlement with the debtor.

    3

    Hire a lawyer that specializes in international business law and sue the debtor for repayment of debt. This option is often taken for debts of especially large amounts. The debt will be settled in the court of the country of the debtor, and the collection of any outstanding money will be handled by an accounting agency that has been given the mandate for the management of international debts.

Debt Settlement Program Guide

The availability of consumer credit and personal loans allow people to make many purchases that they might not be able to afford otherwise, but excessive borrowing can lead to burdensome levels of debt. Once you amass a large debt load, it can take years of careful budgeting to get debt-free, which prompts many debtors to search for other means of getting out of debt. Debt settlement programs involve hiring professional services to negotiate with your creditors to lower your debts.

Debt Settlement Basics

    Debt settlement companies work on behalf of debtors to bargain with creditors and persuade them to reduce debts. Debt settlement companies may make attractive claims about their programs, such as being able to reduce the amount you have to pay toward your debt by up to 50 or more in a short period of time. While a debt settlement program may result in lower debts, there is no guarantee that a settlement company will be able to convince a lender to reduce your debt, and the settlement process can take months or even years. If you fail to make payments on your credit card during the debt settlement process, you may accrue fees that increase the amount that you owe.

Drawbacks

    There are several potential drawbacks of using debt settlement programs. The Federal Trade Commission states that debt settlement can have a severe and long-lasting impact on your credit score, and that debt settlement programs charge fees that diminish any debt savings you gain. In addition, the Internal Revenue Service may consider the money you save due to debt settlement to be taxable income.

Predatory Practices

    Another problem with debt management programs is that some debt settlement companies may deliberately mislead or deceive customers by overstating potential benefits or failing to cite risks, while others may partake in illegal activities. For example, the United States Government Accountability Office states that it called 20 debt settlement companies posing as consumers and 17 of those companies said they collect fees before debts are settled, a practice that the FTC has labeled as harmful.

Considerations

    If you decide to pursue a debt settlement program, research thoroughly any company you consider before going forward. The FTC recommends that consumers be wary of companies that charge fees before debt are settled, tout new government programs, guarantee that they can reduce or eliminate debt or tell you to stop communicating with creditors.

Wednesday, April 24, 2013

Debt Settlement & Credit Counseling

Debt Settlement & Credit Counseling

Debt settlement and credit counseling are both different ways of dealing with overwhelming debt. However, they also both have negative aspects to them. Before considering either option, you may want to try to get out of debt by yourself with a debt payment plan. If you have tried that in the past, these options may help you get control of your finances.

Benefits of Debt Settlement

    Debt settlement is when you offer the creditor a smaller lump sum payment as settlement for the debt. Most companies will not consider debt settlement unless you are already behind on your payments. This option will allow you pay about half of what you currently owe and you can clear up your debt more quickly. You can negotiate debt settlement yourself by contacting your creditors one at a time or you can use a company to negotiate debt settlement for you.

Dangers of Debt Settlement

    Debt settlement will have a negative affect on your credit report. The debts will read "Settled" instead of "Paid in Full." This may make it difficult to borrow money for several years. You will pay taxes on any debt that is forgiven during that tax year. It is important to plan ahead and save for this. Many debt settlement companies shut down unexpectedly and take the client's money without settling the debts. If you choose this route, you should carefully research a company to be sure it is a legitimate company that will live up to its promises.

Benefits of Credit Counseling

    Credit counseling companies will work with you to help get your debt under control. The counseling service will help you figure out a working budget. Additionally, they will contact your creditors for you and try to lower the interest rates, and reduce any fees that you may have incurred. You will pay one lump payment to the credit counseling agency and they will distribute the money to your creditors. Generally they set a specific timeline and then you will be debt-free.

Dangers of Credit Counseling

    The biggest danger of credit counseling is choosing a disreputable company or having the agency go out of business while you are using them. Be sure to do your research before choosing an agency. You want one with no complaints with the Better Business Bureau and that has been open for several years. It will affect your credit, since working with an agency will show up on your credit report, but it is better than debt settlement or bankruptcy.

Tuesday, April 23, 2013

Can You Garnish Social Security Income for Unpaid Rent?

A person who moves into a residence and agrees to pay rent is legally obligated to so do. If a person fails to pay the rent, then the landlord may attempt to collect on the debt through legal force. In certain cases, the landlord may be allowed to garnish the person's income. However, a private creditor cannot legally siphon off money from a person's Social Security benefits.

Garnishment

    Garnishment is a debt collection tactic that must be specifically authorized by a civil court of law. If a creditor attempt to pursue the garnishment of a person's wages without the permission of a court---even if the debtor previously agreed to the garnishment---this is illegal. To win a garnishment order, a landlord would have to file a lawsuit in civil court, win a legal judgment awarding him the money and then convince a judge to issue the order.

Federal Benefits

    According to federal law, there are a number of sources of income that under no circumstances can be subject to garnishment. Among these are nearly all types of federal benefits. As Social Security payments, including regular retirement benefits, disability benefits and Supplement Security Income, are issued by the federal government, they are protected from legal garnishment by all private creditors.

Unpaid Rent

    When a person owes unpaid rent, this is considered a private debt. Therefore, because private creditors are not allowed to garnish government benefits, the creditor would not be allowed to receive a garnishment order to take a debtor's Social Security benefits. Even if a judge were to---illegally ---issue a garnishment order on a person's Social Security benefits for a private creditor, the Social Security Administration would not honor it.

Considerations

    While a person cannot have his Social Security benefits seized by private creditors such as landlords, he may be able to have it taken from him by a government agency to which he owes money. If a person fails to pay the taxes that he owes to either a state or federal government, or if he fails to pay child support, a government agency may be legally allowed to garnish his wages or seize his bank account.

How Soon Can They Freeze Your Bank Account After a Default Judgment?

If you have been called to a court hearing by a creditor, that creditor is pursuing its legal right to file suit and is interested in recouping debts as quickly as possible. If you miss the hearing for any reason, the court will likely award a default judgment, which can fast-track the legal process that allows the creditor to seize your bank assets. However, the freezing of a bank account requires action on the creditor's part, and its delayed actions or a debtor's appeals can add many months to the process.

Legal Process

    The legal process a creditor must follow in order to pursue an attachment of your assets, including your bank account, can take many months before the case reaches court. Depending on state law, a creditor must deliver a certain amount of missed payment notices in order to have the legal standing to sue a debtor. A creditor can start the legal process by filing a summons for the debtor to attend a court hearing; debtors typically have 10 to 30 days to respond. If the debtor does not attend the hearing or answer the summons, the court awards a default judgment to the creditor.

Time Frame

    As soon as it is awarded the default judgment, a creditor is free to begin filing the necessary paperwork to freeze your bank account. To freeze the account, a creditor needs to know the exact bank and branch holding the account funds; this can be obtained by filing an informational subpoena sometimes referred to as a financial disclosure statement, which can take about two weeks to receive. Once the creditor has identified the account to be levied, it can file a writ of execution against property through the court that awarded the judgment. This tells the sheriff which assets to legally seize on behalf of the creditor. For local accounts, this may be completed in a week or two, but when debtors live in another state than the court awarding the judgment, it can take three months or longer.

Appeals

    Even after a bank account becomes frozen, a debtor has various legal resources for opening up his frozen bank account. If you or your attorney believe you may be able to contest the validity of the creditor's judgment, you can file an Order to Show Cause to Vacate the Judgment to have the court hold a hearing on the matter. You may also be able to file a general appeal on the judgment to prevent the plaintiff from freezing your bank account; depending on state law, you may have up to a month after the hearing to file this appeal.

Considerations

    Under certain conditions, a debtor's bank accounts can be frozen without ever having a default judgment decided against him by a court. Private debts require the default judgment but public matters, including tax debts or child support debts, can be pursued by public officials without a default judgment. In addition, if your creditor is also the financial institution holding your bank account, it may have the legal right of "setoff," allowing it to freeze the account automatically. Although creditors are responsible for informing debtors of the bank freeze, the first notice of the frozen account comes from the bank, which often sends a notice to the debtor within one business day.

Sunday, April 21, 2013

Can a Collection Agency Take Your Possessions?

Collection agencies have a number of ways of compelling a debtor to pay the money for an unpaid debt or bill. However, in general, a collection agency is not allowed to seize a person's property unless that property has been used to secure the loan. The closest the agency can come is garnishing the person's wages or, in some cases, placing a lien on their property.

Debt Payment

    Under U.S. law, the only time a debt collector can seize a person's physical property is when that property has been used as collateral for a loan. For example, in a mortgage, the mortgage company is allowed to seize the borrower's house in the event of a default, as the property was used as collateral on the loan. In other cases, the house nor the possessions in it could be seized.

Contracts

    A collection agency is not allowed to modify the terms of the contract that outlines the debtor's obligations after the agency takes possession of the debt. This means that it can only seize the collateral listed on the debt contract. However, the collection agency also has the option of suing the debtor in court, so long as the statute of limitations on the debt has not expired.

Asset Seizure

    If a creditor does take a debtor to court -- on the grounds that he breached the debt contract -- and wins his case, the debtor is obligated to pay the creditor damages set by the judge, usually equivalent to the amount owed the collection agency. If the debtor refuses to pay, the creditor may potentially seize the money in his bank account or take part of his paycheck in a garnishment.

Liens

    In certain cases, a creditor may be allowed to put a lien on the debtor's property. This means the debtor must pay the creditor a set amount before the property can be sold. However, this usually is only allowed in the event of a default judgment -- the debtor failing to appear in court to contest the debt -- or when the person owes taxes to the government.

Unpaid Debt Laws

Unpaid Debt Laws

Statute of limitation laws place a limit on how long unpaid debt can be collected. After that date, collectors are not allowed to demand payment of the unpaid debt. The consumer may waive their statute of limitations by reaffirming the debt. Even when the debt is within the statute of limitations, there are strict laws on what collectors can and cannot do to collect unpaid debt.

Statute of Limitation

    The statute of limitations is how long a creditor can go to court to force payment of a debt, such garnishing your wages or place a lien on your property. After that time, the courts cannot be used to collect the money. In the United States, the statute of limitations on unpaid debt varies from state to state. They also vary on the type of debt. Written contracts, oral contracts and promissory notes may have different statutes of limitations even within the same state. The states with the shortest statute of limitations are Alaska, Maryland, Mississippi, New Hampshire, North Carolina and South Carolina at three years. The state with the longest statute of limitations is Rhode Island at 10 years.

Reaffirming

    If an unpaid debt is reaffirmed in bankruptcy, the consumer has given up the right to refuse to pay due to the statute of limitations. A new promise to pay a debt may restart the statute of limitations, though in some states that promise must be in writing to hold up in court. Sending a payment may not restart the legal obligation to pay unpaid debts. However, signing up with a debt settlement company may result in waiving the statute of limitations in exchange for a debt settlement. The statute of limitations does not prevent collectors from filing a lawsuit, but it may prevent them from winning it.

Collections

    The law does not allow someone to go to jail for unpaid debt with the exception of unpaid child support. It is against the law for debt collectors to threaten to put someone in jail for unpaid debt. Collectors can threaten to repossess property that is held as collateral for the unpaid debt, but they cannot take any other property. If the debt owed on one car is unpaid, the creditor cannot take any other vehicles. Debt collectors can demand payment. However, laws to protect consumers with unpaid debt state that they must first win a lawsuit against the consumer before they can take money out of someones bank account or garnish their paycheck. An unpaid mortgage debt can lead to eviction, but this process takes several months. If someones check is garnished due to unpaid debt, the collector cannot take more than 75 percent of their check in most cases.

Integrity Debt Options

Integrity Debt Options is a private debt settlement and consolidation services company. The company offers consumers several products and services designed to help consumers improve their credit score, reduce their debt load and avoid bankruptcy. The company also offers investment opportunities for those looking to earn a return on an investment in credit debt.

Debt Settlement

    One option available at Integrity Debt Options is debt settlement. This is the process by which consumers settle their debt agreements with their lenders at costs reduced from the total outstanding loan amount. Integrity Debt Options claims that their services will help consumers reduce their settlement more than by going it alone with creditors.

Debt Relief

    Integrity Debt Options also offers regular debt relief. This service can vary, but often involves a credit counselor advising a consumer when analyzing bills. Often, the advice given is to reduce revolving balances below 50 percent credit utilization, reducing the amount of revolving accounts and learning to budget without using credit accounts.

Investment Opportunities

    Integrity Debt Options offers investment opportunities to former clients. The company claims that, while they are not investment experts, they liaise with financial experts in investments and money managing. Former clients---especially very satisfied ones---often take advantage of such solutions.

Free Consultation

    Integrity Debt Options offers free consultations to prospective clients. During the consultation meeting, a counselor will assess, on a surface level, the problems a particular consumer is experiencing. Based on the initial consultation, a counselor will advise a particular brand of service, and attempt to secure the prospective client as a paying client.

Warning

    There have been some reports that Integrity Debt Options uses unethical business practices. While it's not always a good idea to take someone else's word about a business, it's important to be vigilant when attempting to secure a representative to consolidate your debts.

Saturday, April 20, 2013

Will a Credit Freeze Prevent Me From Renting an Apartment?

Will a Credit Freeze Prevent Me From Renting an Apartment?

When you decide to move from your current apartment to a new one, the landlord or property manager at the new complex will likely pull your credit information to determine if you are likely to be a good tenant. If you have placed a credit freeze on your personal information with the credit bureaus, you need to remember this freeze when you give your application to the landlord.

PIN Codes

    When you put a credit freeze on your credit information with the credit bureaus (Experian, TransUnion and Equifax), this makes it much more difficult for an identity thief to steal your personal information. The freeze alerts the credit bureaus not to release your personal information to anyone who asks, according to MSNBC.

    At the time you ask the credit bureaus to put a freeze on your personal information, you are able to create a PIN code or password. When you need to temporarily "thaw" your information, give the PIN code and password to the credit bureaus. You do have to pay $10 to the credit bureaus each time you request that your information be thawed.

Benefits of a Freeze

    Putting a freeze on your personal information with each credit bureau makes it virtually impossible for an identity thief to open any accounts in your name, according to Consumer Action's Joe Rideout.

    When a lender cannot gain access to your personal information, they won't open any new accounts, especially to someone who is trying to assume your identity.

    The price for requesting and placing a freeze on your credit information varies from state to state. Senior citizens in 10 states are able to freeze their accounts at no charge; identity theft victims who are able to prove they have had their identities stolen are also able to get their credit information frozen for free. For others wanting to freeze their private information to prevent identity theft, the fee varies from state to state, although most set the fee at $10.

Drawbacks of a Freeze

    When you want to apply for a loan -- or apply to rent an apartment -- you need to contact each credit bureau and ask it to temporarily unfreeze your credit information so the property manager or landlord can get the information. Credit-card companies can still access your private information as they send out their "pre-approved credit card offers." The freeze does not stop this from happening. Identify thieves can still get access to any existing debit or credit-card numbers and your Social Security number.

    A credit freeze also does not stop your creditors from reporting derogatory information, such as late payments, to the credit bureaus.

Accessing Your Credit Report

    When you find it necessary to access your credit report, you need to call each credit bureau and request a temporary unfreezing, which takes up to three days, according to Give Me Back My Credit.

How a Civil Judgment Against You Works

Civil judgments are damaging to your credit and can lead to bank garnishment and even bankruptcy if not resolved. Civil judgments, also called monetary judgments, are legal documents signed by a judge. The judgment orders you to pay a specific amount of money as damages stemming from a civil lawsuit over credit card debt or some other dispute. A judgment from a credit card lawsuit requires you to pay the full balance owed plus court and attorney's costs.

Default Judgments

    Some people receive so-called "default judgments" after failing to appear in court to defend themselves. Judgments are possible only after a lawsuit is heard in court. If the person sued does not show for the court hearing the judge automatically grants a judgment to the party filing suit, called the plaintiff. The New York Times reports that some people learn about judgments only after discovering that their bank accounts are frozen because of garnishment.

Enforcement

    Garnishment is the biggest problem stemming from a civil judgment. The party winning the lawsuit can ask the judge for permission to garnish your bank accounts if you do not pay the amount listed in the judgment. The judge may give you some time to work out a payment plan, but at some point must allow enforcement of the judgment. Garnishment is a popular choice for collecting on judgments.

Frozen Account

    Garnishment allows the debt collector to make regular withdrawals from your bank account. Usually the checking account is garnished, but withdrawals from other accounts is possible. Checking accounts are popular for garnishment because your checking account information is often on file because of previous payments before the account was closed and a lawsuit filed. The account is frozen once the judge signs the garnishment order and a copy of the legal order is delivered to your bank or credit union.

No Access

    You are prohibited from accessing the garnished account except to make deposits. Checks written are returned unpaid and use of your debit card for making purchases, payments or withdrawals is placed on hold. Meanwhile, the party with the garnishment order can freely withdraw money in a lump sum or through installments until the judgment is paid in full.

Bankruptcy

    Some people suffering from garnishment file for bankruptcy. Bankruptcy stops garnishment immediately, but also ruins credit. A legal injunction in bankruptcy called "the automatic stay" forces banks to stop garnishment and reopen your account. Garnishment can resume if you fail to complete the bankruptcy or it is dismissed by the bankruptcy court because of procedural errors.

Settlement

    Debt settlement also ends garnishment if the party collecting agrees. Debt settlement usually allows the paying off of delinquent accounts for less than the full amount due. However, discounts usually are not possible when the debt collector has a judgment and a garnishment order against you.

Friday, April 19, 2013

Does a Down Payment on a Car Improve a Credit Score?

Does a Down Payment on a Car Improve a Credit Score?

A down payment on a car does nothing to improve a credit score -- but paying more money down on the car could make credit approval easier. Down payments are usually necessary on automobile loans for several reasons, including reducing the monthly payments to an affordable level for the buyer's income and other credit obligations. Down payments also represent an investment by the buyer. Theoretically, a buyer is less likely to stop making payments and allow repossession of the vehicle after making a significant down payment. Credit score is important as well, but building a good score takes time and discipline.

Scores

    Credit scores are three-digit numbers ranging from 300 to 850. Scores of 720 or higher are great, and scores below 620 are poor. People with high credit scores may easily qualify for approval on automobile loans and receive the lowest interest rates. Some people with excellent credit purchase new cars with no money down. But people with poor credit scores must usually make significant down payments and accept high interest rates.

Prime Borrowers

    Edmunds.com reported in 2011 that people with credit scores below 620 must usually make a down payment of at least 20 percent. That means a buyer would pay $5,000 down on a car that sells for $20,000. However, so-called "prime borrowers" with credit scores between 680 and 739 and "super prime borrowers" with scores above 740 qualify for special low financing occasionally available through dealers. This financing is often lower than interest rates offered by banks or credit unions.

Challenges

    Some car buyers with poor credit scores try to find quick ways to improve their credit so that they can qualify for better terms on financing. This is sometimes possible by removing inaccurate information from credit reports, such as credit card accounts that appear to be open or past due, even when the debtor paid them off months ago. It's a good idea to order a credit report from a company such as AnnualCreditReport.com. The site offers fee reports under the terms of the Fair Credit Reporting Act. The company also offers instructions for disputing inaccurate information.

Statistics

    Edmunds reports that the average credit score for a new car buyer is 769, while the average for a used car buyer is 683. However, depending on the lender, it's possible to purchase a car with virtually any credit score. The larger the down payment, the better the chances someone with poor credit will be able to get financing. People who must make large down payments because of their credit should consider buying a used car for cash, or financing it. It usually takes two to three years to significantly improve credit scores by paying all bills on time while keeping balances low.

How to Collect Debt From an Estate

An estate includes all of the financial and physical assets a person leaves behind when they die. Debt collectors or anyone else who holds a debt against that person may collect the debt from the estate. Collecting a debt from someone who has died is more difficult than during life, simply because the estate is broken up amongst all debt holders. Anyone who has a legitimate claim against the estate should take immediate action to collect on it.

Instructions

    1

    Determine who is responsible for the debt. If the deceased person is solely responsible for the debt, and no one else is on the account with them, the debt is the sole responsibility of the estate. Family or heirs are not responsible for such debt. If the debt does include another person, that person becomes responsible for the debt, according to the laws in the state.

    2

    Avoid harassing any relatives regarding the debt. Request the name of the attorney in charge of the probate process for the individual and request a copy of the death certificate. Do not discuss the debt in full with anyone other than the probate attorney or the executor of the will.

    3

    File a claim with the probate attorney managing the estate. This attorney handles the management of the estate during the probate process. For a period of one year, in most states, debt holders may file claims against the estate.

    4

    Prove the existence of the debt as necessary to the probate attorney. Documentation of the debt, including signatures of the deceased person, may be necessary to show as proof of the owed debt.

    5

    Wait for the expiration of the probate process. During this process, the probate attorney organizes the debt and determines which debts the estate should pay and in which order. If there are insufficient funds in the estate to cover all debts, unsecured debts often receive no payment, such as credit card debts or accounts.

Thursday, April 18, 2013

Why Is a Charge-Off Still Collectible?

Many consumers misunderstand what a charge-off is. Though a company may list a debt as a charge-off, this does not mean the consumer no longer owes the debt. Companies can continue to attempt to collect charged-off debts. A consumer with a charge-off should understand how the charge-off process works and how to deal with the debt.

Definition

    A charge-off is an accounting practice in which the creditor claims that the company cannot collect the debt. As this creates a business loss for the company, the company receives a tax deduction, because the loss reduces the amount of the company's profit. Often, creditors do not charge off accounts until six months or more after the account becomes delinquent, according to Bankrate. Though the company marks the account in its books (and the consumer's credit report) as a charge-off, the debt is still legally owed, and the company can, and generally will, continue to try to collect the debt.

Collection Activities

    Though the original creditor may continue to attempt to collect a charge-off, the company often will hire a collection agency to collect the debt. The original creditor may also sell the debt to a collection agency, which will attempt to collect on the debt. A consumer dealing with collection calls or letters about a debt owed should be aware of her rights under the Fair Debt Collections Practices Act. The act requires that collectors follow rules of conduct, such as only calling during specific hours (between 8 a.m. and 9 p.m.), not using abusive or threatening language and not making false statements.

Negotiating with the Creditor

    Whether a consumer is contacted by the original creditor or a collection agency about an account marked as a charge-off, the consumer may be able to negotiate a settlement to pay less than the amount of the original debt. Because the creditor does not believe it can collect the full amount, many will settle for some payment rather than no payment. A consumer may be able to settle an old debt for a fraction of the original amount. As part of the negotiation, try to have the creditor agree to remove the charge-off from your credit report in exchange for the settlement payment or for payment in full. Before making payment on the settlement to the creditor or collector, a consumer should insist on having the terms of the settlement agreement in writing.

Advantages of Paying Charge-offs

    A charge-off is a serious detriment to a consumer's credit score. One charge-off may reduce a consumer's credit score enough to make it difficult or impossible for him to borrow money or obtain a favorable interest rate for a loan. Some employers, insurance companies and landlords also check a consumer's credit report, and a charge-off may limit the consumer's ability to get a job, purchase insurance or rent an apartment. By paying off the charge-off, a consumer will see some immediate improvement in his credit score, and the consumer can begin to rebuild a solid credit history. Generally, a charge-off remains on a consumer's credit report for seven years. If it has been paid or settled, it will be reported as such, unless the creditor agrees to have it removed.

Will a Collection Agency Release a Lien?

Will a Collection Agency Release a Lien?

Collection agencies collect debts for original creditors that are not secured by a debtor's assets. The company can secure the debt by filing a lawsuit and placing a lien against the debtor's home, car, boat or vacant land. A lien obtained through a lawsuit is known as a "judgment lien" and prevents the individual from selling the asset that carries the lien unless he pays off the collection debt. Judgment liens do not remain attached to an asset indefinitely.

Payment

    The lien exists as a guarantee of payment. Because a judgment lien secures the collector's previously unsecured debt, the company has the right to seize your asset and sell it if you do not make payment arrangements. Once you pay off the full debt you owe to the collector, it no longer has any use for the lien since it lacks the right to seize your property. Thus, the company must release the lien and provide you with a certificate of release noting that it did so.

Time Frame

    Judgments face a statute of limitations that determines their validity. A collection agency must possess a valid judgment to place a lien against your assets or use its lien to seize your assets. When the collector's judgment expires, so does its lien. The length of time a collection judgment is valid differs by state.

Overturned Judgment

    You don't have to wait years for your judgment to expire to remove a collector's lien. If you have legal grounds to do so, contesting the collector's judgment with the court that originally heard the case could result in the judge overturning the court's original ruling -- costing the collection agency its judgment. When this occurs, the company must remove the lien for lack of a valid judgment. Valid reasons for contesting the original court ruling vary. If, for example, you were seriously ill or conducting business out of town on the date of the original hearing and could not attend, you can request a new hearing in order to defend yourself, overturn the collection judgment and remove the lien.

Asset Seizure

    Multiple liens can attach to a single piece of property. In the event one of the lien holders seizes the asset, it must repay any lien holders whose liens were recorded prior to its own. Liens recorded afterward, however, are dissolved with the seizure. For example, when you finance a car, your lender places a lien on the vehicle until you pay off the loan. A collection agency can also place a lien on the vehicle. If the original auto lender repossesses the car, the collection agency's lien disappears. If the collection agency were to repossess the vehicle, however, it would have to pay off the remaining balance of your auto loan because the auto lender's lien was filed first. Although a foreclosure or repossession from a superior lien holder wipes away a collector's judgment lien, that does not mean that you no longer owe the collection agency. The debt is simply no longer secured by property.

Wednesday, April 17, 2013

Do You Claim a Settled Credit Card on Taxes?

Potentially higher income tax bills are one disadvantage of debt settlement. The Internal Revenue Service requires listing of credit card settlement on income tax returns---if the settlement is for $600 or more. The IRS treats savings through debt settlement as income. Credit card companies send documentation about the settlement to the taxpayer and the IRS.

Form 1099-C

    People settling debts for at least $600 receive a form from the IRS called "IRS Form 1099-C: Cancellation of Debt." Creditors send the form to debtors in January of each year and to the IRS in February. Forms are sent after the creditor takes a tax write-off on all or part of the debt.

Significance

    Debt settlement allows debtors to pay unsecured debts such as credit cards for less than the full balance. It is possible, in some cases, to pay a $10,000 credit card bill for $5,000. That is a significant savings---but it may force the taxpayer to increase his gross income by $5,000 for the year for tax reporting purposes. The amount show in Box 2 of the 1099-C is the amount taxpayers list on tax returns as additional income. SmartMoney reports that creditors often settle credit card debts for 20 to 70 percent of the balance.

Exceptions

    People who were insolvent at the time of the settlement do not have to claim the savings on their tax returns. Insolvency means the debtors had more debts than assets. People with lots of credit card debt and few expensive assets such as real estate often qualify as insolvent. People who wish to claim insolvency must attach a detailed letter to the IRS listing debts or assets, or include IRS Form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness.

Planning

    Debtors engaging in extensive debt settlement should manage the process to avoid tax problems. For example, settling debts early in the year is preferable for tax purposes than settling late in the year. A debt settled in January will not become a tax issue until returns are due 15 months later. However, a debt settlement in November could result in a higher tax bill five months later. Debtors should ask creditors if they plan to report the settlement to the IRS and issue a 1099-C. That allows the debtor to expect the form. However, the IRS reports that the taxpayer should report the savings even if the creditor fails to issue a 1099-C.

Relief & Credit Card Counseling

Relief & Credit Card Counseling

When it feels as if you're in financial free fall, a credit counselor may act as your parachute, preventing you from hitting rock bottom. To find relief, you must first address your true financial situation and create a new plan to map your route to financial freedom. By setting boundaries for yourself, you will have an easier time knowing when to stop spending.

Credit Score

    Before going to a credit counselor, it's important to gain a basic understanding of your financial position. You are entitled to a free copy of your credit report from each of the major credit reporting agencies (TransUnion, Equifax and Experian) each year through the Annual Credit Reporting website. Go over your report to get a good look at your current debt, your existing balances and interest rates, and your score. Report any discrepancies in writing to the credit bureau and creditor to see a quick boost in your score.

Credit Counseling

    Those who need help managing their debt and finances may find assistance through a reputable credit counselor. The National Foundation for Credit Counseling provides information on federally approved credit counseling organizations by location. A credit counselor will help you to understand your options for repaying your debt and get to the bottom of how to change your spending habits to avoid ending up in debt again.

Budgeting

    To create an effective budget, keep track of everything you spend over the course of a week. Multiply that total by 4.3 to get an idea of your out-of-pocket expenses in a month. Add in any recurring monthly expenses, such as rent, utilities, and cell phone bills. Go over these expenses with your credit counselor and compare them with your income. The counselor may be able to objectively give you ideas about where and how to cut back.

Debt Management Plan

    If you have defaulted on payments or you're having a difficult time making monthly payments, your credit counselor may recommend using a debt management plan (DMP). When you take on a DMP, your counselor gets in touch with your creditors to negotiate lower interest rates or payoff balances. Then, the counselor creates a time frame -- usually 48 months or more -- over which you will pay off your remaining debt. DMPs may make it difficult to obtain new credit in the future because you weren't able to pay off your full debt; however, the effect is far less damaging than missing payments or making late ones.

Criteria for Credit Management

Mismanaging credit card accounts can impact your finances for several years. For example, negative information regarding late payments can remain in your file for seven years and lower your credit score. People who have poor credit histories are usually given lower credit lines and charged higher interest rates because they're considered to be a greater financial risk. Managing your credit responsibly can save you money and headaches.

Interest Charges

    Make a payment plan for your credit cards to avoid paying interest charges over a long period if you can't pay off the balances each month. The U.S. Credit Card Accountability, Responsibility and Disclosure (CARD) Act requires credit card companies to issue statements to customers that show them how long it would take to pay off their accounts if they just made the required minimum monthly payments. A U.S. Federal Reserve Board website provides this sobering example: A cardholder who has a balance of $3,000 with a 14.4 percent interest rate and makes a minimum monthly payment of $90 will need 11 years to pay off the balance if no other purchases are made with the card. Furthermore, the cardholder will pay $4,745 in interest over the 11-year period.

Fees

    Get a handle on fees by making credit-card payments on time. Late-payment fees can run as high as $35 if one of your last six payments to your creditor was late. Opt out of allowing transactions that will take you over your credit limit. The CARD Act requires credit card companies to let cardholders decide if over-the-limit transactions will be allowed on their accounts. Your creditor has the right to charge you a fee if you allow such transactions and exceed your credit limit.

Credit Utilization

    A "Kiplinger" magazine article titled "Boost Your Score" recommends using less than 25 percent of your available credit line on all of your credit cards. That's because about 30 percent of consumers' credit scores are based on how much debt they've accumulated, and large amounts of credit card debt can lower your score. The amount you charge on your cards in any given month could impact your score, even if you intend to quickly pay off the balances.

Considerations

    The length of your credit history also can affect your credit score. The longer you maintain credit card accounts in good standing, the better it is for your score. Opening several new accounts in a short amount of time will lower the average length of time you've had all of your accounts. About 15 percent of consumers' credit scores are based on the length of their credit history.

Tuesday, April 16, 2013

How to Figure Out the Payoff on Loans

How to Figure Out the Payoff on Loans

Paying off a debt is a highly satisfying experience--especially if that debt is a home loan or a mortgage. It's very important to pay off a debt correctly, though. If you inaccurately pay off a debt, you may leave a small amount of interest. This interest can build again--unbeknownst to you--and cause late payments that can decrease your credit score. Figuring a payoff is relatively easy.

Instructions

    1

    Review the most recent loan statement you received from your account holder. The balance listed on the statement is not your loan payoff, but you can use this number to figure your payoff amount.

    2

    Find the interest rate on the loan, the loan payment, any late fees and any prepayment penalties on the loan. A prepayment penalty is a fee for paying off the loan earlier than expected. If this fee is high (which it undoubtedly will be on a mortgage), you should reconsider paying off the loan.

    3

    Add your outstanding balance to the following: two months of interest (interest rate multiplied by the outstanding balance), late fees and any other outstanding fees. Make sure you've made the current due payment prior to figuring the payoff balance. Also, you must determine the date you wish to pay the loan in full--it should be either immediately or in the very near future.

    4

    Contact the customer service department for your account holder. You may need to be transferred to the account servicing department. Ask for a payoff figure for the day you intend to pay off the loan. Make sure that figure comes with a per diem (a daily figure to add to the payoff amount for each day past the payoff).

    5

    Compare your figure to the company's payoff. When in doubt, use the company-determined payoff figure. Make sure to send the check with plenty of time to spare. Confirm the payment was posted with the customer service department and ask for a paid-in-full letter for your records.

Which Debt Should I Pay Off First With Extra Money Involved?

Debt can be overwhelming and alarming once it starts to build up. If you find that you have extra money and are deciding what to do with it, starting to pay off debts can be a good place to start. There are many different strategies and considerations for figuring out which debts to pay off first.

Debt Snowball Method

    The debt snowball method entails paying off the smallest debts first regardless of the interest. This method is built on the idea that you have a certain amount of money that you are dedicating towards paying off debt each month. Minimum payments are made on the larger debts while you use the rest of your monthly budget for paying off debt on the smallest debt. Once you pay off the smallest debt, you attack the next smallest debt while continuing to make minimum payments on the others. It is called the snowball method because you are attacking the smallest debts, paying them off with more frequency, and gaining success in eliminating different debts more quickly. If the feeling of accomplishment some people get by paying off a single debt completely is important to you, then the snowball method has its advantages.

Highest Interest Method

    Paying off the higher interest means that regardless of how much you owe on each debt, you pay the one with the most interest. The idea with this strategy is that you are saving money by eliminating the future accrual of interest. The more that you can apply toward the principal, the less interest overall you will have to pay. This method, however, may create less of a feeling of accomplishment in terms of paying of debts as soon as possible. The highest interest method puts more cash in your wallet in the long run by paying off the debts more quickly overall than the snowball method.

Not paying extra money towards debts

    Another option could be to put money toward a savings account or investments for retirement. This money will pay you in the future over the long term rather than paying off debts that are costing you in the short run. The question here is whether the interest rate you are paying on the debt is greater than the likely rate of return on an investment. If it is, you will probably be better off paying off the debt rather than investing the money.
    Also, you should consider whether the interest paid on a certain debt is tax-deductible, such as interest from education loans.

Judging by your credit score

    If you are saddled with multiple credit card debts, investing in your long-term credit score could be beneficial. This is especially true if you plan on utilizing your credit for a house or car loan in the near future. Paying off credit cards with the biggest balances relative to your credit limit will help to improve your score.

Lien on Property & Credit

When you owe money to a creditor, one of the means that the creditor can use to collect the debt placing a lien on your property. While you can elect to place a lien on your property as collateral when applying for a loan, in some cases, a creditor can place a lien on your property without your consent.

Liens on Property

    When you owe money to a creditor and refuse to pay back the debt, the creditor can take legal action by filing a lawsuit against you. If the judgment is in the creditor's favor, the creditor then has the legal capacity to file a lien against your property. A creditor can only legally pursue you for a debt within the statute of limitations in your state.

Lien Impact

    A lien against your property means that the creditor has a legal claim on it and that you cannot sell the property without giving the creditor the money that you owe. In some extreme cases, the lender may move to foreclose on the property. Whether the lender can do this is governed by state law. If your state has a homestead law, for example, a creditor cannot seize your primary residence. Once you repay the debt, the creditor will lift the lien from your property.

Liens on Credit Report

    When you have an involuntary lien placed on your property, it can also show up on your credit report. The lien will appear in the judgments section of your credit report along with any bankruptcies, foreclosures or other debt judgments in your past. The lien can remain on your report for seven years from the time of issuance. Once you pay the lien, you may be able to expunge it from your credit report.

Effect on Credit Score

    When you have a lien placed on your credit report, it can negatively impact your credit score and your ability to acquire credit and financing in the future. Fair Isaac Corporation, or FICO, produces the algorithm to calculate a credit score and does not offer information about how a lien exactly affects your credit score. However, you can be confident that avoiding a lien on your property can significantly improve your chances of getting credit in the future.

Tennessee Laws for Unpaid Medical Bills

Tennessee law considers medical debt an unsecured debt similar to a credit-card bill. Creditors in the state must follow federal regulations with regard to collecting an unpaid medical bill, including refraining from intimidating or harassing tactics. State law has created programs to help those with low income pay off medical debts, but many are left out due to the restrictive eligibility requirements.

Debt Collection Regulations

    The state of Tennessee considers medical debt as a written contract for debt-collection purposes. A patient enters into a contract with a hospital to provide medical services in exchange for a fee. According to debt-information wesbite BCS Alliance, the statute of limitations for collection on an unpaid medical bill in Tennessee is six years. A creditor has this amount of time to sue the debtor in civil court to force repayment. Once the statutory time expires, the debtor gains a legitimate defense in court against the creditor's debt-collection attempts.

Negotiating with Hospitals

    Tennessee law places no restrictions on a debtor's ability to negotiate a medical debt with a hospital or doctor. This can allow the debtor to lower the total amount she owes and make paying back the debt more realistic. A hospital or doctor may be receptive to a negotiated settlement because Tennessee and other states around the country consider medical debt unsecured, meaning the creditor has no property to seize to compel the debtor to pay.

Wage Garnishments/Liens

    Wage garnishment is legal in Tennessee. The state uses federal regulations for garnishment, allowing a creditor to seize the lesser of up to 25 percent of a debtor's disposable weekly income or up to 30 times the federal minimum wage in disposable weekly earnings. The law considers any money left over after paying required state and federal taxes as disposable. A hospital or doctor in Tennessee or another state may find it difficult to secure a judgment for garnishment for an unpaid medical bill because of the unsecured nature of the debt. A creditor may alternatively pursue a lien against the debtor's property. This court action entitles the creditor to a share of the profits from the sale of the attached property.

Limited State Help

    The state of Tennessee has enacted several programs to help consumers reduce outstanding medical debt, but these programs have received relatively little funding and have restrictive eligibility requirements. According to Knoxnews, as of February 2011, the TennCare's "Standard Spend Down" program helps those with large unpaid medical bills who are at least 65 years old or legally disabled with low income. Even with these restrictions, only 2,500 applicants received help on a first-come, first-served basis.

Monday, April 15, 2013

How to Remove Errors on Your Credit Report

Consumers understand that lenders such as banks and credit card companies need to review their credit reports before making a lending decision. What some consumers do not realize, however, is that employers, insurance companies and landlords also routinely base decisions on the contents of an applicant's credit. If your credit report contains errors that lower your score, you could find yourself passed over for a job you're well-qualified for or paying higher insurance rates than you deserve. To ensure that each consumer possesses an accurate credit record, the Fair Credit Reporting Act gives you the ability to contest any information on your credit report that is either inaccurate or that you do not recognize.

Instructions

    1

    Obtain each of your credit reports from TransUnion, Equifax and Experian. If you have not requested your free credit report for the year, you can do so at the Annual Credit Report website. Print two copies of each credit bureau's report.

    2

    Examine your credit reports line by line for errors. Mistakes you may find on your credit report include: late payments, accounts that do not belong to you, incorrect addresses and obsolete items.

    3

    Write dispute letters to Equifax and TransUnion explaining any mistakes you found within your credit reports. You can dispute numerous errors in the same letter.

    4

    Mail each letter along with a copy of each respective credit bureau's report that reflects the error to:

    Equifax

    P.O. Box 740241

    Atlanta, GA 30374

    TransUnion

    P.O. Box 1000

    Chester, PA 19022

    Experian

    P.O. Box 2104

    Allen, TX 75013

    After receiving your dispute, federal law requires that the credit bureaus investigate the disputed information by contacting the original information provider and requesting verification of the data. If the information provider cannot verify that the disputed entry is correct, the credit bureaus will remove it from your credit record.

Does Paying Off Loan Early Affect Credit?

Qualifying for credit involves more than a strong credit rating; your debt-to-income ratio is also an important part of the equation. Paying off loans early can positively affect your credit rating in several ways, as well as reduce your overall debt-to-income ratio. Always check the fine print on any loan to determine if there are penalties involved for early pay-offs. If you have more than one loan, pay off the ones with the highest interest rates first.

Payment History

    A consumer's payment history accounts for the greatest percentage in calculating credit scores---35 percent. Paying off loans early or on-time translates positively into a 'paid as agreed' listing on your credit file. Negative items may be removed from your credit file after seven years, but positive account listings can remain indefinitely.

Credit-to-Debt

    Your credit-to-debt ratio is the second largest factor to affect your overall credit score---30 percent. Paying off loans early can affect your credit score positively, especially if you do not close the account. Some accounts, such as vehicle or mortgage loans, must be closed when paid in full, but paid-off credit cards and other revolving accounts that remain open show more available credit with no debt attached.

    To calculate your credit-to-debt ratio, divide your total amount of outstanding debt by your total available credit. For instance, if you owe $10,000 and have $25,000 in available credit---include the credit on paid-off revolving loans---then your credit-to-debt ratio is 40 percent. Credit-to-debt ratios that exceed 50 percent negatively affect your credit score.

Debt-to-Income

    In addition to your credit rating, potential lenders calculate your debt-to-income---DTI---ratio to determine your creditworthiness. Paying off loans early decreases your DTI, which may help you qualify for a better interest rate or a lower down payment for the credit you seek. Compute your debt-to-income ratio by dividing the total amount of recurring debt per month by the total gross monthly income. A DTI that is lower than .36 is favorable for many lenders.

Other Factors

    Paying off loans early will not affect the three remaining factors in a credit score calculation. New credit accounts for 10 percent of the overall score. Odds are that the loan you are paying off is older than six months, so the new credit category is not affected. When you opened the credit account that you are paying off, both the length of credit history---15 percent---and the types of credit used---10 percent---categories were affected.

North Carolina Foreclosure Help

If a debtor fails to make mortgage payments on time, he risks foreclosure. During foreclosure, the lender goes to court to reclaim the property and recover its loss. Ultimately, foreclosure results in the loss of the debtor's home as well as seriously affecting his credit rating and ability to find new housing. North Carolina offers free counseling to debtors facing foreclosure to help them avoid this possibility.

State Home Foreclosure Prevention Project

    The State Home Foreclosure Prevention Project, or SHFPP, is a free program designed to help homeowners in North Carolina avoid foreclosure. This program offers financial counseling to North Carolina homeowners who may be in danger of foreclosure, and also provides legal services. Clients may speak with SHFPP in person or over the telephone to discuss their options or receive help with their loans prior to foreclosure.

Free Help

    It is illegal in North Carolina to charge homeowners upfront for assistance with avoiding foreclosure. If a company claims to be a foreclosure assistance company but asks for money before providing services, report it to the attorney general's office. The attorney general of North Carolina has set up a hotline at 1-877-5-NO-SCAM (1-877-566-7226) where consumers can report foreclosure scams, and also has placed a complaint form online (see Resources).

When to Get Help

    Seek help as soon as you fall behind on your mortgage payments. Once you miss three payments, your lender may begin foreclosure proceedings. You do not want to ignore your mortgage or letters regarding your mortgage, as your bank can begin foreclosure proceedings if you do. SHFPP can help you even if you have received a final notice from your lender, but it is best to contact them prior to this point to avoid stress and the risk of foreclosure.

Foreclosure Process

    If you are more than 15 days late with your mortgage payment, you may get a letter of default from your lender. The lender may send you a letter once every 30 days until you settle your account or enter foreclosure. After 90 days, your lender may send you a demand letter telling you how much you owe and informing you that if you do not make payment arrangements by a certain date, you will enter foreclosure. Next, you get a letter informing you of a hearing date and time regarding the foreclosure. You must receive this letter at least 10 days before the hearing. You may also get a notice of sale, although this notice can also be served later. The notice of sale must come 20 days before the sale of your home. After your home is sold, you will receive a notice informing you of how much time you have to buy it back before the court finalizes the foreclosure.

Sunday, April 14, 2013

Top 5 Ways to Get Out of Debt

Top 5 Ways to Get Out of Debt

Getting out of debt can be a long-term project, but there are some ways to speed up the process. If you have $9,000 in credit card debt at 15 percent interest and make only the minimum payment every month, you will spend 19 years paying off the card, according to CNN Money. An aggressive debt-management plan can significantly cut the amount of time and money you spend getting out of debt.

Stop Charging Purchases

    Avoid increasing your debt by purchasing items on credit. If you do not currently have the money to buy something, do not charge it to an account and assume you can pay for it later. To avoid accumulating more debt, pay for everyday purchases with cash or a debit card and save the credit card for emergencies. Once a credit card balance has been fully paid off, start using the card again only if you can pay the bill in full every month.

List All Debts

    Debt does not necessarily seem like a big problem when the debts are scattered between many different accounts, none of which are very large. But not knowing how much you owe or when you'll be debt-free can be overwhelming. Start by collecting statements from all credit accounts and loans and making a list of debts owed. The list should include the outstanding principal amount, minimum monthly payment and annual interest rate for each account. Assessing the situation empowers real progress toward getting out of debt.

Lower Interest Rates

    Good debts are those with interest rates under 10 percent per year, especially if the debt was incurred to buy something that appreciates in value such as a home or education, according to The Motley Fool. For any accounts with interest rates above 14 percent, call the company and ask for the rate to be lowered. If you have decent credit and indicate that you may transfer the balance elsewhere, the creditor may agree to lower your rate to something more reasonable. If not, shop around for a credit card with 0 percent APR for six to 12 months on balance transfers and a rate thereafter equal to or lower than that of your current card.

Make Extra Payments

    In addition to making the minimum monthly payment for all debts, make extra payments toward the debt with the highest interest rate. This strategy helps you to pay the least amount of interest possible as you work to get out of debt. Once the highest interest debt is paid off in full, attack the next highest debt with the same strategy.

Find Extra Income

    For those who are committed to getting out of debt, spending a year or two working really hard and paying off debt can lead to many years of freedom when it is done. Consider taking some extra shifts at work or getting an evening job, applying income tax refunds toward paying off debt and even using money received as a gift for a birthday or Christmas to make an extra credit card payment.

Saturday, April 13, 2013

Ways to Reduce Debt Quickly

Ways to Reduce Debt Quickly

In order to reduce your debt quickly, you must be willing to make changes in your spending habits so that you can pay extra money each month toward your debts. Reducing debt is not an easy process, but it's not an impossible one either. If you are ready to cut back on your spending, you can reduce your debt quicker than you may think.

Get a Second Job

    One way to get a little extra money to put toward paying off your debt is to get a second job. Even just working a few nights a week and some weekends will help you to pay off your debt quickly.

Skip the Vices

    If you smoke, quitting could have a dramatic effect on your efforts to reduce your debt. Saving just $7 a day, whether by giving up smoking or your special, expensive coffee, can save you nearly $2,500 per year. Cut up your credit cards to avoid spending money that you should be saving. You should keep only one credit card for emergencies. This will go a long way in helping you to quickly reduce debt.

Reduce Housing Expenses

    Reduce your housing costs by moving to a cheaper home or getting a roommate. Be careful, though, to add up the costs of moving and make sure that your move is not costing more than it is saving you. By putting the extra cash you were paying for housing toward your debt each month, you will see a significant difference in how quickly your debt will begin to disappear.

Modify Travel Arrangements

    If your family owns two cars, consider getting rid of one of them. If you are still making car payments, you could use that extra money each month to pay off your debt. Look for other ways to commute, such as car pools and public transportation. If you live close enough to your job, you could even ride a bike to work.

Can I Pay Off Student Loans?

Can I Pay Off Student Loans?

Student loans may take several years to pay off. Most student loans start out with payment terms of about 10 years, although you can extend that length if you consolidate the loans and lower your monthly payment. If you owe a lot on student loans, it may seem difficult to finally pay them off, but it is possible to do it. Student loans are rarely discharged during bankruptcy, and the only way to not pay them is to become permanently disabled.

Benefits of Paying off Student Loans

    When you pay off your student loans, you stop paying interest on the money. This sooner you pay off the loans, the less you will pay in interest over the life of the loan. Another benefit is that paying off the student loan frees up the money in your budget for you to invest and build wealth, or it can allow to do things you would like to enjoy but cannot currently afford to do. There is no penalty for paying off your student loans early.

Disadvantages of Paying off Student Loans

    Student loan interest is tax deductible, which lowers the amount you will need to pay in taxes. By paying off the student loans you will have more money available to you, but this benefit as well as the lower interest rate on federal student loans may push your student loans to the back of the list when you are trying to get out of debt. Other than the tax deduction, there is no reason not to pay off your student loans.

Finding Extra Money to Pay Toward Student Loans

    Create a budget to find extra money to put toward your student loans each month. A budget will let you track how much you spend and see areas you can cut back on to get out of debt. Make a goal of when you want to be out of debt and then determine how much extra money you need each month to make that happen. If you need to, you can take a second job or sell things to raise extra money. You can also apply bonuses and other extra money you receive toward the debt.

Qualifying for Loan Forgiveness

    You may be eligible for a loan forgiveness program. Teachers can have a portion or their entire loan forgiven by working in a low-income school. Employees of state or federal governments may qualify for loan forgiveness after 10 years of service. There are also other service organizations that will help you repay or allow you to qualify for a portion of your student loan to be forgiven if you work for them for a set number of years.

Friday, April 12, 2013

How to Pay a Receivable Recovery Collection Account

The term "collection agency" can cause worry and make your blood pressure increase. While debtors frequently view debt collectors in a negative light, many collectors are simply doing their job. Often a debtor can talk to the collector to try to work out a payment arrangement that is agreeable to the collector and you. Collection agencies must adhere to federal law when attempting to collect a debt.

Instructions

    1

    Calculate your budget. Before you speak with a collection agency representative, determine how much you can pay monthly toward your bill. Knowing this amount allows you to negotiate with the agency representative without overextending your finances.

    2

    Call the holder of the collection account or answer the phone when its representative calls you. Typically, collection agency representatives call and leave messages when attempting to collect a debt, but if you do not have the agency's phone number, you should be able to find it on any correspondence from the agency.

    3

    Give your account number to the representative. Explain your circumstances to the representative and inform him of your willingness to make payments on the bill.

    4

    Ask the representative whether you qualify for a settlement offer. If the agency is open to settlement, it may accept less money than you owe in exchange for one lump-sum payment or a series of up to three payments.

    5

    Negotiate a payment plan if your attempt at settlement fails. Do not agree to pay more than you can financially afford each month. While the representative is attempting to obtain as much money as possible for her employer, if you agree to pay more than you can afford, you still will not be able to pay the account. Tell the representative how much you can afford. When you reach an agreement, make sure to ask for written documents confirming the agreement terms.

    6

    Make all payments until the account balance is zero.

Will Paying Debts on My Credit Report Raise My Score?

Will Paying Debts on My Credit Report Raise My Score?

If your credit score could use improvement, your first thought may be paying off some of the debts that appear on your credit report. Although it often happens that paying the debts on your report results in a higher score, it's not always the case. Understanding which debts are good for your score, and which are dragging it down, will help you to use your money wisely.

Credit Scores

    A credit score is a ranking of a consumer's credit, based on the information in his credit report. Each of the three credit bureaus --- Experian, Equifax and TransUnion --- has its own formula for rating consumers. The commonly used FICO score relies on an additional, different scoring system. However, all these systems rate how low or high a consumer scores as a credit risk, and take into account debts such as credit cards, personal loans, car payments and mortgage loans.

Current Accounts

    Current debts are not necessarily bad for your credit score, unless your debt-to-credit ratio is too high. If that's the case, pay down some of your current accounts. However, you may want to hold off on paying certain accounts completely, because the older an account is, the more it positively affects your score.

Delinquent Accounts

    Delinquent accounts can do serious damage to your credit score. If an account is not yet in collections, pay enough on the account to get it current, and then continue paying it on time until it's paid off. The longer you pay your bills on time, the more your credit score will rise. If an account is already in collections, paying it off will not remove it from your credit report. However, you may be able to negotiate with the collection agency to remove the account from your report in exchange for full payment. In that case, payment of the debt will significantly increase your credit score.

Closing Accounts

    If you have balances on many credit cards, you may be tempted to consolidate your balances onto just a few cards, or pay off most cards and then close them. However, moving balances around and closing credit cards will not raise your score. In particular, you don't want to close credit cards or other accounts you've had for a long time, since old credit is good credit.

Considerations

    Credit scores can be very slow to improve. They usually require a steady, dedicated approach to paying bills on time and paying down large debts. You may see the fastest improvement through the pay-for-deletion method of negotiating with collection agencies, where the agency deletes delinquent accounts from your credit report in exchange for full payment.

Thursday, April 11, 2013

Do It Yourself Debt Reduction?

Debt restricts what you can accomplish by taking away your future income. If you have borrowed too much money, don't beat yourself up. Make a commitment to move on and improve your financial situation from this point. Take responsibility for the fact that you have spent more than you earned and move forward.

Budget Your Money

    The first step in winning financially is to establish a solid plan. A budget should be a realistic picture of what you will earn and spend, and should be updated each month. If you are married, your spouse should participate in the budgeting process. List the income that you expect to bring in for the month. Then list each of your expenses one by one. Place only the minimum credit card payments on the budget because you will deal with extra payments later. Hopefully, you have some money left over to pay extra on your debts. If you don't, you may need to trim expenses or take on a part-time job to make more money available for debt reduction.

Develop a Debt Elimination Plan

    List all of your debts on a sheet of paper. Include the balances and interest rates. Stop using all of your credit cards immediately. List the debts from the smallest amount to the largest. You will work the debts in this order. Pay any extra money that you have in your budget towards the debt at the top of the list. When that debt is gone, take the money you have been paying on it and apply it to the next debt on the list. Continue this until all of the debts are gone. Consider selling any assets that you owe money on and apply the proceeds to the loan in order to further reduce debt.

The Emergency Fund

    Many times people go into debt because they do not have an emergency fund. When a financial problem comes up, they use their credit cards to take care of it. Soon things are back to normal, and then another financial problem comes up, starting the cycle over again. Most experts say that you should have an emergency fund of at least three months of your income. Start putting some money away for it immediately. Even $2,000 will take care of many financial emergencies and keep you from using debt.

In Too Deep

    If you can not balance your budget and pay your regular bills, let alone extra money on debt, you may have no choice but to take aggressive measures. Debt settlement can be done yourself and may work if you are past due on a bill. You can try to negotiate a payoff of less than the amount due in this case. If a creditor agrees to a settlement, make sure that you get the agreement in writing before you pay them and keep a copy of your payment forever, in case the bill comes up again. If you are facing lawsuits and garnishments, you may have no choice but to consult with a bankruptcy attorney.