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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..

Wednesday, July 31, 2013

Can a Creditor Levy or Garnish an Account That You Are a Beneficiary On?

Creditors can take aggressive action to seize control of accounts held by individuals who owe them money. Depending on the laws of the state in which the creditor and the debtor are located, the debtor may find property held by third parties levied or, in the case of cash flows, garnished. While you may have your own property levied or garnished if you are a beneficiary of the property, another person's property cannot be seized for your debt.

Garnishments and Levies

    When a person has a cash flow garnished, the cash flow is diverted from the intended recipient -- the debtor -- to another party -- the creditor to whom he owes money. When a creditor seizes assets of the debt held by a third party -- such as stocks held by a broker or accounts held with a bank -- this is known as levying the debtor's assets.

Beneficiary Accounts

    If you have a beneficiary account, meaning an account from which you receive regular payments, a portion of this account may be seized by the debt collector. If you have title to the account, the whole account could theoretically be seized. However, if you only receive payments from the account, only the payments could be garnished.

Non-Ownership Accounts

    A person can also be a beneficiary of an account he does not currently own, but which he will inherit in the future. For example, a person may be a beneficiary of an account left to him in another person's will. A debt collector has no right to seize an account a person does not actively own or receive money from, on the expectation that he will receive money from it in the future.

Considerations

    Laws regarding garnishments and levies vary widely from state to state. The only way to be sure whether a certain asset can be garnished or levied by a creditor is to check with a debt counselor or an attorney who practices debt law. If the IRS is seeking the levy, speak to a tax attorney.

How to Pay Down Credit Card Debt Quickly Using the Snowball Method

How to Pay Down Credit Card Debt Quickly Using the Snowball Method

Many Americans are drowning in credit card debt. The White House says that 44 percent of families carry a balance on their cards. The Nilson Report states that the average credit-card balance was $10,679 at the end of 2008. If you want to take control of your credit card debt and achieve quick results that will help keep you motivated to get out of debt, you can use the snowball method. The method got its name because it builds momentum like a snowball rolling down a hill. Essentially, you will pay off your lowest balances first, freeing cashflow to pay the remaining cards more quickly.

Instructions

    1

    Assemble the most recent statements from each of your credit card accounts. Arrange them in order from smallest balance to largest. If you don't keep your statements on file, you can obtain copies online or by phoning your credit card companies.

    2

    Write the following column headings near the top of a piece of paper: Name of Card, Balance, Due Date, Minimum Payment, Actual Payment. Create your snowball-method spreadsheet by writing a line for each of your cards, starting with the lowest balance. Fill in all the information except the last column, Actual Payment. Calculate the total of the Minimum Payment column and write it at the bottom.

    3

    Calculate the amount you can afford to spend each month to reduce your credit card balances. If you don't have a budget that includes this amount, you can make a simple budget by adding up your monthly income and subtracting your fixed monthly expenses other than credit-card payments. Allocate as much as you can of the remainder to debt reduction.

    4

    Subtract your spreadsheet's Minimum Payment total from your budgeted monthly debt reduction amount. Add the difference to the Minimum Payment amount for the first card on your spreadsheet and write the result in the Actual Payment column for that card. For all the remaining cards copy the Minimum Payment amount into the Actual Payment column. If your budgeted debt reduction amount is less than the total minimum payments, then you will have to rearrange your budget or bring in extra income.

    5

    Pay your credit card companies according to the Actual Payment amounts in your spreadsheet. Depending on how much extra you've allocated to the first card's balance, you will pay that card off relatively quickly. Once it is fully paid off, start at the beginning and make a new spreadsheet covering your remaining credit card balances. Repeat until all your credit cards are paid off.

Tuesday, July 30, 2013

How to Make Money to Pay off Debt in 3 Months

How to Make Money to Pay off Debt in 3 Months

Being in over your head with debt is common in a tough economy. It's sometimes necessary to pay off debt quickly, when a loan is due or your credit card's interest rate goes up. Pay off your smallest amount first, rather than your debt with the highest interest rate, according to debt expert Dave Ramsey. Whatever your intention, you can make extra money and pay off your debt in three months.

Instructions

    1

    Organize your debt so you know exactly how much you need to make in three months. Always go into any money-making venture with a plan. Once you know how much you need to clear your debt, divide the amount into achievable chunks of money and then pursue ways to make some extra income for each group.

    2

    Gather items from around your house that you don't need and sell them online. Websites like eBay.com and craigslist.com make selling items on the Internet easy. You can get creative and buy items cheaply to resell, such as books from a local library book sale.

    3

    Search online for jobs you can do on the side from home. Legitimate at-home jobs are more available now. In the past, it was rare to find an opportunity that wasn't a scam. There are now chances to make serious money working from your home computer. Two of your options are writing for online publishers and transcribing legal documentation.

    4

    Advertise a big rummage sale at your house during the summer. Ask around for items your friends and families don't need any more and put them out for sale too. If you live somewhere with little traffic, ask a friend if you can hold your sale on his well-traveled street.

    5

    Research seasonal jobs in your area. During the summer, you can make extra money mowing lawns, and around Christmas, you can easily work a few extra hours in retail. Because these jobs are short-term, they won't interfere much with your regular job.

    6

    Cut back and save in areas temporarily. Drink less when you go out and cook at home more often. Make it fun by having potlucks with your friends for a few months. Consider canceling cable or cutting down on your cell phone usage to save a few dollars. If you save money in several areas, it really adds up.

    7

    Offer your abilities to neighbors and friends. Look for babysitting and house-sitting opportunities while they are away. Distribute fliers around your neighborhood offering mowing, cleaning or landscaping services. The tasks you can do are only limited by your imagination.

The California Garnishment Laws for Withholding Limits

A creditor has a right to obtain a judgment against a debtor when his collection efforts fail. To collect an outstanding debt, he can file a writ of garnishment to withhold a debtor's wages. California has a set of laws that protects an employee's wages from excessive withholding, allowing him to claim an exemption in certain situations.

General Provisions

    California Civil Code Procedures 706-020 through 706-034 describe the requirements an employer must meet to withhold wages. The law gives an employer a 10-day grace period to start garnishing an employee's paycheck. Wage garnishment for support payments has priority over nonsupport payments, such as creditor debt. An employer must stop a nonsupport garnishment withholding and notify a creditor that a support judgment exists. As a community property state, California permits garnishing a non-debtor spouse's paycheck and requires a separate court order to do so.

Employer Obligations

    California garnishment law requires an employer to perform several tasks when he receives a garnishment order. First, it must notify an employee and provide him with a copy of a withholding order. He must complete a form and mail it to a levying officer within 180 days. An employer must withhold the garnishment amount from an employee's earnings during a withholding period and mail the funds withheld during a prior month by the 15th of the following month.

Garnishment Amount Restrictions

    California garnishment law does not deviate from the federal law that allows a creditor to take as much as 25 percent of a debtor's disposable income. However, an amount after garnishment must be at least 30 times the federal minimum hourly wage, which is $7.25 as of July 2009. Only half of an employee's earnings is exempt from garnishment for support.

Withholding Exemption

    California Code of Civil Procedure section 706-105 allows a debtor to claim an exemption on additional earnings if the garnished amount creates a financial hardship for a debtor and does not allow him to meet his daily needs. An exemption applies only to non-support garnishment. When a debtor files an exemption, the levying officer must notify the judgment creditor about an exemption. A creditor has 10 days to file a notice of opposition. If a creditor does not oppose the exemption, the court automatically grants the exemption and releases the earnings.

How to Build My Credit with Credit Cards after Bankruptcy

How to Build My Credit with Credit Cards after Bankruptcy

Credit ratings affect an individual's ability to purchase a vehicle, secure housing and get a job. After bankruptcy, it's important to work hard to improve your credit score. Using secured credit cards to show credit bureaus your ability to make timely payments and manage credit can improve credit scores.

Instructions

    1

    Apply for a secured credit card. These cards typically have low limits (sometimes only $400 or $500) and are secured by a deposit. However, over time, your limit will be increased and the creditor may offer you a card that doesn't require a deposit.

    2

    Pay your monthly credit card bill on time. Paying your credit card bill on time has a large impact on your credit rating, according to MSN Money. Consider setting up automatic payments from your checking account to ensure payments are made on time every month. This will prevent late payments, from damaging your credit rating.

    3

    Keep your credit card balance low. When using a secured credit card, use it solely to build credit. Keep your credit card balance to 35 percent or less of the total available balance. On a card with a $400 limit, for example, keep your balance to $140 or less. This will help raise your credit score and get you a credit limit increase quicker.

    4

    Avoid closing credit card accounts. If you have more then one credit card, don't close accounts (even if you aren't using them any longer). Keeping these accounts open, according to Entrepreneur Magazine, will increase your credit rating.

How to Reduce Credit Card Attrition

Credit card attrition is, in simple terms, a reduction in credit card users for a company. Credit card attrition is enhanced by several factors. Some involve market conditions (changes in the economy) and some involve particulars at a specific company. In any case, reducing attrition and winning back customers requires strong action plans that are marketed specifically toward former customers.

Instructions

    1

    Assemble a research team to conduct market research surveys. The purpose of these surveys is to gain information, not to recover lost customers. Most successful surveys are conducted with short phone interviews where interviewees are asked to rate your company's strongest and weakest areas.

    2

    Study the results of the surveys conducted. If you have a local financing business, you should call only former customers. However, for larger banks and lending institutions, the surveys should be spread nationwide and with varied demographics so as to get an accurate sample.

    3

    Look at the least positive areas based on surveys. It could be customer service, rates or limited programs. Whatever the factors, make sure to pay special attention to them when you begin designing an action plan.

    4

    Change your business model to adapt to growing attrition. This could mean lowering credit card rates temporarily (and taking a hit on your bottom-line) or it could mean making more introductory offers (with zero percent interest, for example). It may mean changing corporate values to focus more on consumers, not profits. If you gain more customers, profits will automatically follow.

    5

    Market any new strategies you are implementing. Do massive advertising campaigns to rebrand your company. This means direct mailings, newspaper, television and radio advertisements. Make sure to test each new campaign with a small test group with different demographics.

    6

    Track your attrition rate after you've made changes. If attrition still does not decrease, you'll need to review your strategies again.

Monday, July 29, 2013

What Is Exempt From a Judgment in Georgia?

A judgment can bring your creditors one step closer to garnishing your wages or taking away some of your assets. Without protection, your creditor might have the power to clean out your bank account. However, most states offer debtors at least some protection from a creditor who has won a judgment, including Georgia.

Judgments and Collections

    Judgments are a natural outgrowth of the collections process. If you become seriously delinquent on a credit account, meaning you are behind more than a few months in payments, your creditor will usually assign your account to the collections department. While the time may vary from situation to situation, eventually many creditors will file a lawsuit against you if you continue a course of nonpayment. If the court rules against you in the lawsuit, your creditor will be granted a judgment, authorizing more aggressive collections actions. If your creditor wins a judgment in Georgia, they are subject to the collections laws of that state.

Georgia Wage Garnishment Rules

    The federal government allows the individual states some latitude in terms of rules regarding wage garnishment. However, Georgia opts to use federal guidelines for wage garnishment. Federal guidelines state that most creditors cannot take more than 25 percent of your weekly wages or 30 times the federal minimum hourly wage, whichever is less. In Georgia, any wages you have below this amount are exempt from garnishment by a creditor with a judgment, unless that creditor is the federal government.

Georgia Asset Seizure Rules

    A creditor with a judgment may have the ability to attach your bank account, particularly if they are denied the opportunity to garnish your wages. However, Georgia protects from seizure certain cash payments that may be in your bank account. For example, in Georgia a creditor may not seize cash that represents any type of pension or retirement benefit, most public benefits such as veterans' benefits, and all annuity and endowment benefits. Social Security payments are also exempt from garnishment or seizure. Alimony and child support are also protected under Georgia law.

Bankruptcy

    Bankruptcy is a way to stop most judgments against you in Georgia. Although you will have to deal with the long-term consequences of bankruptcy, including damage to your credit, a bankruptcy discharge usually has the power to stop any lawsuits or judgments against you. While certain creditors, such as the IRS, cannot usually be gotten rid of through bankruptcy, most other creditors can, including credit card companies.

What Is Insufficient Debt Capacity?

What Is Insufficient Debt Capacity?

When you apply for a loan, credit card or line of credit, the lender or credit card company will ask you a number of questions about your financial situation and look at your credit history. If they deny you, they may give you one of a number of reasons for denial. One of these reasons could be insufficient debt capacity.

Definition of Debt Capacity

    Debt capacity is the amount of debt you can conceivably take on in your current economic situation. Lenders are concerned with this because they realize that there is only so much debt that a person can handle. If prospective monthly debt payments exceed your disposable income levels, lenders will see you as a high risk, and they will probably deny you under the assumption that you would not be able to pay them back.

Contributing Factors of Debt Capacity

    Lenders determine your debt capacity based on various factors, such as living expenses, regular income and existing debt. If you have high levels of existing debt or high living expenses and your regular income is low, this means that your debt capacity is low. If you have low levels of existing debt or low living expenses coupled with a relatively high regular income, your debt capacity is probably high.

Debt Coverage Ratio

    Debt coverage ratio is a calculation that lenders make to determine debt capacity. They look at your expected income in the near future (minus living expenses and existing debt payments) and divide it by what you would be paying them for the debt you will incur. Credit card companies typically assume that you will have your credit card at its maximum limit. If this ratio is lower than 1.2, they probably will decide that you have insufficient debt capacity.

Increasing Debt Capacity

    If you are denied a credit card, loan or line of credit due to insufficient debt capacity, you can improve your debt capacity in the future by paying off your existing debts. The most basic way of doing this is by living in a more frugal manner, such that you have additional money with which to pay off your loans and credit cards. After significantly decreasing your existing debts, you may be able to get loans and lines of credit in the future.

Sunday, July 28, 2013

Consumer Credit Debt Relief

Consumer Credit Debt Relief

Consumer credit debt can range from the credit cards you carry in your wallet to the mortgage you used to buy or refinance your home. Most consumer debt relief programs are provided by private companies, which help people in working with their creditors and debt collectors to reduce or get rid of their debt. Legislation exists for consumers seeking debt relief, but whether you can use government help or need a private company depends on your situation.

Debt Consolidation

    One of the most popular consumer credit debt relief resources that consumers turn to are debt consolidation companies. A debt consolidation company can also be called a credit counselor. These companies negotiate lower payments and lower payoffs with creditors on your behalf. Once the debt consolidation company negotiates the terms and conditions for you, it acts as the servicer, collecting one monthly payment from you and paying your creditors. However, the Federal Trade Commission warns of potential pitfalls from working with debt consolidation companies. Some consumers have said they were charged high fees for debt consolidation services that were not provided; that they paid an advance fee to receive a consolidation loan; and that they paid a fee for credit repair, when consumers have the right to remove inaccurate information from credit reports for free.

Mortgage Debt

    Congressional legislation such as the Mortgage Forgiveness Debt Relief Act, which was passed in December of 2007, lets homeowners work with their lenders for mortgage modification. A mortgage modification is when a lender changes the terms on an original mortgage, to make the monthly payments more affordable. The Mortgage Forgiveness Debt Relief Act allows homeowners to exclude personal cash reserves or income in determining whether they are eligible for mortgage modification.

Fair Debt Collection Practices

    Another federal act that deals with consumer credit debt relief is the Fair Debt Collection Practices Act, which gives consumers relief against debt collectors. The act prohibits debt collection agencies from harassing consumers to repay their debt. For example, the act sets the 8 a.m. to 9 p.m. as the hours that a debt collector may contact a consumer. The act also provides consumers the right to ask debt collectors to stop contacting them. When the request is made in writing, debt collectors have to honor it.

Renegotiate

    For consumer credit card debt, one of the first places you can turn for debt relief is to the credit card issuer. Although it might be challenging, it is possible to work out terms and conditions with your credit card company to make your payments more affordable. Negotiating with credit card issuers is usually a multistep process that takes time, but with persistence you can at time acquire better terms, lower interest rates and a reduced balance.

Bankruptcy

    Although filing for bankruptcy protection should be a last resort, filing for Chapter 7 or Chapter 13 (for personal debt) might be the ultimate in debt relief. Chapter 7 liquidates assets to pay off your debt. Chapter 13 is an option to get rid of your debt, but you still retain your assets that you can afford to make payments on.

Government Credit Card Debt Relief Programs

    Changes in federal legislation began in 2009 and were carried over into 2010 to help credit card holders to find some relief from their credit card debt. The legislation helps consumers with three main areas. First, credit card companies are required to give credit card holders at least 45 days notice before instituting any changes to their credit card agreements. If the consumer does not agree to the change in terms, then the consumer has up to five years to pay the credit card debt off under its original agreement with the credit card issuer. Second, the credit card issuer must send the bill for the credit card to the consumer at least two weeks before the due date, to allow the card holder enough time to get the money together to pay the bill. Third, credit card companies are prohibited from changing interest rates unless the cardholder has gone 60 days without making a payment.

Can a Debt Collector Report You to a Credit Reporting Agency If You Are Making Payments?

Debt collectors often report their accounts to credit bureaus, who in turn put this information on your credit report. If you are working with a collection agency to pay off a debt, be sure to monitor your credit report. While the debt collector is not obligated to delete any accurate information it submitted in the past, it must report a paid account or a lower balance.

Debt Collectors

    Debt collectors, also known as collection agencies or bill collectors, specialize in persuading people to pay their debts. They do this by calling and mailing debtors as well as placing negative information on debtor's credit reports. In some cases, a debt collector works on behalf of the original creditor, taking a percentage of any money collected. Other debt collectors are actually debt buyers who buy up debts at a fraction of their value, then attempt to collect them. Both types of collection agencies must adhere to the regulations in the federal Fair Debt Collections Practices Act (FDCPA) as well as any applicable state debt collection laws.

Credit Reporting

    Creditors, including debt collectors, can document your repayment history and report it to credit bureaus. Credit bureaus then add this information to your credit report. Creditors, landlords, insurance companies and employers often use credit reports in making decisions about extending credit, hiring, offering housing or issuing an insurance policy. According to the federal Fair Credit Reporting Act (FCRA), creditors and credit bureaus are responsible for only reporting accurate information about your credit history. If you discover inaccurate information on your credit report, you can demand that the credit bureau investigate the inaccuracy and delete unverifiable information.

Payment Plans

    Many collection agencies will set up a repayment plan if you cannot pay your debt all at once. Be sure to get the details of your payment plan in writing before sending the debt collector any money. While your debt is in a repayment plan, the collection agency can still report your debt to credit bureaus, but it should report your balance as it continues to decline. Once your account is paid off, the debt collector should report it as "paid" to the credit bureaus.

Negotiations

    When you negotiate a payment plan with a collection agency, ask it to delete your collection account from your credit report in exchange for repayment. If the collection agency agrees, get their agreement in writing before sending them a payment.

Checking Your Credit

    It is a good idea to periodically check your credit reports while you work with a debt collector. Check to make sure that your reported balance reflects the payments that you've made. When you complete your repayment plan, make sure that your balance is zero and that the debt collector reports it as paid. If your credit reports are not updated properly, send a dispute letter to the credit bureaus requesting an update to your information. You are entitled to one free copy of your credit report during a 12-month period from each of the three major credit bureaus. You can order your free credit report by visiting AnnualCreditReport.com.

How Long Is Debt Owed?

The length of time a debt is owed is largely unrestricted, unless actions have been taken to relieve people of their debt obligations. There are laws that restrict the legal actions taken against people who haven't paid delinquent debts. However, debt collectors may attempt to skirt those laws in their efforts to recoup the money owed.

Statutes of Limitations

    Debt collection in the United States is restricted by statutes of limitations. The statutes restrict the amount of time that creditors and lenders have to sue consumers to recoup a debt. Still, it's important to understand that you're liable for a debt even if the statute of limitations has expired, unless the debt has been forgiven or discharged in a bankruptcy. A debt collector can legally seek payment for a delinquent account even if the debtor can't be sued to recover the money owed.

State Statutes

    The statutes of limitations on debts vary from state to state. The state restrictions apply to credit-card debt, written contracts and other forms of debt. For example, a debt collector in Arizona has six years to sue a consumer to recoup a debt specified in a written contract. However, that time limit is reduced to three years for credit-card debt. Your state attorney general's office has information on your particular state's statute of limitations on consumer debts.

Debt Collection Practices

    Creditors and lenders have the right to attempt to recoup delinquent debts indefinitely, as long as they don't violate the U.S. Fair Debt Collection Practices Act. Companies that sue or threaten to sue a consumer after the statute of limitations for a debt has expired are violating the act. Even so, creditors and lenders may choose to turn over delinquent debts to collectors to renew efforts to get the money they're owed. Among other things, the Fair Debt Collection Practices Act prohibits collectors from using obscene language to force debtors to pay. Collectors also must stop calling debtors if they receive a written notice from the debtor to cease their contact.

Considerations

    Some debt-collection companies may violate the Fair Debt Collection Practices Act and pursue a lawsuit against a debtor even if the statute of limitations has expired. In such cases, it's important for debtors to respond to the lawsuit to prevent collectors from winning court judgments against them. It's up to debtors or their attorneys involved in such cases to point out that the statute of limitations has expired. Debtors who ignore such lawsuits will probably end up paying the entire amount of money sought by the collector involved.

Debt Help for the Disabled

Climbing your way out of debt is hard for any average person, but if you are disabled the situation can seem even more hopeless. Lack of job prospects can make it very difficult to pay down your credit cards and get back on track. However, it may give you hope to know that there are laws in place to protect disabled people from creditors as well as opportunities to receive grants and take advantage of debt settlement programs.

Lawful Protection

    When a person defaults on their credit, creditors have the option of taking the person to court and winning a settlement which may allow garnishment of the person's wages. In the event that the person who defaulted is disabled, the creditor has fewer options to collect the full amount they are owed.

    While creditors may still win the settlement and garnish your wages, they are not legally able to garnish deposits from Social Security, pensions, and/or disability benefits. If you receive most or all of your income from these programs, you can continue to receive a steady stream of income unhindered by collection agencies.

Government Grants

    Investigate government grants to help pay off your debt. FederalGrantsWire.com (see reference below) has a listing of federal grants, any of which you can receive if you qualify. Simply browse FederalGrantsWire.com and click on the title of a grant that fits your particular situation. The link will explain if there are any prerequisites or conditions to apply. Also browse ADA.gov or the Americans with Disabilities Act (see reference below) to read more about grants for disabled persons and disabled persons' rights.

    It is not easy to qualify for federal grants, but you may apply for as many grants as you like simultaneously. While there are millions of dollars available in federal grants for disabled people, many disabled people do not bother to apply and so many grants go unused.

Debt Settlement

    Even though your income may protected, you may still be required to participate in a debt settlement program. To begin the debt settlement process, stop paying money toward your debts. This puts the creditors in a situation where they will not receive any of what they are owed and must consider reducing interest rates or the debt balance itself.

    While this decision will not help your credit score, it could keep you from bankruptcy and financial ruin. You may seek the aid of a debt consolidation company to negotiate directly with your creditors, although this can be expensive. Doing it alone requires research but it can be done.

    Before you begin negotiating yourself, make a list of your debts, breaking out the principle and interest and calculating what you can actually afford to pay based on how much cash you can come up with right away. Call your creditors and begin the negotiation process. They will likely make an offer that will require you to pay in one lump sum. However, consider what you can afford and make a counter offer. Over time, the creditors will lower their offers so you are able to pay only what you can afford.

Lien & Garnishment Laws in North Carolina

Lien & Garnishment Laws in North Carolina

North Carolina law permits creditors to take certain legal actions against residents who owe outstanding debts. If you're sued for a debt and your creditor wins a judgment against you, the creditor can then take steps to garnish your bank account or place a lien on your personal property. If you've been served with notice of a pending creditor lawsuit, you need to understand how the process works and what your rights are.

Wage Garnishment

    North Carolina is one of four states that does not permit creditors to garnish your wages for unpaid consumer debt. This protection applies to credit card debt, medical debt, payday loans or other personal debts. According to Chapter 1 of the North Carolina General Statutes, wage garnishment is permitted for debts relating to unpaid state or federal taxes, student loans, child support, alimony, and expenses for ambulance services in certain North Carolina counties. The maximum amount that can be garnished for these debts is the lesser of 25 percent of your net income or the amount by which your net income exceeds 30 times the federal minimum wage.

Bank Account Garnishment

    North Carolina does permit garnishment of your bank account for unpaid debt. To enforce a garnishment of your bank account, your creditor must first obtain a judgment against you in civil court. Claims of $5,000 or less are heard in small claims court while claims up to $10,000 are heard in district court. Larger claims are handled in superior court. Once a judgment is entered against you, the creditor must seek a writ of garnishment against you. If you wish to exempt certain funds in your bank account, you must file an exemption claim within 20 days of receiving notice of a pending garnishment.

Liens on Personal Property

    In addition to garnishing your bank account, your creditor may also seek to place a lien on your home or other property. In the state of North Carolina, a judgment lien is automatically placed on any real estate you own when a civil judgment is entered against you. Under Chapter 1-234 of the North Carolina General Statutes, the lien can remain in place for up to ten years. If you owe a contractor money for home repairs or home improvements, the contractor can place a mechanic's lien on your property without having to first seek a judgment.

Exemptions

    North Carolina law offers some protection to judgment debtors in the form of property exemptions. Under Article 16 of the North Carolina General Statutes, you can exempt up to $35,000 in home equity value or double this amount if you're married. This means that if a creditor attempts to force the sale of your home by placing a lien on your property, your home equity value is protected up to these amounts. Under federal law, you can also claim an exemption if your bank account includes certain types of income, including Social Security benefits, Supplemental Security Income, student assistance or veterans' benefits. State law also protects child support or alimony payments you receive, worker's compensation benefits and unemployment.

Saturday, July 27, 2013

How to Fix Credit & Settle Debts

You have finally realized that no matter what you do your income will not cover your expenses and you're slowly getting in over your head in debt. If you have to decide every month whether food is on the table or the credit card bills get paid, it's time to sit down and come up with a plan to settle your debts and fix your credit. It won't be easy.

Instructions

    1

    Write down every unsecured loan you have, the payment amount, balance due and when you made the last payment. Unsecured loans are not attached to an asset unlike a car loan. A car loan is secured against the car. If you don't make your car payment, the car will be repossessed.

    2

    Review the amounts that are owed. Compare the amount that is owed to what you can afford to pay. You will need some money on hand to pay off the loan at a lesser amount. Sell assets, cash in bonds, sell stocks or use your savings. Most creditors will not accept less than 50 percent of the balance. Save the money you would have paid on your credit cards and debts for six months and use it as well as savings and cash from asset sales to settle the debt.

    3

    Check to see when you made the last payment. If the creditor believes there is a chance that they can collect the entire balance due, or that you have assets they can obtain, or that they can garnish your salary, they may not be willing to settle. If you've only missed one or two payments or aren't more than 90 days past due, that's a sign that they may be able to collect more than if you're six months past due. Creditors are willing to settle a debt for a lesser amount if they believe the debtor will declare bankruptcy and they won't receive anything.

    4

    Call each creditor and make an offer to settle the debt for 25 percent to 30 percent of what is owed. The odds are they won't accept it but it's better to start low and raise your offer. The person you initially talk with may not have the authority to agree to a settlement and will most likely insist that you make a payment. Don't agree to the payment. Keep asking to talk to someone who does have the authority. It may take several phone calls. Get the agreement in writing.

    5

    Pay the amount that you've negotiated as soon as you've agreed to and receive the written agreement. The creditor can still take legal action until they've been paid, even if they've agreed to a settlement.

    6

    Start improving your credit by making your mortgage and car payment on time every time. Debt settlement will substantially decrease your credit scores. Obtain a secured credit card, use it every month and pay off the entire balance every month. After 12 months ask to have the deposit that secured the card returned to you.

How Do I Deal with Long-Term Debt Instruments Issued by Firms With Excellent Credit Rating?

How Do I Deal with Long-Term Debt Instruments Issued by Firms With Excellent Credit Rating?

The most challenging part of the long-term debt instruments offered by financial institutions is understanding them. Conceptually, debt instruments are more complex than basic equity instruments (e.g. stocks), because debt instruments are further removed from the core product or service that is offered. For example, if you buy the stock of General Electric, you are essentially betting that you will profit from the stock if and when GE's revenue stream expands; however, when you buy a long-term debt obligations such as five-year corporate bonds, you are betting that the revenue stream of GE will expand in the future, surpass the rate of inflation and be appropriately paid off on time.

Instructions

    1

    Study economics. All debt instruments operate within the realm of economics, and you need to understand economics in the broadest capacity possible in order to best understand a particular debt instrument. The basic economics courses are microeconomics and macroeconomics; however, for a fuller comprehension of economics, study those courses in addition to microeconomic theory, macroeconomic theory, financial markets, econometrics and accounting. These latter courses will help you understand how debt functions on the accounting and how the viability of a debt instrument--as an investment--is impacted by the broader condition of the market at-large or the specific industry in which the asset underlying the debt instrument is located.

    2

    Review the asset underlying the debt instrument. Not doing so can lead to catastrophe. For example, owners of mortgage-backed securities in 2007 found the total value of these securities to be in absolute freefall. According to economist Nouriel Roubini, though the entire market owned these securities, very few economists and financial specialists had taken the time to investigate the exact assets underlying the securities and the exact process by which the market was accounting for these assets. In particular, the sub-prime housing industry imploded because homeowners could not pay the debts on the homes they were buying. In short: Investigate the value of the debt instrument at the very root to determine is true value--regardless of the credit-rating of the institution providing the debt.

    3

    Consult with the investor relations department of the firm and ask about the repayment schedule. You need to be familiar with the exact repayment terms of the debt instruments. For example, "preferred" sets of long-term debt obligations (e.g. preferred classes of corporate bonds) will be paid back before other asset classes of the same debt (e.g. non-preferred classes of corporate bonds). Knowing the repayment schedule of a long-term debt instrument will help you deduce whether purchasing it is consistent with your personal appetite for risk.

Friday, July 26, 2013

What Happens After a Debt Is Charged Off?

A charged off debt means a lender has reported the account as a loss for accounting purposes. The debt is no longer on their receivable listing. It is also considered to be a bad debt. When a debt is charged off, the lender usually takes other actions.

Time Frame

    Debts are charged off when you dont make a payment for 180 days. The lender will report the information to the credit reporting agencies as a bad debt or charge-off. This information remains on a credit file for seven years.

Credit Score

    Your credit score can be lowered significantly as a result of a charged-off account. This makes it difficult to get credit in the future.

Warning

    Lenders will usually forward their charge off accounts to collection agencies, also known as third-party debt collectors, for further collection activity. In some cases the agency will start legal action and get a judgment.

Considerations

    When accounts are forwarded to collection agencies, the lender is now out of the picture. You must deal with the collection agency.

Significance

    When the statute of limitations has passed for a charged-off account, collection agencies are limited in their collection activity. They cannot win a judgment against you in a court of law. The statute varies from state to state.

Expert Insight

    Sometimes a lender will sell the charged-off debt to a collection agency for pennies on the dollar, and other times they will let the collection agency collect on their behalf. In the latter instance they pay the collection agency a percentage of what they collect, such as 25 percent.

Large Credit Card Consolidation Options

Large Credit Card Consolidation Options

Consolidating debt is a practical way to reduce an accumulation of monthly payments. If multiple credit card balances have reached the point that reducing the debt seems impossible, consider combining the balances in one loan or onto one credit card. The single payment is likely to be more manageable than multiple payments and allow the consumer to gain better control of the use of credit.

Transfer balances

    One of the more popular ways to consolidate credit card debt is to transfer the unpaid balances to a new card or to one with a lower rate of interest. Some card companies offer 0% interest rates on new cards or low introductory rates for new customers. The rate of interest will vary depending on how much debt is transferred and what kind of credit rating the customer has earned. Some negotiation with the lender may be required.

Secure a personal loan

    Acquiring personal loan from a bank or other lending institution is an option many consumers choose when consolidating credit card debt. Some banks, especially if the costumer's relationship with the bank is long-standing, will offer special loan rates for funds intended to pay off credit cards. This kind of loan will require a reasonably good credit score and may require that the bank transfer funds to the credit card companies directly.

Take out a home equity loan

    A home equity loan from a bank or other lender is based on the worth of the customer's home compared to the amount of mortgage still owed on that home. In order to apply for this kind of loan, the customer must have established some equity and have a good credit score. A home equity loan may have a lower interest rate than a personal loan.

Thursday, July 25, 2013

Oklahoma Garnishment Rules

The federal government establishes laws and standards for debt collection, including wage garnishment, that all states must follow. As long as states meet federal minimums and standards, they can further regulate wage garnishment. Oklahoma follows federal law, with only a few state-specific rules.

Garnishment

    Wage garnishment is a form of debt collection that is generally regarded as a last resort. In Oklahoma, a creditor can petition to have a debtor's wages garnished if the debtor owes money from a judgment or other court decision, if the debtor has not repaid a contract or, as in any state, if the debtor owes taxes, federal student loans, child support or alimony.

Petition

    In order to garnish a debtor's wages, the creditor must petition an Oklahoma judge. If the judge grants the petition, a court order will be sent to the local sheriff, who will present the court order to the debtor's employer. Oklahoma usually puts a 180-day time limit on wage garnishments.

Exemptions

    Oklahoma state law exempts 75 percent of the debtor's wages from garnishment. In other words, the creditor can take a maximum of 25 percent of the debtor's wages. Furthermore, the debtor can have a larger percentage exempted if they can demonstrate hardship (usually, this means demonstrating that the garnishment would prevent him from covering basic expenses). Under federal law, garnishment cannot push a debtor's weekly take-home wages under the weekly federal poverty rate. The rate changes every year, but is usually around thirty times the minimum wage.

Statute of Limitations

    In order to garnish wages, the debt must be within Oklahoma's statute of limitations. In the state of Oklahoma, creditors can try to collect on an account (such as a credit card) for three years after the last due date, on a written contract five years after the last payment date stated in the contract and five years after a judgment.

Florida Credit Protection Laws

Florida Credit Protection Laws

The federal Fair Debt Collection Practices Act regulates ways in which debt collectors can collect money that consumers owe. In Florida, the state's Department of Financial Services' Division of Consumer Services enforces regulations governing fair debt collection practices. The Division of Consumer Services tracks consumers' complaints against debt collectors and punishes collection agencies that violate the laws.

Proof of Debt

    A collector can contact a consumer who is behind on payments for credit cards, medical bills mortgages or other debts. The collector must provide written proof of the debt, or a "validation notice," within five days of first contacting the consumer. The consumer may then contest the validity of the debt in a written letter to the collector within 30 days. The collector may resume contact and correspondence after providing proof of the debt in writing. The consumer can still request the collector to cease contact through writing but the collector will be allowed to notify the consumer in advance of a specific action regarding the debt, such as initiating a lawsuit to pursue its collection.

Permissible Contact

    The collector may contact a consumer by fax, email, telephone call or mail but must not inundate her to the point of harassment. Nor may a collector contact her before 8 a.m. or after 9 p.m., or reach her at work, without her permission.

Prohibited Statements

    The collector may not threaten to hurt a consumer, use profanity or publicly expose his debt. Florida credit protection laws also prohibit the collector from using "false statements," such as identifying himself as an attorney, stating that the consumer owes more than she does or threatening her with arrest if she does not pay. Falsely claiming abilities to collect the debt through wage garnishment, property seizure or a lawsuit without legal standing also is prohibited.

Collection Methods

    The collector may not collect any amounts that are not permitted by contract or law. Nor may the collector deposit a post-dated check prior to the approved date. In Florida, the collector may sue to collect an open-ended debt, such as a credit card bill, for up to five years. If the collector wins a lawsuit, the court may allow the creditor to garnish the consumer's wages. Federal benefits such as Social Security payments are typically exempted from garnishment.

Complaints

    In Florida, a consumer may file a complaint against a collection agency with the Division of Consumer Services. The division tracks overall complaints and sanctions individual collectors as appropriate. A collector who receives five or more written complaints from consumers within 12 months may be subjected to regulatory action. The collector is entitled to an administrative hearing prior to any final enforcement action.

What Happens When a Bill Is Sent to a Debt Collector?

Credit card companies and other lenders often sell or assign delinquent debts to debt collectors. Usually the original creditor gives up trying to collect on the account after the debt falls six months behind, although some lenders send past-due accounts to debt collectors sooner than that. Before transferring the debt to a debt collector, the creditor usually closes the account, lists it as charged off and sends that information to the major credit bureaus.

Considerations

    The debtor remains fully responsible for the debt even after the original creditor lists it as charged off and places it with a debt collector. A charge off is merely an accounting term. Debt collectors will attempt to collect the full amount due on the account, although some will accept settlement offers for less than the balance -- a process known as debt settlement.

Control

    Original creditors who assign debts to debt collectors maintain overall authority over the collection of the account. Debt collectors working on assignment earn a commission for collecting, but the creditor has the final say on settlement offers or payment plans. Creditors who sell debts to debt collectors no longer own the debt. Debts several years old are sometimes sold to so-called "junk debt buyers" for as little as pennies on the dollars. Junk debt buyers are debt collectors and their potential for profits is high. A junk debt buyer could purchase a $10,000 credit card debt for $500 or less -- and then demand full payment from the debtor.

Process

    Debt collectors usually begin the collections process by contacting the debtor by phone. Federal law requires the debt collector to follow up within five days by sending a written notice identifying the original creditor and the amount due. However, the law also allows the debtor to challenge the letter and force the debt collector to prove that it has the legal right to collect the debt. Debtors can accomplish this by writing a letter to the debt collector within 30 days of receiving initial written notice from the debt collector. The Fair Debt Collection Practices Act forces the debt collector, upon receipt of correspondence from the debtor, to stop all collection efforts while it submits information to the debtor verifying that the debt and the collection effort are valid. Proof could include copies of the debtor's most recent billing statements or the original credit application.

Tactics

    Debt collectors rely a lot on phone calls as they attempt to collect and may call a debtor several times a day. However, federal law gives the debtor the right to tell the debt collector to make contact only in writing -- or not at all. Some debt collectors resort to civil lawsuits in a final attempt to collect. Lawsuits are an effective means of collection for the debt collector because they can lead to a court judgment and permission to garnish the debtor's bank account or wages for the full amount of the debt.

Wednesday, July 24, 2013

Does My Spouse Have to Pay My Judgment?

If you have judgment from a private creditor debt, such as a credit card or a loan that belongs only to you, your spouse is not responsible for paying your judgment. If you have a debt for which you have a judgment to garnish or offset your state or federal tax refunds or to levy your bank account, your spouse will end up paying a portion of your judgment even though she is not legally responsible for the debt.

About Judgments

    When you receive a judgment from a court, it means one of your creditors sued you for a defaulted debt. If you do not pay off the balance in full or work out payment arrangements with the company suing you, the company can garnish your wages and state income tax refunds. If the debt belongs only to you, the creditor cannot sue your spouse. If you are not sure whether the debt belongs to you or to both you and your spouse, look on your judgment paperwork under the "Defendant" section. If it belongs to both you and your spouse, both of your names will appear in this section.

Legal Responsibility

    When you sign loan documents or credit agreements, you become legally responsible to pay back the loan. The creditor then has the right to sue you in court to receive a judgment to recover the outstanding balance on your account. If your spouse did not sign the loan or credit agreement, he is not legally responsible for paying the judgment resulting from a private creditor suit. However, if your spouse did sign the loan or credit agreements, both of you are legally responsible for paying the judgment.

Tax Refund Offsets

    Private creditors can obtain a judgment to offset or garnish your joint state tax refunds. Federal and state government agencies are permitted to garnish your joint federal tax refunds to pay your judgment. This means that even though your spouse is not legally responsible for paying your judgment, she will end up paying toward it if you file your state and federal income taxes as married filing jointly. The creditor will take the entire joint tax refunds unless your spouse submits an Injured Spouse Allocation form to your state taxing agency and Internal Revenue Service . By filing the forms, your portion of your joint tax refunds will go toward paying your judgment and your state's taxing agency and the IRS refunds your spouse's portions to her.

Community Property States

    If you live in a community property state, typically the property in which you and your spouse acquire while married is community property. Unfortunately, these states also typically consider the debt you acquire while married, as community property. This means that a creditor can pursue both you and your spouse for payment on a judgment for a debt belonging only to you. Community property laws can differ by state, so you may want to talk to an attorney.

Problems with a High Debt Ratio

The biggest problem with a high debt ratio is the effect it has on your credit score and your creditworthiness. Because your credit score is used as an indicator of your level of financial responsibility, having a lot of debt relative to the amount of credit available to you can impact your ability to obtain new loans or credit, rent a home or even get a new job. It's important to pay down your debt so your credit score is as high as possible.

Credit Score

    The ratio of your debt to your available credit is called "credit utilization," and it is one of the key factors in determining your credit score. When you have a high ratio of debt to available credit, it weighs heavily on your score, because it demonstrates to creditors you're a high credit risk. You should carry a balance of no more than 25 to 30 percent of your credit limit to keep your credit score high, according to the Better Business Bureau website. Paying off your credit card each month is a way to help earn a high credit score.

Borrowing Money

    Each time you submit an application for a loan or a credit card, the lender looks at your credit score, among other things, to help predict whether you will make the payments to repay the loan. This is known as your level of credit risk. When you have a high credit utilization ratio, lenders may be reluctant to lend you money, because it appears you're having difficulty handling the debt you already own. It's important to lower your credit utilization ratio if you intend to borrow money. Otherwise, lenders will continue to view you as an irresponsible borrower.

Renting/Job Hunting

    A high utilization ratio may also cause problems when you're trying to rent a home or find a job. In addition to lenders, landlords and prospective employers may look into your credit report to determine how responsible you are. Employers must ask your permission before looking into your credit report. Some landlords won't look into your credit report; however, some landlords or larger developments or rental agencies often will. You may benefit from asking previous landlords for letters of support, stating that you have been responsible with your rent payments in the past.

Considerations

    Lowering your credit utilization ratio requires budgeting and a payment plan. According to the Liberty Mutual website, you can calculate your monthly budget by tracking your spending for a week and multiplying it by 4.3, then adding your regular monthly payments, such as rent, utilities and cell phone. Compare this with your monthly income, and find places to cut back so you can pay off more debt. Pick a payment plan and stick to it. In an August 2009 article on his website, Dave Ramsey recommends paying off the debt with the lowest balance first to motivate yourself to continue paying off debt. He reports in the same article that others recommend paying off the debt with the highest interest rate first, to avoid continuing to pay costly interest.

Can Credit Card Companies Attach My Wages?

Can Credit Card Companies Attach My Wages?

In most states, credit card companies can attach wages with a court order. Federal and state laws limit garnishment amounts for credit card debt and when the laws conflict, the rule benefiting the debtor generally applies. Wage attachment continues until debts are paid or until the debtor is unemployed. Neglecting to reply to a court summons for wage garnishment may result in a default judgment against you.

Facts

    Some states limit wage garnishment for consumer debt, while Texas, South Carolina, North Carolina and Pennsylvania prohibit the practice. Excluding government and child or spousal support debt, federal and state laws totally exempt some forms of income from garnishment. Incomes exempt from garnishment for credit card debt include Social Security benefits, public assistance payments, some retirement funds and most other government aid.

Process

    Excluding some government debt, creditors must obtain a court order to attach wages. Once a wage garnishment judgment is established, employers receive a copy of the order and remove funds from an employee's wages before issuing a paycheck. Employers cannot fire an employee based on one garnishment order. Federal law does not protect employment for multiple garnishments, but state laws may prohibit termination due to multiple garnishments.

Amounts

    Federal law limits garnishment for credit card debt to 25 percent of a person's pay-period earnings or the amount of a person's disposable earnings that is more than 30 times the federal minimum wage, or whichever is less. States may have alternative garnishment limits. When laws conflict, the smallest garnishment rule applies. In cases of multiple garnishments for credit card debts, employers withhold wages in the order judgments are received. Regardless of the number of garnishments, the total amount withheld cannot exceed state or federal limits per paycheck.

Concerns

    In addition to garnishing wages, creditors may levy bank accounts when permitted by state law. The process for bank levies is similar to wage garnishment in that a creditor files a claim with the court and the consumer's bank receives a copy of the order. Bank levies result in a temporary "freezing" of bank accounts and the withdrawal of funds to repay the debt. Income exemptions for government-assistance payments apply to funds in bank accounts and consumers may claim these exemptions to prevent a levy.

How to Get Away From Debt Settlement Companies

How to Get Away From Debt Settlement Companies

Once your delinquent accounts are transferred to a debt settlement company, you will need to arrange a payment plan. If you avoid them and do not attempt to pay off your debts, they will likely take you to court to collect their money, plus interest and penalties. Fortunately, most debt settlement companies are willing to work with you to reach an agreement that will stop repeated phone calls and letters.

Instructions

    1

    Talk to them. There is no real way to avoid debt settlement companies without breaking the law or ending up with a lien or garnished wages, so it is best to talk to them and try to arrange a payment plan that works with your budget.

    2

    Dispute the charges. If you do not think you should be held liable for the charges the debt settlement company is seeking, write them a letter challenging their request. If they find that you are not responsible, they will not call or write you again.

    3

    Consolidate your debts. If you are unable to reach an agreement with the debt settlement company directly, consider consolidating your debts through a private firm. Once the debt settlement company begins to receive money from you, they will not call you in an attempt to collect.

    4

    File for bankruptcy. Once you file a bankruptcy petition with the court, debt settlement companies are not permitted to contact you in an attempt to collect.

    5

    Direct them to your lawyer. If you have retained a lawyer to help you with bankruptcy or debt restructuring, request that debt settlement companies contact your counsel. This will raise your legal fees, but you will not longer have to deal with creditors directly.

How to Secure Debt With Trust Assets

Secured debt is debt backed by some type of collateral to be turned over to the lender in the event that the borrower cannot repay the debt. Secured debt generally grants the borrower better terms and interest rates than unsecured debt. Many kinds of property can be used to secure debt, including homes. Provided you are a trustee or a trustee approves of your action, you can use assets from a trust to secure debt.

Instructions

    1

    Determine whether the debt you wish to insure is an existing unsecured debt or loan you intend to take on soon. If it is an existing unsecured debt, proceed to Step 2. If not, proceed to Step 3.

    2

    Visit a bank to discuss taking out a new secured loan with your bank, using your trust assets as collateral. This will enable you to pay off the old, unsecured debt and start paying down the new, secured debt with better terms and interest rates.

    3

    Contact the trustee of the trust to determine whether you can use your trust assets as collateral if you are not already the trustee. The trustee(s) should have sole discretion on how the assets are to be used if there are no explicit instructions against such actions made by the originator of the trust.

    4

    Collect all paperwork and evidence of ownership of the property to present to the lender when negotiating your loan. Have property transferred to your name if it was not already done so within the trust.

    5

    Set up an appointment with your bank or lender to negotiate terms of the secured loan.

The Credit Report Fraud Alert Policy

The Credit Report Fraud Alert Policy

All three major credit reporting agencies have a credit report fraud alert policy that allows a consumer to put a fraud alert on his credit report. Typically, fraud alerts are placed on credit reports of consumers who have been victims of identity theft or have lost or had important personal information stolen (such as credit cards, identification cards or a Social Security card. A credit report fraud alert requires a creditor to contact the consumer and verify certain information before a credit application can be processed and a credit report can be pulled by the creditor.

Identification

    The Fair Credit Reporting Act provides specific rights to you if you're an identity theft victim. This is the law that allows you to place a fraud alert on your credit report. The law also requires creditors to follow specific procedures to issue credit in your name when you have a fraud alert on file.

Time Frame

    If you believe you're a victim of identity theft, you can place an initial fraud alert on your credit report for a 90-day period. If you've filed a police report as an identity theft victim, a copy of the police report can be provided to each of the three credit agencies (TransUnion, Equifax and Experian) to extend the fraud alert to up to seven years.

Requirements

    An initial or extended fraud alert can be placed on your credit report by phone or in writing. You have to contact each of the credit agencies separately to add a fraud alert to your credit report. Each agency requires proof of your identity to add the alert to your credit files. Proof may include providing your Social Security number. Extended fraud alerts require proof of identity theft, such as a police report or formal report filed with a state, county or federal agency.

Disadvantages

    One of the effects of having a fraud alert is that it may cause a delay in receiving credit approval or denial. Since creditors are required to do due diligence in verifying that you're the one actually applying for credit, it takes extra time to verify this information.

Other Considerations

    If you're a member of the military who's on active duty, a special alert referred to as an active-duty alert can be placed on your credit report files. An active-duty alert remains on file with each of the credit reporting agencies for a one-year period.

Tuesday, July 23, 2013

How to Block Debit Card Information

How to Block Debit Card Information

If you find that your debit card is lost or stolen or you have disclosed the information on some scam website, you could be a victim of monetary loss. Another type of fraud is card skimming, the illegal copying of information from your card's magnetized strip. This can occur when a clerk or restaurant employee takes your card out of your sight, but your information can also be stolen by devices slipped behind the faceplate of an ATM that read the personal information embedded in the strip. Some of these devices also are able to discern your personal identification number (PIN) as you enter it. Most banks provide protections to assist you in such situations, but card holders are encouraged to block card information immediately to avoid financial risk.

Instructions

Call your Financial Institution

    1
    Report to customer service.
    Report to customer service.

    Contact your bank immediately through its help line to report your missing card so the bank can block your account. You can find the help-line number of your location in the booklet provided with the card.

    2

    Answer any questions posed by the bank to verify your identity. The information requested may include such identifiers as your name, birth date or location.

    3

    Ask your bank if you need to supply additional documentation so that action on your request is not delayed.

Documentation Formalities

    4
    Document reasons to block the debit card  information.
    Document reasons to block the debit card information.

    Prepare a follow-up letter that explains what happened to your debit card or your debit card information. Describe the place you left your card or where you think it was stolen or your personal information compromised, and include when the theft or loss occurred. Detail any suspicious charges deducted from your account.

    5

    Submit your request for the blocking of your debit card information, along with your documentation, to the bank. As soon as the bank receives the request, your debit card information will be blocked. You will not be able to access your account until the bank provides you with new information (a new PIN) and a new debit card.

    6

    Call the customer service agent to activate your new card once you have received it in the mail.

How to Negotiate Your Credit Rating With a Collection Agency

How to Negotiate Your Credit Rating With a Collection Agency

Although a collection agency doesn't directly control your credit rating, the agency does control what it puts on your credit report. Becoming an informed consumer is the most important step you can take to improve your credit rating.

Instructions

    1

    Gather your paperwork. This includes all notices and letters you have received from collection agencies as well as your personal records for all accounts mentioned.

    2

    Pull your credit reports. You can request one copy of your reports once a year from the three major credit reporting agencies (Equifax, Experian, and TransUnion) online. See Resource section below.

    3

    Review your credit reports. Pay special attention to negative items, which will include any accounts currently in collections.

    4

    Learn about your rights as a consumer. Read the FDCPA (Fair Debt Collection Practices Act) and the FCRA (Fair Credit Reporting Act), the two most important legal documents for anyone trying to improve his credit. While you can start with a simple review of the text, the more familiar you are with the FDCPA and the FCRA, the better you will be able to negotiate with collection agencies and credit bureaus. These two acts also outline requirements for the validation and verification discussed in the next two steps.

    5

    Request validation from the collection agency by sending them a letter by certified mail. Communicate with collection agencies by mail, never by phone. Validation requires the collection agency to give you proof that they may legally collect the debt from you.

    6

    Send a notice of dispute to each of the three credit agencies. Credit agencies must remove information that has not been verified as accurate from your credit report.

    7

    Begin negotiating a settlement once you have received validation of the debt. During the negotiations, make sure to stipulate that the collection agency must delete information about the account from your credit reports. You MUST get an agreement IN WRITING that the collection agency will delete information about the collections account.

About Co-Signers

About Co-Signers

Co-signing on a loan or credit card has both potentially positive and negative effects. While a co-signer allows a person to obtain credit at a better interest rate than without a co-signer, it also obligates the co-signer to pay the account in the event of a default by the borrower. Since many applicants who need co-signers are already a high credit risk, co-signers should take care before agreeing to add their names to accounts.

The Facts

    Co-signing on a credit application is a way to vouch for the primary applicant. Co-signing tells the creditor that in the event of a default on payments, the creditor can turn to the co-signer for payment. Although the co-signer is legally obligated to pay the account if the primary borrower does not, the co-signer does not have access to the account. This means co-signers can't use a credit card for purchases if they are only listed as a co-signer, but the account still shows up on their credit reports as financial obligations because they are indeed obligated to pay in the event of a payment problem. Co-signers do a great service to borrowers because they allow applicants to get approved for credit that they can't qualify for on their own. This allows people with no credit or bad credit to borrow money and build up their credit scores by making timely payments.

Benefits

    Lenders are apprehensive about loaning money to applicants who have no credit or bad credit. When a credit-worthy co-signer is on the application, however, the application becomes much more attractive to lenders. Parents sometimes co-sign for their adult children for student loans, mortgages, and other forms of credit. This allows the children to obtain credit at a reasonable interest rate and term while also allowing the parents to do something beneficial for their children. As long as all payments are made in a timely manner, using a co-signer can be an advantageous situation for everyone involved.

Risk Factors

    Co-signing for someone who does not make payments on time, or who defaults on a credit account entirely, can be a financial disaster for co-signers. Not only does the account become the legal obligation of the co-signer, but the negative payment history may show up on the co-signer's credit report. Even if payments are made as scheduled, the account on the credit report may push a co-signer's credit score down because of the additional financial obligation. Additionally, any time finances are mingled with relationships there is always the potential to create problems. While some friends and relatives can lend and borrow money to each other without any negative repercussions, other relationships cannot withstand something as complicated as co-signing.

Time Frame

    A co-signer is obligated to the account until it is paid in full or the primary borrower refinances without the co-signer. There is no time frame where the co-signer's financial obligation falls off the account. Loan applications may also have a longer time frame if a co-signer is involved because additional credit reports must be run and some lenders have additional documentation requirements for applications with co-signers.

Expert Insight

    Conservative personal financial experts caution against co-signing for any borrower, even if the applicant is a close friend or relative. Other financial experts suggest to people with no credit or bad credit to find a suitable co-signer in order to get approved for credit at a decent interest rate. Potential co-signers should consult with a financial adviser before agreeing to co-sign to find out what the potential financial impact of co-signing will be.

What Does a Dealership Do If Someone Wants to Default on His Car Loan?

If you have to default on your car loan, a dealership can agree to take back your car under a "voluntary repossession" --- if the dealer is the official creditor receiving your monthly payments. After you purchased the car, however, the dealer may have sold the loan to a bank or credit union. The bank or credit union may also agree to take the car back if you wish to default.

Significance

    An automobile repossession is considered a negative credit event and likely will lower your credit score. Although you're volunteering to return the car, the dealership or creditor can still list it on your credit report as a repossession, according to the Federal Trade Commission (FTC). The repossession will remain on your credit report for seven years and make it difficult to obtain another auto loan, at least initially. The Bankrate website reports that the negative impact of an auto repossession will lessen over time. However, no one can say exactly how long a repossession will affect your credit or your ability to buy another car on credit.

Benefits

    Arranging for a voluntary repossession can provide you with some peace of mind. You may not be able to afford the car because of a job loss or illness and have been struggling to make the payments.

Misconceptions

    Giving the car back may not end your financial obligation. The FTC reports that the dealership or creditor could hold you responsible for a "deficiency" --- the difference between what you still owe on the car and what the dealership or creditor sells it for. Say you owe $12,000 on the loan. The dealer or creditor sells the car at auction for $10,500. That leaves a deficiency balance of $1,500, plus any other fees, such as a fee for early payoff of your financing. If you refuse to pay the difference, the dealer or creditor can file a lawsuit and possibly win a deficiency judgment, according to the FTC.

Considerations

    Florida Attorney General Bill McCollum reported in 2010 that the dealer or creditor must act in a "commercially reasonable manner" when selling your car. McCollum reports that the car should not be sold for a price far below fair market value, leaving you with an unreasonable deficiency balance. Specific state laws may vary, but the FTC also reports that the dealer or creditor must act responsibly when selling your car. You should seek advice from an attorney if you feel you've been treated unfairly, the FTC advises.

Prevention/Solution

    Sell the car instead of surrendering it through a voluntary repossession. The selling price must at least match the balance owed to the lender --- or you have to make up the difference with cash. Selling the car accomplishes your goal of getting rid of it, and by controlling the transaction, you can avoid a deficiency judgment and a repossession on your credit report.

Monday, July 22, 2013

When is a Credit Card Debt Unenforceable?

Since credit card debt arises from the existence of a legally binding contractual agreement, any defects in the contract formation process may render the debt unenforceable.

Defective Contracts

    Some of the reasons a contract might be unenforceable include an agreement with an individual who lacks the legal capacity to enter into a contract, such as a minor or an individual who, due to diminished mental capacity, is incapable of expressing an intention to be legally bound by the terms of the contract.

Statute of Limitations

    Credit card debt may also be unenforceable due to the running of the applicable statute of limitations period. The statute of limitations establishes certain specified periods for filing lawsuits. Any civil action by a creditor filed against a cardholder for recovery of the default balance that is outside the applicable limitations period is called "time-barred," and must be dismissed.

Considerations

    The statute of limitations is an affirmative defense that a debtor must raise when an action is filed against him in court. Most jurisdictions require a debtor to raise the defense in his answer to the creditor's complaint. Once properly raised, upon request of the debtor, the court must dismiss the action. A creditor whose civil action is dismissed has no further legal recourse against the debtor.

Sunday, July 21, 2013

Do You Get Loan Money Back When You're Dismissed From College?

As a means of paying for college, many students choose to take out loans. These loans can come from a number of sources but are very often provided directly by the U.S. government, which offers student loans at a low rate of interest. If a student has used these loans to pay his tuition but is then dismissed from school, he will usually not be paid back this money unless his tuition is refunded.

Tuition

    When a student attends an institution of higher learning, he is responsible for paying the tuition money to the school. This money can be collected from a number of different sources, but the student uses it to pay the total tuition cost to the school. So, it is the school, then, that decides how much of this money will be returned if you are dismissed.

Loans

    When a student takes out a loan for school, he uses the loan amount to cover the tuition of the school that he is attending. If the student pulls out of school voluntarily or is dismissed in such a way that he is entitled to a refund, the money will not be paid back directly to the lender, but to the student. He can use this money to service the loan, but the lender will not directly grant him a refund.

Dismissal

    With many schools, if a student is dismissed involuntarily -- meaning that he is required to leave school because of an infraction of the school's rules -- then the student will not receive any refund of his tuition. In such a case, the student will still be responsible for paying back the student loans, even if he does not receive the education which he used to them to pay for.

Considerations

    Each school has its own policy regarding the return of money for a student who is dismissed from school. In order to determine for certain whether the money will be returned to you, you will need to consult the school to which you paid tuition. In addition, if you feel you are entitled a refund but the school has not provided you with one, you should consult a lawyer.

Can You Negotiate With a Collection Agency?

Can You Negotiate With a Collection Agency?

Debt collectors are in the business of making money quickly. You can negotiate with a collection agency and most other creditors. Amounts owed, the age of your delinquency and your offer all factor into an agreeable outcome, but successful negotiations ultimately depend on a creditor's willingness to bargain. As with any contract, get it in writing and retain proof of the agreement.

Collection Departments and Agencies

    Dependent on company policy, the early stages of debt collection generally involve an in-house collection department. If the account becomes seriously delinquent, the creditor may use an outside collection agency. If the lender believes the account is beyond collection, the entire account may be sold to a debt buying company. These companies are collection agencies that buy delinquent accounts for less than the total amount owed and then seek payment from the original debtor.

Preparing for Negotiation

    Do not negotiate with a collection agency without creating a budget. Go over you finances and allocate money to where you need it most before making an offer. Your home, utilities, food, insurance and any other necessities come first. Calculate exactly how much you can afford to pay and how often you can afford to pay it. Never offer or agree to more than you can afford just to stop collection attempts. Additionally, request proof of your liability, amounts owed and the original creditor's name. Collection agencies must provide verification of the debt upon request.

Negotiating

    Many collection agencies prefer lump sum payments to installment plans. Wisconsin consumer protection attorney Mary Fons tells Bankrate.com that she often advises consumers to begin negotiations by offering debt collectors 10 percent of the requested amount. Generally, debt collectors counteroffer very low bids. With lump sum bargaining, start negotiations well below what you are able to pay and increase your offer in small increments. If you're unable to make a lump sum payment, request a repayment plan. Offer less than you're able to pay each month and gradually increase the amount as negotiations continue. Once you hit your allowable budget, stay firm.

Concerns

    Get the plan in writing before making a payment. You may send the agency a certified letter detailing agreement terms with your first payment. Stipulate that accepting the payment or cashing the check constitutes acceptance of the plan. Retain a copy of the notice and the mailing receipt. Don't skip payments as failure to pay may result in further collections and legal action. Keep proof of payments, attempts to negotiate and agreements. If a collection agency does sue, providing the court with proof of your attempts to negotiate helps your defense.

What Happens When You Lose to a Creditor in Court?

What Happens When You Lose to a Creditor in Court?

Debt plagues thousands of Americans each year, and unfortunately, many creditors take their clients to court in order to collect what the clients owe. The loss of a debt lawsuit is actually part of the initial stages of the formal collection process through the court. This is because it is only after the creditor has the judgment against you that it is possible to forcibly collect from you.

Filing of Finding

    Following the loss of your case, the judgment against you is filed with the court clerk. This verifies the judge's findings so that any subsequent actions are based in formal documentation.

Subsequent Motions

    After the judgment is filed, creditors usually file a motion to seize your property or other assets or to garnish your wages. The exact motions depend on the amount of the debt, whether you have other judgments against you and the debt collection procedures for your jurisdiction. These motions indicate the specific means of debt collection the creditor intends to pursue.

Writs and Notifications

    If the motion filed by the creditor is within the scope of the initial judgment filed with the court, the court issues a writ authorizing the creditor to collect the debt as requested. The creditor sends you a notice of the writ, typically through the local sheriff or their attorney. Once you get a writ, you typically have some time to respond and appeal. An appeal won't necessarily stop the creditor from collecting, but it gives you the opportunity to negotiate. For example, you might ask that the amount of your garnished wages be lowered.

Hearings

    If you have appealed any of the writs, you must go back to court to make a case for the appeal. The judge will investigate whether changes to the writ are warranted given your circumstances, and the creditor must continue to defend his claim.

Collection

    If the judge denies your appeal, or if you let initial writs proceed with no contest, the creditor moves to execute the writ. At this point, your bank may freeze your accounts, your employer may deduct a portion of your pay or you may have to give back or liquidate assets.

Considerations

    Any judgments made against you on behalf of creditors appear on your credit history. Because of this, if you lose a debt case, your credit score may go down. This can make it harder to get financing in the future, which impacts your economic stability and freedom. It is to your benefit to do what you can to build up your credit following a lost case for this reason. Additionally, although it is rare for a person to go to jail for having debt -- by itself, having debt is not a crime -- warrants of arrest can be issued if you end up in contempt because you ignore a writ.

Saturday, July 20, 2013

How to Get a Full Credit Report

The Federal Reserve says that every consumer is entitled to receive one free credit report a year from the three major bureaus. Several companies claim to give free reports to consumers. However, free reports are often provided only after a person enrolls in a credit monitoring service. Annual Credit Report is different, and this authorized agency provides full credit reports, no strings attached.

Instructions

    1

    Submit your request for a free report online. Go to Annualcreditreport.com. Provide the requested information to confirm your identity such as full name, address and Social Security number. Submit the information and select which credit reports you want to view online. Annual Credit Report gives immediate access to credit information.

    2

    Get full credit reports from all three bureaus with a telephone request. Skip the online request form and call Annual Credit Report to get copies of your reports mailed to your home. Contact the agency by calling 877-322-8228.

    3

    Make a request for credit reports in writing. The third method for accessing full credit reports involves mailing a request to Annual Credit Report. Download and complete the request form available from the agency's website, and then send the completed form to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281

Friday, July 19, 2013

Debt Remedy Information

Debt has become a way of life for many people. The endless collection calls, the mounting piles of bills and growing list of negative entries on credit reports can have people thinking that it's impossible to overcome the amount of debt they owe. However, a little ingenuity and self-discipline as well as a plan of action can help alleviate and eliminate out-of-control debt.

Know Your Debt Balance

    Gather all of your account balance statements. Record the balance due of each account and the contact information for each crediting agency. Obtain copies of your credit report from TransUnion, Equifax and Experian to find collections accounts that you may have overlooked and add those accounts to your debt balance list as well. Tally the total balance of all debt. Knowing the exact total of your debt will give you an overall view of how much debt you actually owe, as well as lay the groundwork for building a budget to reach your debt-elimination goals.

Pay Down Smaller Accounts First

    Sort your account balances from smallest to largest and start paying down the account with the smallest balance first. The sense of achievement you feel after that first account balance has disappeared will motivate you to start tackling your higher account balances. If possible, try to send in an extra $50 to $100 in addition to the monthly minimum payment on the account to make the balance disappear faster.

Build a Better Budget

    Budgeting will give you more control over where your money goes every month. The idea is to spend less money than you make, while saving money to pay down your debt account balances. Record your transactions for a month to find out where every cent goes. Review your purchases for the month and devise ways to cut down (or eliminate completely) unneeded spending. For example, consider carpooling to work whenever you are able to and make coffee at home instead of purchasing it at the coffee shop. After you have found ways to cut your spending, apply the money you've saved to pay off your debt account balances.

Don't Acquire More Debt

    The key to getting out of debt, and staying out of debt, is not acquiring debt in the first place. Use cash instead of credit cards whenever you can. Using cash will save you the interest paid (and perhaps additional fees) on credit card balances. Never use credit cards to spend beyond your means. If the temptation to use a credit card is hard to deny, consider having your spouse or good friend hide your credit cards where you will never find them. Another option is freezing your credit cards in water in the freezer. By the time the cards have melted the desire to spend money may have passed.

Credit Reporting Limits for States

Credit Reporting Limits for States

While no one particularly enjoys having negative items on a credit report, state and federal limits exist for most reportable items. After a certain length of time has passed, credit reports cannot list certain negative credit items. In some cases, such as with unpaid taxes, the negative credit reporting has no statute of limitations.

Types

    While each state has its own statute of limitations dealing with debt, there are two different areas addressed in the statutes. One area deals with actual debt collection. Debt collectors can sue for payment of outstanding debts up to a certain period of time. Once the statute of limitations expires, the debt collection can no longer sue a borrower. This does not mean the debt collector must stop trying to collect on the debt. The debt collector can attempt repayment indefinitely, but once the statute of limitations passes, the collector is unable to pursue a legal recourse. The other type of statute of limitations is on the credit report. In most cases, most states do not list bad credit items beyond the federal statute of limitations, which is usually seven years.

Written Contracts

    A written contract is a legally binding covenant between a borrower and a lender. Typically, written contracts have a better likelihood of being upheld in a lawsuit, since there is actual physical documentation available. In most cases, the reporting limit for a written contract being reported is anywhere from two to 10 years. In some cases, such as with the state of Colorado, the written contract reporting expires after six years, but can be renewed every six years. Most states do not have a policy of renewal.

Open Accounts

    States impose their own limits on open accounts. Open accounts usually include credit card accounts, as well as vendor accounts. An open account is an account with a balance remaining unpaid by the borrower. Some states, such as Alabama, have open account credit reporting limits of three years. However, whenever activity takes place on an account, the state credit reporting limits usually reset to the date of the latest activity. If an account is going to expire in November of 2011 and a small payment is made in October of 2011, the time limit commences once again starting in October of 2011.

Tax Liens

    In most cases, when it comes to unpaid taxes, states do not limit the length of time the credit reports list the debt. This holds true for local taxes, state taxes and federal taxes.