Should I Ask Credit Card Companies to Lower My Credit Limit?

Just as you can request an increase in your credit line from a creditor, you can ask it to lower your credit limit. Whether or not you should ask for a reduction in available credit will depend on your financial circumstances and the goals that you have set for yourself. Lowering credit limits can work in your favor or against you. Reasons for Asking for a Lower Limit The reasons behind asking creditors for a lower limit can vary. Perhaps you have evaluated your current credit situation and you feel your spending is spiraling out of control...

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How to Insure Debt

Credit or debt insurance is insurance that is purchased in addition to taking a loan or line of credit in order to secure the buyer in the event that an illness, injury, job loss or death prevents him from repaying his loan. Debt insurance can either be voluntary or an involuntary part of the contract when applying for a loan or mortgage. The lender is the beneficiary of this insurance, although the premium is paid by the buyer. A few steps can help...

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Debt Relief for Unsecured & Secured Debt

Being overloaded with debt is not a pleasant experience for anyone. There comes a time when you know you won't be able to pay even the minimum debt payments and still cover day-to-day living expenses. When that happens, it's time to consider debt relief for unsecured and secured debt. Unsecured and Secured Debt Any debt not secured by an asset is an unsecured debt. Credit cards are unsecured. Personal loans and most medical bills are unsecured. Payday loans and pawnshop loans are secured by your postdated check or permission to debit your...

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The Truth About Zero Percent Financing

It sounds good when you hear it. Zero percent financing on car or credit card offers is a common promotion, but is it really a good deal for you? While a loan may have 0 percent interest rates, you may pay in other ways. In many instances, 0 percent interest is a marketing tactic and has little to do with the actual cost of the credit. Do the Math Some consumers get so excited about the 0 percent financing offer, they don't bother to look...

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Laws for Financial Hardships & Garnishments in Florida

Garnishment and financial hardship laws vary from state to state. Each state can create exemptions for certain debtors and set garnishment limits. However, no state can pass garnishment laws that allow creditors to garnish a larger percentage of disposable income than Title III of the federal Consumer Credit Protection Act. Florida has its own wage garnishment laws and it is the only state with a head-of-household exemption. Wage Garnishment...

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What Happens If a Debt Collector Charges Your Bank Account Without Permission?

There are numerous methods that a debt collector may use to get the monies owed. They might include threatening letters or phone calls, harassment of family and friends and even a lawsuit to obtain a judgment. When this happens, a debt collector may garnish your bank account to get what is owed. This is, however, the debt collector's only legal method of accessing your banking information. Look Over Paperwork In some instances, the original credit contract you signed with a debtor states that if you default, the company has permission to...

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Can the Credit Bureau Remove Judgments From Reports?

Court judgments creditors hold after winning a lawsuit against you don't only leave you subject to garnishment and asset seizure, they also hurt your credit. A civil judgment is a public record maintained through the court system indicating that you previously ignored your financial obligations to a creditor. Depending on your situation, you may have the right to demand that the credit bureaus remove the civil judgment from your records. Credit Bureau Rights Each credit bureau has the ability to modify data within your credit files at any...

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How Much Does a Charge-Off Lower a Credit Score?

If you fail to make your credit card payments, typically within 180 days or six months after the first delinquent payment the credit card company will "charge off" your debt. A charge-off is basically a write-off (forfeited as bad debt) that gets reported to the credit bureaus as a charge-off and negatively effects your credit rating. A number of factors determine how much a charge-off will lower a credit score. FICO Score Credit or FICO...

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Is There Help for Credit Card Holders From the Government?

As of 2011, there are no grants, tax cuts, personal bailouts or loans available from the federal government for resolving credit card debt issues. The government does make help available in other ways, but generally the credit card holder must accept responsibility for solving his own problems. Counseling The government makes free credit card counseling available through a nationwide network of government-certified credit counselors. The counselors are approved by the U.S. Department of Housing and Urban Development and can recommend all...

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How to Pay Off Multiple Bills

Having multiple bills to pay can create a lot of financial stress in your life. The total may seem overwhelming, especially if you can only afford to pay the minimum payments each month. People can experience hard financial times when they start to put necessities on credit cards because they cannot afford to take care of their daily needs. Others take advantage of "sales" by using credit cards to buy a bargain when they really cannot afford it and...

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Can I Borrow From My 401k to Pay Down Debt?

Employees usually can borrow money from their 401k retirement plans to pay down their debts. The question is whether you should use your 401k funds for that purpose, because it's not a wise choice in some cases. The amount of debt you have and your career plans should influence your decision on borrowing from your 401k. Process Consider whether you could borrow enough from your 401k to make a significant impact on reducing your debts. Employees usually can borrow up to $50,000 of their 401k account balance, and they typically have up to...

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How to Earn Back Good Credit

After a bankruptcy or paying back bad debts, getting good credit again can seem nearly impossible. But just because you have made some mistakes with your credit does not mean you cannot earn back good credit. It is going to take some time and effort, but you can increase your credit score and have a high credit rating again. Whether you have had credit card debts, loan debts, college loan debts or medical debts in the past, you can earn back good...

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Should I Settle an Account or Pay in Full?

Unpaid bills often give debtors the unenviable choice of paying the account in full or trying to settle for a lower amount and dealing with the consequences of that down the road. Neither choice is correct in every situation. Your current income and long-term goals should drive the decision, such as if you want to borrow money in the future. Benefits of Settling If you need the maximum amount of money in your bank account, settling is the best option, because you sometimes get to pay 20 or 30 cents on the dollar. In addition, by agreeing...

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Tips for Consolidation of All My Debts

If you have thousands of dollars in outstanding debt, getting sound sleep at night is difficult. Those who are overwhelmed by the thought of owing different amounts to a wide variety of creditors may find peace of mind by getting assistance from a debt consolidation agency. Before you determine that debt consolidation is the right strategy for you, remember to choose wisely and read the fine print in your contract. Check Your Credit Study...

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Laws Regarding Student Loan Deferment

Borrowers who cannot afford to repay their student loans right away can apply for deferment to waive or lower the payments for a specific amount of time. The rules for student loan deferment apply to all types of federal student loans, but they do not necessarily apply to private student loans. Borrowers should check with their private lenders to find out about specific policies they have in place regarding deferment. In School All students who are enrolled at least half-time pursuing a degree or certificate can defer student loan payments....

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What to Do When a Collection Agency Enters a Default Judgment

Collection agencies are relentless in their attempts to collect on an unpaid debt. You can ignore their calls and letters, but eventually, the collection agency may file a lawsuit and seek a judgment from the court. A judgment orders you to pay a debt, and sometimes, a collection agency can acquire a default judgment against you. What is a Default Judgment? The court notifies you of an upcoming court date if a collection agency files a lawsuit against you. You have the option of attending this court hearing to dispute the debt before a...

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What Percentage of Debt Is OK?

A debt is a burden. In the case of a financial debt, you must dedicate a portion of your income or assets to paying off that obligation, which could prevent you from achieving other financial goals. If you want to better manage your finances it's important to know what percentage of debt is "normal" or acceptable for someone in your financial situation. Types of Debt Accounts Know the various types of debt accounts before answering the question of what percentage of debt is an acceptable level. The four main categories of debts are secured,...

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IRS Mortgage Debt Relief Information

Losing your home to foreclosure doesn't necessarily wipe away your responsibility to pay your mortgage. According to Bankrate.com, any balance left over after the sale of your home is still yours to pay. If you can't repay your mortgage balance, the bank has the option to write off the mortgage deficiency as a tax loss. Significance When any creditor claims a bad debt deduction on its business taxes for a debt you failed to pay, the IRS requires...

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How to Stop Foreclosure by Filing a Lawsuit

Most people who purchase a house take out a mortgage, a loan to finance the price of the house. The borrower agrees to pay back the sum of money owed over a period of time. When a borrower cannot repay this sum, he may face a process called foreclosure. Foreclosure means the bank that owns the mortgage can take the right to live in the house away from him. The borrower loses any equity in the house and may have to move. You can stop this process...

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Help for Personal Debt

It's not uncommon for adults to have some measure of personal debt. However, when debts become a problem and you're unable to make minimum payments, or you notice a decrease in your score due to high credit card balances, perhaps now is the time to take charge. Debt elimination can increase extra income, wherein you're able to save more and improve finances. Make Lifestyle Changes Lifestyle can play a role in excessive debts. If you're accustomed to eating out daily with friends, going on regular shopping sprees or enjoying lavish vacations,...

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Credit Card & Debit Solutions

After you've made the decision to pay off your debt, you must choose between several different options. No one solution works for everyone. Your choice will depend on your financial situation and the severity of your debt. However, with each plan it's vital to make a firm commitment to pay off all the debt and keep it paid off to avoid falling back into debt later. Snowball Plan One solution for paying off debt is to pay off your smallest...

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What Does "Charge Off Account" Mean?

A charge off account is a tax and accounting maneuver done by a creditor. It means that they are reporting the debt as a loss on their income taxes so that they may claim it as a deduction from their income. A charged off debt does not mean that the creditor can't try to collect the debt in the future. Time Frame A creditor will usually charge off a debt if it has been delinquent for 180 days, or six months from the date of the last payment....

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Can I Deduct a Medical Garnishment?

If you incur medical expenses and do not pay the hospital or medical provider, your creditor may initiate collections strategies such as contacting you by phone, sending you late notices or hiring a collections agency to contact you. If these strategies do not result in payment of your medical bills, the creditor may obtain a judgment against you by suing you in civil court. In most states, a creditor with a valid judgment can obtain a garnishment to take a portion of your wages to pay your defaulted debt. However, you might be able to claim garnished...

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What Happens After Your Property Gets Repossessed?

If a lender holds a lien against property you own, it has the right to repossesses the property if you fail to make payments. For example, when you apply for an auto loan, your lender holds a lien against the automobile until you pay off the loan. If you miss a payment, the lender can seize the vehicle. The same is true with a mortgage or some other financed purchases. The consequences of nonpayment stretch beyond the repossession itself. Property Sale After repossessing your property, the lender sells it. Although the lender may sell the...

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Laws on out-of-State Wage Garnishments in Texas

The majority of states allow creditors to garnish debtors' wages; however, Texas does not. If a creditor has a judgment in one state and the debtor is in a different state, wage garnishment might be possible. This concept also applies to debtors who live in Texas but are paid in a state that allows wage garnishments. General Criteria A wage garnishment is a mandatory document that orders the debtor's employer to withhold monies from his income to satisfy the balance he owes the creditor. A wage garnishment is sent to the debtor's employer;...

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Debt Reduction Training

If your debts are spiraling out of control--and according to the site CreditCards.com, the credit-card debt of the average U.S. household is now over $8,000--you might require debt reduction training. This training, which can be provided by a nonprofit credit counselor, community association or financial planner, can help you learn how to not only pay down your debt but prevent it from building up again. Paying For Professional Help If you've run up a sizable amount of debt, it might be time to hire a licensed financial planner. This professional...

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How to Write a Dispute Letter to a Collection Agency

Sometimes, you seem to get a debt letter out of nowhere. Usually, this is called "zombie debt" and it's something that you may or may not have paid in the past, but which your original creditor has sold to a collection agency. Under the Fair Debt Collection Practices Act, you have the right to dispute the debt, by sending a message in writing to the agency. You may want to do this to verify the debt or to prove that you have already paid off this...

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Debt Counseling Vs. Bankruptcy

Mounting personal debt may have you reaching out for professional assistance. There are several options when it comes to debt management, but two of the most common solutions are debt counseling and bankruptcy. Before making a final decision on which route to take, you need to understand the significant differences between the two tough choices. Definition Personal bankruptcy is a court-administered program that allows you to discharge some...

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How to Handle a Judgment

If you owe money to any creditor, that individual or company has the option to take you to court and obtain a judgment against you. You will receive notices, including a summons that you may choose to respond to. If you do not respond, the court will automatically rule in the creditor's favor, and order you to pay the debt, plus interest and fees. If you have received an income execution or notice of judgment from your state's court system you must...

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The Effects of Debt Settlement on Credit Scores

Debt settlement can be a solution to reducing the amount of money you owe. The process of settling your debts involves contacting your creditor -- or hiring a settlement company to do this on your behalf -- and asking the creditor to accept a percentage of what you owe as payment in full. Because debt settlement involves the forgiveness of some of your debt, you cannot use debt settlement without some harm to your credit score. However, debt settlement sometimes is the best way to get back on your feet financially. FICO Scoring Your Fair...

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What Happens If You Bounce Your Bank Account?

You overdraw your bank account when you execute a transaction that exceeds the available balance in your account. Payment or purchase made by check, online bill payment, debit or ATM card, or electronic funds transfers are all subject to overdraft fees. Overdrafts that are honored by your bank can result in fees that, if not paid, can affect your credit rating and your future ability to obtain a bank account. Overdraft Policies When you have a checking account, the bank has the option of "covering" transactions you make if the transaction...

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Collection Letter Requirements

The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects debtors and alleged debtors from unethical collection tactics by third-party debt collectors. Letters from collection agencies must conform to this law, which restricts the kind of language that can be used in the letter, and requires that full information about the debt be disclosed. While the FDCPA does only applies to third party collection agencies, some state laws...

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Statute of Limitations for Phone Bill Debt in Alabama

If you stop paying your telephone bill, you'll accrue a balance you remain responsible for after the phone company shuts down your service. The telephone company may turn an unpaid phone bill over to a collection agency, but the collection agency has a set period of time in which to force you to pay. Significance A collection agency may file a lawsuit for an unpaid telephone bill. In Alabama, the judgment from the lawsuit allows a creditor...

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Incorrect Information on Credit Report

Incorrect information on your credit report can damage your credit rating and reduce your ability to obtain loans and other credit. Unfortunately, many people aren't aware of the information on their credit report until after they have been rejected for credit. Types Incorrect information on a credit report can range from harmless errors such as outdated occupation titles, addresses and phone numbers to more serious errors such as incorrect reporting by a creditor, duplicate information and unknown credit accounts and inquiries, which...

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Should I Stop Paying My Debt to Settle?

Debt settlement is a method for eliminating excessive debt, and it may be preferable to bankruptcy for many. Debt settlement resolves unsecured debt such as credit cards through negotiated agreements in which the borrower pays less than the full amount owed and the creditor accepts it as full payment. However, only past-due accounts are eligible, meaning people trying to negotiate a debt settlement must stop making payments to allow their accounts to fall behind. Credit Impact Debt settlement hurts credit scores, although less than bankruptcy....

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If I Make Payments on Time Can I Get My Bills Sent to a Collection Agency?

Collection agencies specialize in collecting debts that consumers leave unpaid. Creditors must pay collection agencies a percentage of whatever the company collects or sell accounts to the company for far less than the debt is actually worth. Thus, collection activity is reserved for severely delinquent accounts. In certain situations, however, making payments on time does not protect you from having your accounts transferred to collection agencies. Clerical Errors All companies, no matter how well-organized, are subject to the occasional...

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