What Happens When You Answer a Complaint for a Credit Card Debt?

A complaint for a credit card debt is a lawsuit filed in civil court. Lawsuits for credit card debts are very serious matters because they can lead to court judgments and bank or wage garnishment. The complaint is a paper document listing a series of allegations. The complaint may allege that you opened a credit card account on a certain date, made various charges, and eventually stopped paying on the account. Answering the complaint usually requires providing the court with a written response to the allegations. In some states, defendants must...

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Does Debt Expire?

Debts do not last forever. Even if a person signs a contract promising to pay back a debt in full and fails to do so, the creditor will not be allowed to pursue payment of this debt past a certain period of time. This is known as a statute of limitations on debt collection. In addition, a debt will only be listed on a person's credit report for a finite amount of time. Debt Not all debts are the same. In terms of the statute of limitations on collection, both the kind of debt that the debtor has incurred, as well as the person to whom the...

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Can I Fix My Credit by Paying Only Half?

Credit card issuers and other lenders for unsecured accounts sometimes accept settlements for less than the amount you actually owe. You may pay as low as 50 percent of the actual balance. While this releases your liability for the bill, it does not necessarily help your credit rating. Other creditors know about the settlement when they see it on your reports. Process Your creditor will likely send your account to a recovery department when payment delinquency goes past 60 to 90 days. Such departments try to get you to resume payments,...

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How to Borrow Money With a High Debt Ratio

A high debt ratio could indicate that you are a credit risk as creditors fear that you are taking on more debt than you can afford. As a high-risk borrower you may find borrowing money difficult. Or you may find that loans are available but at very high interest rates. MSN Money reports that creditors like to see people using only a small amount of their available credit -- no more than 30 percent. Instructions 1 Get a copy of your credit report from AnnualCreditReport.com -- a website authorized by the Federal Trade Commission to offer...

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Can a Forgiven Debt Be Posted on Your Credit?

Sometimes a creditor will agree to forgive a debtor all or part his debt. This may happen for a number of reasons. For example, the creditor may have worked out an alternative payment method from the debtor, or the creditor may fear the debtor will fall into bankruptcy and the debt will be dismissed. Depending on the actions of the creditor, the debt may or may not be posted on the debtor's credit report. Credit Report A person's credit report contains all the information that a credit reporting bureau--a financial services company that...

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The Length of Time for Negative Reports on Credit Reports

Your credit report is the financial equivalent of your good name, and it is important that it shows you in the best light possible. Having a number of positive entries on your report will help, but you also do not want any negative entries. Bad things can happen, however, and you may end up with late payments or collections, or even worse on your credit report. Late Payments and Collections Late payments are one of the most common negative entries on a credit report. Each individual creditor reports your account as either current or past...

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How to Take Over Payments on a Promissory Note

A promissory note is a promise to pay a debt. It is a financial instrument specifying the terms of a debt owed by one entity to another. By taking over the obligations of a promissory note and making all payments as per the terms of the note, you can obtain ownership to the property described by the note without having to qualify for all of the original borrowing qualifications. In most cases this is a relatively simple procedure. Instructions 1 Determine whether the promissory note you want to take over is assignable or transferable to...

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How to Deal With an Attorney to Pay Debts

Treat an attorney calling about a debt the same as any other debt collector. Like all other debt collectors, the attorney is bound by the terms of the Fair Debt Collection Practices Act, a federal law. That means he cannot threaten or intimidate you, call you at odd hours of the day or night -- or even call at all if you ask him in writing not to do so. However, attention from an attorney should be taken seriously. The assignment of your debt to an attorney could be the final step before the filing of a lawsuit. Instructions 1 Write a letter...

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How to Prove Invalidated Debt on Unsecured Debt

Unsecured debt, such as credit card debt, once sent to a collection agency is required under the Fair Debt Collection Practices Act (FDCPA) to be validated upon the consumer's request. Invalidated collection accounts are not permitted to be listed on a consumer's credit report. Proving that a collection agency has refused to validate an unsecured debt is easily done by creating a paper trail. Instructions 1 Write a letter to the collection agency requesting validation on the account in question. Under the FDCPA, they are required to fulfill...

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The Time Limit for Collecting a Debt

Debtors who fall behind on their loan payments and credit card bills sometimes believe that their creditors are barred from coming after them after a specific amount of time has lapsed. While this is true, the conditions required for this time to pass are often misunderstood, and creditors usually have many years in which to pursue an unpaid debt. Kinds of Debts How long a creditor has to collect on a debt largely depends on what kind of debt it is. States differentiate between four kinds of debts: oral agreements, promissory notes, written...

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The Impact of Credit Cards on American Society

Delinquencies in making credit card payment and high credit card balances have become the norm in American society. As a result many Americans are up to their eyeballs in credit card debt. Reality Many Americans have become dependent on credit cards instead of using cash to purchase various items. This is due to the fact that credit cards are readily available to consumers on the drop of a dime. Intention Companies issue credit cards to consumers to determine their risk factors, for example, how often consumers are making payments...

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How do I Transfer Balances to a Capital One Credit Card?

Credit card holders often want to consolidate balances or secure a lower annual percentage rate (APR), and many credit card companies allow customers to transfer balances from other creditors to their existing credit card account. The process used to transfer balances varies depending on the company. You can transfer balances to a Capital One credit card online or by phone. You can choose to have the balance transfer sent directly to your other creditor...

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Ways to Repair Bad Credit Reports

A bad credit report can impact your life in major ways. You will probably have difficulty obtaining new credit, you may have issues renting a home and you may even have problems getting a new job. The good news is that you have the power to turn your credit report around by cleaning up your act and focusing on the factors that impact your credit score calculation. Consistently Make Timely Payments The biggest chunk of your credit score calculation depends on whether you make on-time bill payments. If you haven't been making timely payments,...

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Will Refinancing Affect Credit Score?

Refinancing can be a good strategy for changing your debt situation. It can lower your monthly debt service bill, give you access to large sums of money or allow you to put high interest debt in a lower interest mortgage. The potential effect of refinancing on your credit score is complex and varies from situation to situation. More or Less Debt? One factor determining your credit rating is your debt to income ratio. This is a measure of all your monthly debt payments versus your monthly income. If you use the refinance to reduce your monthly...

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Do You Mention Bankruptcy With a Hardship Letter?

Bankruptcy information is usually not included in hardship letters, but ultimately it is your call. Hardship letters are written to notify creditors about financial problems stemming from divorce, illness, job loss or some other reason. The purpose of the letter is to ask for lower monthly payments, a lower interest rate or some other help while you recover from a financial setback. Hardship plans can be good for creditors because they may prevent...

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How to Get Something Removed Off Your Credit After Seven Years

Most entries on your credit report are required to be deleted after seven years. The clock begins on the date an account first became delinquent, which is not always the date the account is reported on your credit report. For example, some accounts may be transferred to different collection agencies during the seven-year period. Because of this, a collection account may newer than the actual debt. You may dispute accounts that are too old to be on your credit report with the credit bureau that reports the account. Instructions 1 Obtain a...

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What Can a Collection Agency Do to You?

When you find yourself with a debt that you cannot afford to pay, a collection agency may be given the authority to try to collect from you. While you may be used to the collection agency contact through phone calls and letters, the actions that a collection agency can take against you are limited. Collection Calls When a collection agency has been given authority to contact you, you will start to receive phone calls. The collection agency may try to call you multiple times every day. Although it may seem like the collection agency calls...

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How to Create a Budget Planner

A budget planner is any system or tool that you use to plan out and monitor your budget each month. You need to this tool to check on your budget expenses and make choices regarding your financial status. Both online and offline software programs allow you to perform these tasks. The key is finding the one that is consistent with your needs and preferences. Instructions 1 Use Microsoft Excel as a budget planner tool. Microsoft offers a number of convenient templates, such as the "Family monthly budget planner," that are consistent with the...

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Frequently Asked Questions on Debt Relief Consultation

Debt relief organizations provide resources and debt management services to consumers who struggle with burdensome debts. Consumers seek the help of these organizations to gain control of their finances and reduce or eliminate debt. Prior to enrolling in a debt relief program, consumers participate in a consultation with the organization where they can ask questions about services and determine how the organization can help their personal financial...

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My Debt Burden Ratio

The debt burden of an institution or an individual is the amount of mandatory debt payments that must be made for a given accounting period. Debt burden ratio is the relationship between this amount and the income or earnings of the indebted entity. The ratio is a useful metric in predicting loan repayment ability. Debt Burden Your debt burden is simply the sum of all periodic debt payments you must make. The monthly debt burden would be the amount of money you must pay to your creditors every month, while the annual debt burden would take...

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In the State of Florida If You Are Head of Household Can Your Wages Be Garnished?

Wage garnishment may occur pursuant to a court order granted to a creditor to collect a past-due debt or due to an IRS or state tax collection. Federal law ensures that wage earners retain the right to at least a portion of their income. The state of Florida enhances these protections and prohibits the garnishment of wages for heads of household. Head of Household Defined A head of household is defined as any individual who provides more than half of the support for a child or other dependent. Wages less than or equal to $750 are automatically...

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Definition of Debt Liquidation

People often need to take out loans in order to finance life choices. Debt is not a bad thing if it is within your budget to pay it back in the future. If you find yourself in a bankruptcy situation, consider debt liquidation. Bankruptcy Bankruptcy is a legal declaration of your inability to repay your creditors. Bankruptcy can affect either a person or a corporation. Whether you are filing for personal bankruptcy or corporate bankruptcy,...

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Can a Lender Ask Me About Details of Credit Card Spending?

When borrowing money from a lender, whether it is a mortgage, a consumer loan or a revolving product like a credit card, you will be asked to provide substantial information to the lender about your credit history, your current income and your current debts. Much of this information will come directly from your credit report but you may be asked for other information about your income and expenses. The Lending Process Every lender has different...

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Financial Debt Help Tips

Debt has a way of creeping up on you, especially if you've developed the habit of using credit cards without considering the possible consequences. If you find yourself facing a mountain of debt and want to get rid of it as quickly as possible, there are some proactive measures you can take. However, you won't be able to continue your previous free-spending ways. Keep Your Plastic Although you should try to avoid credit card use if you want to get out of debt, it's usually not a good idea to cancel your cards. Canceling a card lowers your...

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The APR With Refinancing

A refinancing loan, like all loans, comes with interest. The interest rates a lender charges for a refinancing loan vary and change over time, but are usually expressed as annual percentage rate, or APR. This is a measure of the total percentage of interest charged during a year. If you're in the market for a refinancing loan, you should always compare loan rates so you can secure the most competitive loan. Mortgage Refinance One common form of refinancing loan is mortgage refinancing. These loans typically come in several forms, such as...

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Revolving Credit-to-Debt Ratio

The credit-to-debt ratio, also called the credit utilization ratio, is a key metric that lenders analyze when considering a loan application. It's easy to calculate on your own, so you can do your homework before submitting a loan application. Obviously, low ratios are better: but some types of credit are better than others, and think twice before closing that credit card account you're not using. Types of Credit There are three types of loans: revolving, installment and open. A revolving loan has a monthly payment that is determined by...

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Do Closed Accounts Count As Debt?

Borrowers should be interested not only in how they create liability for themselves, but also for how they end it. What types of debt individuals are currently paying is very important in regard to credit ratings and credit scores, but debts that have recently ended are also included in the calculation of the most important credit scores. Closed accounts, or debt accounts that have been shut down by the creditor that holds them, can have far-reaching effects on financial decisions, but they are rarely considered to be debt once they are shut down....

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Definition of a Line of Credit

A line of credit is an unsecured loan whereby a bank agrees to give a borrower access to a set amount of money that he can tap as needed. The credit line can be a good option for both businesses and individuals who need access to extra cash periodically. How It Works Banks extend lines of credit to businesses or individuals they deem to be good credit risks. The bank will give the borrower access to a certain amount of credit that can be...

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Can a High Credit Card Balance Affect a Background Check?

Some background checks provide access to your credit information, with potential employers or someone else you authorize using the information to determine your ability to handle money. A high balance on a single credit card isn't likely to negatively affect a background check. However, multiple credit cards with high balances could cause problems for someone under consideration for a job requiring sound personal financial management. Certain jobs in banking, finance and insurance require good personal credit management. Considerations ...

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Do Creditors Have to Issue a 1099-C?

Under certain circumstances, a creditor who forgives a legitimate debt must issue a 1099-C documenting the forgiven debt. In many cases, the IRS counts this forgiven debt as income to the debtor, which will create a tax obligation. If you have forgiven debt or are negotiating a debt settlement, it is important to understand the creditor's requirements for issuing the 1099-C and how to deal with the form when you receive it. 1099-C Requirement The IRS requires any creditor who forgives debt in excess of $600 to issue a 1099-C to the debtor...

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About Free Debt Reduction

Many companies offer consumers what they call a free debt-reduction program by consolidating credit card bills and personal loans into one easy monthly payment. While there may be no upfront fee for using these programs, there are hidden charges that cost consumers using them. Significance Free debt consolidation can be advertised as free since it is not a loan. Not having a loan with fees and added costs is what is considered a free program....

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What is the Statute of Limitations on Debt In Florida?

According to the Federal Trade Commission, the statue of limitations on most debts is three to 10 years. For example, in Florida, the statue of limitations on credit card debt is four years. However, even if the statue of limitations has expired, a debt collector can still attempt to collect. It just won't be able to sue you in court to collect on the debt. Florida Statue of Limitations In Florida, the statue of limitations, SOL, is four...

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Is an Equity Line of Credit a Good Way to Buy a Car?

Equity lines of credit are usually home equity lines of credit and are tied to the equity in a residential home. The Federal Trade Commission recommends home equity lines of credit for significant purchases or expenses such as tuition payments or medical expenses. Ideally, you should not use home equity loans at all, according to the FTC, but the agency acknowledges that low-interest rates provided by the loans make them ideal for some purposes. However, the FTC does not recommend using a home equity line of credit to buy a car. Depreciation...

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The Effects of Debt on Families

While there are numerous negative effects of debt on a family, there can be positive effects as well. If the family takes the bad situation and uses it as motivation to change, it can have a unifying and healing effect on the family. However, if the debt becomes a bigger player in a family than can be handled, it could lead to the breakup of a family unit. Stress and Arguments Debt, large debt especially, can lead to stress and arguments....

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How to Relieve Your Debt

Too much debt creates a financial burden, and sometimes debt can lead to physical problems such as stress, headaches and insomnia. Although excessive debt is a serious problem that can lower credit scores and result in the inability to obtain credit, there are steps you can take to relieve or get rid of your debt. Stick with a debt elimination plan and you can reverse your situation. Instructions 1 Compile debts. Open your credit card statements and other bills and calculate how much you owe. Knowing your total is essential to outlining...

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Risk Management and Credit Limit

Credit card companies use risk-management tactics to prevent financial losses and protect their profits. The problem with some of these tactics is that consumers who have good credit histories get hit with credit-limit reductions for things that sometimes are beyond their control. Other times customers' credit limits are cut because their accounts are considered unprofitable. Account Delinquencies It seems patently unfair, but your credit card borrowing limits can be lowered because other people aren't paying their bills. That's the case...

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Letter of Explanation & Credit Issues

Credit issues are commonplace among potential homebuyers. Many homebuyers, especially those who have experienced past financial hardship, have collections, late payments, missed payments or even a bankruptcy or foreclosure on their credit report. While all mortgage loan programs have guidelines that lenders must follow, most loan programs offer some form of exception for those who have past credit problems possibly caused by circumstances beyond...

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How to Figure Out the Payoff Date of a Student Loan

Many recent graduates look forward to the day when they will finally be free from the burden of student loan debt. If you have an unusual payoff schedule, the best way to figure out when you will be done is to create your own amortization table by hand or in a spreadsheet program. When you are sticking to a regular schedule, perhaps with consistent extra payments, there are many online calculators available to perform the calculations for you. Instructions By Hand 1 Divide the annual interest rate percent by 36525 to calculate the daily...

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Does a Forbearance Student Loan Affect Getting a Mortgage?

Student loans are a necessary evil for many college students. The long life of these loans can affect students into middle-age and may play a role in determining eligibility for large purchases like a home loan. Forbearing student loans to avoid payment may have an impact when attempting to secure a home loan depending on the overall payment history of the loans and how lenders report the loans to credit bureaus. Student Loans and Credit A forbearance on a student loan should not have any adverse affect on your credit score. If your credit...

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Fair Credit Reporting Act Regulations

The Fair Credit Reporting Act was enacted to protect consumers against fraudulent or inaccurate information from being placed in their credit file, as well as protecting their right to privacy. Information about your credit history is gathered by organizations known as Credit Reporting Agencies (CRAs) who sell the information to parties that have a legitimate interest in obtaining it. CRAs must follow certain procedures regarding the handling of credit information, and you as a consumer are also entitled to certain rights. Access to Your File...

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