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

Friday, December 31, 2004

Help for Fathers Who Owe Back Child Support in Indiana

Child support in Indiana is based on how much money you make, the amount of money your ex earns, the number of children you have and the amount of custody you have. When you are in default of your child support payments and unable to make good on the money you owe, look for organizations that help fathers meet their financial obligations to their children.

Fathers Organizations

    Help lines are set up through child support organizations to assist fathers who have defaulted on payments. For instance, Child Support Help offers information on how to reduce money owed and how to avoid unreasonable increases in payment amounts.


    Contacting a lawyer that has experience working with fathers who owe back child support in Indiana can help absolve your payment issues. A lawyer can be hired to settle the debt you owe and potentially reduce the amount of back child support you must pay. For instance, the law office of Stanley E. Robison Jr. works primarily with fathers to make sure child support payments are fair and the father has adequate visitation with his children.

Government Websites

    For legal help or when you plan to represent yourself in court for your child support case, use government websites to collect information on the laws related to fathers who do not make payments. For instance, the Indiana Courts website has all of the required forms you need to request a reduction, modification or termination of child support payments.


    Before you seek help regarding your back child support payments, look over the rules and guidelines that regulate child support in Indiana. The Child Support Rules and Guidelines was enacted by the Indiana Rules of Court and states the basic guidelines for child support, the determination of child support required, tax exemptions and adjustments to noncustodial parent's obligation.

Thursday, December 30, 2004

Non-Profit Debt Forgiveness Tax Consequences

Choosing to use your education and skills to serve in impoverished areas of the country or with a non-profit organization can bring many intangible benefits as well as eligibility for student loan forgiveness. Participation in government loan forgiveness programs can alleviate the tax liability you might otherwise incur for having debt forgiven. As of 2011, under normal circumstances, you must claim any forgiven debt over $600 as taxable income on your federal return.

Medical Service Jobs

    As a doctor or registered nurse you can dedicate a portion of your time practicing medicine focusing on public health interest groups, serving in poverty-stricken areas or working for non-profit health-care organizations and earn forgiveness for government student loan debt. The U.S. Department of Health and Human Services offers student loan forgiveness programs through the National Health Service Corps and the Nursing Education Loan Repayment Program. As of 2011, the U.S. National Institutes of Health's NIH Loan Repayment Programs can forgive as much as $35,000 of your eligible government medical student loan debt. The IRS does not consider government student loan debt forgiven through such programs as taxable income.

International Non-Profit Organizations

    Volunteering with an international non-profit organization, including the Peace Corps and Volunteers in Service to America, comes with a variety of benefits, including participation in government loan forgiveness programs. For example, as a volunteer with the Peace Corps you can earn a cancellation of your eligible federal student loans, including Stafford, Perkins and federal consolidation loans, at 15 percent per year of service up to 70 percent. Unlike traditional debt forgiveness, you do not have to claim debt forgiven through non-profit work as income on your federal tax return.

Teaching Jobs

    If you're an elementary or secondary school teacher serving a low-income school district, you may qualify for debt forgiveness under the National Defense Education Act. This law grants you forgiveness on your federal Perkins loan up to 15 percent for your first and second years teaching in a low-income environment. This increases to 20 percent in your third and fourth year and to 30 percent forgiveness in your fifth year teaching. Forgiveness under this law does not require you to claim the forgiven debt as income on your federal return.

Lawyers Serving the Public

    If you're a lawyer choosing to serve the public interest with a non-profit legal aid corporation, you can have a large portion of federal student aid forgiven through programs offered through Equal Justice Works. This organization was formerly known as the National Association for Public Interest Law. The American Bar Association also maintains a list of student loan forgiveness programs on the organization's website. As with other government programs, the IRS will not consider government student loan debt forgiven in this manner as taxable income.

Tips on Interest Rates

Interest rates indicate the cost of borrowing money. When you borrow, lenders charge interest on lent funds because they forgo the opportunity to invest the money and risk the possibility that you will not pay the debt. Interest can be very expensive, especially if a lender perceives you as a risky borrower. Avoiding and reducing the interest you owe on debts is one of the keys to building wealth.

Credit Card Interest

    Credit card debt usually carries high interest rates which can make it difficult to pay back if you accrue a large balance. Credit card companies require minimum monthly payments on card balances, but they are often set so low that it takes years to pay off balances in full. The longer you carry a credit card balance, the more interest accrues and the more total money you have to spend on interest. Pay off credit card balances in full each month to avoid paying any interest on spending.

Prioritize Debts

    The average person is likely to have several different debts such as credit card debt, auto loans, student loans and a mortgage. The interest rates on each debt you have will probably be different. Paying off the debt with the highest interest rate as quickly as possible will help you avoid spending more money on interest than necessary. You should, however, always at least make the minimum payments on debts, since missing a payment can hurt your credit score.

Build a Good Credit Score

    A credit score is a number that encapsulates the risk you pose to borrowers. If you have a high credit score, lenders will be more willing to give you loans, and the loans you receive will likely have lower interest rates. A good credit score can amount to hundreds or thousands of dollars in savings on large loans like mortgages and auto loans. Paying your debts on time, keeping low credit card balances and establishing a long credit history can help boost your credit score.

Consider Refinancing if Interest Rates Fall

    Interest rates can go up or down over time. If interest rates have fallen significantly since you took out a loan, refinancing may enable you to reduce the amount of interest you owe. When you refinance, you allow a new lender to buy out your current loan and offer you a new loan with different terms. Refinancing home mortgages is common; a half a percent reduction of the interest rate on a mortgage could result in thousands of dollars in savings over the life of the loan.

How to Dispute a Credit Card Department Letter

How to Dispute a Credit Card Department Letter

A letter from your credit card company is usually an attempt to collect a debt. Your account may be seriously delinquent, and your card company may be on the verge of closing the account, listing it as charged off and selling it to a collections agency.

If you want to dispute that you owe the debt you'll have to wait until it has been charged off. Under the terms of The Fair Debt Collections Practices Act the debt is considered valid -- meaning you owe it -- as long as the account is held by the original creditor. Circumstances change once the account is picked up by a debt collector, and you'll be able to dispute it then.



    Review your credit card statement to determine how delinquent you are. After six months, the card companies generally sell accounts to collection agencies. If you are less than six months behind, write the card company asking for hardship status. Hardship status could result in the card company dramatically lowering your minimum monthly payment to as little as 1 percent of the balance for up to a year. Interest fees would be lowered as well, with a goal of giving you a chance to rebuild your finances following a hardship such as long-term unemployment or serious illness. Send the letter and wait for a response. Or if you are determined to dispute the debt, wait until it has been charged off and you have been contacted by a debt collector.


    Write a letter to the debt collector challenging the validity of the debt. This must be done within 30 days of first being contacted by the debt collector to preserve your rights under The Fair Debt Collection Practices Act. After 30 days, the debt will be considered valid and you will have waived your right to dispute it. Use your letter to force the debt collector to prove that he has a legal right to collect from you, and that the amount he says you owe is accurate. Do this by asking the debt collector to send you a copy of your final statement from the original creditor. Send your letter by certified mail so that you will receive proof of delivery.


    Read the response from the debt collector. You should assume that the debt is valid if the final statement and amount owed appears to be correct. If the statement appears incorrect, follow up with another dispute letter demanding additional documentation. By law, the debt collector must suspend all collection activity until the company provides proof that it has a right to collection from you.

Wednesday, December 29, 2004

If You Can't Pay Your Medical Bills

If You Can't Pay Your Medical Bills

Illness is often unexpected and when it strikes, it can leave you with expensive medical bills. If you are uninsured or are experiencing financial difficulties, you could find yourself in a situation where you are unable to pay them in addition to your other responsibilities. While ignoring medical bills is not an option, there are ways to properly handle your inability to pay.

Make Contact

    Put some money toward the amount that you owe. This will show willingness on your part to pay what you can, even if it is only a small portion of the bill. By showing that you are willing to work with the medical office, there is a greater chance they will be more inclined to work with you.

Pay What You Can

    Put some money toward the amount that you owe. This will show a willingness on your part to pay what you can, even if it is only a small portion of the bill. By showing that you are willing to work with the medical office, there is a greater chance that they will be more inclined to work with you.

Pay in Installments

    Ask if it is possible to pay your bill in installments. Some medical practices will arrange for you to make payments of a predetermined amount monthly. If you are able to arrange a payment plan, set your payments at an amount that you can afford while taking your monthly budget into account. Larger facilities, such as hospitals, may allow you to set up automatic payments through your bank account.

Apply for Medicaid

    Under certain circumstances, you may be eligible for Medicaid. Medicaid is generally three months retroactive and it may help with paying a portion of any bills owed prior to being approved. Contact your areas Medicaid office as eligibility guidelines vary by state.

Look to Other Outside Sources for Assistance

    Seek outside assistance for paying your bill. Depending on the size of your bill, ask your family for a loan or seek financial assistance from charitable organizations, such as your place of worship. Check for regional non-profit programs that offer financial assistance or patient advocacy groups. If your bill is for a hospital, ask if they have any charitable assistance programs that you may be eligible to apply for.

Tuesday, December 28, 2004

How Long Does it Take for Your Credit to Clear After Debts Owed?

How Long Does it Take for Your Credit to Clear After Debts Owed?

Accumulating debt can have deep negative implications to your credit report. Having too much debt can lower your credit score. If you have outstanding debts on which you are behind, you can expect that information to stay on your report for up to seven years, according to the Fair Credit Reporting Act.

Seven Years

    The Fair Credit Reporting Act outlines how long negative items on your credit report can be kept -- and therefore used against you. From the time you become delinquent, which is usually 180 days after last payment received, that info will stay for seven years. Other items also qualify to stay on your record for seven years, including civil suits and judgments, collection records and records of late payments.


    If your debts are bad enough to require bankruptcy, consider the implications of your choice. Having a bankruptcy on your file is a significant red flag to credit bureaus and this information will stay on your record for 10 years. If you file for Chapter 13 (reorganization of assets), the credit bureau can take this off after seven years, but are not under any obligation.


    The higher your debt level is, the worse your credit score will be. If your credit report list your available credit at being, say, 60 percent or 70 percent consumed, your score will be affected. It is recommended to keep your debt level to no more than 30 percent. So, for example, if your total available credit is $10,000, try to keep your debt to no more than $3,000. This factor makes up 30 percent of your credit score. So once you clear off your debts, you are on the road to repairing your credit report.


    If you have cleared your debts owed but still have a number of years to go until that negative information is cleared off, work hard to input as much positive information into your report as possible. For example, paying your bills on time accounts for 35 percent of your credit score. So combined with keeping your debts low, you can work to improve your report, thus improving your score in a few years, allowing you to become a more preferred customer to lenders and credit card companies.

Monday, December 27, 2004

What to Say to Credit Card Companies to Get Your Interest Rate Reduced

Consumers with high credit card balances and interest rates certainly pay a significant amount of monthly interest. However, they can save hundreds or thousands of dollars by requesting an interest rate reduction, according to Bankrate financial columnist Lucy Lazarony. More money is applied to the principal if the rate gets lowered. Lazarony explains that it helps to know what to say when asking credit card companies for a reduction.


    BCS Alliance recommends writing a script for each credit card account, customizing them with specifics for each card. For example, refer to the length of time the account has been open for older cards. Include the perfect history on accounts that have never had a delinquent payment, and note that a particular card's interest rate is not competitive, if most other banks have lower rates.


    Card holders should know what to say to identify the person who can grant interest rate reduction requests. The Motley Fool financial website advises using the customer service phone number printed on the card, bank website or account statement. Select the correct options to reach a live person and ask the agent, "Do you have the authority to grant interest rate reductions?" If not, ask to be connected to the right person. Otherwise, launch into the request.


    Tell the customer service agent about the account's positive history, the BCS Alliance recommends. Credit card companies usually want to retain good customers, so long-time account holders have an advantage in interest rate negotiation. For example, say, "I have had this account for five years and have never made a late payment. I hope you want to retain a good customer like me." Emphasize other positives, too, like, "I have never gone over the credit limit" or "I always pay more than the minimum."


    Banks sometimes turn down rate reduction requests, even for good customers. Motley Fool advises calling and asking again in a few months. Say the same things you did in your earlier rate reduction requests. It may take time, or speaking with several different agents, to finally get a lower interest rate. BCS Alliance recommends asking for a supervisor if an agent refuses to lower the rate. Say, "Can I please speak to someone with more authority?"


    People with good credit who cannot get rate reductions can often get better terms with new credit cards, according to Howard Strong, author of the financial guide, "What Every Credit Card User Needs to Know." Their current card issuers may even grant a rate reduction when faced with account closure. Ask to speak to an agent who can close the account and explain the reason, such as, "One of your competitors is giving me a card with a rate three points lower than yours." The agent may give a better offer to retain your account.

Should I Marry a Girl with Credit Card Debt?

Should I Marry a Girl with Credit Card Debt?

    Marrying someone with credit card debt is a decision that should be taken seriously.
    Marrying someone with credit card debt is a decision that should be taken seriously.

You Can Keep Your Finances Separate

    When you get married, your credit remains your own. Provided that you do not have your name put on any of her credit cards or previous loans, you will be able to maintain a high credit score throughout your marriage. The key is to keep your finances separate until she is able to pay back her credit card debt. If you have concerns about inheriting her debt in the case of death or divorce, consult a lawyer about a prenuptial agreement that will keep you from becoming liable.

Financial Problems Affect Other Aspects

    According to a 2010 article published in the Wall Street Journal, debt is the leading cause of marital conflict during the first several years of marriage. While you may be able to work around her past debt, many people with bad spending habits bring these same habits into marriage. Buying a home or taking out other loans that require both of you to sign may force you into higher interest rates than a couple without debt would have.

Bottom Line

    The decision to marry in spite of credit card debt is one that should not be taken lightly. However, if handled right, her financial situation need not prevent you from having a long, happy marriage.

Three Ways to Face an Uncollected Debt

Benjamin Franklin said, "Creditors have better memories than debtors." The saying may be true, but debtors don't necessarily forget their debts. A well-intentioned debtor may have a cash flow problem that prevents him from repaying a debt. Faced with limited cash flow, individuals must prioritize the bills they pay until their financial situation improves. When circumstances change and you are ready to face your uncollected debt, there are several ways to go about it.

Acknowledge the Debt

    A creditor has a set amount of time to collect an unpaid debt. The collection period is called the statute of limitations. According to Bankrate.com, the statute of limitations for collecting a debt ranges from two years, for a debt owed in connection with an oral contract in California, to 15 years for written contracts in Kentucky, Ohio and Rhode Island. In most states, if you admit to the creditor that you owe the debt, your acknowledgement resets the clock, and the credit or can take collection action against you. At that point, you can try to negotiate a payment plan with the creditor. Acknowledging an old debt is one way to face it.

Pay the Debt

    If you have the funds to pay your debt, the simplest way to face an uncollected debt is to pay it in full. Contact the creditor to verify the amount you owe. Pay the amount you owe and get a receipt for payment from your creditor.

Facilitated Contact

    If you are afraid of facing your debt, ask someone to facilitate contact with your creditor. Your representative will contact your creditor and explain that she represents a debtor who wants to repay an uncollected debt. The representative can propose a payment plan and get the creditor to agree to accept regular payments from you without revealing your identity. After the creditor commits to a payment plan, your representative will reveal your identity to the creditor so you can repay the debt according to the schedule.

Charitable Contribution

    Perhaps you cannot pay an uncollected debt because you don't know where your creditor lives or even if the creditor is still alive. You want to do the right thing and pay your debt, but you can't. If you can't locate your creditor, pay the amount of money you owe to a charity. The charity will welcome the gift, and making the payment will put your conscience at ease.

Sunday, December 26, 2004

How to Negotiate With a Banker

How to Negotiate With a Banker

With much hard work and planning, the purchase of a new car, home or business can be close to becoming a fulfilled dream but, in many cases the time for the need may come before all of the funding has been obtained. In these situations, it becomes necessary to seek a loan to help make up the difference. When seeking a loan from a banker, it isn't the banker trying to sell you money. Rather, it is you trying to sell the banker on why he should loan it to you.



    Call ahead and make an appointment with the banker of your choice. Though many banks will permit visitors on a walk-in basis, it is polite and smiled upon by bankers if you show courtesy by calling ahead and asking for a set time to visit with the banker.


    Present the banker with a copy of your business plan, if starting a business, during the appointment. The business plan should show initial start-up costs, a plan on how income is to be made as well as projected income over a specific period of time. The business plan must be written in a way to show that you have taken into account all of the risks involved and how you plan on mitigating those risks.


    Provide bank statements for all checking and savings accounts, as well as lists of valuable property such as homes, boats, cars, and anything else of value which you are willing to put up as collateral for the loan. Collateral means that you are willing to let the bank take those items should you find you aren't able to pay off the loan requirements for which you sign any loan contract.


    Make it a rule to never attempt to seek a loan for more than half of the total needed. If you need $10,000 to buy a car, for instance, try to save up at least half of it and then ask for the other half from a banker. Bankers like to see this kind of initiative when negotiating with them and will be more inclined to give you the loan you seek.


    Attend a negotiation in your best apparel and with a smile on your face. Be confident and don't let the banker "see" lack of confidence in your eyes or your face in general. If you appear nervous and seem to lack confidence in your ability to repay a loan, a banker will be able to see this from the way you carry yourself and the answer will most probably be "sorry but no."


    Go to the negotiating table expecting to pay half of the value of what you are planning to buy, but start by asking for 75 percent of the value from the banker first. By starting high in this way, you may be able to receive 55 to 65 percent of the money from the bank rather than just 50 percent. However, if the banker doesn't appear to be interested, allow him to talk you down to 50 percent or, if you can, even 40 percent. In this way, you greatly increase your chance of walking away with at least something.

Are Consolidated Credit Counseling Services Legitimate?

With so many people in debt, credit counselors and debt relief agencies are popping up all over the place. Each of these groups states that they can help get you out of debt, but it's hard to know who to believe. One major player in the debt relief community is Consolidated Credit Counseling Service, who offers credit counseling to anyone who feels they need it.

Credit Counseling Basics

    When you place a call to a credit counseling agency, the agency reviews your financial situation with you, including the types of cards you have and the balances on these cards. In most cases, the counseling agency will place you on a debt management program, which aims to get you out of credit card debt within five years. The program usually includes lower interest rates and reduced or eliminated fees, but also requires you to close out your credit cards to help you pay down your debts more quickly.

Consolidated Credit

    Consolidated Credit Counseling Services is a company based in Florida, but does business throughout the United States. Like most credit counselors, Consolidated Credit offers a debt management program, but also provides assistance with mortgages and personal financial management. The company advertises frequently on television and radio, which promotes the company's desired image of compassion and legitimacy.

Consolidated Credit Accrediations

    Consolidated Credit Counseling Services is a nonprofit organization that is a member of the Better Business Bureau. The group is a member of the Association for Financial Counseling, Planning and Education as well as Association of Independent Consumer Credit Counseling Agencies. In fact, Consolidated Credit's president, Howard Dvorkin, was once president of the AICCCA. Consolidated Credit is also a partner of the United Way of Broward County, Florida.

Consolidated Credit Reviews

    Consolidated Credit posts success stories from customers on their site, but these reviews are hand-picked by the organization and may not reflect the experiences of the average customer. However, customer feedback given to outside organizations has been very positive. Consumer feedback site Customer Lobby gives Consolidated Credit a five-star rating. Since customers are far more likely to complain about a bad experience than they are to praise a positive experience, this rating speaks very highly of the company. Furthermore, Forbes.com ranked Consolidated Credit as their Best of the Web in the debt management category.

Laws on Judgments in South Carolina

Judgments are legal rulings that provide for monetary relief to the judgment creditor. Judgment laws, exemptions and time limitations vary by state. Laws in South Carolina state that judgments are automatic liens on real property that does not fall under the exemption category. Judgment creditors have several legal avenues available to them for judgment debt recovery.

Time Frame

    Judgments in South Carolina have a 10-year window of enforcement. Individuals who own real property and have a judgment issued against them must pay off the judgment when selling or prior to refinancing the property. As of January 2011, South Carolina judgments carry a legal annual interest rate of 8.75 percent on all stated accounts. The judgment interest rate on entered and enrolled court-ordered decrees is 14 percent annually.


    In South Carolina, execution is the method allowed by law to enforce the terms of a judgment. An execution is a separate filing with the Clerk of Court in the county where the judgment is issued that directs the Sheriff to seize real estate and personal property from the judgment debtor that is not exempt by state law. Upon seizing the non-exempt property, the Sheriff sells it at public auction and gives the proceeds to the judgment creditor to satisfy the judgment.


    Each state provides for the amounts of personal and real property values that are exempt from judgment liens, levies or seizures. In South Carolina, a person's primary residence is exempt under the homestead exemption law, up to an aggregate value of $5,000. One motor vehicle, not to exceed a value of $1,200, is also exempt from a judgment creditor. Other exemptions include household goods and furnishings with an aggregate value not to exceed $2,500, jewelry with an aggregate value of no more than $500 and cash or liquid assets not to exceed $1,000.

Vehicle Accident Judgment Recovery

    If a judgment is a result of a lawsuit arising from a motor vehicle accident, the judgment debtor -- the losing party -- has 60 days to satisfy the terms of the judgment. If the judgment is not satisfied in full within 60 days, South Carolina law allows for the suspension of the judgment debtor's driver's license and registration. The execution laws and procedures are still applicable in judgments resulting from vehicle accidents.

How to Find out If I Owe a GTE Telephone Bill

If you had an unpaid telephone bill with GTE in June 2000, when Bell Atlantic and GTE merged together to form Verizon Communications, there are ways to find out if your bill was transferred to Verizon. Before the merger, GTE was considered to be the largest independent phone company in America.


Through Verizon


    Contact Verizon's collections department. Check on Verizon.com for the billing department number that corresponds to the region of the country that your GTE phone service was in.


    Advise the Verizon representative that you are a former GTE customer. Ask her to check the Verizon database for an outstanding bill for your old account. Depending upon how old the GTE bill is, it may be still be in the Verizon database.

    If you have an old GTE bill provide the Verizon representative with the account number on the bill, to aid in the process of locating your old account.


    Ask the Verizon representative for the bill amount and ask her to send you a copy of the bill. The Verizon representative can then accept a payment for the bill or create a dispute claim for the charges for you.

Via Credit Report


    Order a copy of your credit report directly from all three credit reporting bureaus:Experian, Equifax and TransUnion. You can also get these reports for free at some online credit report websites.


    Review all three of your credit reports. If you have a GTE bill that has not been paid, it will most likely show as an unpaid debt on your credit report. The credit report may also show the name of the collection agency that is handling the bill.


    Contact the collection agency directly, if you want to pay off the debt. The contact information for the agency should be listed on the credit report. In many cases a collection agency will accept a "settlement" payment that is lower than the actual bill amount. Inquire upfront concerning the settlement cost.

Saturday, December 25, 2004

How to Fix Bad Credit for Buying a Home

If you have bad credit, buying a home is a dream that can turn into a nightmare. If your credit is in bad shape, your request for loans may be turned down. Moreover, if you do manage to get one, it may be at very high interest rates. The good news is that bad credit can be fixed over time by putting the time and effort into repairing your credit. Then, you can get approval for a mortgage you can afford.


Repair Old Credit


    Start by analyzing your credit report. You will need to assess your current credit situation to identify the negative items that are damaging your credit score. You can obtain a free credit report from each of the three leading credit bureaus (Equifax, TransUnion, and Experian) from www.annualcreditreport.com.


    Write to the credit agency to explain any inaccuracies on your credit report. Include proof and relevant documents that will substantiate your claim and send them by certified mail. The credit bureau is bound by law to investigate any discrepancy in your credit report. If they do not receive any confirmation of the existence of the debt within 2 weeks from the creditor, they are required to delete it and send you an updated report.


    Settle all of your valid collection accounts. When you pay off your creditor in full, ask for removal of the negative mark on your credit report. Keep all documents related to the payment and ensure that you have an agreement with creditors first that verifies that the account will either be removed or marked as "paid in full."


    Negotiate with creditors whose negative accounts on your credit report are valid. If the items on your credit report are valid and they are detrimental to your credit rating, you need to consider some long-term strategies to improve your credit scores. In some cases, creditors are willing to settle for amounts much lower than the debt owed in order to recoup the balance owed. If an agreement is reached between you and your creditor, ensure that you document all communication and terms for removal.


    Negotiate with creditors whose marks on your credit report are only 30 days past due. Late or missed payments, even 30 days old, still negatively affect your credit score. Fortunately, many companies will remove these infractions on your credit report if you explain why you were late making payments and also agree to remit what is due.

Establish New Credit


    Establish and maintain a new line of credit. Consider obtaining a secured credit card from your bank in order to start fresh and show creditors that you can be trusted to pay your bills on time. Conduct all of your your financial transactions in an orderly manner and be prompt with payments.


    Adopt new habits in the future when dealing with credit. Repeating previous mistakes in the way you handled credit will only keep you trapped in the habit of adding negative accounts and marks on your credit report. Simple habits you can employ include paying your credit card balances well before the due date. This way, you can avoid late fees, which can accumulate as negative remarks on your credit report.


    Use your credit cards in moderation. Your debt-to-income ratio should be manageable. Keep your balance on the card less than half the credit limit. At any point of time, avoid having more than five cards at a time.

How Do Credit Card Companies Determine the Interest Rate Charged?

The interest rate on your credit card is the percentage of your balance the issuer charges you each billing cycle. Your credit card costs you more over time and usually takes longer to pay off if you have a high interest rate. A combination of factors, including payment and credit history, determines the interest rate you are charged.


    Your creditworthiness is a significant factor in the interest rate you are charged on your credit card. Your credit score, a number assigned to you based on your credit history as reported by the major credit bureaus, is reported to the credit card company when you apply for an account. The lower your score, the higher the amount of interest you will have to pay. Credit card companies usually assign an interest rate based heavily on the score range in which your score falls.


    Your monthly income is considered when determining your credit limit and interest rate. You may receive a higher interest rate even if you have good credit if your household income is considered low by the creditor. That's because you are viewed as a higher risk to the company.

Payment Status

    Your credit card has a default interest rate, which is the rate the company charges if you fall behind on your payments or when an introductory rate expires. A credit card company can charge you the default interest rate once you are at least two months behind on your payments. You can earn your original rate back in a delinquency case if you make at least six months' worth of payments on time.

The Economy

    The current level of inflation and the health of the financial market impact interest rates offered by credit card companies in general. Your credit card company may increase your interest rate when the market slows to make up for lost customers or a higher number of defaulted accounts.

Am I Responsible for My Husbands Judgment If He Is a Sole Proprietor?

A sole proprietorship is the easiest form of business to create and it also carries the most risk. You could end up owing quite a bit of money in connection with your husband's business debts if his business is a sole proprietorship. Keeping your finances strictly separate is the best method of protecting your accounts from a creditor's judgment in connection with your husband's sole proprietorship.

No Liability Protection

    A sole proprietorship offers no liability protection for a business owner's personal assets when a creditor is pursuing the owner for a business debt. A creditor obtaining a judgment against the business owner for the payment of a business debt may move to seize personal banks accounts and property up to the limits of the judgment. If you share any financial assets or property with your business-owner husband, a creditor may execute a court judgment against those assets or property because your husband's name is on the title or the account.

Garnishing Wages

    Your wages should be exempt from garnishment for the payment of your husband's business debt because your wages are in only your name. This is the case even if you're an employee of your husband's business. It may be a smart financial move to keep your earnings out of any bank account you share with your husband while a creditor is pursuing a judgment against the business. This helps keep a creditor from seizing your wages if the creditor is able to freeze the account through a court judgment.

Assets Before Marriage

    Any assets you had before your marriage should be exempt from a creditor's judgment, even if your husband is the sole proprietor of a business. States usually consider property held by a spouse before marriage as separately owned, which means a creditor can't move to seize or place a lien on the property because it has no connection to your husband's business debt. If you used any of your property as collateral for a business debt, this may give a creditor the ability to seize the asset or place a lien on it.

Federal Tax Debts

    Taxes owed to the federal government are in a separate liability category. If you and your husband file taxes jointly, you share in the liability associated with any taxes owed. Basically, if one of you owes, you both owe the government. The IRS has broad powers to seize your assets, garnish wages and drain your bank accounts while in pursuit of back federal taxes. In most cases, the IRS doesn't need a court order to execute any action to recoup a delinquent tax debt.

Debt Consolidation Vs. Chapter 13 Bankruptcy

If you're in debt, you have a number of options to help you deal with your finances. Debt consolidation and Chapter 13 bankruptcy represent two different approaches to getting out of debt. While either choice can potentially help you resolve your debt, each has advantages and disadvantages that you should understand before determining which choice offers the best solution.


    Chapter 13 bankruptcy allows debtors to reorganize their debts and repay them over time from future income. Chapter 13 can help you catch up if you've fallen behind on your financial obligations and prevent you from losing control of your assets. The purpose of a debt consolidation is to allow you to combine multiple debts into one monthly payment so you can pay down your debts faster.


    Chapter 13 is a legal process regulated by the U.S. Bankruptcy Courts. You must file a bankruptcy petition to initiate a Chapter 13 case. You create a repayment plan based on your income and make regular payments to the court over a period of three to five years. With debt consolidation, you typically combine payments through a loan or line of credit and make monthly payments to the lender according to its repayment schedule.


    Both debt consolidation and Chapter 13 can potentially be costly. As of 2010, the filing fee for a Chapter 13 case is $274, according to the U.S. Courts website. However, if you are represented by an attorney, your case can cost thousands of dollars. With debt consolidation, you typically have to pay interest on the loan each month. If you're using a home equity loan or line of credit, you may also have to pay closing or monthly maintenance fees.


    The primary benefit of debt consolidation is that it can help you save money in interest costs and monthly payments if you consolidate to a lower rate. The main benefit of Chapter 13 is that it can help you avoid collection actions from creditors. When your bankruptcy petition is filed, an automatic stay goes into effect that prevents creditors from pursuing outstanding debts. A Chapter 13 bankruptcy can help you avoid lawsuits and foreclosure if you are able to make plan payments regularly.


    Debt consolidation is not without its pitfalls. For example, consolidating credit card debt can help you save money, but it can land you in more debt if you run up your balances again. If you have poor credit, it can be difficult to obtain financing for a consolidation loan. If you file Chapter 13 but are unable to make plan payments, creditors can be free to resume collections against you. Even if you complete your plan successfully, your bankruptcy filing can damage your credit for up to seven years following your discharge.

Friday, December 24, 2004

How to Pay Off $100,000 in Loans

How to Pay Off $100,000 in Loans

A large debt may seem impossible to pay off when you look at the total debt next to your monthly income. Paying off your $100,000 in loans, however, is within reach when you carefully monitor your expenses and strategically pay the debt each month. Do not let the debt overwhelm you; take a breath, lay the paperwork out in front of you and create a plan for getting out of the red.



    Prioritize your $100,000 in loans on a sheet of paper from the highest interest rate to the lowest. Part of paying off your loans is knowing which loan costs the most per month. For example, if you have a business loan with a 10 percent annual interest rate and an unsecured loan with an 8 percent annual interest rate, the business loan costs more. You will pay more money on your loans in the long run if you do not pay down the most expensive loan first.


    Write out the minimum payment for each loan on the sheet of paper containing your loan list. To pay off your loans, you will pay the minimum monthly payment on every balance except the loan with the highest interest rate.


    Create a budget of your monthly income to determine the most you can spend per month on debt reduction. When creating your budget, you may find that you spend needless amounts of money on monthly subscriptions, clothing, eating out or other purchases. Seeing the numbers in front of you will help to tighten your budget for paying down your $100,000.


    Spend some of your saved money from savings accounts to pay off your $100,000 in loans. The interest your debt accrues is often more than the interest your money earns in a savings account. Paying off some of your loans or part of a loan will eventually offset the loss. Use part of an untouched emergency fund for debt reduction purposes as well.


    Raise your monthly payments if you have the cash available. You can pay debts off quicker with less interest if you find ways to pay more per month. For example, starting a part-time job or business can bring in extra cash for loan repayment. Renting a room in your house or limiting your driving can free up extra money each month.


    Consolidate your debts if possible. Your bank may buy all of your loans and create one large loan with a better interest rate if your credit matches its terms. Debt consolidation will make your $100,000 loan repayment easier by creating one bill per month through one lender.

Three Rules for Debt Management

Debt can be overwhelming and lead to financial ruin for many people. It can cause poor credit scores, bankruptcy and other financial problems that affect all aspects of someone's life. For this reason, proper debt management is key to financial survival. Not only can it ease the strain of insurmountable debt loads, but it can also result in better credit and access to larger purchases, such as a new home or car.

Pay Bills Early

    Even if you pay your bills, you may be socked with excessive late charges and miscellaneous fees if you don't pay them on time. This can, in turn, put you even deeper in debt. To avoid this, pay your bills early to ensure that you don't end up paying more than what you actually owe. You can even pay your bills at least two to three days early just to ensure that the payment has processed by the due date and your creditor can't try to charge you anything extra.

Get Organized

    You can't know how deep in debt you are until you organize your finances. Take some time to write down every debt you have and what the total amount of the debt is, including late charges and any associated collection fees. Then, make a list of your income, tallying up all money coming into your household. Once you have a basis of comparison for how much is coming in versus how much is going out, you can then figure out how to pay off debts and where you need to make some changes, financially.

Get Help

    Don't wait until you are too deep in financial crisis to get help with debt management. If you cannot do it on your own, there are numerous reputable debt counseling agencies available that can help to get you back on track. But don't wait until it is too late or you are extremely deep in debt. At the first hint of trouble, seek assistance.


    If you let your debt go, then you may find yourself in deeper trouble financially than you might have been if you tried to work with your creditor on a payment plan. Don't ignore the calls and letters; instead, explain your current financial status and see if there is some way to work out what you owe in a payment plan until you can catch up your account.

Thursday, December 23, 2004

Housing & Credit Counseling

Housing & Credit Counseling

Housing and credit counseling comes in many forms. For example, several nonprofit housing and credit-counseling agencies support borrowers who are already behind or about to fall behind on their debts. In addition, the federal government provides counseling by encouraging mortgage lenders to modify loans. Success begins with facing your problems head-on and developing a plan of attack. Don't wait, and don't hide. Start now.

Best Counseling Resource

    Contact the National Foundation for Credit Counseling, a nonprofit organization founded in 1951. According to its website, the NFCC assisted more than three million Americans in 2010 and has more than 800 offices in the United States and Puerto Rico. Offices are staffed with counselors who are trained in budget- and credit-management services. Initial consultations are free and confidential, and cover all types of debt, from credit cards to mortgages. Begin a consultation online or call 800-388-2227.

The NFCC: What They Will and Won't Do

    The NFCC will review your budget during the first meeting and discuss your financial goals, which probably include getting out of debt. Even if you're late on your payments, call the NFCC anyway. The counselor may be able to enroll you in a debt management plan, also known as a DMP. These management plans are terrific tools for consumers who are struggling to manage debt payments. The consumer makes one monthly payment to the counseling agency, who distributes it to creditors, and the accounts are closed. In exchange, counselors are usually able to negotiate a lower interest rate, eliminate fees and arrange for the debt to be paid in full within five years. Accounts are also brought to "current" status, which improves the consumer's creditworthiness. The NFCC also offers bankruptcy counseling services but does not make or facilitate consumer loans.

HAMP Eligibility

    If you're concerned about making your mortgage payment, consider the Home Affordable Modification Program, also known as HAMP. According to the federal government's Making Home Affordable website, homeowners, delinquent or not, may have their mortgage payment reduced to 31 percent of their monthly pretax income if they meet certain criteria: have a financial hardship, occupy the home as a primary residence, secured a home loan before 2009, have a payment that's more than 31 percent of pretax income, can document their ability to afford the new payment and owe less than $729,750.

    According to the U.S. Department of Housing and Urban Development (HUD), those who had their loans modified successfully saw a 40 percent drop in their payments, many by $1,000 or more. If you are not eligible for HAMP, your lender may have another program to assist you. You may also need to consider a short sale.

    Contact your mortgage lender directly to investigate both options.


    If you've exhausted your counseling and HAMP options, you may need to consider debt settlement. In a debt settlement plan, a consumer pays roughly 40 percent of the outstanding balance. Usually, you have to be between three and six months behind on your payments. Once you've settled, however, it's not reported as "paid in full" to your creditors. Prepare for your credit score to hit rock bottom. However, you'll be debt free.


    Bankruptcy is your last resort. Many debts, such as credit card debts, can be discharged. However, your credit will be severely damaged; bankruptcies are reported for 10 years. It may affect your employment status, and it could affect your insurance premiums. However, employer-sponsored retirement plans are safe from creditors, and you may be able to keep your home and your car. Both debt settlement and bankruptcy may require the use of a professional. Be wary of settlement companies, and check the Better Business Bureau before revealing personal details.

How Can I Cosolidate All My Debts?

Consolidating your debts is a method of combining outstanding accounts such as credit cards and loans into one payment. This way of dealing with debt can simplify your monthly accounting and loan payment. In addition, if you're able to secure a lower interest rate on the consolidation, you can pay down your principal quicker. There are various ways to consolidate your debts. Explore your options and pick the one that works for you.



    Use money from your home's equity. Go to a home loan lender and complete an application for a home equity loan or line of credit. Borrow cash from your equity and use the funds to get rid of your credit card balances and other debts.


    Get a personal debt consolidation loan. If you don't have equity, use other collateral like the title to a paid off car to secure funds for a personal debt consolidation loan. Shop around for the best interest rate. Choose a short term loan of three or four years and pay off your other debts with the money. This will mean that you have only one loan payment to make each month.


    Use a life insurance policy to pay off your debts. Talk with your insurance agent to see if you're eligible to borrow money from your whole life policy. Repay the money over time, or have the borrowed funds deducted from the policy's value.


    Work with a company to consolidate debt. If you can't qualify for a bank loan or home equity loan, use a debt consolidation company. This type of consolidation simplifies debts by combining balances from credit cards and loans into one new bill. You send a payment to the debt consolidation company each month and the company pays individual creditors for you.

Wednesday, December 22, 2004

Estate Lien Laws in Mississippi

Liens are claims that creditors can make against personal property for debts that have not been paid. Because these liens are legal documents focused on the property itself and not a particular debtor, they are considered part of estate debt and can continue on even after an owner dies. Many liens are filed by contractors that did work on a property and were not paid, known as mechanics liens, while other liens may be created by banks and even the government. Each state, including Mississippi, has its own lien laws.

Contract and Subcontract Obligations

    In Mississippi, only workers that have had direct contact and agreement with the owner of the project can file a lien in order to claim payment. This law prevents subcontractors from filing a lien on a property when the owner has actually paid the primary contractor, and the obligation lies with this contractor instead of with the owner.

Filing Liens

    When it comes to filing liens in Mississippi, the supplier of services or equipment at the owner's request must create or "perfect" the lien by filing the notice of the lien with the Chancery Clear in the county where the work itself was located. The lien cannot exist unless this recording takes place and is completely ineffective, regardless of the language of the contract, unless a local government has a record of it. This is a common lien law for most states.

Notices and Suits

    Many states impose particular time limits on lien filing and claims. In Mississippi, a creditor can file a lien, but the filing must take place within 12 months after the actual work was done and the payment date for the work occurs. If the creditor eventually wants to file a lawsuit, then the same 12-month time limit applies. If the creditor does not file the suit within a year after the payment date, then the lien may be wasted completely.

Tax Liens

    Tax liens are created by governments to seize assets to pay for late taxes, often property taxes. Mississippi uses an overbid auction system to sell off assets in a tax sale in order to collect payment on such property taxes. There is also a redemption period in the state, which must be ended by a notice of final sale, which the sheriff must serve to the original owner.

Road to Debt Freedom

Road to Debt Freedom

Living without the burden of consumer debt equals freedom of choice. If you're willing to make a serious commitment, there are several free or low-cost methods that are easy to use. If you're looking for instant gratification, you've come to the wrong place; if not, then know that the rewards of living a debt-free existence are subtle, but worth the effort. The keys to success? Don't incur new debt, and live cheaply.

The Power of the Telephone

    Consumer debts such as credit cards often have interest rates as high as 16 percent, sometimes more, and every dollar you pay off equals that rate's percentage return on your money.

    Make a list of your debts, including all the pertinent financial information, such as the interest rate and outstanding balance. Call each lender and simply ask for a rate reduction; you'd be surprised at the power customer service agents have. Most consumers are unaware that this easy request can be accommodated with a quick phone call (if your account is current, you'll have a better chance of success).

    Once your interest rates are lowered, maintain your payments at the previous levels. This ensures that more of your money is paying off the principal balance, and lessens the amount of time you'll be in debt.

Snowballing Your Payments

    In the debt "snowball" reduction method, one debt is selected and all available funds are "pushed" toward eliminating the balance. Pay only the minimum payments on the remaining accounts. Pay the highest interest debt first; this ensures you will pay out the least amount over time. However, you may opt to pay the smallest balance first; this is a good method to use if you'd like to feel success earlier.

    The key to the snowball is to add the first payment to the next once the first debt is paid off. Continue in this manner until your debts are paid, remembering to allocate every extra dollar toward debt reduction, while living frugally at the same time.

Debt Consolidation Loans

    The financially savvy consumer may find that debt consolidation loans, such as cash-out home equity loans or credit card bill consolidation offers, offer much lower interest rates (home equity loans may also offer tax advantages). However, be honest with yourself. If you take out a debt consolidation loan, have a clear plan in advance to pay it back quickly. Ask yourself: Are you in debt because you overspent? If so, this route is too risky for you.

    Remember that consolidation loans borrow from Peter to pay Paul. If you're using a home equity loan and you default, you have placed your home in jeopardy -- all for debts that would have been eliminated in a bankruptcy proceeding.

Debt Management Plans

    If you are in over your head and don't know where to turn, your first call should be to the National Foundation for Consumer Counseling. This organization is a reputable nonprofit whose counselors are certified in credit management and provide free budget consultations. If you are late or are about to be late, you may elect to participate in a debt management plan (DMP).

    In a DMP, unsecured credit accounts you select will be closed and you will be placed on a payment plan that will eliminate your debts within five years. Interest rates may be lowered, and your accounts will be reported as "current" to the three major credit bureaus. Your credit scores may suffer a temporary hit, but participation in a plan is much less severe on your scores than delinquent payments, settled debts or bankruptcy.

Debt Settlement Options and Bankruptcy

    Your last resorts, and those with the most serious consequences, are debt settlement and bankruptcy.

    Debt settlement, a completely legal tactic, allows consumers to pay a fraction of what they owe, usually in a lump sum payment. To qualify, you must be several months behind. You may hire a professional negotiator or attempt to negotiate on your own; usually, about 40 percent of the outstanding balance is agreed upon. The debt is reported as "settled" to the credit bureaus, but not paid in full.

    Bankruptcy requires hiring an attorney, but your debts may be eliminated or settled for as little as 10 percent of the total. However, it is the solution with the longest-reaching consequences. It may affect your employment status, and it may be years before you can qualify for a loan.

    Regardless of the path you choose, a fresh, debt-free start will provide a financial peace of mind that can't be duplicated by the thrill of instant gratification.

How to Consolidate Debt With Bad Credit

You're up to your eyeballs in debt and your credit is shot. The layoff you experienced a few months ago has taken a toll. You've been searching diligently for work, but in this poor job market, it hasn't been easy. Stop! Before you consider filing for Chapter 7 bankruptcy or enrolling in a bogus debt management plan, consider these alternatives. Seize control of your credit again! With a little planning, patience and persistence, you will be back on top again.



    Tell yourself that it can be done, and you will overcome your current financial situation. Start out with a positive outlook. Be determined to become debt-free, repair your credit and get on with your life.


    Understand that getting out of debt is a process, one that will take time. Remember, you didn't get into this mess overnight, and you certainly won't get out of it that quickly. Be mentally prepared to keep track of your monthly expenses, and maintain a tight budget. Learn to live frugally. You don't have to buy everything name-brand.


    Take a good, long look at your current financial situation. Determine if you truly need to seek the services of a credit counseling or debt management service. There are plenty of these so-called providers out there waiting around like vultures to make empty promises and take your money. Invest the time to shop around and do plenty of research before deciding which one to use. Realize that, despite what these companies insist, there are other options.


    Assemble your current and past-due bills. If you receive unemployment benefits, this will help because some (although very few) lenders actually consider it income. The first thing you should do is call each creditor and try to reach a settlement with them directly. Explain that you've been laid off but still wish to pay your bills. Ask if they are willing to work out a revised payment schedule and offer to pay a lesser amount than normal until you find a job. You'll be surprised at how anxious they are to work with you. Contrary to popular belief, they are not your enemy.


    Consider consulting with a credit union or bank, preferably one that you already have an account with, to see if they are willing to approve you for at least a small personal or signature loan so that you can get you caught up on some of your monthly payments. Some of them may even approve you for a debt consolidation loan and make a check out to each individual creditor, if you qualify. All of this will be depend on your overall FICO credit score.


    Check into applying for financial aid if you attend college. Not only will it help pay for tuition and books, it can also be used to pay some of your debts. You may qualify for several types of aid, including grants (which don't have to be repaid), scholarships and/or loans. Some loans, such as the Federal Perkins Loan, are backed by the Government, so your credit will not be checked. Contact your school's Financial Aid Office for more information.


    Use a consumer credit counseling service if none of the above suggestions work. Exercise extreme caution, and check the websites for the Better Business Bureau and the Federal Trade Commission to see if any complaints have been filed against the company you're considering. Many of these companies claim to be non-profit, but still may charge a monthly service fee if you decide to enroll in their debt consolidation or debt management program.


    Examine your entire financial situation, and decide what works best for you. Whichever option you choose, be consistent in making your monthly payments. The sooner you pay off these debts, the better your credit will look and the less stressed you'll be.

A Guide to Eliminate Debt

Debt elimination can reduce monthly expenditures. Debt accumulation can result from overuse of credit cards or living beyond your means. If you're tired of making high monthly payments, consider ways to get rid of credit card debt or reduce your outstanding balances.

Increase Income

    Additional income each month helps speed debt elimination. Check your finances, and if you don't have disposable income to pay down balances, look for part-time work temporarily to generate extra income. This can include working after your full-time job a few days a week, or asking your present employer for overtime hours.

Sell Items

    Getting rid of personal belongings can create extra cash to pay down smaller credit card debts. Rummage through your closets, garage or basement and look for old items such as jewelry, furniture or electronics. Have a yard sale or list these items for sale in classified ads. Use the proceeds to eliminate a credit card bill or at least pay down the balance.

Reduce Expenditures

    Resolve to cut back on extra spending to help pay down balances. Stop eating out or spending excessively on shopping, entertainment and recreation. Learn how to entertain yourself on the cheap and start preparing meals at home. Apply the monthly savings to credit cards and other debts to lower the balance.

Minimum Payments

    Get away from only paying the minimum on credit cards and start increasing your payments to credit card companies. Do whatever you can to reduce the balance. Start slow and perhaps double your monthly payment. As your income increases, begin to triple or quadruple the minimum payment. Higher payments will knock down the principal quicker.

Destroy Credit Cards

    Take a pair of scissors and destroy credit cards if you have a problem controlling credit card use. Whipping out credit cards to pay for items will keep you in debt, unless you're committed to paying off the balance in full each month. Carry cash and save for purchases to alleviate debt.

Interest Rate

    Help pay down balances quicker by negotiating a better interest rate on your credit cards. Some credit card companies will reduce your interest rate on the spot if you have a good credit history. A lower rate reduces how much you're required to pay in interest charges each month; thus, creditors apply a higher percentage of monthly payments to the outstanding principal.

Tuesday, December 21, 2004

When Must a Resident Be Informed of a Foreclosure?

When Must a Resident Be Informed of a Foreclosure?

If you are facing possible foreclosure on your home, take the time to become familiar with your state's foreclosure laws and time lines. Every state handles foreclosures differently, including notification steps and scheduling of the foreclosure auction. Foreclosure proceedings can be completed in as little as two months in Texas or can take as long as six months in Nebraska. Each state also regulates when a resident must be informed of a foreclosure, whether they own the property or rent it.

Notice to Accelerate

    You are considered to be in default on your mortgage after 30 days without making a payment. Typically, after 60 days the lender will begin the foreclosure process, but you may be able to stall the process if you have been in contact with the lender since the first month of missing a payment. Once your payment is late by 60 days or more, you may receive a Notice to Accelerate, and if you fail to bring the loan current, the lender may accelerate the due date on the loan and begin foreclosure proceedings.

Demand for Payment

    If the amount due is not paid by the date indicated by the lender in the Notice to Accelerate, the next document you may be receiving is a Demand for Payment letter, drawn up by the lender's attorney. The demand letter is to formally notify you of the next step the lender will take if you do not respond with a payment, and typically, you would have 30 days to bring your mortgage current or the foreclosure process will move forward.

Notice of Default

    If you fail to respond to the demand letter, the lender would choose the appropriate type of foreclosure to pursue for your state or in accordance with your mortgage contract. The lender will initiate a judicial or non-judicial foreclosure; whereby, a judicial foreclosure must be processed through the court system and a non-judicial foreclosure is handled solely by the lender through a power of sale clause in the mortgage contract. You will receive a Notice of Default, usually anywhere from 60 to 90 days after your first missed payment, and this is your formal notice of foreclosure and lists the total amount due.

Notice of Sale

    If you fail to respond to the Notice of Default within 20 to 30 days, you would be presented with a Notice of Sale. The notice establishes the foreclosure auction date for your property, and it must be posted in an adjudicated local newspaper and somewhere on your property, for a specified period of time prior to the auction. Once all publication time period requirements have been met, the property will be sold at auction to the highest bidder.


    The Protecting Tenants at Foreclosure Act of 2009 protects renters who are subject to possible eviction when the property owner loses the home to foreclosure. The act provides that leases signed prior to foreclosure proceedings will continue, and the tenant will be allowed to stay until the end of the lease. Month-to-month renters are entitled to 90 days notices before having to vacate the properties, which is longer than any states non-foreclosure notification period.

Is My Spouse Liable for My Mortgage?

Is My Spouse Liable for My Mortgage?

For most homeowners, a mortgage is their largest personal debt. The consequences of not paying a mortgage loan include foreclosure, credit damage and a possible lawsuit.

Joint Contract

    Lenders determine mortgage liability by whose name is on the original loan contract. If you and your spouse applied for the loan together and the contract reflects both of your names, the mortgage is a joint contract and you are both equally liable. If, however, the loan is in your name only, your spouse isn't responsible for the payments unless you live in a community property state.


    Some states, such as California and Nevada, have special laws regarding the distribution of marital debt. These states are community property states. In a community property state, any property that either spouse acquires over the course of the marriage belongs to both parties equally. The same rationale also applies to debts. Your spouse, therefore, is liable for your mortgage if you live in a community property state and acquired the property after getting married.


    If your spouse is legally liable for your mortgage, she cannot merely fill out a quit claim deed and place the full burden of repayment on your shoulders. A quit claim deed will legally transfer property ownership, but doesn't exonerate the homeowner who has filed it from the responsibility of paying off the original loan.

Monday, December 20, 2004

What Is a Debt Agreement?

A debt agreement is a contractual arrangement in which one party, a creditor, agrees to work with another party, a debtor, who is unable to meet the previously stipulated obligations of a loan repayment. A debt agreement is sometimes referred to as a right of claim for money against a debtor. Debt arrangements can be either formal or informal.

Debt Basics

    Debt is established by contractual arrangements, submissions into public records, judgments of debt by the court, issuance of bonds, and many types of consumer and business loan contracts in which terms of the debt are spelled out in the loan contract, according to The 'Lectric Law Library website's legal definition of debt. In some instances, debt agreements are verbally established between two parties. While usually legally binding, a verbal debt agreement is more difficult to substantiate in court. When you repay your debt in total, your debt is discharged.

Debt Remedy

    When a debtor fails to meet his obligations under the contractually agreed upon terms and conditions of a debt agreement, the creditor may seek legal action to recover the debt and any money owed, notes The 'Lectric Law Library. This legal action to recover debt is called a debt remedy. A creditor may take a debtor to court, for instance, and sue for recovery of unpaid debt as well as financing fees, if applicable.

Formal Debt Agreements

    Formal debt arrangements are called Part 9 Debt Agreements, according to the Debt Advice website. These are formalized arrangements established between a debtor and his creditors that offer an alternative approach to debt repayment. Added to the bankruptcy act in 1996, these formal agreements are intended to offer both parties a remedy that avoids bankruptcy, where no one would benefit. Often negotiated by a third-party debt solutions company, these formalized contracts help the debtor repay the debt over a longer time frame, or they may reduce the total debt. Creditors do not have to go along with a debt agreement, but may do so to avoid a total loss when a debtor files for bankruptcy.

Informal Debt Agreements

    Informal debt agreements are less formalized and are not legally binding. Debtors that have personal loan and credit card obligations that exceed what they can manage may approach a creditor on their own to discuss an informal agreement that either suspends repayment, extends the repayment period, or reduces the debt obligation. The Debt Advice website indicates that creditors often have "hardship departments" that work specifically with debtors on these arrangements. If you lose your job and cannot meet upcoming payment obligations, a creditor may work with you directly to avoid expenses and delays with more formalized debt agreements.

How Is Bad Credit Removed From My Credit Report?

How Is Bad Credit Removed From My Credit Report?

Negative entries such as charge-offs and repossessions can remain on your credit report for up to seven years. A bankruptcy can remain for as long as 10 years. By law, the three major credit reporting bureaus--TransUnion, Experian and Equifax--must remove outdated negative information, according to the Fair Credit Reporting Act. However, federal law gives you the right to challenge any information on your credit reports, and that information must be removed within 30 days if the credit bureau cannot verify its accuracy.


    So-called credit repair agencies advertise that they can clean up your credit by removing negative information, but that's often wishful thinking. There are no legal grounds for removing negative information from your reports unless it is outdated or incorrect. The Federal Trade Commission advises that you should stay clear of credit repair firms and work directly with the credit bureaus through a disputes process if you think information on your report is inaccurate.


    Removing negative entries from your credit reports could cause your credit scores to increase, making it easier for you to obtain credit and qualify for loans at lower interest rates.

Time Frame

    Those benefits are among the reasons some consumers challenge information on their reports even though they know that it is accurate. The Federal Trade Commission says the burden of proof is on the credit bureaus. When you file a dispute with the credit bureaus, the credit reporting agencies immediately contact your creditors to verify the information. Time is often on your side, because creditors have to respond to the credit bureau within the 30-day window. If they don't respond in time, the credit bureau must acknowledge that the negative information could not be verified and is being removed from your report. On the other hand, negative information that is confirmed remains on your report.


    The disputes process is a common tactic used by credit repair agencies. You can take the same action and potentially gain positive results. It is common for some credit repair firms to simply dispute multiple entries at once in hopes that the original creditors will not verify all or most of the information. You can dispute entries in your credit reports by writing the individual credit bureaus or contacting them through their websites. Also, by law, you are entitled to free copies of your credit report every 12 months from each of the three major credit bureaus. You can get free reports at AnnualCreditReport.com.


    The Federal Trade Commission says credit bureaus can ignore frivolous disputes. For example, a letter from you challenging previously confirmed information might be considered frivolous.

Bill Paying - Tips for Getting Organized

Paying the monthly bills isn't something many people look forward to, but the task is made more difficult if you don't organize your bill-paying effort. Bills can get lost, current bills can get mixed up with older bills, and credit accounts can get behind if you're not organized.

Develop a System

    When your bills come in the mail, the worst thing you can do is put them in mail piles all over the living room or the kitchen. Purchase two office baskets and designate one for bills that need to be paid in the current month and the other for bills that need to be paid next month and beyond. Put the current-month basket on top so it gets the most attention, and do not forget to put bills in the top basket when the months change.

    Keep all your bill-paying materials with the bill baskets. Your checkbook, calculator and anything else associated with paying the bills should be in one area for easy access.

Establish a Schedule

    Sit down with your bills and write down which bills are due on which day of the month, then develop a monthly budget and bill-payment schedule around those due dates. Designate one day each week to be bill-paying day, and sit down with your schedule and your bills to make sure the bills get paid on time. Create a checklist of the bills that need to be paid every month, and check them off as you pay them.

    Refer to the list regularly to make sure all the bills are accounted for, and don't forget to put any one-time bills, such as florist bills or tax bills, on the list as well.

Pay Bills Online

    Your computer can be a huge help in organizing your bills. In fact, you can probably pay most of your current bills online from your checking account, which saves money on stamps and saves time because your payment is posted almost immediately. Check with your bank to see if you can pay your bills online.


    Invest in money-management software and follow the program each month to make sure your bills are paid. There are also many inexpensive spreadsheet programs you can use to create your own monthly bill planner--you may find it easier to follow something you created than something made by another person.

What Does 'In Loan Default' Mean?

Loans are governed under contract law. A borrower receives something of value from a lender -- like cash or an asset like a car -- and signs a contract agreeing to repay the lender under certain terms and conditions. This contract becomes a binding legal agreement between the parties. If one party fails to live up to the terms of that agreement, he is said to be "in default."

Default Provisions

    Most loan agreements contain a section that outlines the consequences if one party fails to honor the terms of the contract. Although each loan can have whatever provisions both parties find agreeable, in general, the default provisions outline the conditions that constitute a breach of the contract, which puts the loan itself "in default," and the mechanisms both parties have to try to resolve a default.

Lender Default

    Although rare, it's possible that a lender could default. For example, a bank could try to finance the sale of a house to a borrower only to learn that the title to the house is contested. In a lender default, the terms of which are usually spelled out in the loan agreement, typically both parties are held harmless and the loan contract is simply voided.

Borrower Default

    The most common cause of borrower default is failure to make regularly scheduled payments on the debt, although defaults for other reasons -- like not obtaining insurance on a house or car, or filing a fraudulent application -- do occur. When a borrower is at risk of default, the lender notifies the borrower and attempts to resolve the problem. When the lender cannot get mutually agreeable traction, it declares the loan to be "in default" and the default provisions of the contract take effect.

Consequences of Default

    In default, most loans require the entire remaining loan balance to be repaid in full, immediately. If the borrower cannot make the lender whole, then the lender may pursue the full range of collection activity, including repossession, court judgments, garnishments and collection agencies, to recover its interest in the debt.

    Some banks or credit unions may offer a reconciliation process to get a person out of default, but this is not common; once the contract is breached, it's breached. Some lenders, like the Department of Education, allow a defaulted loan to be rehabilitated, but the costs and impact to the borrower's credit report can be significant.

Sunday, December 19, 2004

Does an IRS Tax Lien Show Up in a Credit Bureau Report?

Does an IRS Tax Lien Show Up in a Credit Bureau Report?

Consumer credit bureaus rely, in part, on public records to determine credit scores. This information is regularly collected from state and county courts. Those courts hold a wealth of information, including state, federal and local tax liens, as well as judgments, foreclosures and bankruptcies.

Tax Liens

    Tax liens give a lien holder a legal right to claim a person's property. The IRS only files liens after they give a debtor notice of a tax liability and the debtor fails or refuses to pay within 10 days. A lien gives the lien holder a priority claim to property in bankruptcy or if the property is sold at auction. They're filed publicly to warn other creditors that there's a large, outstanding debt they're entitled to collect first. An IRS lien attaches to all of a debtor's property, including his house, car, and in business, accounts receivable.


    Tax liens are similar to bankruptcies. They stay on your credit report for seven years. According to the Fair Isaac Corporation (FICO), which is the company responsible for the most widely used credit scoring formula, "The presence of a public record (such as a bankruptcy or tax lien) and a serious delinquency are powerful predictors of future payment risk."


    Some people believe that a tax lien will be removed from a credit report after it's paid. This is false, according to FICO. "Satisfying the public record will not remove it from your credit report. The fact that it occurred is still predictive of future payment risk and will be considered by your FICO score."

Actions to Take

    The best way to prevent a tax lien from impacting your credit score is to pay your taxes or enter a payment plan with the IRS before a lien is filed. Mistakes can happen, and tax liens are occasionally filed improperly. If this happens, the IRS will send you a tax certificate stating that the lien was in error. Mail a copy of the certificate to the three major credit reporting bureaus: TransUnion, Equifax and Experian.


    Lenders like borrowers who pay back loans. Borrowers who do so are often given more favorable terms on car loans, mortgages and credit cards. A good credit score can save a borrower thousands in interest rate payments and other fees. If you have a tax lien and do not want to pay it, consider the idea that having a tax lien on your credit report may cost you more in future interest payments than it does in taxes.

Friday, December 17, 2004

How to Explain Charge Offs

How to Explain Charge Offs

A charge off often appears on a credit report after a person has been denied a loan or other form of credit. Some people get upset and angry because they don't understand what a charge off is or how it negatively affects credit. A correct explanation of charge off can help to defuse an already upsetting situation. Explaining a charge off doesn't have to be a complicated or confusing process if a few simple, necessary points are made.



    Provide information about the definition of charge off. It is important to remember that a charged-off debt is beyond a past due debt and is not considered to be collectible. Charge-off is an accounting term used to remove a debt from a company's assets when that debt is no longer considered to be collectible. Once a debt has been charged off, it can be sold to other debt collection agencies. Those agencies can continue to try to collect the debt and report their efforts to the credit bureaus. The original creditor can't continue to collect interest on the debt, however, the agency purchasing the debt can.


    Explain how a charge off negatively impacts credit. A debt considered to be a charge off is more serious than a past due debt. Charge offs generally can't be removed from a credit report for 7 years from the date the charge off first appeared on the report. Past due debts reflect that the debt is still active but past due. It is difficult to obtain credit while the charge off is still on the credit report. Potential creditors view a charge off as a black mark on a credit report. If credit is obtained, interest rates will likely be significantly higher.


    Recommend ways to avoid future charge offs. Keeping an open line of communication with creditors and making regular payments on past due debt before the debt is charged off shows that you are willing to work with the creditor. The creditor will report to the credit bureaus that regular payments are being made. After several payments, the past due debt can be reclassified as current and the charge off can be avoided.

Thursday, December 16, 2004

Does It Hurt Your Credit to Cosign?

State laws govern the rights that creditors have against cosigners. In most states, as recognized by the Federal Trade Commission, lenders can immediately pursue collection efforts against cosigners without first attempting to collect their debts against primary debtors. As further noted by the Federal Trade Commission, a primary borrower's failure to pay his loan can hurt his credit record as well as his cosigner's credit record.


    In most cases, cosigners are relatives of primary borrowers. Most often, a primary borrower's credit history is insufficient to qualify for a vehicle loan or other type of loan for personal property. As a cosigner, the individual cosigning a loan becomes financially responsible for repayment. If the primary borrower defaults or simply sends one payment after the due date, the lender can demand repayment from the cosigner for the delinquency. Furthermore, a lender can demand repayment of late fees and interest from a cosigner. Unlike "guarantee loans," lenders can pursue repayment from cosigners even before a buyer is technically in default.

Legal Consequences

    Although the Federal Trade Commission regulates the disclosure notices, it does not regulate state laws governing the consequences of default. Creditors have a legal right to report any default by the primary borrower to credit reporting bureaus. The negative report can affect the credit records of both the primary borrower and cosigner. Furthermore, joint and several liability laws allow lenders to sue cosigners and primary borrowers separately for repayment of their loans. Moreover, a lender can sue a cosigner without suing the primary borrower. Lenders can garnish and levy a cosigner's personal property and wages once he obtains a judgment and writ of execution.

Federal Law

    Under the mandatory federal disclosure laws, creditors must provide cosigners with an informational statement regarding their rights. Codified in the Code of Federal Regulations, banks and lenders engage in deceptive practices in violation of federal consumer protection laws if they fail to provide cosigners with a disclosure notice.

Disclosure Notice

    A lender must place its cosigner disclosure notice conspicuously in the original loan agreement or within a separate document. A lender must specifically state that it has a right to collect debts from the cosigning party without first attempting to collect its debts from the primary borrower. Furthermore, a lender must notify a cosigner that it has the same collection rights against the cosigner as it has against the primary borrower. The lender must warn consumers that as cosigners of loans, they may experience lower credit scores and damage to their credit reports.

When to Negotiate a Debt Settlement

Debt is an issue that many people face and a number of options exist for dealing with it. One option that many choose is debt settlement. Settling debts can provide you with a way to save money, but this option is not for everyone. Before settling your debt, a few factors must be considered.

Debt Settlement Basics

    The basic idea behind debt settlement is that you agree to pay a creditor a lump sum of money. The creditor then agrees to close out your account for less than what you actually owed. Debt settlement can be pursued on an individual basis or you can do it with the assistance of an attorney. Once you settle you make your payment to the creditor, it closes out your account and reports it to the credit bureaus as "settled" in most cases.

Future Credit

    Before you settle a debt, you need to think about the potential credit consequences of doing so. If you are thinking about taking out a mortgage, getting a car loan or taking out some other credit in the near future, you may want to avoid debt settlement. Debt settlement can be very damaging to your credit report and you may not be able to get a loan immediately after going through the process. It will lower your credit score and you may not qualify for the financing you need. If you have no need for credit in the future, you may want to settle.

Saving Money

    Even though debt settlement can be very damaging to your credit report, it can also save you some money. If you have a lump sum of money, but you do not have the total amount that you owe a creditor, debt settlement can be an attractive option. In some cases, your creditor may be willing to settle for half of what you owe. For instance, if you owed $8,000 on a credit card and you have not made your payment in several months, your creditor might take $4,000 to close out your account.

Avoiding Bankruptcy

    When you want to avoid bankruptcy, debt settlement might be a better option to pursue. Bankruptcy can be extremely disruptive to your credit profile and it will remain on your credit report for 10 years. If you had hopes of being able to rebuild your credit and get financing again at some point in the future, debt settlement can be a less damaging option to pursue. If you settle several debts separately, the damage you do to your credit could be close to what bankruptcy causes. If you only have one or two large debts, settlement might be the better option.

Wednesday, December 15, 2004

Pennsylvania Credit Card Judgment Laws on Joint Banking Accounts

Pennsylvania Credit Card Judgment Laws on Joint Banking Accounts

Pennsylvania law prevents creditors from garnishing your wages. However, the state does not protect your bank account if the credit card company wins a judgment against you. This also applies to wages directly deposited into your bank account. Even if you share the account with another person, a creditor may seize funds in your bank account.

Credit Card Judgment

    For a credit card company to win a judgment against you, it must sue you and win its case in court. Pennsylvania, like all states, requires the credit card company to serve you notice of the impending lawsuit, giving you time to respond and mount a defense. Failing to appear in court gives the credit card company an automatic default judgment, which it can use to pursue further collections action, such as a lien against your assets or seizure of your bank account.

Marital Property

    Pennsylvania is not a community property state. States that follow community property law consider money in a joint bank account deposited after the marriage as marital property, subject to garnishment even if only one spouse owes the debt. However, a bank account seizure in Pennsylvania still affects your spouse if her name is on the account. Your spouse may attempt to vacate the judgment, thereby releasing the account entirely. If you have no access to the account, such as through an ATM card or withdrawal privileges, your spouse may invoke Banking Law 678, claiming she added you to the account for convenience only. In this case, she may have the entire account released. If this is not the case, she may recover 50 percent of the money in the account under Banking Law 675.


    Pennsylvania is one of a few states that do not permit wage garnishment as a legal recourse available to creditors. However, certain debts, such as child support, federal taxes and PHEAA student loans, are subject to garnishment.

Bank Seizure

    In a bank seizure, your credit card company has the right to freeze the funds in your bank account, effectively barring you from access to the money in your account. Creditors use this as a tactic to force you to pay your debt. Seizure of a joint bank account is permissible in Pennsylvania as long as the debtor's name appears on the account.


    If you share a joint bank account and have a default judgment against you by the credit card company, the other account holder might want to open a bank account under her name to protect herself against a bank account seizure. However, if you are joint account holders on the credit card, the lender has the right to pursue you and the other account holder equally.