Debt-to-Limit Ratio

Everyone who has a credit card has a debt-to-limit ratio. It is a measure of your total available credit against how much credit is being used. This ratio is used as part of your credit score calculation. The more debt you have as compared to your available credit, the higher your debt-to-limit ratio. Calculating Debt-to-Limit Ratio The debt-to-limit ratio is calculated by dividing your total outstanding debt by the total amount of credit available to you. For instance, if you have one credit card with a $10,000 available line of credit...

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Garnishment Statute of Limitations

If you ignore your delinquent debts, your creditors may sue you rather than continue sending demands for payment. Although not legal in all states, a successful lawsuit and court judgment often give creditors the right to garnish your paychecks or bank accounts. Significance Court judgments enable creditors to obtain the writ of execution necessary to enforce a garnishment. Judgment statutes of limitations vary by state, but garnishment is...

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How to Work With the Finance & Debt Recovery Team

There can come a point when it is impossible to manage your delinquent accounts on your own. When things progress to this point, you can seek the assistance of a finance and debt recovery team. The team will set you on the path to managing your situation and resolving your delinquent accounts. Respectful and productive collaboration with the team is essential to a successful effort. Instructions 1 Inform the debt recovery team of your expectations. Knowing what you want to achieve is vital to the team's strategy. If you are looking to reconcile...

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Does Paying a Car Note Build Credit?

While many people have heard about credit scores and credit reports, these pieces of important consumer financial information often remain a mystery. If you're paying back your bills on time and end up paying off a car loan or car note in a timely manner, this will likely impact your score positively. Reports and Scores Whenever you pay a bill or get a new form of credit, that transaction is included in your credit report. These reports are...

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Steps to Settle a Debt Upon Death

The debts of an estate are still owed to creditors, but only the executor of the will is authorized to make payments on debts. Once the assets of the estate have been depleted to repay creditors, the rest of the assets can be legally distributed to the heirs. If there are no assets remaining after the estate has paid its debts to the fullest extent possible, all debts are discharged. Companies may still attempt to collect on these debts from heirs...

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What Does Circular Debt Mean?

One of the new economic terms coined to describe some of the situations caused by recent recessionary activity is "circular debt," which is meant to illustrate a scenario of inescapable debt due to interwoven credit or loans among multiple parties. If left to expand without being controlled, circular debt can even provoke a shutdown of public utilities if it causes a nation's wealth to stagnate. A situation of circular debt is best addressed by correcting the underlying reasons for the inability to pay, whether that means stricter accounting practices...

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How to Avoid Losing Your House From Credit Card Defaults

Credit card debt is unsecured, meaning there is no collateral for the debt other than your signature and promise to pay. However, creditors and debt collectors can file a lawsuit against you if you default on your credit card account because of missed payments. A lawsuit could result in a civil judgment and garnishment of your wages and bank account. The creditor or debt collector could also attempt to foreclose on your home, but the site says that most state laws make that difficult for credit card debt. Instructions 1 Make an appointment...

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My Husband's Business Is Failing: Can Creditors Come After Our Personal Accounts in Pennsylvania?

Personal liability for your husband's business debts in Pennsylvania depends largely on the legal structure of the company. Some business forms allow limited liability protection for personal assets, while others leave your personal assets completely vulnerable. Wage garnishment in Pennsylvania is only available for child support, student loans, criminal activity, alimony and back taxes, which means creditors cannot go after your income to pay off business debts, regardless of business type. Sole Proprietorships A sole proprietorship is...

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The Effect of a Dispute on a FICO

FICO scores represent the translation of a borrower's overall credit history into a numeric value. FICO scores are calculated by accounting for the number of open credit lines, closed accounts, and positive and negative payment histories. When a consumer disputes an item on a credit report due to inaccuracy or fraud, it will influence his credit score. Disputes The act of disputing an item with the credit bureau is not enough in and of itself to cause a ripple in a FICO score. The credit bureau has 30 days to receive confirmation from the...

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What if I Don't Repay Student Loans?

Students who do not make payments on their student loans will face crippling financial penalties. Since students can rarely default on federal student loans, they should make every effort to become current on their minimum monthly payments. Most individuals can consolidate their monthly loan payments or make lower payments if underemployment or unemployment hinders them from remaining current on their loan obligations, according to the U.S. Department of Education. Interest Individuals do not usually start repaying student loans until six...

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How to Opt Out of Credit Mailer Sample Letter

Credit card marketing companies use sales strategies such as mailers and telemarketing calls in hopes of enticing prospective cardholders to apply for credit. You may find these promotional materials more annoying and intrusive than useful. Just as there are ways to stop or at least reduce telemarketing calls, there are a few techniques you can use to stem the flow of unwanted mail. The Federal Trade Commission provides a form letter to help you...

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Missouri State Laws for Collecting a Medical Debt

In Missouri, medical debt falls under the same classification as consumer debt. Missouri does not have its own debt collection law but Missouri residents are protected from unfair debt collection practices by the Fair Debt Collection Practices Act. This is federal legislation protecting all residents in the U.S.A. from harassment, abuse and unscrupulous debt collection. Times Under the Fair Debt Collection Practices Act, debt collectors are...

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How to Get Medical Bills Written Off

Medical bills that are written off are not recognized because the bill has been zeroed out. For example, if a hospital writes off a $100 medical bill, the hospital's records will no longer show the $100 as outstanding. However, medical bills that are written off usually are not forgiven because the bills are purchased by collection agencies. A collection agency will pay the hospital a fraction of the bill, such as $1 or $5 for a $100 medical bill, and proceed to collect payment from you. Thus, you still would owe money for a bill that the hospital...

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Guide & Tips for Credit Repair

If you're struggling to improve your credit, you're not alone. Whether you were a victim of identify theft or simply got behind on your bills, your journey to improve your credit is a common one. Fortunately, you can repair your credit in a number of ways. Take advantage of available resources, many established by the Federal Trade Commission, to stay informed of your credit score and to dispute any fraudulent charges connected to your name. Access Your Credit Report The Fair Credit Reporting Act states that you can receive a free copy...

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How to Write a Proof of Collateral Letter

Proof of collateral letters are important when applying for a secured loan from a bank, credit union or other lending institution. The bank is guaranteeing the loan based on clear evidence of collateral, with approval of the credit application unlikely if your letter is not convincing. Simply indicating in the letter that the collateral exists is not enough. Supporting documents are usually necessary for a successful proof of collateral letter. The supporting documents are usually available through an independent third party confirming the presence...

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Does Debt Consolidation Affect Getting a Mortgage?

If your debt has become overwhelming and you have fallen behind on payments or worry that you may not be able to continue making payments on time, debt consolidation may offer a means of managing your debt. This strategy involves making a single payment each month for your debt instead of having to make payments to several creditors each month. It may also help you manage your debt by lowering interest rates and waiving late fees. However, debt consolidation may affect your ability to obtain a mortgage. Debt Load Participation in a debt...

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Do It Yourself Debt Repair Tips

Being in a large amount of debt can take a serious toll on your emotional well being, and the longer you allow yourself to stay in debt, the lower your credit score will fall. Having a poor credit score due to debt can make obtaining credit cards and loans in the future very difficult. You can easily take small steps in your life to repair your credit and manage your debt. Get a Second Job Working a second part-time job will provide you with...

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Risks of Credit Counseling

Credit counseling is a service provided to consumers by hundreds of different companies. Credit counseling can help reduce or eliminate consumer credit card debt and provide the consumer with the skills and information needed to maintain a healthy credit profile and a debt-free life. Not all credit counseling services are created equally, however, and credit counseling involves an element of risk to a credit card consumer. Negative Credit Impact...

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Divorce and Debt Liability

When your marriage breaks up, it requires not only a physical separation but a financial one. The former marital residence, cars, retirement accounts and bank accounts all have to be ironed out and distributed. Since very few couples are debt-free, your legal separation process will probably also include the division of marital debt. Marital and Separate Debt Generally States divide marital property and debt under the laws of either community...

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What Does It Mean to Consolidate Your Debt?

Debt consolidation combines multiple bills into a single monthly payment. The primary reasons for consolidating debt are to obtain a lower interest rate and simplify the debt payments. Debt consolidation is common among people with credit problems and companies with maxed out business credit cards. Credit card debt consolidation is perhaps the most beneficial, as credits cards tend to carry some of the highest interest rates. Credit Cards and...

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Can a Credit Card Close My Account for Lack of Use With a Balance?

Credit card accounts with a balance generally are not closed if you continue to make at least the minimum monthly payment. Card companies sometimes send notices to customers whose accounts have a zero balance but have not been used in years. The card company wants the customer spending again, and sends a notice as a friendly nudge. Finance Charges Maintaining a balance on your credit card makes you a profitable customer---another reason the company has little reason to close your account if you are making regular monthly payments. Many...

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If I Have a Judgment From a Credit Card Debt, What Is the Next Step?

There are few debts more onerous than a court judgment. Judgments mess up your credit score, typically have an extra-long statute of limitations and give your creditors a lot of power over you and your assets. If a judgment is entered against you for credit card debt, seek legal advice about how to proceed. Bankruptcy, protecting your exempt assets and settlement are all options to consider. Collection Activity After a credit card company or collection agency wins a judgment against you, it will try to collect the money you owe. In addition...

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How to Settle With A Debt Collector

When life is tough, sometimes you may not be able to pay your bills on time and that can send your accounts into collections. That can cause a lot of stress especially when collection agencies are hounding you day and night. But the situation doesn't need to be hopeless. Dealing with debt collection agencies can be very frustrating especially when the debt collection effort becomes harassing, annoying, threatening and verbally abusive. You have rights that credit card companies, banks and attorneys have to abide by. Knowing your rights can...

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If I'm in Default on Student Loans Will That Be Deducted From My SSI Back Pay?

Supplemental Security Income (SSI) cannot be garnished because it provides funds to allow elderly and disabled people to meet basic needs. The U.S. Department of Education can garnish other types of Social Security income to collect student loan debt, but only up to specific limits. Garnishment Creditors -- including the government -- can get a court order and take a percentage of a person's pay check in order to get money back for a debt. The person's employer or a government entity takes the percentage stated on the court order out of...

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How to Get a Loan With Really Bad Credit History

Getting a loan with a really bad credit history may be difficult. You may have to pay high interest rates or offer collateral, such as the title to a car that has been paid off. You may qualify only for loans for small amounts -- perhaps as low as several hundred dollars -- unless your collateral and other qualifications make you eligible for more. Having a stable address and steady income are also important as you apply for a loan with really bad credit history. Instructions 1 Get a copy of your credit report and score to determine just...

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Consumer Credit Counseling Laws

People have become increasingly wary of credit counseling companies because of wide-spread dishonesty. Many paid high fees for services that were not delivered, and law suits were filed against them causing many to go out of business. However, millions of people have benefited from the services they provide, to such an extent that federal bankruptcy laws were changed, and the Consumer Protection Act passed in 2005, requiring credit counseling companies to comply with several criteria. Nonprofits Only Almost all credit counseling companies...

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Risks of Debt Settlement

When you are overwhelmed by debt, debt settlement can seem like the only way out. Debt settlement means negotiating with your lenders and getting a reduction in the amount that you owe and in return making a one-time payment for that amount. However, attempting debt settlement comes with risks to your credit score and may leave you in a worse financial position. Credit Score Lenders are motivated to settle your debt only if they believe you...

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Does a Creditor Have the Right to Contact My Employer for Income Verification?

You may be eager to keep your financial life private in the workplace, but if you're either out for a loan or behind on your payments, that may not always be possible. Federal law gives creditors the right to contact your employers to confirm the income information you have presented to them is correct. Income Verification Creditors want to know your financial picture when you apply for a loan or when they are trying to collect a debt. This...

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Accounts to Help Build Credit

It can be difficult to know where to begin when you first start building credit. However, everyone has to start somewhere, and it's important to begin at the right place. Once you choose your starting point, it's vital to handle your credit responsibly so that you build up a healthy credit score to qualify for prime interest rates and offers in the future. Secured Credit Cards Secured credit cards are a good way to build credit for those...

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How to Remove Your Name Off a Credit Card

Your name can be added to a credit card by either applying for the credit card and being approved or by being added, as an authorized user, to another person's credit card. An authorized user can be removed from a credit card account at any time, but if you applied for the credit card with another person, removing your name will require the cooperation of the other account holder and working with the creditor. Instructions 1 Call the credit...

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How to Extend the Statute of Limitations by Making a Payment

The statute of limitations means that after so many years have passed without you making a payment on a debt, the creditor cannot win a lawsuit against you in a court of law. Each state has its own statute of limitations for debt. The time frame for the statue of limitations is two to 15 years depending on your state. In some states, if you make a payment on your account, the statute of limitations is activated all over again. Instructions 1 Review the state laws for your state (see References). In some states, the statute of limitations...

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What Is Secured & Unsecured Debt?

Debt is defined as owing money to a person or institution. Debt is typically accrued through taking out loans, running up credit cards and not paying bills on time. Secured Debt Secured debt is debt with some form of security in the event of non-payment. When a secured debt goes unpaid, the debtor may be entitled to sell the security in an attempt to pay for the debt. Unsecured Debt Unsecured debt is debt accrued without anything put...

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How to Raise My Credit Score After Paying My Debt

Eliminating your debt is no easy task. Yet once it's gone, it can still be hard to build a solid credit score for those large purchases down the road. Contrary to popular belief, the best way to build your credit score is not to eliminate your debt but rather to control it. The best way to make the credit companies view you as an asset is to show that you are a responsible, reliable consumer of credit. Instructions 1 Confirm that your debts...

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Does Owing Money to an Apartment Affect Your Credit?

Owing money to an apartment complex can have many adverse effects. An unpaid debt to an apartment owner can have a negative effect on your credit score, lead to a court judgment against you or get you evicted. As in all cases with debt, your best move is to pay the debt or to avoid acquiring it in the first place. Causes of Apartment Debt There are a few ways to end up owing money to an apartment complex. You could owe the apartment complex for unpaid rent. You might have broken the lease and moved out for reasons beyond your control, but...

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How to Pay Off Your Title Pawn Quickly

Title pawns provide quick access to cash for people with low credit scores who own their vehicle. While some states limit the amount of interest a title pawn company can charge, according to the Georgia Governor's Office, even with limits, the maximum yearly interest rate can be as high as 187.5 percent. If you are unable to buy back your title, the pawnbroker can charge you for his expenses if he must repossess your car. If you pawned your car title, the quicker you pay off the balance of your loan, the better it will be for your finances. Instructions...

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How Can I Ease My Debt Through a Collection Agency?

Receiving a phone call or letter from a debt collection agency can be an unnerving experience. However, you don't have to feel intimidated or think that there is nothing you can do to resolve the issue. In many cases, you can work with the agency to set up a payment plan and end up paying less than what you owe. It's even possible that you might not be legally obligated to repay the debt at all. Determine Validity Just because a debt collector says you owe money, it doesn't necessarily mean it's true. Be sure to ask the debt collector to...

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Is it Better to Settle a Credit Card or Pay it in Full?

Credit card debt can be inhibiting to consumers, especially when the credit-card holder cannot afford the minimum required payment. When a debtor cannot pay the bill, the creditor can turn the account over to collections. This may present the consumer with options. Identification Once a credit card account is transitioned to a collections agency or attorney, the debtor is still obligated to satisfy the debt either in full or through a settlement....

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What Is the Difference Between Debt Consolidation and Debt Negotiation?

Both debt consolidation and debt negotiation are methods in which a person struggling to pay debts can reach some sort of alternate agreement with their creditors. This is common for people who have many different debts from different sources, such as multiple credit card debt. The larger the individual debt, the more difficult it is to enter into any sort of debt assistance program. Debt Assistance Both debt consolidation and debt negotiation...

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Can Subletting a Room in Your House Affect Your Mortgage?

Mortgages are complex agreements, as might be expected from loans that last decades and involve hundreds of thousands of dollars. Although the bank owns the deed on your home, you are assumed to have all the rights and responsibilities of the owner in terms of most of what you choose to do with the land and home. How a tenant interacts with your mortgage depends on some circumstances of the mortgage itself. Qualifying for the Mortgage Your...

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