Welcome to our website credit and debt managementr.

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..

Sunday, October 31, 2004

Free Debt Help in San Diego

Free Debt Help in San Diego

There are several agencies in San Diego that can help with everything from budgeting to foreclosure prevention. Many of the services are free, but if the agencies take over management and payment of unsecured debt, there is usually a small fee. MSN Money recommends consumers find their agencies through the Association of Independent Consumer Credit Counselors or the National Federation for Credit Counseling.

Springboard Non-Profit Consumer Credit Management

    Springboard Non-Profit Consumer Credit Management has appointments by phone, in person or online (see Resources). Counseling is free. If the customer decides to create a debt management plan, the cost is 8 percent of the money dealt with or $35, whichever is less. There is a $50 setup fee for debt management plans. The agency also does reverse mortgage and housing delinquency counseling for free. The agency has an A-plus rating from the Better Business Bureau. It is a member of the NFCC and the AICCA.

Money Management International

    This business is listed as Consumer Credit Counseling Services, doing business as Money Management International.(see Resources). It also has an A-plus rating from the Better Business Bureau. It does free counseling on the phone, by Internet or in person. Debt management plan fees are $35 maximum, with a $50 setup fee. The agency advertises help with foreclosure prevention among its services. It is a member of the NFCC and the AICCCA.

Novadebt

    Novadebt, affiliated with Garden State Consumer Credit Counseling, is a nonprofit consumer credit counseling service that provides free counseling (see Resources). Neither the agency nor the Association of Consumer Credit Counseling, with which it is affiliated, advertise fees for debt management plans or other services. The agency has an A-plus Better Business Bureau rating and does counseling over the phone, in person and via Internet. The agency also offers a personal financial program, which is separate from one-time counseling or debt management, in which the agency coaches customers through their financial recovery plan.

Debtwave

    Debtwave offers free credit counseling as well as foreclosure prevention counseling and debt management plans (see Resources). The company does not advertise its fees. Debtwave is accredited by the Better Business Bureau and is a member of the National Association of Certified Credit Counselors and the American Association of Debt Management Organizations.

Mortgage Assistance Programs for Single Mothers

Mortgage Assistance Programs for Single Mothers

Single mothers carry the unique burden of handling every task in the family normally shared by two parents. Providing food, clothing and basic needs can be difficult enough in a one-parent household, owning a home on top of that can seem a distant dream. There are several options to assist a single mother with the goal of homeownership for her family.

Government Assistance Programs

    Two major programs are available to provide both counseling and assistance in the purchase of affordable housing for single-parent families. The Department of Housing and Urban Development specifically targets families with lower income for assistance with homeownership. One-income families such as single mothers can get a low-interest mortgage and other assistance for a home loan through HUD, the link is found in the resources section below.
    Another government program is available through the USDA. The Housing and Community Facilities Program, targets more rural areas for homeownership programs and also assists with renovation and repairs for older homes, and provides homeownership programs for lower-income families such as single mothers.

Community Resources

    Habitat for Humanity is a well-known volunteer-based organization with the goal of providing housing to those in need. Applicants contact their local agency to seek approval. The homes are built by volunteers and donated materials and time, and the homeowner provides hours of volunteer labor to the project. Habitat homes are designed for families like single mothers or low-income working families to be able to have homeownership and secure housing.
    Church-based groups often will assist single mothers in the local community as well, either with financial counseling and help with finding mortgage resources, or providing a small down payment or a portion of a down payment toward purchase the home. These resources are more difficult to locate as they are specific and local, however contacting local church organizations can be a good start to find this type of assistance.

Banking Sector

    Some banks and mortgage lenders do provide programs for lower-income families such as single mothers. In the difficult economy and with so many homes being foreclosed, financial institutions have tightened many of the requirements for mortgages. While this means they are more careful about income limits and mortgage guarantees, on the other end of the spectrum there are a large number of homes available at a lower price than ever before. If the lender's requirements are met homeownership is obtainable and at a more reasonable cost. These institutions are interested in filling homes that have been foreclosed on, and will work with new homeowners such as single mothers to see if they meet the criteria. Often in the interest of selling a home, lenders have begun programs that walk potential homeowners through the process of getting a mortgage, and will even connect them with the proper resources for assistance if needed.

Fixed vs. Floating Interest Rates

Fixed vs. Floating Interest Rates

When you take out a loan, the interest you are charged typically comes in one of two forms: fixed or floating. Each has its benefits and drawbacks, and any consumer contemplating a loan should know the different between the two to make an informed decision about your loan and how it will affect you.

Fixed Interest Rates

    A fixed interest rate is one that remains the same over the length of the loan's term. Fixed rate loans come in a variety of forms, including mortgages, car loans, personal loans and even credit cards. However, interest rates on some fixed-rate loans, such as credit cards, can change. If, for example, you take out a credit card and fail to make your payments for several moths, the credit card company can increase your fixed rate

Floating Rate

    Floating rate loans, also known as variable-rate or adjustable-rate loans, have interest rates that change over time. The conditions under which the loans change differ depending on the terms of the loan, but, in general, the interest rates on these loans are tied to indexes. An index, such as the London Interbank Offered Rate, or LIBOR, are industry-wide measurements of average interest rates offered by lending institutions. When these interest rates change, so does the rate charged to borrowers of a floating rate loan.

Fixed Rate Pros and Cons

    The primary advantage of a fixed rate loan is the borrower's ability to secure a particular interest rate at a particular time. When, for example, interest rates are low, borrowers often seek out fixed interest rate loans as a hedge against future rate hikes. If you take out a fixed-rate mortgage when interest rates are low, you won't have to make higher interest payments if interest rates later go up. However, if interest rates go lower, you generally cannot take advantage of this unless you refinance your loan.

Floating Rate Pros and Cons

    A floating rate loan's primary advantage is that lenders generally charge lower initial interest rates to borrowers than they do for fixed-rate loans. A fixed-rate loan has the advantage of not being tied to a permanent loan rate. If, for example, you take out a variable-rate loan when rates are high, your interest will decrease if rates later go down. A fixed-rate loan taken out at the same time would not. The primary downside of a variable rate loan is that you may have to make far different payment amounts during the life of the loan.

Saturday, October 30, 2004

About CCCS

If you are awash in debt, you my be thinking about declaring bankruptcy. But there is one more place to turn. Millions of people have sought help from credit counseling agencies that have helped them solve their problem. Reaching national stature is Consolidated Credit Counselors, Inc. (CCCS). The people at CCCS will ease the repayment of what you owe by working with your creditors to reduce the amount of the debt or the terms.. That could result in your returning to a life of living within your means.

History

    CCCS opened its doors in 1991 and can now be found in cities throughout the U.S. CCCS provides debt management programs and credit counseling to its clientele. The company works with its clients individually to put a financial program in place that suits their condition and needs. CCCS is different in that it matches its clients with counselors who helps design a program that will eventually free them from debt.

Benefits

    CCCS is especially helpful to those clients who are considering bankruptcy. CCCS will work towards putting the client on a budget and teach them how to live within their means. If the client follows the rules set by his credit counselor, eventually his credit score will begin rising.

Function

    Typically, people who gravitate to CCCS have difficulty managing their debts. CCCS will work with creditors such as health insurance carriers, credit card companies and even student loan providers to reduce interest rates, lower payments and even reduce the amount owed by eliminating penalties. CCCS will also work on a client's behalf to consolidate all his debts so that a single payment will be due. The client will pay a single amount to CCCS, or its designate, who will pay creditors in accordance with what has been negotiated.

Considerations

    Due to the fees charged by CCCS, you may find that you can be successful by contacting your creditors directly. The last thing any of them want is for you to declare bankruptcy because they will receive nothing from you. Instead, many of them are eager to work out an arrangement for repayment, including debt reduction, reduction of penalties and the amount owed, as well as the interest rate you are being charged.

Warning

    CCCS has been targeted by hundreds of customers who have complained publicly about various aspects of its service. Since many of the complaints relate to the lack of supervision of personnel on a local basis, you are advised to check complaints filed with the Better Business Bureau for your local office.

Friday, October 29, 2004

Laws on Balance Billing in California

In recent years, the nation began focusing on patients' health care rights and rights to fair billing. Without a federal law regulating medical billing procedures for non-Medicare providers, many states enacted laws against the use of balance billing by medical providers. In 2009, the California Supreme Court issued an important legal decision in "Prospect Medical Group, Inc. v. Northridge Emergency Medical Group." The California Supreme Court issued a unanimous decision against medical providers who use balance billing practices in an emergency room setting.

California Law

    In a legislative effort to protect its residents against deceptive medical billing practices, California enacted legislation prohibiting the use of medical billing by certain medical providers. Emergency room doctors cannot charge their consumers directly for unreimbursed medical expenses; instead, they must seek payment from their insurance companies. In a landmark decision issued in 2009 by the California Supreme Court, the prohibition on balance billing procedures was upheld as part of the Knox-Keene Health Care Service Plan Act of 1975.

Knox-Keene Health Care Service Plan Act of 1975

    In the "Prospect" case, the California Supreme Court limited balance billing to emergency room physicians. The Knox-Keene Act, in the California Supreme Court's decision, applies to the use of balance billing methods, and patients who are most detrimentally affected by balance billing procedures are emergency room patients. The Court reasoned that emergency room patients generally have no control over which doctors treat them and which hospitals they are taken to by paramedics.

    Often, insurance companies act as "gatekeepers" to protect their customers against balance billing practices by incorporating limitation language in their contracts with participating doctors or "in-network" providers. Typical limiting language includes provisions that state providers will accept their payments as full payment for their billed charges and cannot balance bill their patients.

Limitations

    California law does not prohibit doctors from charging their patients for out-of-pocket charges or copayments, and it does not cover elective procedures that are not covered by insurance providers. Additionally, balance billing laws do not apply to out-of-network medical visits, according to an HMO's regulations.

Considerations

    Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.

What Is the Meaning of Debt Servicing?

What Is the Meaning of Debt Servicing?

Debt is something that affects most Americans in one way or another. MSN reports that 2004 statistics show that about 43 percent of American families spend more than they earn, personal bankruptcies have increased 200 percent from 1994 to 2004 and the average U.S. household has at least $8,000 in credit card debt. It is therefore of vital importance that people educate themselves in debt management and debt terminology.

Debt Service

    Debt service is essentially the money required to repay total interest and principal on a debt within a set period of time. If there are tagged on fees, such as an early pay-off fee, and you pay off the debt early, then this fee must be included in what is considered debt service. For example, you may have a personal loan of $1,000 with an interest rate of 5 percent. Your terms are that you must pay $45.94 per month for two years. Since the company will be making a bit more than $100 from interest, the firm wants you to pay off the loan over the two-year period and not repay it immediately. If you follow the terms, your debt service is $1,102.50. If the company has a stipulation that if you pay off the loan early, then you pay a $200 fee, and you want to pay off the loan within a month, your debt service is about $1,200.

Total Debt Service

    Two sub-terms ought to be understood to fully understand what debt service is. Total Debt Service (TDS) and Gross Debt Service (GDS) are terms often found when dealing with mortgages, home or car loans. TDS is what percentage of your income is being consumed by monthly obligations and housing expenses, generally gotten from your credit report.

Total Debt Service Example

    To put TDS in simple figures, if a person has a salaried income of $1,000 a month and pays $300 rent, $100 food and life expenses, $50 per month payment on one credit card and $50 on a car payment, then his TDS is 50 percent ($300+$100+$50+$50= $500 which is 50 percent of his income).

Gross Debt Service

    Gross Debt Service is a part of Total Debt Service. GDS is only the percentage of your income being consumed by housing expenses, meaning rent, principal and interest on a mortgage, property taxes and expenses related to your home. If a person is bringing in $1,000 per month on a salary and $300 includes rent, gas, heat, water and all housing expenses, then her GDS is 30 percent.

How Debt Servicing Is Calculated

    Banks and financial institutions have diverse requirements in what they look at when deciding if you are a good candidate for a loan. They may look at your GDS and if your credit is average, only be willing to have your GDS go up to 34 percent. This means that if your salary is $1,000 per month, they will not give you a mortgage where you would have to pay more than $340 per month. The lender may average your GDS and TDS or only consider the higher figure. Independent loan or mortgage specialists are generally able to help you calculate your GDS and TDS, and find a loan that can fit your budget.

Wednesday, October 27, 2004

How to Easily Find Government Grants so you Can Pay Off Your Bills And Eliminate Debt

How to Easily Find Government Grants so you Can Pay Off Your Bills And Eliminate Debt

There are many programs that can be available to you so that you can eliminate your debt. A Government Grant can help you get debt free and help to pay off old debt that you may have. Basically a Government Grant will give you Free Money so that you can pay off old bills but it is important to know the secrets so that you have the best chance to qualify for this free money that the Government gives to people in need.

Instructions

    1

    It is important to know that the Government gives away Grant Money so that they can help people and it also stimulates the economy and people spend more. The most important thing is that you want to learn the best ways you can apply and get qualified to get the money that you need to get out of debt once and for all.

    2

    Like most of us it is getting harder to make ends meet because it seems like our salaries are not keeping up with the rising price of gas and food. More of us are using credit cards to charge the things that we need and it creates a situation that we find ourselves more and more into debt and this makes it hard to survive.

    3

    The best thing that you can do to get A Free Money Government Grant is to get the information that you need to apply and get approved for the Free Money. It is always best to get the billions of dollars that are given away every year by knowing the secrets on how to get them.

Does Debt Management Hurt My Credit Report?

Debt management companies help borrowers pay down credit accounts by negotiating with the credit companies to lower terms, reduce fees and consolidate the credit accounts so only one payment needs to be made per month. Debt management can appear on your credit report, although the specific effects vary.

Credit Report Basics

    Your credit report contains information about your credit accounts, such as credit cards and mortgages. The credit report also has public records and collections for negative marks. The credit report information comes from your creditors, courts and collection agencies. When a lender looks at a credit report, he examines your debt level, the number of accounts you have and the negative marks that exist on your credit report.

Debt Management

    Debt management companies are third party companies that act as a go-between for the creditor and debtor. The debt management company is paid by the debtor with a single monthly payment, which then goes to the creditors. Debt management companies create a long-term debt repayment plan, usually three to four years, and may also negotiate more favorable terms with the creditors.

Credit Report Impact

    Your credit report is not directly impacted negatively by a mark that an account is under a debt management program. However, each account under a debt management program does have a notation indicating that it is being paid under this program. A manual review of your credit report may lead creditors to not offer you credit because of this notation, although debt management plans may prohibit you from applying for new credit until you are debt-free.

Prior Impact

    Actions that a debtor takes prior to entering a debt management plan are what usually have a negative effect on credit. Debtors may wait until they have multiple late payments on the credit report, collections or even judgments before entering the program. These negative credit marks have a large impact on your credit report.

Monday, October 25, 2004

What Happens If You Default on a Payday Loan in Pennsylvania?

Although they must generally be paid back within a short period of time, payday loans command a high rate of interest. In addition, borrowers who don't pay their loans back on time face steep penalties and additional hikes in the interest rate on their loans. Laws regulating the issuance of payday loans vary between states. Pennsylvania has various laws designed to protect consumers from exorbitant fees.

Interest

    In Pennsylvania, a lender cannot charge a borrower an interest rate of more than 20 percent on the first $300 that a borrower loans out. For any amount after that, the lender can only charge 7.5 percent. In addition, the maximum loan a person can have out at any one time is $400. If a person renews a loan, then the interest rate on the first $300 increases to 30 percent.

Fees

    One of the ways that payday loan companies make money is by charging individuals fees. These fees can be applied to the original loan and in a number of different ways if the individual is delinquent paying back the loan. For example, the company may apply a fee if the individual's repayment check bounces or if the individual does not make make the required payment on time. However, in Pennsylvania, a person can only face $75 worth of fees at a single time.

Collection Actions

    If a person defaults on a payday loan in Pennsylvania, he can expect to face many of the same collection actions that he would face in other states. For example, the company may hire a collection agency. This collection agency may limit its collection actions to contacting the borrower and requesting payment. However, it may also file a civil suit against the individual and seek a garnishment of his wages or a freezing of his bank account.

Criminal Charges

    Some payday lenders attempt to bring criminal charges against an individual who has defaulted on a debt. Generally, the lender will charge that the debtor engaged in fraud when he provided a check for repayment that did not clear. Under Pennsylvania law, payday lenders cannot seek criminal charges against a borrower simply for failing to pay back a loan, even if his check bounces.

Debt Consolidation Facts Online

Debt Consolidation Facts Online

There are many ways to consolidate your debts. You can choose a consolidation program that targets certain types of loans, such as student loans or revolving credit accounts, or look for a single program that allows you to consolidate different types of debt. You need to find a program with an affordable monthly payment to maximize the benefits gained from debt consolidation.

Debt Management Plan

    Don't confuse a debt management plans with a debt consolidation program. A debt management plan is a financial program that might be suggested by one or more credit counselors. You should be able to get free information about a program before you enroll or provide information about your credit accounts, says the Federal Trade Commission. When you look for debt consolidation facts online, remember to make this important distinction between debt management, in which a service makes payments to all of your creditors, and a debt consolidation plan, in which a lender rolls all of your debts into a single debt with a standard monthly payment.

Low Interest Rate

    Another advantage of rolling debts into one account is that you can get a single interest rate for all of the outstanding debts. You also get to make one monthly payment. Shop around for debt consolidation programs and find the one with the lowest interest rate. Compare programs to see how the monthly payment compares to your budget and how many monthly payments it will take you, even at a low interest rate, to satisfy the loan terms. If you aren't careful, you might pay more money for a lower-interest-rate loan with a longer repayment period than a higher-interest-rate-loan with a shorter repayment period. Calculate the total you will pay over the duration of a program.

Compare Programs

    You also want to determine if some loans you want to consolidate might not be eligible for a program. For example, if you want to consolidate student loans, you won't be able to consolidate federal student loans with private student loans. You might also find that a federal loan consolidation will only result in a fixed interest rate, whereas consolidators of private loans might allow you to reduce your payment by securing a lower rate when the prime rate goes down.

Potential Damage to Credit

    If you select debt management or debt settlement programs as an alternative to debt consolidation, you could lower your credit score. You will have to stop making payments and then rely on the program to negotiate new terms with each creditor. However, you may get the benefit of lower interest rates because some reputable programs have agreements with credit card companies. You have to ensure that you will actually get out of debt faster and save money by choosing debt management over debt consolidation.

Consolidated Debt Obligations

Consolidated Debt Obligations

Anyone drowning in debt may be tempted by the dozens of consolidation offers they see each day through email, television, radio, web and print advertisements. Although debt consolidation may ease the problem of keeping track of multiple monthly payments, it's important to understand that your obligations to those debts do not change. In fact, your financial obligations become even greater when you add another debt to the mix in the form of a consolidation loan.

Debt Consolidation

    Debt consolidation simply gathers up your existing debt under one loan with one interest rate, which means that you make one payment each month. It does not mean that any of your debt goes away; therefore, you are obligated to continue making payments on your debt. You may save money using a consolidated loan if the interest rate is lower than your individual loans, which could mean that your monthly payment would be lower than what you were paying.

Commitment

    Before taking on a consolidation loan, you must evaluate whether you are completely committed to paying off the loan. According to credit union manager Chris Viale, over 70 percent of those who utilize consolidation loans end up with the same or more debt within just two years. It's vital to take stock of your current debt and look carefully at whether a consolidation loan is actually going to save you money. Oftentimes, the interest rate consumers qualify for will not make a significant difference with regard to saving on the overall debt. If you do decide to take on a consolidation loan, you must understand that you're fighting debt with more debt, which means that you must be careful not to contribute to the debt wiped out with the consolidation loan.

Credit

    Your credit score is largely determined by two factors: the timeliness of your payments valued at 35 percent and your debt utilization ratio which is weighted at 30 percent. The debt utilization ratio compares the amount of debt you have with the amount of credit available to you. When you take on a consolidation loan, the amount of credit available to you rises, which means that your debt utilization ratio actually improves. However, if you unwisely continue to spend on your

    newly freed credit and you do not pay down the consolidation loan, you may quickly sink your credit score. Keep in mind that lenders may view irresponsible handling of a debt consolidation loan as financial negligence making it difficult for you to obtain new credit in the future.

Considerations

    Anyone considering a debt consolidation loan should consider utilizing the services of a reputable non-profit credit counseling organization. The National Foundation for Credit Counseling website contains listings to local credit counseling organizations in every state. A credit counselor will help you to create a budget, get to the root of your spending problems and determine whether consolidation is worth the risk.

Sunday, October 24, 2004

Can a Debt Collector Collect on a Repossessed Leased Vehicle?

If you fall behind on your payments on a leased vehicle, your lessor will likely contact you in an attempt to help you bring your account current. However, if you do not bring your account current, your lease agreement gives the lessor the right to repossess the vehicle. You might assume that repossession relieves you of the obligation to make future payments under your lease; however, the lessor or a debt collector may still collect from you after a repossession.

Deficiency

    After a lessor repossesses a leased vehicle, it will typically sell the vehicle at an auto auction to recover some of the amount you owe under the lease agreement. Although the lessor must sell the vehicle in a "commercially reasonable" manner, it is not required to demand a selling price equal to your lease debt. Typically, the auction price of the repossessed vehicle is not sufficient to cover your lease, storage fees, repossession charges and other fees -- the difference between what you owe and the sale price is called a deficiency.

Collection of Deficiency

    Although you no longer have possession of the leased vehicle after a repossession, you are still responsible for paying the deficiency. The lessor typically uses a third-party collection agency to pursue payment of the deficiency by sending you collection letters and placing telephone calls to your home and work. In some cases, the lessor may authorize the debt collector to accept a settlement for less than the deficiency; however, in other cases, the lessor may demand full payment.

Deficiency Judgment

    If you ignore a debt collector's attempts to collect a lease deficiency, the lessor or debt collector may file a lawsuit to obtain a judgment against you. A judgment is a legal affirmation that you owe the deficiency, and that the lessor or debt collector has the right to use additional strategies to collect the deficiency amount. You will have an opportunity to respond to the lawsuit, but the court will not typically dismiss the suit unless you can prove you have already paid the deficiency.

Post-Judgment Collection

    After obtaining a judgment against you for the deficiency, the lessor or debt collector may order your bank to freeze your accounts and send funds held in the accounts to the court for payment against your deficiency. In most states, it may also contact your employer to garnish a portion of your earnings. Although sale of personal property is uncommon, a collector or lessor with a valid judgment may order the sale of your property if the deficiency is sufficiently large.

What Happens When You Get Sued for a Student Loan?

When you borrow money to pay for a college education, you are responsible for repaying your student loans, even if you didn't graduate or have trouble finding a job after graduation. If you stop paying, the loan goes in default and can have serious consequences.

Court Hearing

    A lender can file a lawsuit if he cannot collect student loan debt through other collection attempts. When a creditor receives a judgment against you, he can use many tools to collect debt, including wage and bank account garnishment and placing a lien against your property. When you get a notification of a court hearing, you should not ignore it. You can attend the hearing and present your defense as to why you are unable to repay the debt.

Wage Garnishment

    If the court awards the judgment to your creditor, he may choose to garnishee your wages by obtaining a writ of garnishment from the court. The garnishment order goes to your employer, who is then obligated to withhold the payment amount from your wages. The federal garnishment law limits the amount to 15 percent of your disposable wages. The creditor must also leave you at least 30 times the federal minimum wage for your needs weekly. Garnishment will continue until all debt has been repaid. The amount may include legal and court fees and accrued interest charges.

Loan Rehabilitation

    If your lender is suing you, you must act quickly. By then, the lender has already referred your loan to a collection or a guarantee agency. You must contact the agency and negotiate a repayment plan. If the lender is already garnisheeing your wages, garnishment withholding does not count as voluntary payments. You must also make payments within 20 days of their due date. After making nine consecutive voluntary on-time payments, the agency considers your loan "rehabilitated," returns it back to the lender and removes the default notice from your credit report.

Offsets of Income Tax Refunds

    If you default on federal student loans, the federal government can intercept your federal and state tax refunds and other payments from the federal government to repay your loan debt. You will receive a notice within 45 days if the servicing agency intercepts your refund to offset your student loan. If file your income taxes jointly with your spouse, you have a right to request a hearing and claim the innocent spouse defense, as long as your spouse has not defaulted on his student loans.

How to Find a Reputable Debt-Management Company

When you start to feel that your personal debt is spiraling out of control, you may begin to consider contracting the services of a debt management company. There are many reputable and experienced debt-consolidation companies to choose from, but you should still do your homework to make sure that you're dealing with a company that's looking out for your best interests, instead of just trying to make a commission. The search process for a debt management firm should be geared toward finding just the right company for you.

Instructions

    1

    Ask for referrals from your friends, family members and people within the financial industry that you trust, such as your banker or your accountant. It may turn out that your bank or your accountant offers debt management services. Even if they don't, they should be able to offer you referrals to work with.

    2

    Contact each of the referred debt-management companies by phone to set up a personal interview. Ask them what formal certifications they hold, how many years they've been in business, and whether they're affiliated with a larger company. Some states allow certification of financial planners, while other states don't require certification of debt counselors at all. A debt company that has taken the extra step to become officially certified by a national organization when state law doesn't require it shows a desire to be known as a reputable company.

    3

    Check each company with the Better Business Bureau. You can check with the bureau's online resource, or you can contact your local office for more information. A debt organization with a history of client complaints should be avoided.

    4

    Check each organization out online. Go through its website and see what its affiliations are and if any past customers have posted anything about the company on public Internet message boards. Be wary of any company that does business these days without offering a website as a resource.

    5

    Ask plenty of questions in your personal interviews. Make note of the answers given so you can check on their validity later; also make note of how confident and comfortable the representative made you feel. Describe how completely they answered your questions (be sure to ask several direct questions about how the company does business).

How to Consolidate Your Credit Bills

If you want to consolidate your credit card debt, you may choose a consolidation loan. Those who have defaulted on credit card payments and are in dire financial straits may qualify for a debt management plan. Both options consolidate your debt and allow you to make one monthly payment. You must be completely dedicated to paying off your debt and keeping it that way to find success with either.

Instructions

    1

    Consider your options carefully. A consolidation loan uses collateral, such as your house, to secure funds that wipe out your credit card balances. You make just one monthly payment; however, many fall prey to the lure of using their newly freed credit. If you're already delinquent, you need to speak to a credit counselor about whether or not you qualify for a debt management plan or DMP. If you qualify, the counselor will attempt to negotiate lower interest rates and payoff balances, then create a timeline over which you will pay off your debt. A consolidation loan may make it difficult to obtain new credit; most DMPs require that you don't even attempt to apply for new credit.

    2

    Research to get the best rates and service. Consolidation loans are often advertised at very low rates; however, you must have excellent credit to qualify for these rates. Get estimates from several different lending institutions to find the best rate -- and don't forget about credit unions. With a debt management plan, it's vital that you work with a reputable credit counseling program to avoid taking a further hit to your credit score. With a DMP, you make payments to the counseling company and they pay your creditors. If the counseling company is late on making your payments, your credit score will plummet. Check with the Association of Independent Consumer Credit Counseling Agencies or the National Foundation of Credit Counseling to find out whether or not your credit counseling company is reputable.

    3

    Apply for and accept your consolidation loan or DMP. It's vital that you understand that a consolidation loan is an additional line of credit, which means that the application itself grants a lender permission to access your credit report. This inquiry creates a negative impact on your credit score. For DMPs, you will have filled out paperwork with the credit counselor to qualify for a DMP. The paperwork upon acceptance of the plan means that you agree to make monthly payments to the credit counseling company over a specific period of time to pay off your debt.

    4

    Make your payments on time, in full, each month. One reason debt consolidation has such a bad reputation is that people fall further and further behind on their payments, which creates an even greater negative impact on their credit scores. However, if you follow through by making your payments on time each month, you'll boost your credit score and pay off your debt. Users of consolidation loans must be particularly careful not to use the newly freed credit that is opened up by the loan.

Saturday, October 23, 2004

How to Get My Credit for Paying Child Support

Paying child support can be tricky. You want to support your child in a manner that is personable, not in a manner that seems like a business transaction. However, if the other parent alleges that you are not making child support payments, the courts may side with her. If the court charges you with failure to pay child support, it can result in wage and bank account garnishments. For that reason, you must treat the situation as a business matter to ensure that all of your contributions are recognized.

Instructions

    1

    Require the other parent to sign and date a written document each time you give her a child support payment. The written document should include your name, the name of the child the money is for, the name of the parent you are giving the money to and the amount of money you are giving. Keep the original copy of the signed document for your own records.

    2

    Ask for a receipt from the other parent before handing over the money. This is especially true when using cash. The receipt should include your name, the date, the amount you are paying, the name of the child and the name of the parent you are paying the money to.

    3

    Pay your child support using a check or money order. Write the name of the parent in the "Payable To" field. Enter the monetary amount. In the memo section, write a note stating that the money is intended to be a child support payment. Include the name of the child the money is for. Make a copy of the check or money order for your own records. If you are sending a money order, keep the money order receipt stub.

    4

    Send all mailed child support payments via certified mail. By doing so, the other parent can not claim that your check or money order was lost is the mail. In order for the other parent to receive the certified mail, he must sign for it.

    5

    Pay child support using automatic payroll deductions. By doing so, all you have to do is present a copy of your check stubs to prove that child support has been paid. To setup automatic payroll deductions, speak with your employer or the Human Resources department.

When Does My Bankruptcy Expire?

Bankruptcy is a last resort for many individuals who are experiencing financial issues. Before an individual makes this very serious move to resolve financial problems, it is important to first understand all of the consequences, including how long it takes for a bankruptcy filing to expire from a credit report.

What Is Bankruptcy ?

    When someone files for bankruptcy, he declares that he is officially unable to manage his debts. Bankruptcy proceedings, which are initiated in court, legally release the individual from all or some of his debts. In other cases the filer can arrange a reduced payoff schedule. An individual has several different bankruptcy filing options including Chapters 7, 11, 12 and 13.

When Does It Expire?

    When a consumer files for bankruptcy that automatically gets listed on his credit report. It is a matter of public record. A Chapter 13 bankruptcy filing remains on the individual's report for seven years while Chapter 7, 11 and 12 filings stay on for a minimum of 10 years. Chapter 13 has a lesser term due to the individual's agreement to make some payments toward the debt over time.

Downsides

    It is very difficult, if not impossible, for an individual to get approved for credit as long as the bankruptcy is listed. One of the first questions asked on many credit applications is "have you claimed bankruptcy within x amount of years ?" A positive answer to that question in addition to the credit check usually leads to an automatic rejection by the creditor. A person who has claimed bankruptcy must be prepared to live on a cash basis until the listing expires. A bankruptcy listing can also negatively affect an individual's ability to get new employment.

Avoiding Bankruptcy

    Before choosing bankruptcy, a consumer should first consider all alternatives. The most logical step is to contact a credit counselor. Non-profit credit counseling organizations like the National Foundation for Credit Counseling provide advice to consumers on how to modify their budgets and get debt payments down to a manageable level. The counselor may also help the consumer start a debt management plan, which combines all payments into one. When the consumer pays, the DMP plan provider pays off credit cards on his behalf until the debt is satisfied.

What Is Debt Workout?

What Is Debt Workout?

U.S. consumers owe more than $900 billion on their credit cards, with close to $70 billion of it past due, according to a March 2010 article on the Fort Gordon Signal website. With borrowers so far underwater, some creditors are offering debt workout plans as a means to collect that debt. Such a plan can help the defaulted borrower avoid bankruptcy and allow the creditor to receive at least some payment on the principal owed.

Definition

    Debt workout, by definition, is the process by which a borrower behind on paying his debts seeks a repayment plan with one or more creditors. An attorney or unsecured debt professional can facilitate such a plan by contacting creditors on the defaulted borrower's behalf in the hopes of settling the accrued debt through settlement payments. The plan can vary from extending the repayment period to reducing principal, interest and other fees.

Function

    The primary function of a debt workout is to avoid bankruptcy. If the defaulted borrower were to enter the bankruptcy process, the lender would have a harder time recovering the principal and other fees. While bankruptcy proceedings protect some of the defaulted borrower's assets, DebtSteps.com points out that others might have to be liquidated and the borrower's credit rating would be severely impacted for years. A debt workout provides a solution for both the defaulted borrower and lender in that each party keeps or receives more of the assets or monies owed.

Offer

    Not every offer will be accepted by the creditor. To make an offer, defaulted borrowers first determine how much money they owe and at what interest rate, before contacting the creditor(s) directly or through a debt settlement company. According to a 2009 report on the Credit Infocenter website, many creditors accept settlements in the range of 35 to 50 percent of all monies owed.

Lender Review

    Once contacted about a debt workout plan, the creditor reviews the offer. A creditor's trying to recover the most money possible against the owed debt, and may require other asset statements from the defaulted borrower to see how much more the borrower can pay. A lender typically makes a counter-offer, trying to gain more favorable terms than what the defaulted borrower was seeking. The negotiation continues until both parties have reached an agreement, and it may take several months before the new terms are arranged and payments begin.

Execution

    After entering into a debt workout plan, the defaulted borrower makes payments to the creditor or a debt management service that pays the creditors on the borrower's behalf. These payments are deducted from the monies owed in accordance with the new plan, which could take 48 months or more to complete, according to the Federal Trade Commission.

Friday, October 22, 2004

Does Using Prepaid Credit Cards Help Your Credit Score?

Some people who struggle to maintain a good credit history or who have experienced credit trouble in the past consider using so-called "prepaid" credit cards in an effort to help increase their credit scores. While prepaid cards can help you with non-cash purchases, they aren't credit cards at all, and most have little or no impact on your credit score.

Credit Score

    When you request that a lender extend you credit, the lender wants to know whether you'll pay back the loan. To accomplish this, lenders look at your credit score, a number that indicates how you've handled credit in the past. If, for example, you've defaulted on loans or gone through a bankruptcy, your score will be low and you are unlikely to receive credit. To increase your score, you have to demonstrate that you can use credit responsibly.

Prepaid Cards

    A "prepaid" credit card is not really a credit card. When you obtain a prepaid card, you essentially trade your cash for a piece of plastic. The card tells anyone with whom you're conducting a transaction that there is cash available to pay the money you owe. A credit card, on the other hand, indicates that the credit card issuer will pay the bill even if you don't have any money. You don't have to have good credit to obtain a prepaid credit card, because it is not a form of credit.

Increasing Scores

    To improve your credit score, you have to show you use credit wisely. When you add money to a prepaid credit card, you are only showing that you can use money you already have. This is not credit. Using credit is using someone else's money and then paying it back. To increase your credit score, you have to pay back all debts on time and take other actions, such as limiting the amount of your available credit you use.

Alternatives

    You can consider alternatives to a prepaid card if you want to increase your credit score. A secured credit card, for example, is a true credit card, because the lender extends credit to you. However, you have to pay a security deposit or provide some other form of security to the lender before you can obtain this card. If your credit is good enough, you may consider obtaining a traditional unsecured credit card. The kind of card you can get if you have bad credit typically has high interest rates and low limits, but using it responsibly will increase your score.

Statute of Limitations on Debt Collection for a Credit Card in Georgia

A debt collector in Georgia faces a deadline for using the courts to enforce the debt, called the statute of limitations. The time limit set by the statute of limitations is specified in the Georgia Code and varies depending on how the debt was incurred. Prior to 2008, the applicable statute of limitations for credit card debt was uncertain due to variations among parts of the Georgia Code; however, rulings by the Georgia courts in 2008 indicate the limitation period for credit card debt is six years.

Georgia Code

    The uncertainty regarding the statute of limitations for credit card debts stemmed from the different limitation period for debts based on "open accounts" and "simple contracts." Georgia Code section 9-3-25 states that the limitation period for debts based on an open account, as well as "contracts not under hand," is four years. The reference to "under hand" means the signature of the party against whom the contract is being enforced. In contrast to this section, Georgia Code section 9-3-24 specifies a six-year limitation period for "simple contracts in writing." This latter code section with a longer limitation period is more beneficial to a debt collector, while the former code section, with a shorter limitation period, favors a debtor.

Case Law

    The issue of whether the four- or six-year limitation period applied to credit card debts was addressed by the Georgia Court of Appeal in 2008. The debtor stated that the credit card debt was an open account and that he never signed a contract with the credit card company; therefore, the four-year limitation period applied. The court disagreed and held that a credit card debt under Georgia is a simple contract, not an open account; therefore the six-year limitation period applied. In 2008, the Georgia Court of Appeal also held that the six-year limitation period applied to store-issued charge card accounts.

Judgments

    If the debt collector files a lawsuit within the statute of limitations and has the evidence to prove the credit card debt in court, a judgment is made by the court against the debtor. Although the limitation period for filing the lawsuit no longer applies, a new limitation period affects the debt collector's right to enforce the judgment. Georgia Code section 9-12-60 states that a judgment becomes dormant after seven years if no action is taken to enforce it. After the seven-year period expires, the debt collector has three years to apply to the court to revive the judgment. If the three-year period lapses without any action taken, the judgment cannot be enforced against the debtor.

Reviving the Statute

    Credit card debt that is expired under the Georgia statute of limitations can be revived. A debt collector is not prevented by any state or federal law from contacting a debtor regarding payment on an expired debt. Such contact may involve sending a letter to the debtor requesting information to confirm the amount and basis for the debt. If the debtor were to reply in writing with the details of the debt, this may cause the statute to be revived and the six-year limitation period will begin again.

Can You Consolidate Debt & Buy a Home?

Can You Consolidate Debt & Buy a Home?

When you take out a home loan, you are usually unable to receive extra funds to consolidate other debts. This is because your home loan is based on the home's value. If you would default on your loan, your lender must be able to recoup the money by selling the property. Under certain circumstances, however, you may be able to buy a home and consolidate.

Do Not Currently Own a Home

    If you do not currently own a home, or do not have another large asset to use, consolidating your debt and buying a home at the same time is not possible unless you have an exceptionally large down payment. Cash out equity refinancing and home equity loans are both ways that homeowners can consolidate debt, but you need enough available equity to qualify. Available equity is the percentage of the home's value already paid for. For example, if you put $30,000 down on a $300,000 home loan, your lender may be willing to consolidate your $15,000 credit card debt.

Currently Own a Home

    If you do currently own your home, you may be able to use the equity in your existing home to pay off your bills. Afterwards, you could sell your home and buy a new one if you wish. This method allows you to reduce the amount of revolving credit you are using, possibly increasing your credit score, which could help you get a lower interest rate when you buy your new home. There is an important caveat, however. You have to have enough remaining equity to pay realtor commissions and closing costs when you sell, as well as afford the costs associated with buying a new home.

Refinancing

    Instead of trying to consolidate your debt at the same time as buying a home, you could always consolidate your debt after you make the purchase. This requires that you have enough equity to consolidate your debts and can be done in one of two ways: refinancing your mortgage or borrowing off the home's equity. In the former, you will have to pay closing costs all over again but you will typically pay less in interest than if you had borrowed off the equity in your home.

Equity Loans

    An equity loan could take the form of a Home Equity Loan (HEL) or a Home Equity Line of Credit (HELOC). If you decide to borrow off the equity in your home, remember that you may pay a higher interest rate, but you can set the term for as short as you like, allowing you to pay off your consolidated debts in the matter of a few years rather than paying a mortgage over 15 or 30 years, which would include the consolidated debts. Moreover, you could end up paying less in interest, even with having a higher interest rate, because of the shorter pay off period.

Thursday, October 21, 2004

Statute of Limitations for California Debt Collection

Statute of Limitations for California Debt Collection

If you have just received a threatening letter about an old debt, check the date of the debt before making a payment. All states, including California, have a statute of limitations on using the courts to collect a debt. Depending on the type of debt, you may no longer be legally obligated to pay it off, and a debt collector cannot legally threaten to sue you.

Statute of Limitations

    According to legal publisher Nolo.com, a statute of limitations is the legal time limit on filing a lawsuit. In California, creditors have anywhere from two to four years to file a lawsuit to collect a debt.

Types of Debt

    California's statute of limitation laws differ according to the type of debt that the creditor wishes to collect. For example, if there was no written agreement between you and your creditor, the statute of limitations is two years. If a written agreement was used, the statute of limitations is four years. If a lawsuit was filed and won by the creditor, the statute of limitations on collecting the debt (including getting a lien on your property, seizing your assets or garnishing your wages) is 10 years, but is also subject to renewal at the request of the creditor.

Credit Reporting

    It is important to understand that there is a difference between the statute of limitations and limits on how long negative items can be placed on your credit report. According to federal law, negative items can remain on your credit report for only seven years after the account becomes delinquent. Because of this, your creditor can no longer sue you for the debt, but it can still report the debt to credit bureaus.

Collection Efforts

    The statute of limitations does not preclude ongoing collection efforts by your creditor. Even though your creditor cannot sue you once the statute of limitations has passed, the agency can still try and persuade you to pay the debt.

Zombie Debt

    Unfortunately, there are some companies that specialize in what is known as "zombie debt," very old debt that is no longer collectible under the statute of limitations. These companies, also known as "debt scavengers," will buy up old debt for a fraction of its face value, then try and intimidate you into paying it. If you are contacted by one of these companies, check the date on which the debt went into default. If it is older than the statute of limitations allows, send the collector a stern letter via certified mail that informs them that the debt is past the statute of limitations and that they are not to contact you ever again.

How to Get Help Paying Doctor Bills

Medical expenses can pose a significant financial burden for those with no monetary means to immediately pay the bills. The inability to pay a doctor's bill may arise because an individual lost his job, is uninsured or was denied repayment by the insurance company. Regardless of the reason, many individuals find means of postponing payment or receiving assistance with covering the fees related to such medical expenses.

Instructions

    1

    Review the documents issued by the medical institution and the insurance company if the insurance agency has refused coverage for the medical event. If you are uninsured, skip to Step 3. Insurance companies and hospitals may process thousands of patients a month, and your form and/or bill may contain errors that one or both parties overlooked. Ask for clarification on expenses to ensure you are being charged for services you actually received.

    2

    Compare the names and identification numbers (e.g. social security number or insurance number) on all forms to ensure accuracy; a misspelled name or missing number may have caused your claim to be rejected inadvertently. Also check that the insurance company noted on your medical bill is the company and plan that you use. Notify the doctor's office if you notice errors during Step 1 or Step 2 so that they may rebill the insurance company.

    3

    Obtain government assistance with paying the doctor bills if you don't have insurance. If you meet certain criteria, the state and/or federal government will provide funding through the U.S. Medicare and Medicaid programs to cover necessary medical expenses. Examples include pregnant women and individuals over the age of 65. Both programs also cover necessary medical events that have already passed. Contact the local office for Medicare and Medicaid to determine your eligibility (see Resources).

    4

    Ask the doctor's office or medical institution for a customized payment plan. Many institutions would rather create payment plans for patients who are unable to pay up front instead of forcing the patient into bankruptcy, because the latter increases the institution's risk of not getting paid at all. The office may ask you to draft a letter explaining your personal circumstances, as well as provide documentation of economic hardship (e.g., bank statements or proof of unemployment).

Wednesday, October 20, 2004

Clearing & Settlement for Credit Cards

The Federal Trade Commission recommends debt settlement as an effective strategy for clearing credit card debt. Settling debt clears, or eliminates credit card debt and makes it possible to avoid the risk of bankruptcy. Settlement resolves delinquent credit card accounts for less than the full balance. Savings are often significant, with SmartMoney reporting savings of 20 to 70 percent off the original balance.

Disadvantages

    Credit card companies will not consider accounts for settlement until they are considerably past due, and that presents a challenge for people who want to settle but don't want to ruin their credit as they do so. Unfortunately, debt settlement does hurt credit -- even before accounts are paid off for less than the full balance. Card companies have no incentive to settle while the accounts are paid as agreed, but generally will consider settlement when accounts are two or three months past due. Missing payments damages credit scores, and it is possible that someone with good credit could have very bad credit by the time multiple settlements are completed.

Credit Scores

    Credit scores are three digit numbers ranging from 350 to 850, with scores of 720 or higher considered outstanding. All credit situations are different and it is impossible to predict how settlement would affect scores. However, someone with credit scores around 700 can expect to lose a significant number of points -- perhaps more than 100 -- through debt settlement. A credit score of 620 is widely considered as the minimum score needed for "good" credit, meaning a drop of 100 points could ruin credit for some people, at least over the short term.

Tough Decisions

    Settlement is still a good option for many people despite the damage to credit scores. Many people struggling with excessive debt and trying to avoid bankruptcy already have poor credit because of missed payments. Someone whose score is already below 620 could decide that losing another 50 points or so through settlement isn't going to matter much in the long run. People in that position often decide that they are better off settling as many debts as possible and then starting over with a credit rehabilitation plan. It is possible to restore credit within two or three years after settlement by selectively opening new accounts -- perhaps secured credit cards -- and making timely payments while keeping balances low. Secured cards require deposits in savings accounts that serve as collateral.

Process

    Settling credit card accounts is not difficult. Although credit card companies are not required to settle accounts most will. Negotiations are possible over the telephone or by mail. Telephone discussions are faster, although written correspondence offers a paper trail and is a good choice for people who want to settle but don't want to speak directly with a skilled negotiator. Card companies usually offer their biggest discounts on settlements just before the six-month mark when accounts typically are closed, charged off and sent to debt collection agencies.

How to Do Debt Consolidation Without a Lawyer

By means of a debt consolidation, you can combine your debts into one, and reduce your number of creditors and monthly payments. Different options are available to merge your debts. And while some debtors seek advice or assistance from lawyers and other financial experts, it is possible to consolidate debts on your own. Before deciding on a debt consolidation option, it's wise to explore different alternatives and select the method that best suits your situation.

Instructions

    1

    Talk to your credit card issuer about a balance transfer. As a loyal customer, your credit card company may approve you for a low-interest credit card, which allows you to transfer your balances from multiple cards to the new one. If not, compare credit card offers on sites such as Creditcards.com

    2

    Consolidate with a secured debt consolidation loan. Use your car title (if applicable), or another valuable piece of personal property and talk to your bank or another financial institution about a debt consolidation loan. A good credit score and steady income are required.

    3

    Use your home's equity to eliminate outstanding balances. Home equity loans give property owners the opportunity to consolidate their debts. Once approved for a home equity loan, the lender gives you a check for a particular amount, and you use this money to pay off balances.

    4

    Check into debt consolidation programs. These organizations do not issue loans. Instead, they freeze your current accounts, structure a new repayment plan and negotiate a lower interest rate to help you reduce your debts faster. Non-profit debt consolidation programs do not charge monthly fees.

Statute of Limitations of Debt Collection

Statute of Limitations of Debt Collection

Different jurisdictions have different statutes of limitations in the United States. Debt has to be written off after a certain period of time. Every state has a time frame within which debt can be collected or the debtor can be sued. If that expires, debt must be expunged from the collector's books. States allow a space of between two to 15 years for the collection of delinquent debt.

The Statute of Limitations

    Debt collection is governed by state laws across the United States. The laws provide guidelines for the lifespan of a debt before it must be written off. The statute of limitations (SoL) on debt collection varies according to states, but generally the creditor's claim to debt is six years after the debt is written off.

Why Limitations Are Important

    The SoL is aimed at protecting debtors from creditors. Debtors would owe creditors for the rest of their lives if it were not for the SoL. For most people in debt, this law provides a breathing space and a time to realign their personal finances. The law protects consumers unable to pay debt from being abused or harassed by collectors. For instance, a creditor or debt collector cannot contact you after 9 p.m. local time or contact your employer at any time.

The Fair Debt Collection Act

    The Fair Debt Collection Act (FDCPA) provides guidelines on legitimate debt collection practices and was amended in 2006. This amendment came amid overwhelming evidence that debt collectors were increasing the use of unscrupulous and unfair debt collection practices. For example, a debt collector cannot threaten to sue when he does not intend to or send documents purporting to be legal papers when they are not. Unethical conduct not only led debtors into losing their jobs, it created marital instability, according to the FDCPA. The U.S. Congress had to make changes in order to give the Federal Trade Commission enough authority to rein in these bad debt collection practices.

State Laws

    Wyoming and Louisiana have the longest SoL. In Wyoming, open debt accounts, including outstanding credit card payments and oral agreements, can be collected up to a period of eight years. Creditors of written contracts, oral agreements and promissory notes in Louisiana can collect debt for up to 10 years. The District of Columbia, Delaware and Maryland have some of the shortest statutes of limitations. It takes three years for any kind of debt not payable to be expunged in the District of Columbia and Delaware. Maryland is the same, except for promissory notes which require a period of six years.

Creditors

    Creditors can sue a debtor. But this has to be in a court with jurisdiction over where the defendant lives. For instance, a creditor based in Texas will have to sue his debtor in Manhattan, New York, if that is where he lives. However, there are exceptions in cases such as debt related to child support which is enforced in every state. Signed contracts are also an exception. The collector is allowed to sue in the jurisdiction where the debt was issued. When judgment is passed, collectors or debtors can use the statute of limitations where it was granted, or they can domesticate it to where the defendant is living. The collectors will most likely choose a place where the statute of limitations is longer.

Tuesday, October 19, 2004

Unsecured Debt Laws in Texas

Unsecured Debt Laws in Texas

If you live in Texas and are concerned about paying your unsecured debt, you should know about your rights and obligations under Texas Law. Texas residents are protected by federal and state fair debt collection laws. Texas also limits the steps that creditors can take to collect debtor judgments.

Debt Collection Laws

    Texas residents are protected by two sets of laws that restrict the activities of third-party collection agencies: The Federal Fair Debt Collection Practices Act and Chapter 392 of the Texas Finance Code. Both laws require collection agencies to respect the privacy of debtors, to refrain from making baseless threats or using vulgar language, or calling during inconvenient hours. The Texas law further requires collection agencies to be bonded by an agency authorized to do business in Texas. Debtors who are the victims of unscrupulous collection agencies have the option of suing the collector under either state or federal law (See References 2 and 3).

Statute of Limitations

    The Texas Statute of Limitations on filing a lawsuit to collect a debt is four years after its default date. If a creditor does win a lawsuit against a debtor, the Statute of Limitations on collecting the judgment is ten years, but this can be renewed by a judge. If a debt is past the Statute of Limitations, a creditor or collection agency can still attempt to collect a debt, but can no longer win an enforceable judgment in court (See References 1).

Wage Garnishment Laws

    If a creditor wins a judgment against a Texas debtor, the creditor cannot collect the judgment by garnishing the debtor's wages. Creditors can, with some exceptions, garnish the bank accounts of a judgment debtor. Exceptions include money from Social Security income. If the money in your account is from a Social Security payment, you can ask the court to exclude that money from garnishment (See References 1 and 4).

Monday, October 18, 2004

How to Liquidate Debt

How to Liquidate Debt

Many people dispute debts that they feel are unfair or unowed. But if you have a debt and you know that you owe it, then you should liquidate your debt. Liquidating your debt means that you acknowledge the debt is owed and then you pay it off. If a dispute occurs, a debt is no longer considered liquidated. You must know the entire amount of the debt for it to be considered liquidated and then sell your various assets to settle the debt.

Instructions

    1

    Contact each creditor who you believe has a valid claim against you.

    2

    Request a letter stating the exact amount of the debt. Return a letter acknowledging that you owe the debt and intend to pay it off.

    3

    Take stock of your individual assets. Be sure to break down the larger assets into smaller, salable items. If you own a business, for example, you may have furniture, a building or money owed to you by customers.

    4

    Sell any items that you can for as much money as possible.

    5

    Use the money you earn to pay off the debt you've acknowledged to your creditors.

Can Lottery Winnings Be Garnished to Pay Judgments?

When you owe money to a creditor, one of the strategies that it could use to collect is a wage garnishment. This involves taking money straight out of your paycheck before you ever see it. This process can be used not only with your wages but also with other income, including lottery winnings.

Using a Judgment

    If you are concerned about losing part of your lottery winnings to a creditor through a garnishment, several factors will come into play. The creditor cannot just take part of your lottery winnings unless it has a judgment first. This means the creditor will need to file a civil lawsuit against you and obtain a ruling that verifies the debt. Once the debt is verified through a judgment, it will also need a writ of execution from the court before a garnishment can take place.

State Laws

    Whether your lottery winnings can be garnished will depend on the state laws where you live. For example, in the state of Connecticut, case precedent has said that lottery winnings cannot be garnished. But states such as Colorado and Oklahoma have allowed money to be garnished from lottery winnings. You will need to check with your state's laws to find out if your money could be taken.

Payments

    When you win a large amount of money in the lottery, you are typically given the opportunity to take a lump sum payment or to get regular payments over time. If you take the lump sum payout, the money is less likely to be garnished. This is a matter of timing. The creditor would have already needed to have a judgment from a lawsuit to get the garnishment by the time you take the payment. If you choose regular payments every year, a garnishment is more likely.

Levy

    Even if you take a lump sum payment and the money is not garnished, your creditors could still find a way to get some of it. If you owe money and you have a judgment against you, the creditor could levy your bank account directly. This would involve taking some of the money out of your account without your permission. If the lottery money is deposited in your account, you could lose a portion of it to repay your debt.

Saturday, October 16, 2004

How to Attach Wages After a Judgment Is Won

A wage attachment, also called a wage garnishment, is a legal document that orders a debtor's employer to withhold a certain portion of his pay to satisfy a debt he owes. As a creditor, you must sue the debtor and win a judgment from the court before you can seek to garnish his wages. Legal entities, such as the state taxation department and the Internal Revenue Service, do not need a court order to garnish, but you must obtain one.

Instructions

    1

    Find out if your state laws allow wage garnishments by contacting your local or county courthouse. The states of Texas, Pennsylvania, South Carolina and North Carolina, for example, do not allow creditors to garnish wages in the state. However, after obtaining the judgment, you can ask the court to allow you to recover the debt via other methods, such as levying the debtor's bank account.

    2

    Apply for the wage garnishment from the same court that gave you the judgment if the state allows wage garnishments. Procedures vary by state. For example, in California, you apply for a writ of execution then prepare an Application for Earnings Withholding Order. Depending on your county, you might need to hire a process server to serve the debtor's employer with the garnishment paperwork. In Indiana, after you obtain the judgment, the court orders a Procedural Supplemental for you and the debtor to attend. At the hearing, the court determines how the debtor will repay the debt, such as via wage garnishment.

    3

    Follow court procedures regarding the wage garnishment. Once the debtor's employer receives the garnishment order, in most cases, it must verify that it has the debtor's wages and the amount and time frame in which payments will be submitted. In many cases, the court instructs you how to apply payments received, such as to interest first and then to the principal owed. Further, the state might allow the employer to withhold a small administrative fee for performing the garnishment; the cost might be split between you and the employee, or the employee alone might absorb the cost.

    4

    Send the debtor's employer the necessary paperwork if you establish a payment agreement with the debtor. Contact the issuing agency on its procedure for stopping the garnishment if the debtor enters into an installment arrangement with you.

How to Make Carecredit Payments

How to Make Carecredit Payments

CreditCare is a credit service that allows you to fund medical procedures for your family and pets. Not all providers will allow all plans, but many plans will afford no interest for between six and 24 months. After 30 days, you will be required to make monthly payments and receive a statement each month. In addition to sending back the payment stub included in your statement with a check, you can also make online payments using the GE Money service.

Instructions

    1

    Go to the GE Money website and click "Register Now" in the "Consumer Center" box on the right side of the screen.

    2

    Enter your CreditCare account number in the "Register Now" field along the left side of the screen and click "Submit." Follow the ensuing prompts to enter your name and contact information and create the account.

    3

    Click on "Payments" in the left hand navigation menu and then click "Make Payment."

    4

    Select "One-Time," "Multiple" or "Monthly Auto-Pay" from the list of available payment types. If you choose to have payments deducted automatically each month, the payments will continue indefinitely. Setting up multiple payments allows you to set up to six future payment dates.

    5

    Enter the amount of your payment and the date it should be made. For multiple payments, enter a date for each payment.

    6

    Enter your banking information. Verify that all information is correct and then click "Submit."

Does a Garnished Check for Child Support Affect Your Credit?

Does a Garnished Check for Child Support Affect Your Credit?

When a parent falls behind on child support, a local or state child support agency may initiate court-ordered wage garnishment of the parent's paychecks. The parent should understand how wage garnishment due to overdue support, also known as child support arrears, can affect the parent's credit history. The content of credit reports may affect the parent's efforts to buy property, open bank or credit accounts or even apply for work with a new employer.

Purpose of Garnishment

    Wage garnishment, also known as wage deduction or withholding, generally compels an employer to take court-ordered child support from an employee's checks and transfer the funds to a local or state child support agency for payment to the other parent. While federal law requires a version of wage garnishment for all child support cases, states can set their own requirements as well. Not every state requires garnishment for all parents ordered to pay child support --- some states allow parents to opt out of garnishment or only start garnishment after a parent has fallen behind on payments. When garnishment occurs due to overdue support, rather than regularly-scheduled, on-time support, federal and state laws allow the garnished checks to affect a parent's credit history.

Federal Laws

    The Fair Credit Reporting Act explains many consumer rights under federal law. Section 622 of the act discusses child support obligations. The section requires inclusion of overdue support on an individual's credit report when credit bureaus receive the information from a local or state agency engaged in child support enforcement or from any other local, state or federal government agency. Only overdue child support reported within the preceding seven years may appear on an individual's credit history.

State Laws

    The laws regarding child support and credit history vary according to the state. Each state may set a minimum amount owed by the parent before the state's child support agency reports the arrears to the credit bureaus. Parents should understand the minimum amounts to require reporting in their own states. For example, Idaho sets a minimum of $500 or three months of missed payments before the state reports the arrears. In contrast, Arkansas simply specifies a minimum of $1,000 owed. A state may continue to report arrears owed until the parent pays off the debt in full.

Procedures to Appeal Reporting

    Each state sets its own procedures to fight the reporting of child support arrears to credit bureaus. A state may require written notice to the parent before the state conveys information regarding child support debts to credit agencies. The parent should respond to the notice within the specified number of days. The parent's written appeal should explain that the parent does not owe enough child support to require reporting according to state law or that the agency has identified the wrong person, or provide another reason to appeal the reporting. After the parent appeals, the child support agency will review the case and possibly schedule a hearing. A parent worried about the effect of child support on credit history should consult with a family law attorney who has expertise in a particular state's laws.

Friday, October 15, 2004

How to Get a Personal Loan With Bad Credit & Bankruptcy

How to Get a Personal Loan With Bad Credit & Bankruptcy

After the global economic crisis that began in 2007, more people than ever before have not only bad credit but also bankruptcies and foreclosures on their records. Due to the prevalence of the hard economic circumstances, lenders have become more willing to work with people whose credit histories are far from perfect. With a little bit of time between you and the worst of your credit problems, you can obtain a personal loan if you can show you are a good credit risk.

Instructions

    1

    Gather your relevant financial information to apply for the loan. This may include your income statements, Social Security number, bank statements and other sensitive documents.

    2

    Look for a lender that works with or specializes in lending to people with bad credit and obtain their loan application. This is often advertised on the company's website, advertisements and storefront.

    3

    Fill out the lender's application and attach all requested information. Ensure your application contains correct and up-to-date information with all requested information attached the first time to prevent an unnecessary denial of credit for mistakes or missing information.

    4

    Present your application to the lender. Bankrate.com suggests also offering copies of the last six months of bills that have been paid on time and in full to show to your lender "to demonstrate you are a good credit risk."

    5

    Wait for the loan decision. Most personal loans are approved within 48 hours and some lenders offer notification by email or telephone as well as by mail.

What Happens When You Can't Pay Your Bills?

What Happens When You Can't Pay Your Bills?

Every month, most people take money out of their paychecks or other income sources and send it where it needs to go. Utilities, rent, car payments, mortgages and credit cards are just some of the bills the average person has each month. If for some reason you can't pay your bills, there are a number of things that can happen helpful and hurtful.

Reminders

    The first thing that will happen when you can't pay your bills is a reminder or two. Let's use a power company as an example. If you get your power bill on the 14th of June, you typically have 30 days to send in a payment of some kind. Depending on how much your power bill is, the company might take a payment as little as 1/4 of the total owed. If you don't send in anything during that 30-day period, you will probably get a past due letter. You will get a couple of these over the next few weeks and you may get phone calls as well. The power company will encourage you to call and at least make some sort of payment arrangement.

    If no arrangement is made, and 60 to 90 days passes, you will usually get a disconnect notice. By this time, you will have two choices and that is let your power get shut off or pay the bill in full. When you have a disconnect notice, you've usually waited too long and the company won't let you make a payment arrangement anymore so it's a better idea to pay as much as you can as soon as you can before this happens.

Disconnection

    For utilities and cable/phone/internet providers, if you can't pay your bill for an extended period of time, they will stop your service. This is commonly called disconnection. Your power, water, garbage pickup, cable, Internet, and phone service are all subject to disconnection if you haven't made a payment in a while.

    If you live in an area that gets very cold, the power company may keep your power on, especially if you have small children. It will eventually get disconnected if you aren't making payments, however. Cable and phone providers aren't as relaxed and will shut you off if you aren't in communication and making some type of payment.

    Most companies are more than happy to work with you and can extend your payment date by up to 30 days if you've lost a job, had a medical emergency or something else has come up where you are left unable to pay.

    Disconnection is the last resort by the company because it doesn't really want to do it. If you are disconnected, it's lost revenue. The company prefer that you set up a payment arrangement instead.

Eviction

    When it comes to not paying your rent, it can ultimately lead to eviction. Eviction is basically the landlord or property management company telling you to find a new place to live. They may give you as much as 30 days or as little as three days and may decide to evict you via law enforcement.

    Eviction can be a devastating force on a family. It could lead to you being temporarily homeless, your children may have to change schools, and the property managers could even take you to court to collect their money.

Repossession

    Repossession is when a company you haven't paid hires someone to recover what technically belongs to them. This is most common with cars and rent to own items. If you get a television and entertainment center from a rent to own business and stop paying them, they will call you a few times to remind you but after 30 days usually, the company will simply ask for the merchandise back

    The same applies to vehicles. If you stop making payments on your vehicle, eventually it will get repossessed. It's a good idea to give the repossession people the keys to the vehicle instead of arguing and forcing the company to tow it. This shows the finance company that you are cooperative and will hold that vehicle for you until you can make payments again or work out a new arrangement.

Wage Garnishment

    Wage garnishments are the last resort for various companies that you owe money to. If you owed a power company $600 in January and get disconnected, if you show no signs of paying them any money, it will send your information to a collection agency. The collection agency will call you very often and if you ignore them, eventually this can lead to wage garnishments. The usual garnishment amount is 25 percent of your net pay every paycheck.

How to Stop an Automatic Checking Account Withdrawal

How to Stop an Automatic Checking Account Withdrawal

Payments taken out of your checking account can be very convenient and help you save time. Payments can be for an Internet provider, insurance premiums, car payment or a mortgage payment. These payments come out automatically on a specified date that is set up by you. If you want to cancel these automatic payments, you will need to go through a certain procedure. You will need to put in your request within a reasonable time frame.

Instructions

    1

    Confirm how many automatic checking account automatic withdrawals need to be stopped. If you have several withdrawals you will need to make a list for all companies. Gather the contact information for each company. The faster you respond the better chance you have of stopping the charges from going through.

    2

    Determine why you are having the checking account withdrawals canceled. If you are opening another checking account, you may want to take care of that process first. Get the new checking account open and then call the companies that are deducting the payments and give them the new checking account information, including the routing number and checking account number.

    3

    Call the customer service department. Let the company know you wish to cancel the automatic deductions being taken from your checking account. Some companies will require that you put your request in five or six days before the payment is scheduled for deduction. If you wait too late the payment will come out for one final time and will not be stopped until the next due date.

    4

    Wait until you receive your next checking account statement. The charges should be stopped if you called in time. If the charges are still showing up on your checking account statement you may need to call again. Transactions are not always canceled on time even when you call on time. A delay can happen for a variety of reasons. Someone may have forgotten to process your request or it may have been overlooked. If these charges continue to be deducted from your checking account, it can really cause your checking account to be overdrawn.

    5

    Contact your bank. If you cannot get the company to stop the automatic checking account withdrawals, your bank may be able to assist you with this process. The charge will need to be disputed with your bank. Sometimes intervention by your bank may be the next step to get the issue resolved. They may be able to exert more influence if the company continues to delay the cancellation.

How to Deal With Collection Agencies on a Nursing Home Bill for My Brother

How to Deal With Collection Agencies on a Nursing Home Bill for My Brother

Medical bills can mount quickly during an illness. If a medical provider -- such as a nursing home -- is not satisfied that it is being paid quickly enough, the bill may be turned over to a collection agency. "The New York Times" reported in 2006 that complaints had risen against debt collectors for "aggressive and sometimes unscrupulous tactics." By the end of that year, the Fair Debt Collection Practices Act had been signed into law, outlining what debt collectors can and cannot do.

Instructions

    1

    Contact the nursing home about the medical bill before discussing it with the collection agency. Make sure it has any pertinent insurance information on your brother, and that the insurance company has been forwarded the bill for review. Inquire about a payment plan to bring the bill up to date; most providers would prefer any payment arrangement from the patient or his family, rather than no guarantee of payment while the collection agency tries to collect. Follow up with the insurance company to make sure any payment it can handle is applied to the bill.

    2

    Call the collection agency and notify it that it must stop making any calls to your brother or other family members on this bill. Advise the company that a copy of what it is attempting to collect on the nursing home bill must be provided to your brother or you. This should be an itemized bill, rather than a simple total, so that it can be reviewed for mistakes. Be polite but firm. Do not give any information. If the collector asks for personal financial information or guarantees, repeat that the company must send the information in writing, and end the call.

    3

    Send the collection agency a "cease and desist" letter in addition to your call. This should state firmly that all calls on the matter are to stop, and that the agency must send you or your brother written notification of the amount it is trying to collect. Ask for an itemized bill.

    4

    Review the itemized bill carefully after it is received from the collection agency. Review it with the insurance company and the nursing home to make sure it is complete and charges are accurate. Now is the time to contact the collection agency and set up a payment plan for your brother's bill; negotiate a lower amount for a lump sum payment, if possible. If he can't afford this, find out what payment plans the collection agency is willing to offer.

    5

    Refuse to make any payment until the collection agency sends the agreed payment plan to you or your brother. This should include written notice that the collection agency will not add adverse information to your brother's credit reports. Review the document carefully to make sure that the agreed amounts are noted and that nothing has been added or taken away from the verbal agreement over the phone. Read all fine print on the agreement; if you cannot understand it, have a lawyer review the document to make sure you understand what you are signing.

    6

    Make payments on your brother's medical bill by check only, which leaves a paper trail if you need to show proof of payments at a later date. Do not authorize automated payments of any kind, as this will require you to give the collection agency private banking information, such as a checking account number.

    7

    Obtain a written notice when the debt is paid in full. Follow up with the credit reporting bureaus to make sure your brother's credit was not affected by information from the collection agency, and that the debt is showing as paid in full.