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..

Monday, January 31, 2005

North Dakota Wage-Garnishment Laws

North Dakota laws permit creditors to garnish debtors' wages for unpaid debts. Garnishment is typically a court-ordered process where a court orders a debtor's employer (the garnishee) to withhold portions of the debtor's wages and pay that money to a creditor to help satisfy a debt. In some cases, however, garnishment can be done administratively, without a court order. In North Dakota, the four main types of entities that garnish wages are creditors, tax collectors, custodial parents in divorces and the Department of Education for delinquent student loans.

Creditors

    Creditors must follow North Dakota laws and procedures to garnish wages of debtors who have defaulted on their credit card debt. Default simply means that the debtor has stopped making payments. Once a debtor defaults, a creditor must sue a debtor in a North Dakota District Court. The creditor must obtain a judgment against the debtor before it can move to have the debtor's wages garnished. North Dakota exempts 75 percent of a debtor's wages (or 40 times the minimum wage, whichever is greater) from wage garnishment. A debtor gets an additional $20 exemption for every dependent.

Tax Debt

    Both the Internal Revenue Service and the North Dakota Office of the State Tax Commissioner can garnish wages of delinquent taxpayers. The IRS can garnish wages administratively, without getting a court order, to collect back taxes. In addition, the tax commissioner may garnish wages for unpaid state income taxes. The wage exemptions that apply to creditors do not apply to tax debt.

Child Support

    When a noncustodial parent fails to make child support payments in North Dakota, the custodial parent can seek to have that parent's wages garnished. Federal law permits a custodial parent to garnish up to 60 percent of a noncustodial parent's wages. If the noncustodial parent has a separate dependent spouse or child, then the custodial parent may garnish only 50 percent of the noncustodial parent's income. However, if the noncustodial parent is over 12 weeks late on child support payments, the custodial parent can garnish an additional 5 percent of that debt.

Student Loans

    The Department of Education may garnish up to 15 percent of a student loan debtor's income if the debtor defaults on his student loans. Like the IRS, the Department of Education can garnish administratively without obtaining a court order.

Warning

    Contact a qualified attorney licensed to practice in North Dakota to find out how the facts of your situation apply to North Dakota wage-garnishment laws, which are subject to change.

Saturday, January 29, 2005

Can a Judgment Creditor Take a House?

Can a Judgment Creditor Take a House?

When recovering delinquent payments, most creditors will send frequent collection letters and call debtors both at home or at work. Collection calls and letters serve as a reminder that you neglected to pay what you owe. The creditor's goal is to coerce you into paying your debt voluntarily -- thus preventing an expensive court battle. In the event you still do not pay off your delinquent balance, the creditor can move to seize your assets -- including your home.

Judgment Creditors

    The court awards your creditor a civil judgment if it sues you for the debt and the judge sides with the creditor. Because the civil judgment gives the creditor a wider range of collection options, after winning a lawsuit, the creditor becomes a "judgment creditor." Only judgment creditors and government creditors can seize property you own.

Real Estate Seizure

    The creditor can seize your home by registering its civil judgment with your county's Land Records office. Registering the judgment creates a lien against all homes and land you own within that particular county. As soon as the creditor attaches a lien to your property, it can call the lien due. If you cannot pay off the judgment when this occurs, the creditor can foreclose on your real estate and sell it. Doing so helps the judgment creditor limit or eliminate the financial loss it incurred when you left your debt unpaid.

Priority Order

    Although a judgment creditor with a lien can seize your home, that does not automatically mean the seizure process is either simple or common. Should a judgment creditor opt to foreclose, it must eliminate all other liens your property holds that were filed before the judgment lien. Lien priority -- or the order in which liens were filed -- ensures that a lien holder cannot lose its claim on your property to any creditors that filed subsequent liens unless those creditors provide the previous lien holder with full financial compensation for its lien.

Considerations

    Paying off a homeowner's existing real estate liens solely to earn the right to foreclose on the property and hopefully sell it for enough to cover the individual's debt is a risky and time-consuming venture for a judgment creditor. In most cases, a judgment creditor attaches a lien to your home not with the intention of seizing the property, but with the hope that you will sell the property sometime in the future. The proceeds from the sale of your home will be distributed among all the creditors that hold valid liens against the property before you receive any profit from the sale.

Time Frame

    Judgments only remain enforceable for a limited period, which varies depending on your state's laws. After the judgment expires, the creditor loses its right to use a property lien to collect the debt from you involuntarily -- leaving you free to sell your home if you wish and eliminating the worry that your creditor could seize your home at any time.

What Happens if I Don't Pay My Consumer Credit?

What Happens if I Don't Pay My Consumer Credit?

Although consumer credit can provide several important benefits, such as increased purchasing power and the ability to handle financial emergencies, credit is only beneficial if you handle it responsibly. Responsible credit management includes paying at least your minimum debt payments when they are due. If you fail to pay your consumer credit, several negative occurrences can result.

Collection Activity

    Once your credit account reaches past-due status, your creditor will typically initiate collection activity. It will send you a letter stating that you need to make a payment to bring your account current. The creditor may also use in-house collection agents to call you at your home or place of employment. If initial efforts fail, or if the company does not have the resources to initiate in-house collections, the creditor may forward your account file to a third-party collection agency to carry out collection activities.

Legal Action

    If your account becomes severely past due, typically six months or more, and you have not made arrangements to bring your account current, the creditor may decide to pursue legal action against you. The creditor usually hires a debt-collection attorney to make a final demand for payment. If you do not respond or refuse to pay, the attorney can file a lawsuit against you in your county's civil court. The court then notifies you of the lawsuit and gives you time to respond -- about 30 days in most states. If you do not respond, the court awards a judgment against you for the amount you owe, plus interest, court costs and attorney fees.

Post-Judgment Collections

    When a creditor obtains a legal judgment against you for a debt, it may use additional strategies to collect from you. In most states, the judgment creditor can contact your employer to have as much as 25 percent of your post-tax wages garnished to apply to the debt. It may also order your bank to freeze your accounts and send most or all of the funds to the court for payment to the creditor. A judgment creditor also typically places a lien against any real estate property you own, which prevents you from selling or transferring the property until the judgment is paid. In most cases, you can only end a garnishment, bank freeze or judgment lien by filing for bankruptcy protection.

Credit Damage

    Each collections phase also damages your consumer credit score. After an account reaches 30 days past due, the creditor can report the delinquency to TransUnion, Equifax and Experian, which are the three primary credit bureaus in the United States. It may report your delinquency again when your account becomes 60, 90 and 120 days past due. Your report will also show transfers of debt to third parties, as well as public records such as judgments and bankruptcies. All of these reports damage your credit score, impairing your ability to obtain new credit, obtain insurance and even secure employment.

How to Easily Fix Your Credit Report

How to Easily Fix Your Credit Report

Its important to fix your credit report. Your report is accessed by lenders whenever you apply for credit. Ensure you check your credit report regularly. You can fix your credit report easily by checking for errors and looking for areas of the report where improvements can be made. Get your three credit reports (Experian, Equifax and TransUnion) from AnnualCreditReport.com. Its the official website sponsored by the credit reporting bureaus.

Instructions

    1

    Apply online to get your credit reports from AnnualCreditReport.com. (See resources). It takes about 15 minutes to apply and is the easiest way to start to fix your credit report. Reports can be viewed instantly online. Select the state you live in from the drop-down box. Click Request Report. Accurately enter your details in the application form. Retype the alphanumeric security code at the bottom of the form into the adjacent box. Click Submit. Wait for your identity to be verified. Select a log-in ID and password. Click Enter. View your credit report instantly.

    2

    Check your reports for errors. Its the fastest way to easily fix your credit report. Report errors to the credit reporting bureau in writing. Errors should be rectified within 30 days.

    3

    Check your credit report for missed or late payments. These get reported to credit reporting bureaus and affect your credit rating. Pay late or missed payments urgently. Make future payments on time. In a few months, your report will reflect the on-time payments. This step, too, will help to easily fix your credit report.

    4

    Check if you have any credit cards where you are close to or have exceeded the limit. Pay off overdue and over-limit amounts as soon as possible. Reduce the amounts outstanding. Once your available credit has increased to more than 40 percent, your credit record will easily improve.

    5

    Pay utility bills by automatic transfer from your bank. Timely payments are not recorded, but the utility companies set up a credit file for bad debtors. Lenders who check your record will see that no bad debts have been registered. Timely utility bill payments help give confidence to a lender.

Thursday, January 27, 2005

Credit Card Debt Counseling and Debt Reduction

Credit Card Debt Counseling and Debt Reduction

Credit card-counseling and debt-reduction agencies assist consumers by offering to construct customized plans designed to reduce or totally eliminate unsecured debt. These agencies may also create a personalized monthly budget to help consumers control unnecessary spending and find ways to save money for emergencies or retirement.

Credit Card Counseling

    Credit card-counseling agencies evaluate a consumer's total debt, interest rates and any additional fees incurred, such as for late payment. A consumer is then counseled on how to efficiently pay down his debt over a specified time. Certain credit card-counseling agencies also provide free classes that educate consumers about how credit cards work and how to properly use them.

Debt Reduction Management

    Debt-reduction management services work with unsecured-debt creditors to reduce interest rates and eliminate or reverse late-fee charges. A consumer makes one monthly payment to the debt-reduction agency, which then makes monthly payments to the consumer's creditors. A consumer's commitment to a debt-reduction service can extend to several years, depending on the amount of unsecured debt incurred, according to the Federal Trade Commission.

Fees

    Credit card-counseling and debt-reduction management services normally charge a fee for their services. Credit card-counseling agencies may charge this fee per appointment but often offer free initial consultations. Debt-reduction management services normally charge a setup fee in addition to monthly service fees.

Expert Insight

    The N.Y. Consumer Protection Board recommends that consumers book appointments with multiple credit card-counseling and debt-reduction providers to compare offers and service fees. Consumers should check with the Better Business Bureau and their state attorney general's office to see whether any consumer complaints have been made against the agencies they are considering for debt-reduction counseling services. Consumers may also want to attend free workshops or classes held by credit card-counseling providers to educate themselves before deciding on a service provider.

Warnings

    The N.Y. Consumer Protection Board warns consumers to use caution when dealing with debt-reduction counselors who promise that their service can remove negative credit information, such as late-payment notices, from credit reports. Debt-reduction services cannot remove accurate information from a consumer credit report. Consumers should avoid signing a contract during their initial debt-reduction review and should not consider doing business with any counseling agency that pressures them to do so, according to the N.Y. consumer agency.

Wednesday, January 26, 2005

Debt Consolidation Risks

Debt Consolidation Risks

Debt consolidation can sound like the answer to your financial problems. Consolidating debt means bringing all of your high-interest credit card accounts under one low-interest loan. It lowers your interest debt, lowers your monthly payments and helps you free up extra cash each month. But there are debt consolidation risks that you need to consider before determining if consolidation is the right solution for you.

Extra Fees

    A debt consolidation program can reduce the amount of interest you are paying on your credit accounts, but it can sometimes make up for that interest in loan fees. According to MP Dunleavey at MSN Money, debt consolidation programs normally include monthly fees for administering your loan, and they can be as much as 10 percent of the monthly payment. So if your payment for the loan is $200, the debt consolidation company will add $20 to it and keep that extra fee for itself. You run the risk of going through the consolidation process only to find out that the extra fees make your monthly payments the same, or even higher, than they were before.

Credit Rating

    According to Bankrate.com, being on a credit assistance program such as debt consolidation does place a note on your credit report. While it may not necessarily hurt your credit score, being on a consolidation plan can prevent you from getting new credit until you complete the consolidation program. New creditors look at a consolidation program as an indication that the consumer is maxed out on the credit she can handle, and they will not issue new credit until the accounts are paid off.

Temptation

    One of the risks of debt consolidation is the temptation that exists to put yourself back into a bad credit position. According to MortgageLoan.com, if you do not cancel your credit accounts after they are paid off, then the idea of having several accounts with a zero balance can be an invitation to run up your balances again. The catch is that many credit counselors will tell you to leave some accounts open and even use them sparingly to help you rebuild your credit rating while you are paying off your consolidation loan. If you are not confident that you have the willpower necessary to hold off on spending on your accounts, then talk to a credit counselor about a possible solution.

When Is It Worth Refinancing Your Mortgage?

When Is It Worth Refinancing Your Mortgage?

When deciding if it is worth refinancing your mortgage, you need to consider more than attractive interest rates. You should also consider the amount of closing costs involved (typically around 2 percent of the total loan amount) and whether the potential monthly savings will justify the costs of refinancing. Refinancing involves restructuring your current mortgage. If your credit is strong and you take the time to compare lenders, you could end up with sizable savings.

Closing Costs

    Consider, for example, refinancing your mortgage for a total loan amount of $220,000, with closing costs of 2 to 3 percent (which could be as high as 5 percent if your credit is less than stellar). At 2 percent, the closing costs will be $4,400, but if you are saving $250 a month, it will take just under a year and a half to recoup the cost of refinancing. In this case, it is worth refinancing your mortgage as long as you are not planning to sell the house within a year or less.

Loan Terms

    It may be worth refinancing your mortgage if you need to lower your monthly payments to avoid foreclosure. If you have 23 years left on your loan and you refinance for a 30-year loan term, you can dramatically reduce the monthly payment amount and have more time to repay the loan, especially with a 1 to 2 percent drop in your interest rate. However, you will likely end up paying more over the life of the loan, particularly if you have already been paying on your current mortgage for a long time or if you get an interest rate with less than a 1 percent difference from your current rate.

Subprime Loans

    Subprime loans are often given to borrowers with poor credit histories at a rate of interest that is higher than the prime rate --- the lowest rate offered to preferred borrowers. If you could qualify only for a subprime loan when you obtained your original mortgage and you have stayed current with your payments, your credit rating may have improved enough to qualify for a better interest rate. In this case, it is definitely worth refinancing your mortgage as long as you can afford the new monthly payments and all the associated costs of refinancing.

Debt Consolidation

    When deciding whether it is worth refinancing your mortgage, consider what you hope to achieve with a refinance. For many homeowners, debt consolidation is the foremost goal of refinancing. Combining a first and second mortgage or home equity line of credit, along with any student loans or credit card debt, into one lower, fixed-rate mortgage will mean a single monthly payment and potentially save you thousands of dollars in credit card interest.

Considerations

    It is worth refinancing your mortgage if you can cut your interest rate by at least one point, according to CNN Money. Most of the time, a refinancing is worth it only if you will be in your home long enough to recoup the closing costs. Also, before deciding to refinance, make sure you know whether your current loan has a prepayment penalty.

Statute of Limitations to Enforce a Debt in Texas

When a person takes out a debt, he is legally obligated to pay back the debt for the rest of his life. However, the debt is only legally enforceable -- meaning the creditor can only sue him for failure to pay it back -- for a finite period of time. The statute of limitations for a debt in Texas is four years for most types of debts, although certain factors can affect this.

Debt Collection

    A debt collector can, technically, collect a debt for an indefinite period of time. However, to prevent a person from being hounded by creditors for the rest of their lives on debts that are decades old, a creditor can only sue before the statute of limitations on the collection of the debt has expired. The start of this time limit begins when the loan goes into default.

Statute of Limitations in Texas

    The statute of limitations for the collection of a debt in Texas is four years. Most states allow different statutes of limitations for different types of debts and break down debts into open accounts, promissory notes, oral agreements and written contracts. In Texas, the statute is the same across the board.

Civil Judgments

    The only exception to the statute of limitations is for the collection of civil judgments awarded in court cases. If a person sues another person and is awarded a civil judgment, whether stemming from a debt contract or from another type of injury, the person has ten years to collect on this judgment. Most of the same debt collection methods are available to this party as to parties owed money from another kind of debt.

Renewal

    A creditor cannot generally file to have the statute of limitations on the collection of a debt extended past four years. However, a person who has been awarded damages in a civil lawsuit can generally petition a judge to have the statute renewed. This means that the judge will reset the statute to allow another ten years for collection. Theoretically, a civil judgment could be enforced indefinitely.

Tuesday, January 25, 2005

The Evaluation Principles for Credit Risk

Evaluating credit risk is important for banks or any other business that extends credit to its customers. While some risk is inherent in all types of borrowing, businesses have a vested interest in trying to minimize that risk to acceptable levels. When making credit decisions based on the appropriate level of risk, losses due to non-payment of the debt can be controlled, and the business can remain profitable.

Judgment-Based

    Judgment-based credit risk evaluation is a non-automated system for making credit decisions. The judgment-based evaluation is also called manual underwriting. A loan underwriter examines the credit application carefully, and he may verify the information that the applicant provides with other sources. The underwriter examines all the supporting documents that accompany the application for thoroughness and accuracy. He may consult different financial calculations, such as debt-to-income ratios, to determine whether the borrower is capable of paying the bill. In the end, the underwriter makes a loan decision based on his own judgment concerning the credit risks the transaction presents.

Scoring Models

    Scoring-based credit risk evaluation is designed to make credit decisions more automatic and less subject to the judgment of an individual who might be biased. A uniform standard for credit evaluation allows consistency in assigning risk to different loans, and it indicates a likelihood of default on a loan. Scoring-based models use information found in retail credit reports to calculate a score according to a proprietary formula. The FICO score is the most common score-based model used to evaluate credit risk.

Business Credit Analysts

    Some business credit transactions are less formal and involve a credit manager or analyst making credit decisions for purchases that a business wants to make. While these analysts may use a credit report or application to help with their credit decisions, their decisions may be based on an interview or discussion with the business owner or manager seeking credit. An analyst may consider customer behavior and buying habits, as well as how sensitive to pricing the customer is. Business credit analysts must watch accounts continuously for any signs of trouble that could increase the credit risk.

Other Considerations

    Evaluating credit criteria for businesses or individuals allows credit grantors to institute risk-based pricing. If there is a higher risk involved with a transaction, the price of the credit must reflect this to offset potential losses. Scoring-based models also eliminate the possibility of a lender or business being accused of illegal credit discrimination, because the scoring-based model does not take into account criteria that it is illegal for a lender to consider.

Garnishments And Liens

Garnishments and liens are two post-judgment collection procedures that permit a plaintiff who has prevailed in his civil action against a defendant to obtain satisfaction for his judgment for monetary damages. Since a judgment for damages legally entitles the holder to collect the sum awarded, the judgment holder is frequently characterized as a judgment creditor and the defendant who has been found liable as the judgment debtor.

Judgment Required

    Garnishments and liens are available only to individuals who have first obtained a judgment by a court of competent jurisdiction. When a plaintiff prevails in her civil action against a defendant, a court will enter the judgment on its docket and notify the plaintiff by sending her a copy of the entry. In most jurisdictions, a plaintiff who has been awarded a judgment must request that the court issue an "execution." The execution is an official document that bears the seal of the court and identifies the plaintiff as legally entitled to collect the damages stated in the document.

Garnishment

    In most states, garnishment refers to the procedure of instructing an employer to set aside a specified amount of an employee's weekly wages for the benefit of the judgment creditor. A judgment creditor must apply to the court for approval of a writ of garnishment. Most jurisdictions exempt a specified percentage (usually 25 percent) of an employee's wages from a garnishment order. The writ of garnishment must be served on the employer for each successive pay period. The employer is directed to remit the approved amount of wages to the court, which then disburses the sum to the judgment creditor.

Lien

    A judgment creditor can apply to the court for a lien to be placed on the real property of a judgment debtor. The lien acts as a cloud on the title to the property. Even if the judgment debtor is financially incapable of paying off the judgment when it was initially issued, should the judgment debtor wish to sell his home in the future, the lien acts as an encumbrance on the title to the property. This means the debtor would need to pay the judgment creditor the full amount of the judgment before the lien would be dissolved.

Duration

    Each state establishes its own statute of limitations period for judgments that can range from five to 20 years. Most states allow a judgment creditor to renew the original judgment before its expiration. Once the statute of limitations period for the judgment has expired, any writs of garnishments or liens are automatically dissolved.

Considerations

    Garnishments and liens are not mutually exclusive. A judgment creditor may apply to the court for a writ of garnishment as well as an order permitting him to place a lien on the judgment debtor's real property.

Can Debt Collectors Attempt to Collect From the Workplace?

Can Debt Collectors Attempt to Collect From the Workplace?

You're under enough stress when you're behind in paying your debts. The threat of a debt collector calling at all hours or working to embarrass you only adds to the stress. Debt collectors have one job: to collect money from you by any means possible. They can be ruthless in their methods. However, The Fair Debt Collection Practices Act protects consumers from overzealous debt collectors. The act covers such issues as whether a debt collector is allowed to call you at your place of employment.

When They Can Call

    According to The Fair Debt Collection Practices Act, a debt collector is allowed to contact your employer by mail to verify that you work for the company, to get the company's street address or to garnish your wages. He may only call in the event your employer does not respond to his letter. If the debt is a medical bill, a collector may also contact your employer to find out whether you have medical coverage that will cover the debt. It's important to remember that no matter what a debt collector threatens, he cannot garnish your wages until he's sued you and been granted a judgment.

Calling You at Work

    A collection agency can contact you by phone or mail at work. However, the moment you inform the debt collector that your employer prohibits such contact at work he must cease calling or writing.

Put It in Writing

    Even if you told the agency by phone not to contact you at work, follow up with a letter and send it by by certified mail with return receipt requested. State in the letter that your employer does not allow such calls and that all contact, by phone or mail, must stop immediately unless he is contacting you to say that he is going to take a specific action in regard to the debt. Keep a copy of the letter for your records. The return receipt will serve as proof that your letter was received by the collection agency.

Privacy Issues

    According to the law, a debt collector cannot discuss your debt with anyone but you. The only legitimate reason a debt collector has for contacting relatives, friends or neighbors is to try to find out where you work and live. Even then, he cannot talk about your debt. He cannot badger these people for information and should only call them once. If you have an attorney representing you in regard to your debt, the collector should contact your attorney directly.

Your Rights

    If a collection agency continues to contact you at work once you've put it on notice or if the agency in anyway violates your rights under The Fair Debt Collection Practices Act, you have the right to sue the agency in state or federal court. Contact an attorney right away if you believe that your rights have been violated. Time is of the essence, as you have only one year from the date of violation to sue.

Monday, January 24, 2005

What Happens If Noncompliance in a Bankruptcy Agreement?

Adhering to the terms and conditions of a bankruptcy agreement is critical. Agreements typically forbid continued use of credit or require a minimum contribution to a court-ordered payment plan each month. Other terms are possible as well. Failing to comply with terms could result in dismissal of the bankruptcy suit and wasted money on bankruptcy filing fees and attorney costs.

Ramifications

    Noncompliance and dismissal of a bankruptcy case remove important protection. Everyone in bankruptcy benefits from a legal injunction called the automatic stay. The stay is the most powerful provision in bankruptcy, as it prevents debt collectors from continuing collection efforts during the bankruptcy. The stay stops enforcement of judgments, ends bank and wage garnishment and stops all lawsuits. The stay ends the day the judge dismisses the bankruptcy because of noncompliance. The move allows debt collectors to resume full collection efforts -- including garnishment.

Considerations

    The bankruptcy judge makes decisions on case dismissals, and not every act of noncompliance leads to an automatic dismissal. Minor indiscretions, such as failing to list a debt in the bankruptcy agreement, may lead only to an admonishment by the court and an adjustment of the bankruptcy application. However, applying for and using more credit without the court's permission or hiding income could result in a quick dismissal. Noncompliance issues and resulting dismissals are a key reason bankruptcy courts recommend that people file for bankruptcy with the help of an experienced attorney. People who represent themselves often don't fully understand all the rules because of the complexity of bankruptcy. That can lead to noncompliance because of procedural errors. An attorney serves as a resource throughout the bankruptcy and can help avoid mistakes.

Payments

    Failing to make court-ordered payments is an example of noncompliance. Payment plans are a part of Chapter 13 bankruptcy. Chapter 13 requires a payment plan of three to five years. The plans pay unsecured creditors after allowances for reasonable living expenses and payments on secured debts. The bankruptcy trustee sets the amount for the payment plan, and payments are mandatory. However, the court is willing to show some flexibility. The United States Bankruptcy Court For The Middle District of Florida reports that disclosing an inability to make the payments could lead to an agreement for making the payments later. Dismissal is next if an agreement is not possible.

Refiling

    Filing a new bankruptcy petition -- or converting to another form of bankruptcy -- are the only options after dismissal. For example, some people unable to make Chapter 13 payments because of a new job layoff find they qualify for Chapter 7 after several months of reduced income. In that case, the court allows for conversion to Chapter 7. Chapter 7 has income limits that vary by state. Usually only people with low income or long-term unemployment qualify. There are no income limits for Chapter 13. Also, the court may require a waiting period for refiling depending on the circumstances of the dismissal.

How to Find a Reputable Loan Modification Company

Finding a reputable loan modification company could require considerable time and research. The Federal Trade Commission recommends that you use extreme caution in dealing with loan modification companies because of widespread abuses. Working directly with your lender can result in a successful loan modification for free, or you can get free help from a nonprofit housing counselor certified by the U.S. Department of Housing and Urban Development. The housing counselor can provide all the services of a loan modification company, including convincing your lender to change various terms of your loan to make it affordable--the primary goal of loan modification. Despite the free help, you have a right to seek the services of a for-profit company if you wish.

Instructions

    1

    Visit with a government-certified housing counselor in your area. Sitting through a free consultation with a housing counselor could be valuable even if you are determined to hire a for-profit loan modification company. The housing counselor can tell you what to expect during the loan modification process and how to spot loan modification scams. Find a nonprofit counselor in your area by checking the website for the U.S. Department of Housing and Urban Development (see Resources).

    2

    Ask the counselor to refer you to reputable loan modification companies in your area. Explain that you simply prefer hiring a for-profit company. The counselor may offer referrals that could include local real estate attorneys specializing in loan modifications or even retired local bank executives who are working part-time out of their homes on loan modifications.

    3

    Call your bank or credit union. Speak to a loan officer to ask for more referrals. Tell the loan officer you are seeking referrals for loan modification companies operating in your area. You'll want to meet with representatives from some of the companies face-to-face before making a decision.

    4

    Scrutinize your list of referrals for reputable loan modification companies by entering the names into the database for the Better Business Bureau (see Resources). The database will tell you about complaints--if any--received about the businesses by the bureau. Eliminate companies from your list if they seem to have a troubling number of complaints lodged against them--even if the companies were recommended to you as being reputable.

    5

    Meet with some of the companies on your final list. Ask the companies if they are in compliance with the Mortgage Assistance Relief Services Rule announced by the Federal Trade Commission in 2010. Among other things, the rule makes it illegal for loan modification companies to collect upfront fees before providing services, and from making false and misleading statements about possible solutions for loan modifications. Ask the companies to provide at least three references you can contact, such as former customers.

    6

    Speak with the references as you make your final decision about choosing a reputable loan modification company.

If I Owe Money to a Private Credit Card & I Am on a Pension Can My Pension Funds Be Garnished?

People who take out of credit cards must sign a legal agreement that obligates them to pay back any money they draw against the line of credit within a certain amount of time. Like any other debt, this credit card contract is legally enforceable, and credit card companies may take a number of actions to secure payment of the debt. A person's pension may or may not be garnishable, depending on state law.

Garnishment

    A garnishment can only be legally accomplished if a creditor sues a debtor in civil court, is awarded damages for an unpaid debt and the judge orders the debtor's wage garnishment. Garnishment made by a private company, including a credit card company, under any other circumstances is illegal. In addition, many pensions cannot be legally garnished, including nearly all public pensions and many private pensions.

Public Pensions

    All federal benefits, including Social Security benefits and disability benefits, are protected from garnishment by private creditors under federal law. However, pensions issued by local governments are not protected by federal law, only state law. State laws vary in regard to whether these public pensions are exempt, but most states don't allow them to be seized. So, for example, a police officer receiving a pension from a city would likely be exempt from garnishment for credit card debts.

State Laws Regarding Private Pensions

    Private pensions -- those issued by businesses and other nongovernmental organizations -- are not protected to the same degree public pensions are. Like public pensions, the garnishment of these pensions is determined by state law. Generally, however, private pensions are less often exempt. To determine rules regarding the garnishment of these pensions, a debtor should consult his local secretary of state or attorney general's office.

Account Seizure

    Even if a private pension cannot legally be garnished, this does not mean creditors may not be able to seize money another way. Some states that do not allow these pensions to be garnished do allow them to be seized through the freezing and forcible seizure of assets in a person's bank account. So, if the pension is deposited in a bank account, it may taken out under a judge's orders.

The Regulation of Credit Card Interest

The Regulation of Credit Card Interest

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which took effect Feb. 22, 2010, regulates how and when credit card companies can charge interest and increase interest rates. The law bans unfair rate increases and protects consumers from deceptive lending practices.

First Year Interest

    The interest on a credit card must remain the same for the first 12 months the account is open. Credit cards with variable rates tied to an index or those with introductory rates are excluded from this regulation. Rates may also go up if the account is 60 days or more past due or if payments for a payment arrangement are not made as promised.

Introductory Rates

    Introductory rates offered by credit card companies must be in effect for at least six months.

Rate Increase Notifications

    Banks are required to notify credit card account holders of rate increases 45 days before the increase takes effect. Credit card customers have the right to opt out of the increase. This may result in the company closing the account and requiring a higher minimum payment.

Fair Interest

    Rate increases can only apply to new charges made after the increase takes effect. Excess payments will be applied to the highest interest balance first. Double-cycle billing, in which the previous month's balance was used to calculate the interest for the current month, is also banned.

Retroactive Rate Increases

    The CARD Act bans retroactive rate increases at any time, for any reason or for universal default. Retroactive rate increases for late payments are strictly regulated.

Deferred-Interest Balances

    On deferred-interest balances, credit card companies are required to apply the full payment made to the remaining deferred-interest balance for the two billing cycles before the deferred period expires.

Government Help to Pay Off Debts

The Federal Trade Commission and other government agencies recognize problems created by excessive personal debt. Credit card debt and other credit obligations sometimes lead to poor credit scores and high interest rates on loans, making it tougher for people to afford needed goods and services. There are some government-sponsored programs to help with credit debt, but no direct cash handouts are available. As of 2011, the government does not offer grants, tax-free loans or bailouts for personal debt.

Chapter 7 Bankruptcy

    Bankruptcy is an effective government program for resolving debts. Chapter 7 bankruptcy wipes out all credit card debt and other secured debt within three or four months. Non-exempt assets are sold during Chapter 7 to pay debts. Luxury boats and expensive jewelry are examples of non-exempt debts. Most people in Chapter 7 keep their primary residence and cards below a certain value. It's possible to not lose any assets at all in Chapter 7. The bank trustee pays as many creditors as possible after liquidation with any remaining debt discharged, or eliminated. With the help of an attorney, Chapter 7 bankruptcy is an easy process to navigate, and it offers a streamlined application process for people needing a same-day emergency filing because of bank or wage garnishment stemming from unpaid debts. The disadvantage of Chapter 7 is its income limits: The limits are set by individual states, and generally only people with low incomes qualify.

Chapter 13 Bankruptcy

    The government offers Chapter 13 bankruptcy for those who cannot qualify for Chapter 7. Chapter 13 does not have income limits but does require a payment plan lasting three to five years. The court establishes a strict budget for Chapter 13 participants, with allowances for reasonable living expenses and payments on secured debts such as cars and mortgages. Money remaining is considered disposable income and is paid into a court-ordered payment plan. Unsecured creditors, such as credit card issuers, receive payments from the plan. Some people in Chapter 13 spend all their money on living expenses and secured debt, leaving nothing for unsecured creditors over the three to five years. The bankruptcy court can discharge, or eliminate, remaining unsecured debt at the end of the bankruptcy period.

Debt Management Plans

    The government offers trained credit counselors to help people manage budgets and pay their debts. The U.S. Department of Housing and Urban Development maintains a nationwide network of government-approved counselors. The counselors offer special debt management plans, which allow counselors to take full control of a person's budget over a four-year period. Once a person signs up, a counselor calls the person's unsecured creditors to negotiate lower monthly payments, lower interest rates and the elimination of some finance fees. The goal is to eliminate as much debt as possible over four years. The participant in the plan sends a lump-sum check to the counseling agency each month, with the counselor making direct payments to creditors. The agencies charge a monthly management fee.

Debt Settlement

    The government endorses debt settlement plans as an alternative to bankruptcy. Debt settlement allows significant savings on delinquent credit card bills and other unsecured debt. It is possible to pay off credit card bills for as little as 20 percent of the balance, although settlements of around 50 percent are more likely. The Federal Trade Commission recommends people manage their own debt settlement after instruction by credit counselors.

Sunday, January 23, 2005

How to Use Introductory Credit Card Offers to Reduce Debt

How to Use Introductory Credit Card Offers to Reduce Debt

If you have thousands of dollars in credit card debt, you may be able to save money paying it off by transferring the balance to a credit card with a low introductory rate. This helps reduce your debt more quickly because you can use the money that would have gone toward interest on the other card to pay off the principal on your new card.

Instructions

    1

    Find introductory credit card offers in your mail or by visiting websites of major banks and credit card issuers.

    2

    Read the fine print on the introductory credit card offer. Although the main offer may say zero percent interest on balance transfers, the fine print may specify that this is only for people with excellent credit and everybody else pays 8 percent interest on the balance transfer.

    3

    Read the terms for the balance transfer, looking especially to see if you will be charged a fee of a percent of the balance transferred. Compare the fee plus the interest rate to the interest that you are currently paying on your credit card. For example, if an introductory offer of 5 percent APR for one year also charges a 5 percent fee for transferring the balance, this is like being charged 10 percent interest. This offer is only advantageous if your current credit card balance is being charged more than 10 percent interest.

    4

    Apply for the introductory credit card offer. Read the fine print when you get the credit card to make sure you understand the terms.

    5

    Transfer your balance to the new credit card. Contact the customer service number on the back of your new card to find out how to transfer the balance.

    6

    Set up automatic payments on the account to make sure you do not miss any payments. Most credit card companies will increase the interest rate on their introductory credit card offers if you miss a payment.

    7

    Pay off the credit card as aggressively as you can during the introductory period. If you are not done paying it off when the introductory period ends, you will have to pay off the rest of the balance at the higher interest rate or apply for another introductory credit card offer and transfer the balance again.

Fastest Ways to Get Out of Debt

Fastest Ways to Get Out of Debt

According to a Forbes magazine survey of wealthy people, "the best way to build wealth is to become and stay debt free." For many Americans
struggling under the burden of debt, it may seem like there's no way out.
But as hopeless as you might feel, there are simple things you can do to
ease your financial strain and get out of debt faster.

You Can Live Debt Free

    According to a Forbes magazine survey of wealthy people, "the best way to build wealth is to become and stay debt free." For many Americans struggling under the burden of debt, it may seem like there's no way out. But as hopeless as you might feel, there are simple things you can do to ease your financial strain and get out of debt faster.

Pay Off High Interest Credit Cards

    Call your credit card companies and ask if you qualify for lower interest rates. Consolidate high interest balances onto a single card with a low rate. And regularly check your credit score, also known as your FICO score. You can view your credit report for free once every 12 months at www.annualcreditreport.com. Any score above 680 is considered good, while scores above 720 are excellent.
    If your score is low, you can repair it first by paying your bills on time. If any balances have gone to collections, call the debtor and arrange a payment you can afford. Most debtors would rather get a small amount of money each month than nothing at all. Also, don't close credit card accounts; doing so can damage your credit-to-debt ratio, an important figure in determining your score. Closing an account erases any good payment history you may have had, decreases your available credit and increases your debt ratio.
    And by all means, stop charging! Credit cards give the illusion of wealth, and it's all too easy to fall into that trap. Try shopping with cash instead. You will be much more aware of what you're spending when you hand the cashier hard-earned dollars instead of a credit card.

Don't Do Debt Consolidation or Debt Management

    You may have seen TV commercials from companies promising they'll help you get out of debt. According to nationally syndicated radio host and financial expert Dave Ramsey, debt consolidation is a con. Yes, they may lower your payments, but all they're really doing is extending the loan term, which means you'll actually pay more over time.
    Such programs only treat the symptom, not the disease, which is irresponsible spending. That's how most people get into debt in the first place. Even if you do pay down your debt, if you don't learn from your mistakes, you are likely to get yourself back into financial trouble. Also, parents who spend irresponsibly are more likely to have kids that fall into debt as adults. Set a good example by resisting impulse buys, bargain hunting and saving up for the things you want.

Keep Track of Your Spending

    For one month, keep track of every dollar you spend. Categorize your spending, for example, "dining out", "clothing", "automobile" and "groceries". At the end of the month, you'll see exactly where your money is going, and you might be surprised at how many corners you can cut. Those mocha lattes every morning can really add up. So can eating lunch out every day. Just packing a sack lunch and brewing coffee at home can save you more than you might think.
    And smart shopping can really save you a bundle. These days there are discount stores for everything from clothing and home decor to groceries and sporting goods. If you truly want to get out of debt, stop overpaying for fancy labels and instead seek out bargains and use coupons.
    Gift giving can also take chunks out of your budget, so instead of last minute spending sprees, plan ahead and shop for gifts when you see a good deal. If you see the perfect gift for a loved one on sale in July, why not buy it and tuck it away until the holidays? Take advantage of after-holiday sales; buy wrapping paper or ornaments in January and save them until next Christmas. And don't go crazy with the gifts, especially with kids. Spoiling kids rotten with everything they want won't serve them well in the future and won't help you get out of debt.

Lower Bills

    Shop around for lower rates and refinance your mortgage and auto loan; even just a point less will save you money over the long run. Lower your utility bills by using fluorescent bulbs and turning off lights in unoccupied rooms, washing clothes in cold water and bundling up instead of cranking the heat. If you're not using all your cell phone minutes, ask your provider if there's a plan that better suits your needs. And get quotes from several insurance companies to see if you can find better deals on car and homeowners insurance.

Cut Expenses and Save, Save, Save!

    With a little effort, you can cut corners and save money every month. And the more you save, the more you can pay down your debt. Tuck some money into savings right when you get your paycheck, before you pay your bills. Decide how much you can save out of each check, even if it's just $50. Don't touch it, and over time you'll accumulate a nice bit of savings which you can invest or use to help pay off debt.
    Pay off credit cards and stop charging, spend responsibly, lower your bills and start a savings account. These simple steps can help you get out from under the burden of debt and enjoy a financially secure future.
    Sources: www.daveramsey.com, www.goodhousekeeping.com, www.debtsteps.com

What Happens in the State of Texas If You Do Not Pay Your Payday Advance Loan Back?

A paycheck advance offers a borrower a small loan with a short time frame that the borrower must repay by his next payday. Texas payday loans are unsecured loans, meaning that a lender cannot seize any of the borrower's property in the event of a default. If a debtor cannot pay back this loan, the payday lender may assess penalties set by the state of Texas and can pursue collection actions against the borrower.

Late Fees

    Per Section 342.206 of the Texas Statutes, payday lenders may assess fines on the unpaid balance of a loan. The state allows for a maximum five percent interest penalty on any amounts unpaid 10 days after the due date of the loan. According to Section 342.257, payday lenders may instead choose to charge a delinquent borrower a five percent delinquency charge on cash advances of $100 or more with a maximum penalty of $10.

Notification

    If a borrower cannot pay or refuses to pay the owed amount with late fees, the payday lender may begin collection action against the borrower. Per the Texas Debt Collection Law, lenders can contact a borrower via telephone or fax between the hours of 8 a.m. and 9 p.m. Within five days of first contact, the debt collector must send a written notice to debtor detailing the amount of money that the debtor owes and the collection action the agency will take.

Collection Agency

    Payday lenders who are unable to collect a debt may sell a borrower's debt to a third party collection agency. This agency will try to convince the borrower to pay off their debt. Per Texas law, collection agencies cannot harass a borrower at their place of employment and cannot use obscene or threatening language during communication. Within 30 days of receiving their first written notice of collection in the mail, borrowers may send a letter to the creditor by certified mail to stop all communication from the creditor or collection agency. The recipient of the stop letter must cease all communication with the borrower within 30 days of receipt of the letter.

Legal Action

    A payday lender or third party collection agency can choose to simply report small payday loan defaults to credit bureaus, which will damage the borrower's credit. For any size debt, a Texas payday lender can press civil charges against the borrower in order to recover their money. In the state of Texas, creditors cannot place a lien against a borrower's house, as long as his house has been declared a homestead. According to the Attorney General of Texas, a court within the state cannot garnish a debtor's paycheck for repayment of consumer debt. While the state protects a worker's paycheck and residence, a court can still file a judgment against the debtor, and the borrower will have the obligation to pay off the debt as soon as possible.

SSI Benefits and Credit Card Debt

Supplemental Security Income (SSI) is a benefits program for people who have very little income, few assets, and are either disabled or elderly. If you receive SSI, you are subject to the same credit card and debt laws as anyone else.

Court Judgments

    Creditors cannot garnish or seize SSI benefits, however. If are sued and your creditor wins a judgment against you, you should inform both the creditor and the court that your income is from SSI. By federal law, your creditor cannot garnish or levy your SSI payment, nor can it seize SSI income from your bank account, according to the Social Security Administration.

Collections Efforts

    There is no law that prevents a creditor or collection agency from attempting to collect a debt from you, even if your only source of income is SSI. Under the Fair Debt Collection Practices Act you can write a letter to a third-party collection agency and request that they stop contacting you. Under the law, they may only contact you one more time to inform you if they are planning further action, such as a lawsuit, according to the Federal Trade Commission.

Credit Reporting

    Being an SSI recipient does not protect you against creditors placing negative information on your credit report. Negative information about credit card debt can remain on your credit reports for seven years, according to Experian.

Saturday, January 22, 2005

How to Remove Derogatory Items After Bankruptcy

How to Remove Derogatory Items After Bankruptcy

Bankruptcy offers a fresh start following excessive debt. Bankruptcy pays or eliminates all unsecured debt such as credit cards, and resolves issues with secured debts such as automobile loans or home mortgages. Some people keep cars and homes through bankruptcy, while others allow repossession or foreclosure. The process leads to a slew of derogatory items on credit reports, with limited options for removal. The Federal Trade Commission reports that derogatory information on credit reports, such as charge-offs and late payments, must remain for seven years. Bankruptcy information remains for a minimum of 10 years.

Instructions

    1

    Obtain copies of your credit reports from Annual Credit Report. The website is the only site endorsed by the Fair Trade Commission to offer free credit reports under the terms of the Fair Credit Reporting Act. Visit the website to view and print credit reports from the major credit bureaus---TransUnion, Equifax and Experian.

    2

    Review each report separately, as they may contain different information. Highlight each derogatory item on the reports. Note if the items are outdated or the information is wrong. Federal law prohibits credit bureaus from posting credit information that is outdated or wrong.

    3

    Write letters to the credit bureaus challenging wrong or outdated information. Ask for removal of outdated items and updates or removal of items are wrong. Items resolved through bankruptcy, such as credit card accounts, should receive updates indicating that that they were "included in bankruptcy," according to Experian. This does not remove the items, but accurately reflects that the accounts are paid. Specifically ask for updates on that accounts eliminated by the bankruptcy.

    4

    Send the letters to the credit bureaus at their respective addresses listed on the credit reports. Or dispute the information online or over the telephone by following instructions on the credit reports. Allow the credit bureaus 30 days to respond.

How Large Does an Estate Have to Be to Require Probate in Texas?

In the state of Texas, the estate size is only one determining factor for probate proceedings. The amount of outstanding debt a decedent has, whether she has real estate or other valuables that must be transferred in title or deed, and whether there is an official will all contribute to determining the need for the probate process.

Probate Not Mandatory

    According to probate attorney Dianne Reis, probate is not mandatory in the state of Texas. It can be useful when the title or deed to real property must be changed legally, however, and it can help mitigate the length of time creditors have to try to collect debts from the estate.

Under $50,000

    Generally, if an estate has probate assets valued at less than $50,000, it does not have to open a probate court case in Texas. An estate's assets include all real estate that was held solely in the decedent's name, bank accounts without joint owners and retirement accounts or life insurance that have no named beneficiaries.

Transfer of Property

    If a will is left, the probate court's job is to ensure the terms of the will are carried out properly. If there is real estate or other property that requires deeds and titles, the probate court process is the only way to legally transfer ownership of those assets to heirs and beneficiaries.

Affidavits and Exemptions

    When an estate has no assets or the assets are valued at less than $50,000, an attorney or account administrator can submit affidavits and other documentation to show proof of exemption from probate or to show the estate is insolvent and unable to pay off its creditors and claims.

About Debt Cures

Curing or eliminating debt may be a necessary step for people who are over their head in bills. Legally there are several debt cures.

Debt Settlement

    Debt settlement is used when most of the debts are not secured against an asset such as a house, car or furniture. Secured debt means that if the debt is not paid, the asset can be repossessed by the lender. Unsecured debts, or debts not secured any asset, can include credit cards, personal loans, store credit, and medical and dental bills.

    When settling a debt, the lender agrees to take a payment that is less than the full amount due; upon receipt of the payment, the lender settles the account. The payment can range from 50 to 60 percent of the full amount. In rare cases, the lender will take less than 50 percent. When the agreed-to amount is paid, the debtor no longer owes the debt. Until the amount is paid, the lender can proceed with legal action even while in negotiations with the debtor.

    Debt settlement has a negative impact on the debtor's credit rating because the written-off amount, the amount not paid, is reported to the credit bureaus.

    Additionally there may be tax implications. Debts that are forgiven may be considered income and taxable as such.

Debt Consolidation

    Debt consolidation is used for unsecured debts. The debtor takes out a new loan and pays off the unsecured loans with the proceeds. The new loan will most likely be a second mortgage on real property--the debtor's house, for instance. The current mortgage can be refinanced for a larger amount and the excess used to pay off debts. In most cases, the debtor is in a better position financially because the interest rate on the second mortgage, or refinancing, is less than the interest on the current debts and the loan is for a longer time, resulting in a payment that is less than the total of the previous monthly debt payments. There is no impact on the debtor's credit rating because the debts are being paid in full.

Debt Counseling

    The counselor goes over the debtor's income, assets and budget to determine a new debt payment. The debtor may have to sell assets or increase his income to qualify for the new payment. The counselor negotiates with the unsecured lenders for a longer time period for repayment and a decrease in the interest rates. Sometimes the lender will also agree to waive late fees and other charges. The debtor makes the new payment to the debt counselor who then pays each creditor. The debts are paid in full but over a longer time period and at a lower interest rate.

Bankruptcy

    A bankruptcy is a court proceeding that legally absolves the debtor from the debt. In essence, the debt no longer exists. The lender has no rights to the money and cannot attempt to collect it through any method. Since the debt has not been forgiven, there are no tax implications. However, a bankruptcy is a permanent stain on the person's financial record. It is not reported on a credit report after 10 years, but many employment, insurance carriers and lenders ask if a bankruptcy has ever been declared.

Statute of Limitations

    There are statutes of limitations on how long a creditor can pursue legal remedies in collecting a debt. The limitation varies by state and country and ranges from 3 to 10 years. The debt cure is simply a matter of time.

Friday, January 21, 2005

How to Beat the Collection Agency

How to Beat the Collection Agency

Dealing with collection agencies can be scary, especially if they threaten to take you to court. But you do have rights. You can exercise these rights, and even if the debt is valid, in many cases, you can stop the collector in his tracks.

Instructions

    1

    Write to the collector or collection agency and tell them to stop calling you. Put in the letter that you have been receiving harassing phone calls from them. Tell them you will only communicate with them in writing.

    2

    Request in writing a verification of the debt. This is your right under the Federal Fair Debt Collection Practices Act. According to the Act, all debt collection activity stops until you are given verification the debt you owe is yours and the amount is correct. Taking this action signals to the debt collector that you are not going to give in to his intimidation. If the debt collection agency cannot verify your debt, all collection activity ceases.

    3

    If your debt is verified, and you want to pay it off, try to settle the debt. Most collectors will settle for pennies on the dollar, and will be happy to settle for 50 percent of the original debt amount. If you want to settle, you will have to call the collection agency and be ready to make a settlement offer. You should have the money in hand and be ready to pay immediately by check over the phone or pay with a credit card. If you don't have the cash on hand, you may be able to work out a settlement payment plan with the collection agency.

    4

    File a sworn denial with the court, if you don't want to or can't pay the debt, and you are taken to court by the collector. Type the denial, sign it, get it notarized, file it with the clerk of the court and send a copy to the collection lawyer. Write in your sworn statement "I deny this is my debt. If it is my debt, I deny that it is still a valid debt. If it is a valid debt, I deny the amount sued for is the correct amount." When a sworn denial is filed, the collection attorney must produce a live witness to testify about the debt. The likelihood the court action will proceed decreases.

    5

    File a motion for Discovery, if the court action continues. File a written Request for Production of Documents in which you ask for a copy of the original contract on which the debt is based. Ask for the contract at trial, if you are being sued in small claims court, where discovery is not allowed. If your debt is old and has been sold to a debt purchaser, the likelihood of retrieving the original document is small. If your debt is a credit card debt, it's likely the attorney will not be able to get a copy of the original document in a timely manner, if at all, because most credit card agreements are stored on electronic archives.

    6

    Show up at trial. If your case goes to trial, do not make the mistake of skipping the trial. The worst thing that can happen to you is a money judgment will be made against you. Oppose the case being continued, if the attorney doesn't have his live witness available. Tell the judge you have taken off from work and are ready for trial. Show up again if the judge does continue the case to a new date.

    7

    Be ready to question a live witness if your court case goes forward. Your attorney will probably produce someone who will testify about your collection file. Ask this person if he has personal knowledge about your account, how long he has been in his job, when was the first time he saw your file, what he does on a daily basis, if he knows what exactly is in your file. Odds are the attorney will not bring a witness who knows on a day to day basis what is in your file. If you can destroy the witness's credibility, you may win the trial.

    8

    Appeal if you lose the trial. Appeals can take months to years, and in most jurisdictions no collection action can take place during the appeal.

How do I Make a Credit Card Payment to UnionPlus.com?

How do I Make a Credit Card Payment to UnionPlus.com?

Union Plus is a large banking and finance conglomerate. The finance division--that issues credit cards--is backed by the large British bank, HSBC (Hong Kong Shanghai Banking Corporation). This company is also sponsored and endorsed by the AFL-CIO, one of the largest labor unions in the United States. If you have a Union Plus account, you have several methods by which you can submit payments. If you need to make a payment with a credit card, you have two options: an online payment or a phone payment.

Instructions

    1

    Enroll in online banking with Union Plus, if you haven't yet and you wish to conduct banking online. To establish your online account, you will need your Union Plus account number, Social Security number, date of birth, email address, permanent address and primary contact number. Then you must create an individual user ID and password.

    2

    Logon to your Union Plus account using the user ID and password. Click on the account that you wish to manage (if you have multiple Union Plus accounts). Click on "Make a Payment." Follow the steps--fill in the payment amount, the card number, expiration date and security code. Double check your figures and numbers and click "Submit." You will receive a confirmation email.

    3

    Contact Union Plus. You can get the toll-free number from a recent account statement, or dial 1-800-622-2580 to reach customer service. Ask for an account servicing representative. Ensure you have your credit card handy. Also, ensure you know your password.

    4

    Ask to make a phone payment. Be warned that you will likely need to pay a service charge (more, perhaps, for a credit card and not a check). Give the credit card number, expiration date and security code to the account servicing representative. Confirm the payment amount.

    5

    Ask for your confirmation number. Keep this number in your Union Plus financial records. Check your online account to ensure the payment was posted properly and to the right account.

Thursday, January 20, 2005

How to Extend Your Unemployment Benefits

When you lose your job and apply for unemployment benefits, you are granted a monetary amount on your unemployment award letter. That amount is given to you in a set weekly amount, which varies. Once you expend that award, you may start to panic if you still haven't found a job. Fortunately, federal extended unemployment benefits can help you continue to receive unemployment compensation. You don't even have to fill out a separate application for the extended benefits.

Instructions

    1

    Use all your initial unemployment benefits. Usually you can see your total remaining benefits on your check stub.

    2

    Contact at least three employers each week you are unemployed to seek work. This is a requirement in all states to remain eligible for benefits. Besides your newspaper's job ads section, you can search online job websites such as Indeed.com or Beyond.com.

    3

    Await a letter via mail from your state unemployment office, once you have used all your initial benefits. The letter should arrive within 10 business days. The letter will confirm you have expended your award and state that you may be eligible for extended benefits. The letter's purpose is to inform you that the state unemployment office is reviewing your claim to see if you qualify for the extension. As long as you are still unemployed and looking for work, you will typically qualify.

    4

    Expect your extension awards letter, usually within a week of the first letter, to learn your benefit amount. Weekly claim forms will again arrive, which you must complete like the previous claim forms.

Wednesday, January 19, 2005

How to Obtain Free Credit Score

You see the ads all the time that say how to get your free credit score, only to find out it is not free. You need to sign up for a trial on legal or credit protection services. Forget to cancel and you are faced with more fees. The resource I am about to show you how to use is free, no strings attached and very easy to use.

Instructions

    1

    Open up your Internet browser. Type in www.creditKarma.com on the top address bar and hit your enter key.

    2

    Click on the yellow get your free credit score button at the top of your screen once on the creditkarma website. This will open up a new screen.

    3

    Fill in the fields on the credit score registration screen. Keep your security and login information in a safe place. You will need it for future checks on your credit score and updates.

    4

    Decide if you want credit score updates and site updates emailed to you once a month. If you decline, uncheck the box. You can always check the site manually as needed with your login information. Click the yellow join now button at the bottom of your screen.

    5

    Click on the my credit tab. This will bring you to the next screen that helps you get your free credit score.

    6

    Click the yellow get your credit score button on the right side of your screen. Click update your score if it has been a few months or more since the last update. Your score will appear on the screen for your reference.

How to Consolidate Collection Agency Debts to One Monthly Payment

Making multiple monthly payments on debts held by collection agencies can be stressful. The collection agencies may harass you by telephone if you are late by even a day. Or you may find that you have over-committed on your promises to pay and that your budget won't allow you to pay what you have promised. Consolidating all the debts into one affordable monthly payment could help you better manage your budget and relieve some of the stress.

Instructions

    1

    Get a debt consolidation loan or home equity loan. Granted, credit approval may not be possible because of the collection accounts. However, the collection accounts could be very old and may no longer be affecting your credit score as they once did. If your credit score has recovered, a bank or other lending institution might approve a debt consolidation loan or home equity loan specifically for paying off the collection accounts.

    2

    See a nonprofit credit counselor such as those affiliated with Consumer Credit Counseling Services (see Resource). Get a referral from your bank or credit union. Ask the counselor about debt management plans, which allows the counseling agency to contact unsecured lenders and debt collectors on your behalf.

    3

    Agree to a debt management plan. The counselor will contact the debt collectors to negotiate monthly payments. You must send the counseling agency a lump sum each month to cover the payments. This will allow you to pay all the collection accounts with one monthly payment. You will also be charged a management fee, however.

Can a Company Turn a Debt Over to a Collection Agency If Payment Is Being Made?

Sometimes, a creditor will no longer wish to attempt to collect on a debt and will decide to turn the debt over to a collection agency. Usually, a creditor will only do this if the debt is delinquent and the company believes collecting on the debt will be difficult. However, a creditor is legally allowed to sell a debt at anytime, including to a collection agency, even if the debtor is paying on time.

Debt Contracts

    A consumer usually will sign a document in which he agrees to make repayments on the amount of money he took out according to a specific timeline and at a specific rate of interest. This debt may or may not be communicated to a credit reporting agency. Unless the contract specifically forbids the creditor from selling the debt to someone else, this is the creditor's right.

Collection Agencies

    Creditors will often use collection agencies -- firms that specialize in the collection of debt -- to incur payment from debtors. These agencies may act as the creditor's representative or they may be the creditor's customer, buying the debt directly from them. In either case, the debt collection company retains all the rights of the original creditor once he has purchased the debt, as specified by the contract.

Additional Fees and Penalties

    Once a debt has been turned over to another party, the contract remains valid. The new owner of the debt is not allowed to change the terms of the contract to reflect the fact that the debt has been sold. This means the collection agency is not allowed to charge the borrower new penalties on the debt, such as new fees or a higher rate of interest on the principal he took out.

Considerations

    While a creditor can legally turn over a debt to a collection agency, if the person is paying the debt off on time, it likely will not do so. Turning a debt over to a collection agency costs the creditor money. If the creditor hires the collection agency, it has the pay the agency a commission. If it sells the debt outright, it will receive only partial payment for the debt. If the debtor is paying, the creditor will likely want to hang on to the debt.

Can a Debt Collector Sue After Seven Years?

If you become delinquent on a debt, the owner of the debt automatically has certain rights and can try multiple strategies to collect the amount in arrears. The creditor can also choose to "charge off" the debt as a tax loss and sell it to a debt collection company. Typically, the account has been delinquent for around 180 days before a creditor will convert it to charge-off status. There are also certain protections for debtors to ensure that collectors don't abuse their authority.

Statute of Limitations

    One type of protection is a statute of limitations. In general, a creditor may report an account to a credit bureau up to seven years past the date of delinquency. Exceptions include bankruptcies, which usually remain on your report for 10 years, and unpaid tax liens, which can remain indefinitely. There is also a separate statute of limitations that applies to the amount of time a creditor has to sue to collect a debt.

Lawsuits

    The statute of limitations for lawsuits varies in each state and for different types of debts, so verify the laws for limitations in your state. The typical time frame averages around seven years depending on your state. For example, the statute of limitations to sue for unpaid credit card accounts is three years in California, six years in New Jersey and 10 years in Rhode Island. Even if the age of the debt exceeds the statute of limitations, the creditor can still sue you.

Response

    If the debt collector files a lawsuit after the statute of limitations expires, you must appear in court in order to use the statute of limitations as a defense. The lawsuit will be dismissed. If you fail to respond or attend court, you will automatically lose the lawsuit regardless of whether the statute of limitations has passed. If you lose the lawsuit, you are responsible for all costs, including the debt collector's legal fees, and you will have to repay the balance. If you can't work out payment arrangements with the collector, that company can garnishee your wages, seize your bank accounts and/or attach liens to your property until the debt is satisfied.

Re-aging

    Unscrupulous debt collection agencies attempt in some instances to "re-age" accounts. This typically happens when they buy the account and report the date they purchased it as the first date of delinquency instead of the original date of delinquency. This means such a collection agency can purchase a debt even after the statute of limitations has expired, re-age it and be able to sue the debtor. This practice is illegal, and you may dispute any re-aged accounts on your credit report. If you end up in court over a re-aged account, the lawsuit should be dismissed as long as you can provide proof of the original debt and the date it first became delinquent. If you make even a partial payment on a re-aged debt, it validates the debt and extends the statute of limitations, so carefully investigate any debt claims for old accounts before deciding how to proceed.

How to Pay for an Overdrawn Checking Account When You Live Paycheck to Paycheck

How to Pay for an Overdrawn Checking Account When You Live Paycheck to Paycheck

Overdrawing a checking account can be unavoidable at times for people trying to balance housing payments, utility bills and other necessary expenses on a limited income. The term "living paycheck to paycheck" means that an individual holds no savings or investments and consistently runs out of money before the next paycheck. Living this way can make it extremely difficult to pay off outstanding debt, but a solid plan can put you back on the right track.

Instructions

    1

    Contact the institution holding your account and request that it freeze the account and set up a repayment plan. Banks can impose multiple fees and interest charges on overdrawn accounts if the fees are set forth in paperwork signed by the account holder. Speak to a manager in the customer relations or collections department and let her know you intend to bring the account into good standing but that you need the bank to work with you on a solution that benefits both parties.

    2

    Open a new checking account with another institution if possible. When living paycheck to paycheck, you cannot allow your entire check to disappear into an overdrawn account; you must find an alternate way to cash your checks before the next payday. If you cannot find an institution that will grant you an account, use check-cashing services in cash advance stores or certain convenience and grocery stores.

    3

    Create a household budget to keep your expenses under your income. Look for ways to reduce expenses in any area of your life. Look at food and entertainment expenses first. Shift your focus to free or inexpensive entertainment rather than more costly entertainment. Buy more fresh ingredients to cook at home rather than eating in restaurants or buying fast food.

    4

    Designate a set percentage of your weekly income to pay off the overdrawn account. Ten percent is a good rule of thumb for investments, and it works just as well for paying off debt over time. Ten percent is reasonable no matter what a person's income. If someone earns $1,000 per week, for example, he can afford to put away $100 toward debt; if someone earns $100 per week, he can afford to use $10 for debt.

    5

    Stick to your repayment plan until your account is in good standing. If your bank levied excessive fines and fees on your account in the process, consider opening a new account with a credit union or a friendlier bank after your debt is settled. If your bank was accommodating and understanding, show your appreciation by continuing to do business with it.

Monday, January 17, 2005

How Can I Remove the Fraud Alert From My Credit?

How Can I Remove the Fraud Alert From My Credit?

A fraud alert is a notification in your credit report that warns creditors you have been or may be the victim of credit fraud or identity theft. The alert is a security measure to prevent creditors from opening new accounts under your name. There are two types of fraud alerts: initial and extended. An initial alert lasts 90 days. An extended alert remains in your credit report for seven years. You can remove a fraud alert by contacting a major credit reporting agency.

Instructions

    1

    Contact one of the three major consumer credit-reporting agencies. These are Experian, Equifax and TransUnion. Call them to have the fraud alert removed (see Resources).

    2

    Provide proof of identity. The credit reporting agencies will require proof of identity to remove the alert. This can include your name, address, Social Security number and other personal information.

    3

    Ask the credit reporting agency to provide you with written confirmation the fraud alert has been removed.

Sunday, January 16, 2005

What Does Derogatory Mean for a Credit Report?

What Does Derogatory Mean for a Credit Report?

Your credit score has a powerful impact on your life. You can expect your credit to be evaluated when you apply for loans, housing and credit cards. The lower your credit score is, the less likely you are to be approved.

Facts

    If an item is marked as "derogatory" on your credit report, this means that the item has a negative impact on your credit score, causing it to drop. Some examples of derogatory items are bankruptcies, judgments and charge-offs.

Significance

    If you are approved for credit or a loan with derogatory items on your credit report, you may be charged a higher interest rate than an individual without any derogatory entries.

Time Frame

    According to the Fair Credit Reporting Act, most derogatory credit entries will be removed after seven years. The exception to this rule is a bankruptcy, which can appear on your credit report for up to 10 years.

Options

    If a derogatory item is inaccurate, you may dispute the entry with both the creditor reporting it and the credit bureaus. This may eventually result in the item being removed.

Warning

    Numerous inaccurate derogatory items on your credit report indicate that you may have been the victim of identity theft. This should be reported to the proper authorities immediately.

Saturday, January 15, 2005

Consumer Rights Concerning Debt Collections

Consumer Rights Concerning Debt Collections

Consumers who are behind in paying their bills are protected by laws that limit debt-collection companies' methods for collecting a debt. People may be able to avoid lawsuits and wage garnishments by dealing with collection agencies to settle their debts. However, they don't have to endure harassment or abusive behavior from debt collectors in the process.

Debt Collection Act

    The U.S. Fair Debt Collection Practices Act prohibits debt collectors from using abusive, deceptive or unfair tactics to collect consumer debts. Among other things, consumers don't have to tolerate collectors who use obscene language or who misrepresent the amount they owe. Consumers can sue debt collectors for pursuing illegal collection methods as long as they do so within a year of an alleged violation. Report problems with debt collectors to your state Attorney General's Office and to the U.S. Federal Trade Commission.

Stop Contact

    People can stop calls from debt collectors, but the FTC recommends making contact with them at least one time to potentially resolve a problem quickly. For example, a debt collector may mistakenly contact you about an account that's not yours, or you may be contacted about a loan you've already paid in full. In any case, you can tell a debt-collection company in writing to stop contacting you, but that won't stop legitimate collection efforts. Debt collectors are obligated to stop calling you after receiving your written request, but you may receive a letter in return to inform you that you're being sued to recover a debt you owe.

Contact Rules

    The FTC website indicates that debt-collection companies may not contact you at inconvenient times or places without your consent. Collectors also must stop contacting you at your place of employment if they're told by phone or in writing that you're not allowed to receive such calls there. Collection companies are allowed to contact a consumer's lawyer if a consumer hires a lawyer to handle a debt issue. Debt collectors may contact other people you know to track down an address or phone number in an attempt to locate you. However, the FTC says collectors generally aren't allowed to discuss their reasons for calling with anyone other than you, your spouse or your lawyer.

Garnishments

    Creditors or debt-collection companies that successfully sue a consumer to collect a debt can request that a garnishment order be issued against the consumer. In such cases, a bank or other financial institution may be directed to turn over some of a person's finances to pay the debt. A wage garnishment usually requires a court order as well, and it involves having an employer withhold part of an employee's pay to cover a debt owed to a creditor. Social Security, service members' pay, railroad retirement benefits and many other federal benefits are protected from garnishment.

Help With Consolidation for Consumer Debt

Consumer credit can get out of hand if you hit unfortunate circumstances or are unable to control your spending. You may be interested in effective methods to simplify your debts and ultimately pay off the balances more quickly. Debt consolidation provides a means to combine your outstanding balances into one loan payment.

Use Credit Cards to Consolidate

    There are different methods of debt consolidation, and if you're a credit cardholder, consider applying for a low-rate credit card and then transferring all your balances to the new card. This method works well if the interest rate on the new card is much lower than on your existing cards. Contact your present credit card company to inquire about balance transfer offers, or speak with a new lender. Complete the application, and if approved, start moving your balances to save money on interest payments each month. A lower interest rate equals decreased monthly minimums. Begin making higher monthly payments with the lower interest rate to pay off debt more quickly.

Home Equity Loan

    Another method of consolidation is a home equity loan. This benefits property owners who have equity in their homes. By borrowing cash from your equity at a low interest rate, you can pay off your high-rate credit card balances and other loans, and then re-pay your home equity lender at a much lower rate. Plus, home equity loans often feature a fixed term, which means you can pay off the debt within a few short years. While beneficial, there are dangers in taking equity from your home to pay off credit card balances. Once credit cards are paid off, some consumers make the mistake of re-accumulating debt, ultimately doubling their debt. Plus, if you default on a home equity loan, there's the risk of losing your property to foreclosure.

Personal Loan

    With collateral in-hand and a good credit score, you can walk into a bank or credit union and apply for a debt consolidation loan. Personal debt consolidation loans help individuals who don't own real estate, or those who don't want to pledge their home equity as collateral. Instead, they can use a vehicle title, electronics or other personal property of value to secure the debt consolidation loan.

Debt Consolidation Companies

    A low credit score or lack of collateral can prevent the above options for consolidating consumer debt. Non-profit debt consolidation agencies can help in this regard because you're able to consolidate your debts and receive credit counseling with no credit check. Representatives who work for consolidation companies place a freeze on your credit accounts, and then contact creditors to work out a lower interest rate on your outstanding debts. You no longer work with your present creditors. The consolidation agency pools your debts into one bill, and you forward one payment to the company each month.

Guidelines for Bill Consolidation

After paying multiple bills in a single month, you may have the idea of consolidating your accounts into a single package, so that your life can be simplified. While debt consolidation is a common process, you need to keep a few tips in mind so that you consolidate in the correct manner.

Consider Home Equity

    When you want to consolidate your bills, your home's equity can be a very valuable tool to use. You could take out a home-equity loan or a home equity line of credit to gain access to money that you can use to pay off your debts. By doing this, you can get a low interest rate and a tax deduction at the end of the year. The amount of interest that you pay on these loans is tax deductible, which can lower your taxes.

Look at Interest Rates

    One of your primary concerns during the consolidation process should be the interest rates involved with each account. When you consolidate your debt into a single account, you should try to find a source of funds that has a lower interest rate than what you are already paying. If you pay off the debt with money that you borrowed at a higher interest rate, you may simplify your life with a single payment, but you actually may end up spending more money in the long run.

Balance Transfers

    Many people who have problems with multiple debt accounts consider using credit card balance transfers as a way to consolidate their debt. With a credit card balance transfer, you move the amount that you owe one credit card company over to another card. You can take advantage of zero percent introductory rates with many credit cards. If you pursue this option, you have to always make your payment before the due date or the credit card company can raise the interest rate on your card.

Professional Help

    When you want to consolidate your bills, a number of companies may be willing to help you with this process. If you want to work with a company that offers this service, make sure that you deal with a legitimate provider. Some companies charge predatory lending fees for this type of service and do not provide much more than what you could get without them. Check reviews to see what previous customers thought of a company before signing on with them.