What Are Florida's State Laws on Credit Card Debt?

State law regarding credit card debt in Florida centers around bankruptcy and the statute of limitations for collecting debt. Whether the agreement between the consumer and the creditor is a written contract or an oral one determines the statute of limitations time frame. However, the precise definition of the two contract types appears to be left up to the discretion of the individual courts. The statutes for bankruptcy are much clearer.

Written Contract

The statute of limitations for a written contract credit card debt in Florida is five years, according to the 2009 Florida Statutes Title VIII, Chapter 95, Section 95.11 (2)(b). The five-year period starts when you stop making payments, not when you received the credit card. If you later make a payment, the statute of limitations clock is stopped, according to Section 95.051 (1)(f). The same is true if you move out of state. The statute of limitations clock stops and restarts when you move back to Florida.

Oral Contract

The statute of limitations for an oral contract credit card debt in Florida is four years, according to the 2009 Florida Statutes Title VIII, Chapter 95, Section 95.11 (3)(k). All other factors apply as in the case of a written contract credit card debt. If the state where the charges were made is not Florida, the statute of limitations is not governed by Florida law, and other factors could be used to determine when the statute of limitation begins. This could be the case for either a written contract or an oral contract.

Bankruptcy

Filing for bankruptcy in the State of Florida does not eliminate all of your credit card debt. The first $750 of cash advances on your credit cards within 70 days of filing are not included in your bankruptcy protection. Obtaining bankruptcy protection is not easy. Chapter 7 bankruptcy allows the court to take all of your non-exempt assets, dispose of them and distribute the proceeds to your unsecured creditors. With Chapter 13 bankruptcy, you do have the ability to affirm secured debts. This will allow you to keep the asset by continuing to make the payments. Some credit card purchases, such as those on store cards, are considered secured debts.

Considerations

Under any circumstances, credit card debt and how it is handled can have a long-term effect on your financial bearing. This subject is complex and varies from jurisdiction to jurisdiction. The information provided herein is general in nature and should not be relied upon as legal advice or counsel. Please contact an attorney specializing in bankruptcy if you have specific questions or require legal advice.

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Can a Debt Collector Add Interest in Massachusetts?

A debt collection agency or creditor in Massachusetts may charge interest within the boundaries of the law when attempting to collect on a debt. The law in the state places caps on the interest rate a collection agency or creditor may charge depending on the type of debt in question.

Caps on Contracts

Massachusetts laws places a cap on the interest a creditor or debt collection agency may charge when seeking repayment. According to BCS Alliance, a credit information website, the maximum interest rate a creditor or collection agency may charge on a written contract is 12 percent. A credit card company is an exception to this rule since the company can assess a variable interest rate on purchases made over the life of the account, which can take the interest rate over the state maximum.

Court Judgment Interest

A creditor or collection agency winning a court judgment against a debtor may only charge a maximum interest rate of 12 percent on the balance owed. This enables the creditor or collection agency to recoup any related fees associated with the filing of a court judgment while still allowing the debtor an opportunity to pay down her obligation in a reasonable amount of time. The statute of limitations on a court judgment in Massachusetts is 20 years, according to BCS Alliance. This gives a creditor or collection agency ample time to collect the debt once the judgment is in hand.

Wage Garnishment Rules

A creditor or debt collection agency winning a judgment against a debtor may move to garnish the debtor's wages to satisfy the debt owed. Massachusetts has different garnishment rules than those established by the federal government and only allows a debtor to exempt up to $125 per week from garnishment. If a creditor or collection agency attempts to garnish a debtor in excess of the 25 percent federal limit, a debtor may invoke federal law to cap the wage garnishment. The collection agency or creditor may still charge the maximum interest rate when garnishing a debtor's wages.

Preventing Negative Amortization

Negative amortization is a financial phenomenon where a creditor's interest rate and fees are so high, even a debtor making a minimum payment and not using the account to make additional purchases will still cause the account balance to increase. The cap on interest rates in Massachusetts, and other states across the country, is in place to help prevent negative amortization and allow each debtor the same chance to pay down financial obligations and maintain good credit.

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Can Collection Agencies Charge Debtor Interest?

Collection agencies are private companies hired by creditors to seek payment of a debt. In some cases, these collection agencies will be hired on commission, receiving a percentage of the amount they recover. In other cases, the agencies will buy the debt outright from the creditor. In either case, the creditor is not allowed to charge the debtor any fees or interest payments that the original debt contract does not specifically allow for.

Collection Agency

A collection agency, whether it has purchased the debt or is merely acting as a representative of the creditor, is afforded the same rights with regard to debt collection as the creditor. This means that the collection agency is allowed to collect the exact amount of money that the debtor contractually owed the original creditor. However, the collection agency gains no special rights, meaning he cannot charge the debtor new fees at will.

Contracts

All debts are secured in contracts, either verbal or written. When a debt is sold or transferred, the original recipient of the money owed in the debt switches from one party to another. However, the original terms of the contract apply. When a debt is transferred, the new recipient of the debt cannot amend the terms of the original contract without the debtor's consent. This includes adding in new interest payments.

Additional Interest

According to the Fair Debt Collection Practice Act, a federal law, neither a creditor nor a collection agency acting in his stead can add additional interest to a contract. Even if a creditor claims that the interest is justified because the debt has been outstanding for a certain period of time, this is patently illegal if the contract does not explicitly allow the creditor to do it.

Considerations

Some contracts do allow creditors to charge debtor's additional interest if the debt is delinquent. If this is the case, a collection agency can charge the debtor interest in keeping with the terms of the contract. However, the collection agency must also abide by state and federal laws. Some states will cap the amount of interest that a company can charge a debtor. These contracts do not absolve collection agencies of a responsibility to follow the law.

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How to Pay Down Debt When Money Is Low

Paying down debt may come easy for people who have extra money. They can simply write a check to pay off their credit card balances. But if funds are low, getting rid of credit cards and other types of debt can prove challenging. Fortunately, you don't need a lot of extra money to eliminate debt. True, having money can speed this process. But even if you're not in a position to wipe away debt with a single check, other options are available.

Instructions

1

Renegotiate your interest rate on credit cards. Take an active approach and call your credit card company. Ask for a lower interest rate, and if necessary, ask to speak with a supervisor. With a lower interest rate, more of your payment goes toward knocking down the principal.

2

Double your minimum payments. If the minimum payment on your credit card is $25, send $50 or $75 a month. Paying an extra $25 to $50 may not create a huge financial burden, and it helps you pay down the balance quicker.

3

Use the money you would otherwise spend on extras such as hair appointments, dining out, shopping and cable to pay down debt. Getting rid of debt often calls for personal sacrifice.

4

Borrow from family. Obtain an interest-free or low-interest loan (with a repayment plan) from a family member. Use this money to pay off your high-interest balances.

5

Borrow against your home's equity. Home equity loans carry low interest rates and fixed terms, which are more attractive than high-interest, revolving credit cards. Discuss home equity options with a mortgage lender.

6

Get rid of personal belongings. Selling material possessions can create enough funds to pay down debts when your money is low. Opt for a lower car payments and trade in your current vehicle, if applicable. Spend a day going through your home (garage, attic, basement and closets) and pull out items you no longer use. Have a yard sale or sell these items online or via classified ads to generate cash to get rid of debt.

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What Is a Debt Claim?

Most businesses and individuals need to borrow money at some point, whether it's to invest in expansion, hire more workers or buy a home. But when someone borrows money it's with the expectation of making more money in the future to repay the debt. If this doesn't happen, the borrower may face bankruptcy, which will bring up the question of debt claims and how to pay them.

Definition

A debt claim is a claim that a lender makes asserting that a borrower in the process of bankruptcy owes it money. Lenders can be commercial banks, a business's employees and private lenders or governments. In most cases when a borrower faces enough debt to consider bankruptcy, there will be many different types of debt claims. Each debt claim is the lender's attempt to seek repayment from the borrower through the bankruptcy process. The court that handles the case decides which debt claims to honor and which to dismiss.

Significance

Debt claims play an important role when a business files for Chapter 7 or Chapter 11 bankruptcy. Chapter 7, also known as liquidation, allows the court to sell off all of the business's assets to pay off debt claims. Chapter 11 allows the filer to stay in business but outlines a new plan for paying off debt claims in the future. A similar process applies to personal bankruptcy filers, who can choose between Chapter 7 (liquidation) and Chapter 13 (reorganization). In both cases the court uses debt claims as part of the process to determine how much the business or individual owes and what type of payment is affordable going forward.

Order

United States bankruptcy laws require bankrupt businesses and individuals to pay off their debt claims in a specific order. The first claims paid are secured debts, which use some asset as collateral. For example, a bank loan that uses the business's headquarters building or the individual's home as collateral is paid off when the court sells off the property. The next type of debt claim paid off is the administrative cost of bankruptcy, which involves attorney fees and court fees. Finally, the court can pay off debt claims involving back pay and taxes, as well as unsecured debts with no collateral, if there is any money remaining.

Outcome

Not all debt claims receive the same treatment at the end of a bankruptcy case. Some, such as secured debts, end up being paid off in full since they used real property to back the loan. However, the bankruptcy court may choose to discharge other debt claims after liquidating the borrower's assets in Chapter 7 and paying off the secured debts and administrative fees. In these cases, lenders lose the money the borrower owed and their debt claims are never fulfilled. In a Chapter 11 or Chapter 13 bankruptcy the court may require lenders to agree to accept a reduced repayment or wait longer for repayment as the borrower emerges from bankruptcy.

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Credit Collection Functions

Banks and other lenders as well as independent collection agencies perform credit collection functions. A variety of collection functions can be used in recouping outstanding debts from consumers who have fallen behind in their payments. Each company follows its own business model, collecting debts using a variety of strategies, but the method must follow the requirements of the Fair Debt Collection Practices Act.

Organization

An organization designates the credit collection function to be either centralized or decentralized. The key to this function, whether branches or a central office perform the function, is standardization. Inside the company, the credit collection management team adopts specific procedures to collect payments from borrowers pursuant to their individual situations.

Controls

Collection functions must include built-in controls. An organization adds controls, such as quality control monitoring of debt collection phone calls and correspondence and supervisor approval of payment plans and settlements, to ensure consumers are treated appropriately. Under the Fair Debt Collection Practices Act (FDCPA), consumers are protected from debt collector practices that are deceptive, abusive or unfair. When you are contacted by a debt collector, you should keep notes and ensure that the specifics of this contact do not violate your consumer rights under this act.

Phone Calls

Most debt collectors use phone calls to attempt to collect debts. Even small business owners must use practices to get unpaid accounts current. As a consumer, you should know your rights regardless of the type of company contacting you. Even companies not regulated by the FDCPA should follow good business practices by not abusing or deceiving you during phone calls. You should not be contacted before 8 a.m. or after 9 p.m., and a creditor cannot call your line multiple times in one day. Some companies put your phone number on auto-ring, and you may be called more than once a day. You should keep track of the number of times a company calls you each day, and you may consult an attorney to file a complaint against a debt collector that harasses you.

Handing Over Accounts

Lenders and companies, even small businesses, initially may try to collect debts from consumers directly. After a certain amount of time with an unpaid balance, such as 90 days, 120 days or 180 days, a business may decide to transfer an outstanding account to a credit collection agency. If you've had an outstanding medical bill, you've probably received a letter from the provider stating that this is your final notice before your account is turned over to collections. When you're ready to make payments on an account, you must determine whether you should pay the original creditor or the credit collection agency.

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What Is the Statute of Limitations on Written-Off Debt in Oklahoma?

Writing off debt is an accounting practice used by creditors that is commonly referred to as a "charge-off." The legal enforceability of the debt is unaffected by this practice regardless of when it occurs. The statute of limitations is the legal deadline by which a creditor must file a lawsuit to enforce a debt or its right to sue on the debt is lost forever. Like all states, Oklahoma law provides a statute of limitations regarding debts that is unaffected by a creditor's charge-off of the debt.

Charging Off Delinquent Debt

A creditor typically charges off a debt between 180 and 240 days after it first becomes delinquent -- that is, no further payment has been made on the account. This does not mean that the debt is uncollectable or forgiven. The creditor can attempt to collect the debt or assign it to a collection agency. The charge-off will most likely appear on the debtor's creditor report and can remain there for as long as seven years.

Statute of Limitations for Debts

Oklahoma law specifies a statute of limitations for debt that is generally three or five years depending on the basis for the debt. A debt incurred on a written contract cannot be sued on five years after the debt becomes delinquent. Oral contracts cannot be sued on after three years. The limitation period for open-end accounts, such as credit cards, is not always clear. If the account is based on a written contract it is five years; if not, it is three years. Also, in some situations, a credit card agreement might specify that the laws of another state apply, which may have a limitation period longer than five years.

Judgments

A creditor who files a debt collection lawsuit before the statute of limitations expires can obtain a court judgment for the debt. As a practical matter, the statute of limitations to collect the debt restarts on the date of the judgment. The limitation period to collect an Oklahoma judgment is generally five years. This limitation period can be affected by several factors, such as the creditor's obtaining a writ of execution from the court to garnish wages. A creditor can also apply to the court within the five-year period to renew the judgment and extend the limitation period another five years. However, once there has been a five-year period of inactivity on the judgment, it can no longer be enforced.

For judgments made outside of Oklahoma -- called foreign judgments -- that are confirmed as a judgment by an Oklahoma court, the limitations period is three years.

Affecting the Statute of Limitations

Although the Oklahoma statute of limitations has expired on a debt, it may still appear on the debtor's credit report as a charge-off. Also, the expiration of the statute does not prevent a collection agency from contacting the debtor about payment of the debt. However, the debtor's conduct can affect the statute of limitations once it has expired if he is not careful in his dealing with the creditor or collection agency about the debt. For example, if the debtor makes any payment on the debt, the statute will run again from the date of that payment. If the debtor signs any document acknowledging the debt is valid, this can revive the statute as well. Debtors must be aware that collection agents may attempt to revive an expired debt by either of these means.

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Ways to Rebuild Bad Credit

A poor credit history can have far-reaching negative effects on a person's life. With a bad credit score, a person is less likely to receive reasonable terms on a loan. This can prevent him from purchasing a house or a car, or getting a credit card. Fortunately, there are a number of steps that those with tarnished credit histories can take to rebuild their record.

Pay Down Your Debt

One of the chief factors that lowers a credit rating is the amount of outstanding debt. The first step to rebuilding a credit history is to pay down the debt currently held. If possible, do not negotiate for lower amounts with creditors, as they may mark the unpaid portion of the debt as written off, further blemishing your credit score. If you do negotiate, make sure the creditors mark your account as paid in full.

Ask for a Break

Negative marks on a credit score come from missed payments being reported by a creditor to a credit-reporting bureau. If a creditor wishes to remove a negative statement from your credit report, it can usually do so. If you have a good relationship with a lender, consider asking them to remove mention of the one missed payment from several years ago.

Tranfer Balances

The closer a credit card is to being maxed out, the more this will harm your credit score. For this reason, it can make sense to shift the balances of your cards so that they are relatively even. Skillful balancing can keep all the charges on your cards at relatively low levels. However, do not suddenly close a card: according to Bankrate.com, this can lower your score.

Check for Incorrect Reporting

According to federal law, a U.S. resident is allowed to obtain his credit report for free once a year to see what information has been reported to credit bureaus and is affecting his score. In some cases, the information reported to the bureaus is not always correct, incorrectly lowering your score. Check the report for false information and, if found, ask the company that reported it to correct it.

Open New Accounts Slowly

The only sure cure for a bad credit history is time. Borrowers should seek to repair their record by taking out new loans and paying them on time and in full. However, these accounts should be opened slowly. According to the Fair Isaac Corporation, the originators of the modern credit scoring system, opening too many accounts in a short period can lower an individual's score.

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How to Apply for Minority-Owned Business Status

Being certified as a minority-owned business could help your company grow. Public and private organizations that are proactively looking to do business with minority-owned companies often want proof that the firm really is owned by a minority. Certification is available through many state and local governments, as well as private organizations such as the National Minority Supplier Development Council. Also, the Minority Business Development Agency, a part of the U.S. Department of Commerce, reports that certified minority-owned businesses can gain access to a percentage of government contracts that are "set aside" for minorities.

Instructions

1

Review your ownership structure to confirm that the company is at least 51 percent owned and operated by minorities -- the most important qualifying standard for minority certification according to the Department of Commerce. An example of minority groups includes Hispanic Americans, African Americans, Asian Pacific Americans and Native Americans.

2

Contact a regional office of the National Minority Supplier Development Council. According to its website, the council has certified more than 16,000 minority-owned businesses as of 2010. The organization reports that it uses a database and other efforts to promote the businesses it certifies. The businesses are promoted to major publicly-owned, privately-owned and foreign-owned companies, as well as to hospitals and universities.

3

Tell the council representative that you wish to be certified as a minority-owned business. Ask for the necessary paperwork to be sent to you by email or U.S. Postal mail. The process includes providing information about your company's owners, including copies of birth certificates, driver's licenses, resumes and more.

4

Apply for certification from a state or local government as well. Visit the Department of Commerce website to find a state or local government certifying agency near you. Certification by a government agency gives your company access to government contracts. The application process varies depending on the stage or local agency. Generally the process requires that you fill out of paperwork identifying the race of the company's owners along with other information such as a history of the business, its gross revenues and more.

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Do-It-Yourself Credit Card Debt Negotiation

One of the options available to consumers wishing to lower their credit card debt is debt negotiation. You negotiate a pay-off amount on your credit account with your creditor, and then arrange a monthly payment to settle your debt. You can hire a debt settlement firm, but the costs can be high, according to Aleksandra Todorova, writing for the SmartMoney website. A debt settlement firm's fees can include an account set-up fee, a monthly administration fee and a fee based on the percentage of debt that the firm gets eliminated for you. You can save yourself those costs by using do-it-yourself credit card debt negotiation.

Stay In Touch

Do not avoid contact with your creditors if you realize you are heading for financial problems, according to Dana Dratch, writing on the Bankrate website. Always keep your creditors updated on your situation, and keep a detailed log of the conversations that you have with credit workers. Try to work on ways of staying current on your credit account by asking your creditors for help. When it comes time to negotiate your debt payoff amount, you will have a history of trying to work through the issue with your creditors that can help the creditors to understand why you need the negotiated payoff.

Installments

When you enter into negotiations with your creditors, one of the arrangements you should look for is to be able to pay back your negotiated debt in installments, according to Steve Bucci, writing on the Fox Business website. Your credit card company will consider your negotiated amount a lump sum debt. That means that interest will be added to the debt every month that it is not paid in full. Negotiate installment payments you can afford, but pay as much as you can each month to pay the balance off as quickly as possible.

Goals

When you get ready to contact your credit card companies for debt settlement, you should have goals on how much debt you would like forgiven. Analyze your credit card bills and determine how much of your debt is penalties and late fees, how much is interest and how much is principle. Begin your approach by asking for all of your penalties to be dropped and then ask for a reduction in your interest debt. The principle is money that the credit card company has paid out on your behalf. The company is less likely to agree to a reduction in the principle. Create reasonable goals for your debt negotiation and you are more likely to get results you can afford.

Consequences

When you prepare for debt negotiation, keep the consequences in mind. A negotiated payoff amount will damage your credit score, according to the SmartMoney website. By the time you get to the point of considering debt negotiation, your credit score is more than likely damaged. Debt negotiation will add to that damage by a degree that varies from case to case. You will also have income tax consequences to consider. The debt that is forgiven in a debt negotiation can get listed as income that's subject to federal income tax. Consult an accountant before finalizing any debt negotiation agreement to see what the tax implications will be.

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Financial Problems With Hospital Bills

Having to go into the hospital can be a financially devastating experience, depending on your health insurance situation. When you accumulate large hospital bills, it can be a very difficult process to eliminate the debt. If you are faced with this situation, there are a few potential strategies that you could use to handle the problem.

Talk to the Hospital

When you receive large bills from the hospital, it is common to want to avoid the problem. Most of the time, this can only add to the problems that you will face. Contact the hospital as soon as you receive the bills and talk about them. In some cases, the bills could be inflated beyond what you actually owe. If you talk to the billing department about this issue, you could negotiate your bill down to a lower amount that you can afford.

Consolidation

When you go into the hospital, chances are you will have bills from several different sources. The doctor will send you a bill, the hospital itself will send a bill and you might get a bill from another specialist. All of these bills can be intimidating. In this situation, you may want to consolidate your bills so that you can have a single payment to deal with. This could help you avoid late fees or interest on your hospital bills. If you use a home-equity loan to consolidate the bills, you can also deduct the interest that you pay on your new loan.

Financial Aid

When you face large bills from the hospital, you may be able to qualify for financial aid or government programs. Talk to the business department at the hospital about these options. A counselor should be able to review your financial situation and tell you whether you qualify for assistance. Typically, you have to have a low income to be able to qualify for these programs. The programs available will depend on where you are located as well.

Bankruptcy

If the medical bills are substantial, you may have to consider filing bankruptcy. Filing for bankruptcy can completely eliminate any unsecured debts such as hospital bills. To get this assistance, you will have to file for Chapter 7 bankruptcy and qualify for it. Once you use this technique, you cannot use it again for six years. Using bankruptcy will also have negative effects on your credit score. The bankruptcy will remain on your credit report for 10 years and can make it difficult to obtain additional financing during that time.

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How Can I Pull Myself Out of Debt?

Recent economic upheavals have contributed to the increase in debt for many people. It seems like an impossible dream to get out of debt, but it is possible. There are many get-out-of-debt plans and even more advice givers. One thing most of them have in common is a clear emphasis on hard work and strict budgeting.

Establish a Plan

No matter which plan you go with, or even if you develop your own method, the first step is to look at the numbers. Just how much debt are you in? How much income do you really have, and how much additional income can you bring in? List your current expenses, including food and entertainment, and decide what can be eliminated.

Once the numbers are all out in front of you, it's time to create a plan. Decide which debts you wish to pay off, if not all of them, and which ones you want to pay off first. Many advisers suggest paying the ones that have the smallest balance first or the ones with the highest interest. Paying smaller balances off first can speed up the satisfaction of paying off debt, while paying higher interest first will speed up the overall process and get you out of debt faster. Or you could do a mix of the two strategies.

Pay Off Debt in Steps

Begin paying off your debt with your next paycheck. An effective method is to use a debt snowball or avalanche. After paying the minimum balance on each debt each month, apply any extra money from your income to just one debt---the debt you have decided to pay off first.

It may take just a few payments or it may take many payments, but when your first debt is fully paid off, apply your extra portion plus the minimum payment amount of the first debt that you just paid off to the payment of the second debt on your list. With this method, your debt payments remain the same throughout the debt process, even as the number of debts becomes smaller. At the same time, your snowball payment becomes larger with each paid-off debt. Over time you may find that you can pay off a balance in one payment.

Change Your Habits

An important part of getting out of debt is resisting the draw to get back into debt. Whether you wish to live totally debt-free or maintain a responsible amount of credit, you will need to change the habits that got you into deep debt. If you choose to keep a few credit cards, use them only for purchases that you will pay off with the monthly payment. Do not carry a balance from month to month.

Establish an emergency fund to depend on rather than turning to credit in times of financial need. Start with a small fund, about $1,000, with the long-term goal to have a full six months of expenses saved.

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How to Settle an Unpaid Charge Off Withthe Original Creditor

Unpaid charge-offs on your credit report can immediately stop mortgage and auto loan approvals. Charge-offs indicate that you stopped paying on a debt. These negative items lower your credit score, and a charge-off can stay on reports for seven years. But if you are looking to make credit improvements, you can negotiate a settlement with your original creditor.

Instructions

1

Assess your finances before contacting the original creditor. This helps determine how much you can afford to spend when settling a charge-off.

2

Call your creditor to see if the company still holds the debt. Some creditors sell charge-off accounts to collection agencies. You can negotiate with the original creditor if it has not sold the account. If the creditor sold the debt, contact the collection agency to negotiate a settlement.

3

Ask to speak with someone who has the authority to negotiate a debt settlement. If the original creditor hasn't sold the debt to a third-party company, tell the representative of your plans to pay an unpaid charge-off, and then ask to speak with someone with power to negotiate a settlement. Inquire about the balance plus interest and other fees.

4

Offer to settle about 20 percent of your outstanding balance. This is a low offer, and your creditor will likely counter with a much higher amount. Negotiate and meet the creditor halfway, and do not agree to pay more than you can afford.

5

Prepare to settle the charge-off with one lump sum payment. Some creditors only negotiate settlements on unpaid charge-offs if you agree to one-time lump sum payment.

6

Ask the creditor to delete the charge-off from your credit report as part of the agreement for satisfying an unpaid charge-off. If the creditor will not delete the negative item, ask it to update your file to read "paid charge-off."

7

Forward your payment only after you receive written confirmation of the settlement agreement in the mail.

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How to Negotiate WAMU Credit Card Debt

Washington Mutual or WAMU is now part of Chase banks. All credit cards issued by WAMU are now being handled by Chase. Negotiating the credit card debt is very possible but may take time and repeated efforts. How you negotiate your credit card debt will vary based on whether your account is in collection status or if you are current and trying to lower your payments. Negotiating for a lower payment will require you to negotiate a lower interest rate, while accounts in collection can be negotiated down in both interest rate and balance.

Instructions

1

Have a starting ground in mind before you call to negotiate your WAMU credit card debt. Start your negotiation at paying the account off at 25 to 50 percent of the balance, if you are trying to settle an outstanding collection debt. Figure out the monthly payment you can afford if you are current on the WAMU account, but need your payment lowered.

2

Look on your recent WAMU or Chase credit card statement for the customer service number. The customer service number is also located on the back of the WAMU credit card.

3

Call the customer service number and ask to speak with someone who can negotiate your credit card payment or account. You will likely speak to the person who answers the call, but you can ask to be transferred to a supervisor if you are unable to agree to a negotiation that works for you.

4

Explain to the WAMU or Chase representative why you are calling to negotiate your debt. This may be that you have lost your job, simply cannot pay, need to lower your payment amount or want to settle the balance owed. Let her know that you have a desire to take care of the account and give her your offer. Remain kind and calm with the representative.

5

Expect the representative to counter your offer. Be ready to stand your ground -- politely -- and let her know that your offer is the best you can do. WAMU or Chase wants to get as much money from you as possible and is not likely to agree until you can convince them that you cannot afford more than what is offered.

6

Ask to speak to a supervisor or end the phone call and try back at another time if you aren't getting anywhere. Negotiations often take several attempts before success.

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Is it OK to Decrease Tithing to Pay Off Debt?

Tithing is the ancient practice of setting aside a portion of your income, usually to support your religion. Churches use tithes to support their basic operations and spiritual projects, so many people believe tithing is necessary to bring faith to others and stabilize religious organizations. Not everyone agrees on what amount you should tithe while in debt, with decreasing tithing to accommodate creditors being a major point of contention.

The Tithe Amount

The amount you should tithe varies based on the religion you follow, but in most cases, 10 percent of your income is standard. The amount is supposed to be sufficient to support the financial costs related to the operation of your faith, but not so great that you are left struggling financially. People have tithed based on this amount for thousands of years, as is evident in the Old Testament of the Bible and other religious texts.

The Conflict

People sometimes argue the tithe amount must be paid before all debt. Their rationale is that entering into a credit agreement doesn't exclude you from the laws of your religion. Under this mentality, by giving to God first, you exercise your faith, which God will reward by giving you any extra money you need to handle your debts. The other side of the argument is that, because God has no immediate need for your funds and because God values keeping promises, you should pay your debts as agreed.

Advantages and Disadvantages

If you decide to decrease tithing to pay off debt, you have a financial advantage in that you can pay down what you owe, thereby decreasing the amount you pay in interest on the principal. Your credit score also may rise because your credit history will show a debt paid in full. That, along with your lowered debt-to-income ratio, may help when it comes to getting financing later. However, people who believe strongly in paying the full tithe amount may not support your decision. They may see you as not committed to your faith.

Legal Issues

Michelle Singletary of "The Washington Post" points out that the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 eliminated the protection of the Religious Liberty and Charitable Donation Protection Act (RLCDPA) of 1998. Under RLCDPA, you could withhold some money from a creditor to pay a tithe for your faith. The idea behind this law was to protect freedom to practice the religion of your choosing. As of 2011, BAPCPA means that the government likely will take the side of your creditor if you fail to pay -- that is, the law supports the idea of decreasing tithing to meet debt obligations.

The Bottom Line

Arguments for and against decreasing tithing to pay off debt have merit. Therefore, barring outright response from God about the issue, there is no way to prove whether decreasing or maintaining your tithe is more appropriate. On religion alone, the decision about whether to give less to your faith thus may come down to what side you feel compelled to take. However, in the eyes of the government, your religion is not an excuse to ignore your financial contracts. You may be legally better off if you decrease what you tithe and pay what you owe.

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How to Delete a Credit Account From Equifax

Equifax is one of the three national credit bureaus responsible for maintaining the information contained within the credit reports of every U.S. resident. A credit report is a record of your past and current debt, including mortgage loans, bankruptcies, and credit card accounts. Because of the vast number of company reports Equifax receives on a regular basis, inaccuracies do occur. The Fair Credit Reporting Act (FCRA) limits the credit bureaus to reporting only information that is accurate. In the event that a consumer disputes the accuracy of any information contained within his credit report, the FCRA requires the credit bureau to conduct a full investigation. If you note a credit account listed on your Equifax credit report that does not belong to you, you can take steps to have it removed.

Instructions

1

Call the company providing the information to Equifax. The telephone number for the company will be listed in the credit notation. Explain to the representative you speak with that the company is reporting someone else's account to your credit file. Ask to be transferred to a supervisor who can help clear the matter up. Customer service representatives will rarely have the authority to alter credit files.

2

Give the supervisor the account number listed on your credit report. The supervisor will be able to use this information to look up the account and verify that it does not belong to you. You may be required to mail or fax a copy of your picture I.D. to verify that you are not the owner of the account. In most cases, this is enough for the company to request that Equifax remove the inaccurate information.

3

Contact Equifax by mail in the event that the company reporting the information does not remove it. Include within your letter that the credit account does not belong to you and that you are requesting a full investigation into the inaccuracy. Also include a copy of your Equifax credit report with the account in question highlighted.

4

Wait for a response. The FCRA allows each credit bureau 30 days to investigate disputed credit account entries. After the investigation is complete, you will receive notice via mail of the results of the investigation along with a fresh copy of your credit report if changes are made.

5

Contact the Attorney General for your state and file a formal complaint against the credit bureau if the erroneous notation is not removed. A well placed telephone call from the Attorney General in your favor can usually remedy issues regarding credit accounts. You may also file a complaint with the Federal Trade Commission's Bureau of Consumer Protection.

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How to Lease Equipment With Bad Credit

When you are having cash flow issues and need equipment to run your business, the clear alternative to laying out a large sum of cash is to lease the equipment instead. But lessors will usually do a thorough credit check before letting anything leave their premises. If you have bad credit, you may face challenges when trying to lease equipment. Here are a few tips for how you might be able to lease equipment when you have bad credit.

Instructions

1

Have a friend lease the equipment on your behalf or co-sign on the lease contract. The friend should have excellent credit because the equipment lessor will probably still have reservations knowing that someone with bad credit will be the one who is actually using the equipment.

2

Get positive references from past companies you have leased equipment from to assure the new company that you fully intend to pay the commitment. You also need to assure the lessor that you will take good care of the leased materials. Companies tend to assume that people with bad credit will be more reckless with how they use leased equipment.

3

Put a large down payment on the equipment or allow the leasing company to put a hold on your credit card for as long as you will be holding the equipment. Offer to pay at least 10 percent of the value of the equipment upfront to convince the company to lease you the equipment even though you have bad credit.

4

Give the lessor something of similar value as collateral on the equipment lease. Sign an agreement stating that the collateral will be retrieved when the leased equipment is returned in good condition and have the collateral appraised. Be aware that if you return the equipment in bad condition, the lessor would be able to seize the collateral and sell it in the interest of recouping the value of the equipment.

5

Provide the lessor with full details about where the leased equipment will be located. The longer you have been living (or doing business) at the address the better your chances of being granted the equipment lease. The lessor needs to be reasonably assured that he or she will be able to come retrieve the equipment in case of a default on payments.

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How to Stop a Judgment on Wage Garnishment

When an individual fails to pay a debt, the creditor can go to court and obtain a wage garnishment. The latter is a court-ordered document that the court sends to the employer, instructing it to withhold a certain portion of the debtor's pay to satisfy the debt. Notably, government institutions, such as the Department of Education and the Internal Revenue Service can garnish wages without a court order. But they must satisfy some legal requirements, such as sending the debtor a bill and garnishment notice. As the debtor, you can take certain actions to stop a wage garnishment.

Instructions

1

Contact the issuing institution and agree to an installment payment. The contact information for the institution is listed on the garnishment notice. Most institutions resort to a wage garnishment because the debtor made no effort to settle the debt. Therefore, they are usually willing to set you up on an installment agreement. This stops the wage garnishment and allows you to make your installment payments directly to the issuing institution.

2

File a hardship claim if you cannot afford the wage garnishment amount. If the latter is causing you undue hardship and it's difficult for you to afford the basic necessities of life (such as food and shelter), file a hardship claim with the issuing institution. For instance, for an IRS wage garnishment, you would complete and mail Form 433-F (Collection Information Statement) to the IRS. You would need to include your income and living expenses on the form. The institution can temporarily halt collection activity until you are in a better financial position.

3

File an answer or an appeal with the issuing institution. If the wage garnishment is court-ordered, it includes instructions on how to file an answer with the court. The answer gives you a chance to present your argument to the judge, such as your disagreement with the wage garnishment amount or its existence. File the appeal with the institution listed on the garnishment notice. For example, if you have objections to a federal student aid debt, you must complete the Administrative Wage Garnishment Hearing Form and mail it to the address stated on the form. Notably, you must file the answer or appeal within the time frame listed on the garnishment notice.

4

Pay off the debt in a complete one-time payment or let it run its course. If you make a lump-sum payoff, it stops the garnishment. Or, you can let the wage garnishment continue until the debt is paid off. You can also contact the issuing institution to see if it will accept a settlement amount. The latter allows you to make a lump sum payoff for less than what you really owe.

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Help With RV Refinance

An RV is one of the largest purchases that a consumer can make, as the prices of many RVs are comparable to the price of many homes. When a consumer borrows a large amount of money, even a reduction of one point in the interest rate can result in significant savings over time. Though refinancing an RV is not always a simple process, the prospect of substantial savings makes the process well worth the effort.

Check Credit

A consumer's credit score is one of the most important factors that will determine whether or not a refinance is successful. Before seeking to refinance an RV loan, owners should request a copy of their credit report and review the information in the report for accuracy. If there are inaccuracies in the report, use the credit reporting agency's procedures to make corrections. During the refinance period, consumers should pay all bills on time, avoid opening new lines of credit and pay down debt to improve their credit standing.

Determine Value

Consumers should consult a well known price guide such as NADA or Kelley Blue Book to determine the fair market value of their RV. Consumers should then examine their current loan documentation to determine the balance left on the existing loan. If the consumer owes more on the RV than it is worth, the consumer may have to pay down the existing debt before refinancing the RV. Though the extra payments may be difficult in the short term, the long term savings of refinancing to a lower rate will make up for the costs over the life of the loan.

Choosing a Lender

Lenders each use different formulas to determine whether or not they will approve a loan and what terms they will offer. Owners of RVs should locate a number of lenders, both locally and online, that offer refinance loans for RVs and choose the lender offering the best loan terms. Though longer loan terms will reduce the monthly payment significantly, owners should avoid extending the length of the RV loan beyond 10 years, as RVs rapidly decrease in value and the loan may outlast the RV.

Make Repairs

Many lenders will order an inspection of the RV before approving a refinance. Lenders will want to make certain that the loan is for a RV in proper operating condition. If the RV requires significant repair, owners should have this work completed before seeking a refinance. RV owners should complete minor repairs, routine maintenance and cleaning before the scheduled inspection in order to present the RV in proper working condition. This will increase the value of the vehicle and improve the chances of a successful refinance.

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Does Your Employer Have to Give You Warning Before Garnishing Your Wages?

A wage garnishment is a method used by creditors and others to force people to repay delinquent debts by automatically deducting payments from their wages each pay period. Employees receive advance notice about wage garnishments from an employer or lender in a few ways. However, you may be able to settle or dispute a debt to avoid a garnishment altogether.

Process

Creditors and debt collectors have to win a debt collection lawsuit against you to obtain a court order to garnish your wages. The order would be sent to your employer, and the Nolo law information website indicates employers must notify employees if they receive garnishment orders against them. Your employer also has to give you information on steps you can take to dispute a garnishment. Employers are obligated to follow a garnishment order and send the money deducted from your pay to the creditor or collector who initiated the order.

Tax Garnishments

The Internal Revenue Service doesn't need a court order to garnish your wages if you owe back taxes. However, the IRS would send a garnishment notice to your employer, and Nolo indicates your employer must provide you with a copy of that notice. The U.S. Consumer Credit Protection Act generally limits the amount of money garnished from workers pay to 25 percent of their post-tax income. However, those limits don't apply to delinquent taxes, so the IRS can take a larger portion of your wages if the agency sees fit to do so.

Other Garnishments

You would likely receive advance notice about some types of garnishments before your employer does. For example, the U.S. Department of Education sends garnishment notices to people who have defaulted on student loans at least 30 days before a garnishment is ordered. The advance notice gives a borrower time to dispute a garnishment or negotiate an agreement with the department to voluntarily repay the debt. The department can garnish 15 percent of a borrower's disposable income until a student loan is repaid.

Considerations

Try to settle debts before creditors and others seek to garnish your pay, because a wage garnishment could put your job at risk. The Consumer Credit Protection Act prohibits employers from firing workers due to a garnishment for one debt. That law doesn't protect you from losing your job if your earnings are garnished to repay several debts. However, some states prohibit companies from firing employees who face garnishment for more than one debt, according to the U.S. Department of Labor. Contact your state labor department on local garnishment restrictions.

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How Is Interest Calculated on a Judgment?

A judgment is the outcome of a lawsuit when you are sued for a debt that you owe and the judge decides in favor of the lender. On top of the remaining balance of the loan that is delinquent, you will also have to pay interest on the judgment amount. Every day that the judgment remains unpaid, more interest accumulates.

Interest Rate

The amount of interest that can be applied to a judgment depends on the laws in that state. For example, Indiana allows an 8 percent annual interest rate while Alabama levies a 12 percent annual interest rate on judgments. Florida allows up to an 18 percent annual interest rate if such a rate was agreed upon in the original written contract for the loan.

Daily Interest Amount

To calculate the daily interest on a judgment amount, you first need to multiply the judgment amount by the annual interest rate. For example, a $15,000 judgment with a 12 percent annual interest rate would accrue $1,800 per year in interest ($15,000 x 0.12 = $1,800). Divide the annual interest by 365 days. This will tell you how much interest accumulates on the judgment each day. For example, a $15,000 judgment with a 12 percent annual interest rate would accrue $4.93 per day in interest ($15,000 x 0.12 = $1,800/365 = $4.93 rounded).

Accrued Interest

Interest usually starts accumulating from the day that a final judgment is entered into court records. Count how many days have passed since the final judgment was entered and multiply that number by the daily interest amount. For example, a $15,000 judgment with a 12 percent interest rate that was entered 90 days ago will have accrued $443.70 in interest ($15,000 x 0.12 = $1,800/365 = $4.93 x 90 = $443.70).

Deducting Payments

The daily interest amount will change each time a payment is made against the judgment balance. The accrued interest is deducted from the payment first, and the remainder of the payment is applied to the judgment balance. For example, if a payment of $5,000 was made on the $15,000 judgment above, the $443.70 in accumulated interest would be deducted from the payment first; then the rest would be deducted from the $15,000 original balance. So, the new daily interest amount would be $3.43 ($5,000 - $443.70 = $4,556.30; $1,5000 - $4,556.30 = $10,443.70 x 0.12 = $1,253.24/365 = $3.43 rounded).

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If a Relative Dies Without a Will & Leaves Bills, Is the Family Responsible?

If you die owing money to creditors, those debts do survive you, but in most instances your relatives will not be saddled with the responsibility directly. This is the case even if you die without a will. However, the liability can depend on which state you live in.

Debts After Death

Any money that you owe to credit card companies or other creditors is still owed upon your death. It will be paid out of your estate. If you die without a will, your estate will be divided according to your state's laws. But creditors are usually always paid before any relatives inherit your assets. This means that any inheritance will be reduced by the amount of debt that you owe.

Insufficient Estate

If your estate does not contain sufficient assets to take care of all of your debts, the remainder must be forgiven by your creditors. In most instances they cannot pursue your relatives for any unpaid debt that is not taken care of by the estate. However, this general rule is subject to a couple of very specific exceptions.

Cosigners

If your spouse or any other relative cosigned for any of the debt with you, he will remain responsible to pay off the remaining amount. This rule does not apply to authorized users of credit cards whose signature is not on the account contract, but anyone who holds a joint credit card or other joint loan with a deceased spouse will be held liable for a remaining balance.

Community Property States

Nine states operate under community property laws. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. If you live in one of these states, your spouse can be held liable for your debt, even if she was not a cosigner when the loan was taken out. In these states a surviving spouse should consult an attorney when dealing with debt after a death.

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What Is a Debt Elimination Plan?

A debt elimination plan is a set of steps that a borrower must complete to get out of debt. The plan can be formulated by a financial adviser or by the borrower himself.

Significance

When a borrower has debt that keeps him from having extra funds at the end of the month, he needs to look at ways to pay off that debt. A debt elimination plan will do just that.

Function

A debt elimination plan gives the borrower a set of predetermined steps to pay off his debt in full. It usually starts with building up savings and then tackling the debt.

Types

There are a number of ways to pay off debt, from paying the smallest debt to the largest, to tackling the debt with the highest interest rate first.

Considerations

The type of debt elimination plan a borrower chooses should be based upon her specific needs. What works for one borrower may not work for another.

Misconceptions

Many borrowers assume that tackling debt first is more important than building savings; however, the savings will prevent the borrower from needing debt again.

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How to Convert Daily Percentage Rate to Annual Percentage Rate

Creditors typically use the daily percentage rate, also known as the daily periodic rate, to calculate finance charges. This method allows borrowers to pay interest based on the actual number of days the money was borrowed rather than calculating by the month, which varies in length from 28 to 31 days. The daily percentage rate is related to the annual percentage rate through a simple calculation, so you can convert from one type of interest rate to the other.

Instructions

1

Look up your daily percentage rate for the loan, credit line or account. It might be listed as the daily periodic rate or the interest rate factor.

2

Multiply the daily percentage rate by 365 to convert it to an annual percentage rate.

3

Multiply the result by 100 if the answer came out as a decimal and you want to express it as a percent. For example, if you found the daily rate is 0.000274, multiply by 365 to find that your annual rate is 0.1. Multiply by 100 to find that the annual percentage rate is 10 percent. Depending on the format of the initial daily rate, you might not need to do this step.

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Do I Have to File for Unemployment in Kentucky if I Worked in Kentucky But Live in Indiana?

When you lose your job, where you file for unemployment benefits may or may not be the state in which you live. You are not required to file for unemployment in your state of residence. Instead, unemployment compensation is paid out by the state where you worked. If you have worked in more than one state, you may have your pick of where you can file for unemployment benefits.

Your 18-Month Employment History

When you file for unemployment benefits in any state, your unemployment award is based on your employment for the past 18 months. Usually this is referred to as the previous five quarters, not counting the current quarter. The first four quarters make up the base period for your unemployment benefits. The states you worked in during this period determine where you file.

When You Must File In Kentucky

If all of your work history for the base period took place in Kentucky, you must file for unemployment benefits in Kentucky. This applies regardless of where you are currently living. You have an interstate claim because Kentucky manages your claim but you live in another state. If you worked in Kentucky and in Indiana, the unemployment agency in Indiana may require that you apply in Kentucky and get a denial before you can apply in Indiana. This can occur when you work more in one state than the other. For example, you may have one month of work in Kentucky and four months in Indiana. Neither state reveals the number of work weeks that trigger this requirement.

When You Can File In Indiana

If you worked in Indiana during some part of your base period, you can apply for unemployment benefits in Indiana. Working in both Indiana and Kentucky creates a combined wage claim. With a combined wage claim, your information from Kentucky is used in conjunction with your information from Indiana to create one unemployment claim in Indiana.

How To File

If you have to file in Kentucky, you can do so by phone or online. The number to call is 502-875-0442. To file online, use the Kentucky Office Of Employment And Training website (ky.gov). You need your Social Security number, employment history for the past 18 months and your mailing address. To file in Indiana, you can use the Indiana Department of Workforce Development website (in.gov). Or visit your local WorkOne center to file in person. To file in Indiana, you need your 18-month work history, your Social Security number, your date of birth, your address and the reason you are unemployed.

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Charities That Help With Bills

Get help with bills from local and national charities specializing in financial aid. Utility or medical bills grow into insurmountable obstacles during a financial hardship. Organizations are available which specialize in helping families pay utilities, mortgage payments, car repairs and even veterinarian bills. Certain professional practices provide free services to low-income families. National, state and local charities that help with bills set guidelines each applicant must follow to gain assistance. The services vary by organization and are a phone call away.

Utilities

Charities that help with utility bills include local Salvation Army and Catholic Charities offices. Catholic Charities offices also goes by the name of Catholic Community League in some cities. The Salvation Army may refer you to other local charities that help with utility bills. Your local United Way and Department of Human Services can also provide you with a list of organizations that assist with things like heating and electric.

Housing

Charities that help with housing bills include the Society of St. Vincent de Paul. This faith-based organization provides assistance for rent and mortgage payments. In some areas, the society offers low-cost housing and shelter for the homeless. A federal program--which is issued through local Department of Human Resources--offers assistance in the form of a grant called the PRC grant, or Prevention, Retention, Contingency Program. The PRC program has a limit of funds per a 12 month period, and certain guidelines must be met to qualify.

Medical

The United Way has a hotline in most areas you can access by dialing 2-1-1. Local agencies and charities register with the United Way to offer assistance for medical bills and other necessities. Free health care is provided to families in need through your local Jobs and Family Services program. Some area hospitals offer a forgiveness program that eliminates or reduces medical bills for indigent patients.

Car Repair

Ways to Work provides small, low-interest loans to families for car repairs, uniforms and tools needed to maintain employment. The Website lists the local offices available for this service. Eligible applicants must have a job or be in school and have children. The organization requires the applicants have sufficient income to pay back the loan.

Veterinarian

For low-income families with pets, there are charities that help with veterinarian bills for sick and injured animals. The Animal American Hospital Association provides a list of local veterinarians that are registered with their organization. The AAHA pays up to $500 per year for the treatment of a pet. A maximum of $700 is available to qualified families.

Other Expenses

Modest Needs is an internet-based charity which provides assistance to individuals and non-profit organizations through private donations. The application process is done online, and contributions are made by private donations. The donors are presented with a list of anonymous applicants and the needs. The donor is able to choose which applicant he would like to help.

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Debt Recovery Rules

If you have found yourself overwhelmed by debt, you may have taken the necessary steps to get your debt under control and start on the road to recovery. Debt recovery requires willpower and the dedication to want to work to break the old spending habits that got you into trouble in the first place. By following some debt recovery rules, you can find yourself on the way to financial recovery.

Use Credit Cards Sparingly

Bad spending habits are one cause of debt problems, and during the debt recovery it can be tempting to stop using credit cards completely. According to Bankrate, you should use your credit cards but only on a limited basis. Part of debt recovery is rebuilding your credit, and a key component to rebuilding credit is using your existing credit cards. Limit yourself to only spending as much as you can pay off in a month. It will require willpower, but this is a necessary step in rebuilding your credit score.

Develop a Budget

You can help yourself during debt recovery by making sure that you do not spend more money that you bring in. Get your bills together and write them down, and then add them up to get an idea of how much your total bills are per month. Then compare that to your income, and allow yourself enough for making monthly purchases such as food and gasoline. Limit your entertainment and extra spending budget to fit in with your overall budget. By following a budget you can continue to bring your debt down, and you can also start putting money away in savings each month.

Pay Bills Efficiently

Paying bills efficiently means paying them on or before the due dates, or taking responsibility for late payments. One component of fixing your credit score during debt recovery is to make sure you pay your bills on time. If you cannot pay your bills on or before they are due, then call your creditor to keep the company updated on the situation and that includes giving a date when you will pay that overdue bill.

Set Goals

Debt recovery can seem like an ongoing process unless you set goals for yourself. For example, if you have a consolidation loan to pay off high interest credit card debt, then make paying that loan off a priority. Once that is paid off, set your sights on getting rid of other debt. List all of your debt recovery goals on a piece of paper, and then cross them off when you have completed them. When you have reached all of your goals, celebrate your hard work. When there is a light at the end of the tunnel, it makes the journey much easier.

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What Does It Mean if You Get a 1099 Cancelled Debt?

A notice for a 1099 cancelled debt is a form for the Internal Revenue Service (IRS). Its formal name is Form 1099-C, Cancellation of Debt. Creditors and debt collectors issue the forms after settling debts with debtors for less than the full amount. They send a copy to the IRS.

Definition

The Federal Trade Commission (FTC) recognizes debt settlement as a legitimate debt-management solution. People who have fallen behind on unsecured debt such as credit cards often use debt settlement to pay off the accounts. Credit card companies and debt collectors often will accept 20 to 70 percent of the balance to settle delinquent accounts. That means a debtor possibly could settle a $1,000 credit card balance for just $200. That's a savings of $800. However, the IRS treats any savings of $600 or more as income, and requires creditors or debt collectors to send debtors a 1099 form.

Process

Debtors receiving 1099 forms must include the information on their federal income tax returns. The IRS requires debtors to report debt-settlement savings even if the creditor or debt collector does not send a form. People who settle debts could face a higher tax bill as a result, especially if they are negotiating high balances. For example, people settling multiple credit card accounts or judgments from automobile repossession may receive 1099 forms totaling thousands of dollars, and it's all treated by the IRS as extra income.

Considerations

There is no way to avoid reporting debt settlement unless the savings is less than $600 on a specific settlement. Creditors and debt collectors will not agree to withhold the information from the IRS, and taxpayers who fail to report the transactions could face tax penalties.

Strategy

Circumstances sometimes dictate when a debtor must settle a debt. For example, people facing court action for an unpaid debt may settle immediately rather than risk losing a lawsuit. However, people who can plan debt settlement should study the tax consequences before making payment. Debt settlement activity in December could lead to a higher tax bill four months later in April. But waiting until January gives the taxpayer until April of the following year -- 15 months -- to resolve tax issues stemming from the settlement. Debt collectors usually send 1099 forms in January. Taxpayers who have not received them by the end of January should contact debt collectors to request the form.

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How to Finance a Home Computer

For many people, having a home computer is a necessity. You probably use the Internet on a daily basis to find information. Your kids use your home computer to do school work and write reports. You might even use your computer to work from home or check your work email. If you are in the market for a new or replacement computer and do not have the funds to purchase one, you have the option of financing the purchase of a new computer.

Instructions

1

Decide which method you will use to finance your new computer. You have three main options: 1) finance through the computer store's financing department, 2) use a credit card, or 3) take out a small bank loan.

2

Check your credit report. Before you apply for financing or use a credit card to make a large purchase, order a free copy of your credit report from AnnualCreditReport to make sure that your debt-to-credit ratio is at a reasonable level. If your monthly debt payments exceed roughly 1/3 of your monthly income, your debt-to-credit ratio is too high. If you find yourself in this situation, pay down some of your debt before applying for financing to get a better interest rate.

3

Apply for financing. Complete the application if you are applying through a store or taking out a bank loan. If you plan to use a credit card to finance your computer purchase, check to ensure that you have enough available credit on your card. Most computers cost between $500 and $1,500 dollars, depending on the features that you want. If you don't have that much credit available on your card, you may want to apply for a new credit card specifically to make your computer purchase.

4

Negotiate a finance repayment term of two years or less. This will prevent you from paying unreasonable amounts in interest. To negotiate this term, ask the sales associate or bank loan officer. If they insist on a longer repayment term, ask if there is a penalty for paying the loan off early. If the answer to this question is "yes," consider using your credit card instead.

5

Sign your financing documents and purchase your computer. If you applied for a small bank loan, you may need to wait several days for the bank to process your loan application and to send you a check in the amount of your loan. If you applied for store financing, you should be able to take your computer home that day. If you use a credit card, present your card at checkout and sign your receipt.

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Do It Yourself: Debt Assistance

Debt doesn't pose too many problems if you develop a habit of keeping balances low and paying off balances within a reasonable time frame. But if you ignore debt or allow balances to linger, carrying debt can start to negatively impact your personal finances and financing opportunities. Understand the cons of carrying debt, and take steps to fix debt problems.

Types of Debt

Debt refers to a type of loan or other financing obligation that carries from month to month. This can include monies owed to a lender for a mortgage, auto loan, student loan or other installment loans. Applying for loans and acquiring debt is often necessary to make home and auto purchases, but some consumers carry unnecessary long-term debt on revolving accounts such as credit cards and lines of credit.

Reason to Pay Off Debt

Paying off debt is an effective means of quickly boosting your personal credit score and qualifying for various types of loans and credit cards. MyFICO breaks down credit scoring, and according to this website, the balances consumers carry make up 30 percent of credit scores. It's understandable that someone who controls her spending and pays off debt completely within a short period will likely maintain a higher FICO credit score than someone who only pays the minimum on credit cards and carries high balances for years.

Debt and Interest

Debt involves interest; and the more debt you carry, the more you pay in interest. Creditors and lenders charge interest on a monthly basis, and interest is likened to a fee paid to use a credit card or acquire a loan. Some savvy borrowers choose short-term loans when financing a car or house to save on interest. But if carrying a credit card balance, you can reduce the amount of interest you pay by simply asking creditors for a reduction. Each credit card payment is subdivided into an interest payment and a principal payment. Creditors only apply a percentage of payments to the principal, and this percentage depends on how much is owed in interest for the month. Negotiate a lower rate, pay less interest and pay down your balance faster.

Limit Debt

Controlling the amount of debt you owe involves applying for few accounts. The more credit card accounts you hold and the more loans you apply for, the higher your chances of accumulating overwhelming debt. Retail stores are quick to offer in-house financing to satisfy material wants, and store charge accounts are frequently offered to store patrons. Use cash to control debt and help get rid of your balances.

Increase Payments

Having the means to increase payments to your creditors will require additional or disposable income. Understandably, extra income doesn't come easy for everyone. Resolving debt with little funds will require putting forth the extra effort and thinking of ways to increase your income, if only temporarily. Take advantage of overtime opportunities at work, find part-time or seasonal work, or de-clutter and sell personal unused items. Put every extra dollar towards your outstanding balances.

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How to Write a Payment Agreement for a Personal Debt

When you take on a personal debt from a family member or friend, it is important to write a payment agreement that you both can agree upon. Not only is it vital to keep track of the personal debt, it is necessary for legal backup if something should go wrong. Writing a payment agreement for a personal debt is simple.

Instructions

Write a Payment Agreement for a Personal Debt

1

Discuss the total amount, any interest being charged, and the payment time frame with the person making the personal loan. Determine when they would like the amount back, what type of payments they would accept and how frequently the payments should be made. Write a payment agreement before money changes hands.

2

Identify the borrower and the lender at the top of the loan agreement. Include the name and other pertinent information such as address or telephone number. Include the date of the loan. The next line should include the total amount of the debt and when it is supposed to be paid off by.

3

Determine the interest on the loan and write down what the rate is. Write down what each payment should be and when it is due. More information leads to less confusion and less chance of either party feeling cheated or taken advantage of.

4

Include information about what will happen if the debt is not paid on time, or if it is not paid at all. If collateral is being offered, give a detailed description of it as well as when it can be sold to cover the amount of the defaulted debt. If there will be an increase in interest or a flat rate fine for late payments, state what it is clearly and when exactly it will be applied. For example: A fine of $5.00 will be added to the normal payment if not paid within 10 days of the payment due date.

5

Make copies of the finished loan agreement. All parties must sign all the copies of the loan agreements in slots marked with either lender or borrower and the printed names of the two parties involved. Have a witness sign the loan paper at the bottom. Each person involved in the loan and debt agreement should immediately receive a copy of the agreement.

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How to Dispute Negative Credit Hits

When potential creditors---and other companies from which you're applying for credit---request or "pull" your credit report, this is known as a "hard" credit inquiry or hit. Credit inquiries get listed near the bottom of your credit report and stay on your report for two years. Too many "hard" credit inquiries can result in denials of legitimate credit applications. You may have "hard" credit inquiries listed on your credit report which you did not authorize. Since the Fair Credit Reporting Act stipulates that you must give written authorization to any company wanting to review your credit, you can dispute inquiries which you did not authorize and get them removed from your report.

Instructions

1

Go to annualcreditreport.com and order all three of your free, annual credit reports from Experian, TransUnion and Equifax. Alternately, mail a copy of the written proof that you have been denied credit to the credit bureau and ask the bureau to mail your credit report to you.

2

Review the inquiries listed at the bottom of your credit report. Ignore the "soft" credit inquiries listed, which get listed when you, the credit bureau or existing creditors pull your credit report.

3

Make a list of "hard" credit inquiries listed on each report form from each bureau. Write down the names, and addresses if listed, of the companies who have performed those credit inquiries. Write down only the inquiries for which you did not give permission to the company to look at your credit report or for those which you don't remember. Call the credit bureau and ask for the address of the company if it is not listed on the credit report.

4

Type a business letter to the company with which you want to dispute the negative credit hit. Explain to the company that you found the company's name listed in the inquiry section of your credit report. Give the name of the credit bureau on which the inquiry appears. Tell the company that you do not remember giving authorizing to review your credit and request that the company send you written proof that you initiated or requested the company to review your credit. Tell the company that if it does not send you proof of the authorization---or that if it does not keep records of such requests and cannot provide verification---then you would like it to remove the credit inquiry from your credit report immediately. You can also ask them to send you written confirmation of the removal.

5

Make a copy of the letter and store it for your records in a safe place.

6

Send the letter to the company via certified mail or return receipt-requested so that you can have confirmation that the company received your correspondence.

7

Wait for an answer from the company with which you're disputing the negative credit hit. Call the company or creditor if you have not received a formal reply within a sufficient amount of time---such as 30 to 45 days---and demand that the company remove the credit inquiry from your report.

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Does Bankruptcy Show in a Credit Check?

Bankruptcy tends to be the last step when you cannot resolve your debt problems through simpler means like a budget or professional debt management plan, according to the Federal Trade Commission (FTC) website. Bankruptcy clears your debt or helps you repay it, but your credit score also takes a big blow because this court act is reported on your credit bureau records and stays there for several years.

Time Frame

Consumers usually file Chapter 7 bankruptcy, which eliminates almost all bills, or Chapter 13 bankruptcy, which creates a court-ordered payment schedule, the FTC website advises. Both types stay in Experian, Equifax and TransUnion credit bureau records and affect credit checks for 10 years. Lenders weigh the bankruptcy against your current credit management practices when considering application approval.

Effects

Bankruptcy hurts you in credit checks because it shows lenders that you allowed your debt to get out of control. The MyFICO credit scoring website explains that it also impacts your score, although the exact drop varies. You suffer the most impact if your score was high before your bankruptcy. The effect is more minor if you were already behind in your bills and had many negative items on your credit reports.

Considerations

Bankruptcy law forces you to undergo financial counseling both before and after filing, the FTC website explains. The initial counseling shows you alternatives and the later session covers budgeting and money management. The budgeting session is particularly important because it teaches you to avoid the issues that caused your financial problems. You can undo much of the damage to your credit file if you use new skills to manage new accounts properly. Your recent accounts show up in the credit check along with the bankruptcy, offsetting some of the negativity.

Warning

You may have a hard time getting new accounts right after your bankruptcy, even though they are necessary to repair the damage. Secured credit cards offer an initial solution because you put up your own money to guarantee them, MSN Money website writer Liz Pulliam Weston advises. You give the bank a deposit of at least $200 to $300, and it freezes those funds and gives you a card with an equivalent line of credit. Your account shows up in credit checks, so on-time payments show lenders that you are working hard to repair the damage to your credit rating.

Limitations

The FTC advises that you can file bankruptcy more than once, but there is a waiting period. You can file Chapter 7 bankruptcy once every eight years, while Chapter 13 only requires two years between filings. Multiple filings look much worse in credit checks than just one case that is followed by good financial records.

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Can I Hire a Collection Agency?

People can incur debts in a number of different ways, such as taking out loans or buying goods and services on credit. When a person or company is owed money by a debtor, he may not always be well equipped to collect on a debt. Generally, a person who is owed money can hire a collection agency to collect payment on the debt.

Debt Agreement

The only requirement for a debt to be collected is for the debt to be legal. In order for a debt to be legal, it must have been secured in some form of debt agreement. Many debt agreements are written down in the form of a contract, but in other cases the agreement will be made verbally. As long as both parties made this agreement, then the debt can be collected by the creditor or by her proxy, such as a collection agency.

Collection Agency

A collection agency acts as a representative of the person who is owed money. A collection agency is endowed with the same rights that the creditor is. While collection agencies are generally used by businesses to collect debts from clients, anyone who is owed a debt and who can afford a collection agency is legally allowed to hire one. The only exception would be if the debt contract specifically forbids the creditor from doing so.

Compensation

Generally, collection agencies are hired on commission. This means that the collection agency receives a percentage of the amount it successfully collects from the debtor. In some cases, a collection agency will simply buy a debt from a creditor. In order to hire a collection agency, a person's debt must be large enough to make it financially worthwhile for the agency, or the creditor must be prepared to pay a flat fee for the agency's services. These fees can range greatly. According to Buyer Zone, collection agencies will commonly charge $10 per month to send notices of collection to up to 4 accounts.

Fair Debt Collection Practices Act

Once a person hires a collection agency to collect a debt, the agency must work within the confines of the Fair Debt Collection Practices Act. This act limits the actions that the agency can take when trying to convince the debtor to pay the money back. A collection agency -- and, in some cases, its client -- may face penalties for violation of this act.

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How to Get a Balance Off a Credit Report if a Car Was Repossessed

Getting behind on your car payments can be stressful, especially if the lender repossesses your vehicle. After the repossession, the lender will sell your vehicle for any amount that it can get, and then try to collect any remaining balance from you. Lenders may get aggressive in their collections attempts, using lawsuits and garnishments as allowed by law, but it will always list what you owe on your credit report. You can remove auto loan deficiency balances from a credit report with some effort by using a couple of different methods.

Instructions

Paying or Settling the Balance

1

Contact the creditor or collection agency that currently owns the debt. Let it know that you are interested in clearing the debt, and that you would like to work out a fair settlement for payment.

2

Negotiate with the lender or collection agency. Negotiate the lowest payoff price possible. Collectors may settle for lower amounts on older debts. When you reach a deal that is acceptable, have the lender or collection agency put the deal in writing. If possible, negotiate as part of the deal that the creditor will remove the collection entry from the report, but make sure that it will accept payment of the agreed-upon amount as settlement in full for the debt. Make sure that negotiations also specify how the debt will be listed with the collection agency, either as settled in full, or deleted from the report.

3

Mail a money order or bank check to the creditor with a copy of the letter you received stating the debt is settled in full. Attach a copy to the letter for your records, and keep these documents forever. This is important in case another collections agency attempts to collect the debt at any time in the future.

Filing for Chapter 7 Bankruptcy

4

Collect all of the necessary forms to file for bankruptcy. Consult with an online source for bankruptcy information, or consult with an attorney who specializes in bankruptcy.

5

Complete the bankruptcy forms as required. You will have to complete several different forms outlining all of your debt and assets, as well as your income. These forms also detail what your intentions are regarding debt and assets. Make sure that your car lender or the collection agency handling the account is listed as a creditor in the bankruptcy filing.

6

File the completed forms with the bankruptcy court for your area, and pay the necessary filing fee. The court will notify your creditors, and schedule a meeting that includes them, if they wish to appear. In about 90 days, if nobody disputes your bankruptcy, you will receive a discharge of all your debts, meaning that you do not have to pay them. With this discharge, the creditor must list the balance of the car loan as $0, or as included in bankruptcy. If it does not, you will need to dispute the entry with the credit bureau, and ask it to properly update the listing.

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Can a Collection Agency Threaten to Garnish Wages?

When a person falls behind in paying debts, one option that collection agencies can use is to attempt a garnishment. The garnishment order tells a third party, either a bank or an employer, to either take funds from an account or to withhold money from paychecks to turn over to the collection agency. There are restrictions on the amount of money that can legally be withheld.

Garnishment Order

In order for a collection agency to have wages garnished, a judge needs to mandate a garnishment order. If a debtor receives a notice that he is being sued, ignoring that lawsuit means that garnishment proceedings might be taking place.

Limitations

Under Title III of the Consumer Credit Protection Act, only a certain amount of a weekly paycheck can be withheld due to garnishment. Any weekly wages that are less than 30 times the federal minimum wage cannot be garnished. So, if the federal minimum wage is $7.25 an hour, garnishment only can take place when the weekly paycheck (after taxes are taken out) is over $217.50 but less than $290. When a paycheck is over $290, the maximum garnishment that can be taken is 25 percent of the check. In cases where a pay period isn't weekly, multiples of the weekly equation are factored in. So, if an employee gets paid every two weeks, the paycheck has to be over $435 before anything can be garnished. The CCPA also protects an employee from being fired because of a single instance of garnishment. But if there are more instances of garnishment, an employer does have the right to let an employee go.

Empty Threats

Debt collectors are not allowed to threaten to garnish wages unless they actually intend to file suit and bring the case to court. Simply using wage garnishment as a threat is not legal, and the collection agency that threatens an individual can be reported to the Office of the Attorney General. Naturally, if the lawsuit is going to be filed, however, a collection agency can explain that wage garnishment might occur.

Individual Garnishments

Individuals can also get garnishment orders from a judge. When actor Randy Quaid and his wife failed to pay a private investigator they had hired the money she was owed, she filed a lawsuit against the couple. The judge provided a garnishment order that actually had film residuals from Randy Quaid's movies turned over to the private investigator.

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Can I Divorce Without Paying Alimony in Ohio?

In Ohio, spouses requesting alimony must file their requests for permanent or rehabilitative alimony with the courts of common pleas. Ohio awards alimony based on equity and absent an existing prenuptial agreement, will not automatically award alimony without a hearing. Absent a valid prenuptial agreement, Ohio law does not automatically award alimony.

Ohio Statutory Code

The Ohio Revised Code allows judges to award real or personal property, lump-sum and installment cash payments as alimony. Permanent alimony, according to the Code, terminates upon the death of either party, unless spouses specifically state otherwise through a written agreement. Ohio law requires judges to consider several factors in deciding whether alimony is appropriate.

Factors

Ohio courts must consider the relative income and earning abilities of each spouse, their retirement property and benefits, age, mental and physical condition of each spouse, each spouse's available income after the property allocation, the length of the marriage, responsibility to care for minor children, the standard of living the spouses enjoyed during the marriage, tax consequences and educational opportunities.

Equitable Factors

Judges must also consider lost opportunities between the spouses. For instance, when one spouse was responsible for raising their children while the other was able to work, the spouse responsible for domestic and homemaking duties may have been unable to pursue career or educational opportunities. Courts may also consider "any other factor the court expressly finds to be relevant and equitable," according to Ohio Code Section 3105.18 (c)(1)(m). Ohio courts may deny an alimony award to a spouse who intentionally dissipated marital funds. For instance, if a husband contests an alimony award based on the legal doctrine of intentional waste or dissipation of marital funds, he must convince the court that his wife spent marital assets unnecessarily and with the intent to deprive him of his equitable share. If his wife is able to show that she spent money to feed their children, then that typically does not count as intentional waste.

Considerations

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

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