December 2005 ~ Credit And Debt Management

Saturday, December 31, 2005

How to Check a Credit Report in Canada

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A credit report is a snapshot of your credit history. It contains information about your borrowing and repayment activity over the last seven years. If you've taken out a loan or a credit card, it'll be on the report. If you've missed a payment, that will be on there, too. It's important to check your credit report on a regular basis to make sure there are no mistakes on it. Two credit bureaus hold Canadian credit reports: TransUnion and Equifax.

Instructions

Write to TransUnion and request a copy of your credit report. There are two addresses, one for residents of Quebec, the other for residents of all other provinces.

Quebec residents:
Centre De Relations Aux Consommateurs TransUnion
1 Place Laval Ouest
Suite 370
Laval, Quebec
H7N 1A1

All other provinces:
TransUnion Consumer Relations Department
P.O. Box 338, LCD1
Hamilton, ON
L8L 7W2

Include the following information: name, current address, previous address (if you've lived at your current address for less than two years), date of birth, Social Insurance number and signature.

Include a photocopy of your identification. The following are all acceptable as primary forms of ID: driver's license, Canadian passport, certificate of Indian status, birth certificate, permanent resident card, citizenship and immigration form, health card (excluding provinces of ON, MB, PEI), Old Age Security card, Department of National Defence card.

Include a secondary form of ID. The following are acceptable: utility bill indicating current address (within 60 days of issue), credit-card statement indicating current address (within 60 days of issue), signed credit card, CNIB card, Social Insurance card, T4 slip (current tax year), notice of assessments (current tax year), GST/HST refunds (current tax year), child tax benefits (current tax year). Between the two forms of ID, you must provide your name, current address, date of birth and signature.

Choose to request your credit report in person at one of the offices listed above. You will need to provide the same information as by mail.

Write to Equifax to request your free credit report.

Equifax Canada Inc.
Box 190 Jean Talon Station
Montreal, Quebec
H1S 2Z2

Include the same information as for the TransUnion report. You will also need to fill in a request form, which is available on Equifax's website.

Choose to request your free Equifax credit report by calling 800-465-7166. You will need to provide the same information as you did in Step 2.

Access your credit report online. This will cost you $15.50 CDN, payable by credit card.

How to Garnish the Self-Employed in Florida

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If a resident of Florida owes you money under a contract and has not made payments as agreed under the contract, you may opt to garnish the person's wages to recover amounts the debtor owes. Typically, this involves obtaining a judgment and authorization from the court to garnish wages, then contacting the debtor's employer to have a portion of his wages withheld. Because a self-employed person does not have a specific employer, garnishing self-employment income can be more difficult than garnishing a payrolled employee's wages. However, simple strategies can help you collect debt from a self-employed person through garnishment.

Instructions

File a civil suit against the debtor in the county where the debtor resides. The court will send notice of the lawsuit to the debtor, giving her the opportunity to contest the suit. If the debtor does not respond or cannot raise a valid defense, the court will issue a default judgment in your favor.

File an application for a writ of garnishment with the Florida court that issued the judgment. A writ of garnishment serves as authorization to garnish the judgment debtor's assets.

Send the judgment debtor a statement-of-assets form, on which the debtor must disclose all income and assets, including self-employment income. List a date by which the debtor must respond. A statement of assets can help you determine whether the debtor obtains all of his income from self-employment activities or derives part of his income from traditional employment.

Request a debtor examination hearing from the Florida court that issued the judgment if the debtor does not respond to the statement-of-assets letter. A debtor examination hearing allows you to ask questions about the judgment debtor's income and assets, to which the debtor must respond under oath. If the judgment debtor fails to appear for the debtor examination hearing, she may be held in contempt of court and arrested.

Contact the debtor's employer if he is only partially self-employed. Demand in writing that 25 percent of the debtor's wages be withheld and sent to the court for payment against the judgment debt.

Ask the court to order repayment of the debt through the receivables of the self-employed person's business. Typically, the self-employed person is responsible for paying garnishment amounts to the court. However, if the judgment debtor fails to make payments, the court may allow you to seize and liquidate business assets.

Use the information obtained from the statement-of-assets form or the debtor examination hearing to contact the debtor's banks. Demand in writing that the banks freeze the debtor's accounts and forward funds in these accounts to the courts to pay the judgment debt.

Can I File for Chapter 13 Bankruptcy When I Owe a Family Member Money?

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Chapter 13 bankruptcy is commonly used by people to reorganize debts. It addresses all debts -- including those owed to family members. People filing for Chapter 13 are forced by federal law to include debts owed to relatives. Chapter 13 and other types of bankruptcy requires a listing of all debts.

A Chapter 13 bankruptcy requires a commitment of three to five years because of its required payment plan. Loans from family members are included in the payment plan, but there is no guarantee they will receive money. Participants in bankruptcy follow a strict budget closely monitored by the bankruptcy court. The court establishes reasonable limits on living expenses, with remaining money used for the payment plan. Some people in Chapter 13 do not have money left over after living expenses; and in those situations, no money goes to unsecured creditors such as family members. That means family members, at a minimum, could wait three or five years for full repayment -- or receive nothing at all. The bankruptcy court dismisses all debt remaining in the payment plan after three to five years.

Some people in Chapter 13 feel bad about listing debts to family members. Many wish they could keep the debts separate from the bankruptcy and find a faster way to repay their family members. However, failing to disclose all debts could lead to a dismissal of the bankruptcy. The bankruptcy courts take the application process very seriously, with Chapter 13 participants forced to testify under oath that their applications are correct and list all assets and debts.

It is possible to forget about an insignificant debt owed to a family member, and the court makes allowances for that. If you file for Chapter 13 and forget to disclose a $50 loan from an aunt, you can tell the bankruptcy trustee about the oversight. There are provisions for correcting honest mistakes without dismissing the entire bankruptcy. Forgetting a large loan from a family member, though -- say, for more than $10,000 -- is likely to receive significant scrutiny from the judge as she decides how to handle the omission.

A reputable bankruptcy attorney can offer sound advice on addressing debt to family members before filing for bankruptcy. For example, the attorney can discuss the timing of the bankruptcy, with the possibility of paying all or some of the debt to family members before filing the application. Or the attorney can discuss avenues for treating money from a family member as a gift -- with the cooperation of the family member.

How to Get a Judgement Off Your Credit Report

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A debt judgment from a credit account can have a serious negative impact on your credit score. A credit account judgment can lower your FICO score and stay on your credit report for up to seven years. There are several things that you can do to try and get the judgment removed from your credit report.

Instructions

Get a current copy of your credit report from all three credit bureaus: Experian, Transunion and Equifax. Visit AnnualCreditReport.com to request your free credit report from each credit bureau. Once you get your credit report, read over it very carefully to make sure that all of the information about the debt judgment is correct. That date of the judgment, the amount, the amount you have paid toward the debt prior the to judgment and the credit account information are all things that you should pay particular attention to. You should also look for any typos on your credit report, too. If it is not 100 percent correct, consumer debt laws make it questionable. You have the right to an accurate credit report history and you should make every effort to see that you have one.

If any of the debt judgment information is inaccurate, you should file a credit dispute report. A dispute is very simple to file. You simply fill out a debt dispute form with each of the credit bureaus or send a credit dispute letter to the credit bureau.

Another way you can get a debt judgment removed from your credit report is to contact the creditor and try to negotiate a settlement for the credit account involved in the judgment. You may be able to negotiate a settlement amount for a fraction of the total amount and even work out payment arrangements with the creditor. Make sure you get any and all arrangements made with the creditor in writing, so that you can provide the credit bureaus with a copy of the credit account settlement. Once you are able to do this, the credit bureaus will report the judgment as settled.

How Do Employers Use Credit Reports?

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Credit reports are critical to your financial life. Creditors use information in your credit report to determine whether you are a high or low credit risk. However, some employers also verify information in your credit report before extending employment offers. Rules vary per employer regarding whether a high or low credit score can eliminate you from the applicant pool.

Employers in certain fields use your credit report to determine your character. According to ABC News, credit history is only one tool used to measure your judgment and character, but if you can't manage your financial obligations, an employer might wonder if it's a sign of irresponsibility. Unlike a credit score, your credit report gives specific information about how you handled your account, such as the amount owed on a charge account, how many times you have been late on your credit accounts and the number of times you changed addresses in the past few years.

Not all employers probe into your financial life before offering you a job. If you are applying to a high-security position or a job that requires handling cash, your credit report could be required. For example, if you are applying to become a bank teller, payroll manager or financial planner, good credit is required. Your credit report is the only method, outside of an interview, that offers information on how well you manage money.

The Consumer Credit Protection Act prevents an employer from firing you for a wage garnishment. However, when hunting for a new job, the presence of a judgment to garnish your wages raises a red flag for a prospective employer. Wage garnishments don't happen overnight. Only after consumers have avoided communication and payment negotiation with a creditor does the creditor file a judgment. An employer might assume that your propensity for allowing personal matters to impact your salary will be a distraction from your job duties.

There are many critics to the use of credit in hiring decisions. House Representative Steve Cohen and 26 other members of Congress are promoting the adoption of the Equal Employment for All Act, which is an amendment to the Fair Credit Act. The bill would prohibit the use of a job candidate's personal credit information to determine her qualification for a job. The bill would also prevent employers from firing or denying a promotion to an employee based on credit. As of 2011, the bill has not been signed into law. ABC News notes that there's no link between poor credit and job performance and that many people are simply caught in a cycle of losing income, falling behind on bills and being denied employment due to credit.

Steps to Avoid Bankruptcy But to Stop Paying Credit Cards

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When financial avalanches hit, you may have no choice but to stop paying on your credit cards; however, you may also not be able to file for bankruptcy. This may happen if you recently lost a well paying job and have to wait it out a few months to financially qualify for Chapter 7 bankruptcy or if you want to begin paying on your cards again once you find a new job. There are a few ways that you can stop making payments on your credit cards, while avoiding bankruptcy at the same time.

If you have been paying an additional fee for a hardship protection plan, this is when it will finally pay off. Many cards offer a protection plan that will allow you to defer your payments if you lose your job, until you find a new one. Some plans, like the Chase Protector, allow you to defer your payments for up to two years if you are still unemployed. If you are not covered by one of these plans, it may help to call and explain your hardship situation to the company's representatives. They may have the authority to give you a payment extension and possibly even a short deferment.

Although you will still make one final payment on your credit cards with this option, once that payment is handed over, you will be done with them. According to Bankrate, the first step to negotiating a settlement is to stop paying and save the money, so that you have leverage to negotiate with. Then tell the company that you can only do a settlement or bankruptcy. They will try to sell you on a payment plan, but just remain firm about the settlement. Eventually, as your account gets closer to being charged off, the company may fold and give you your settlement. Just make sure to get it in writing on their letterhead and save it with a carbon copy of your payment check.

There is only one way to completely abandon your repayment obligations and not file for bankruptcy, and that is to just stop paying. This comes with four major drawbacks. First, you must dodge collectors for several years. Second, you must also hope that the company does not file a lawsuit against you before your state's statute of limitations on debt lawsuits runs out. Third, if they do file suit and get a judgment, they may be able to garnish your wages and take money directly from your bank account. Fourth, it will also tarnish your credit report for the next 7 1/2 years.

Bad-Credit Repair Information

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Bad credit can cost you money in higher loan interest rates. Negative credit information such as bankruptcies and judgments can remain on your credit report for up to 10 years, according to an article on the Tennessee Department of Commerce and Insurance website titled "Improving Your Credit the Right Way." But with the right bad-credit repair information, you can take the steps to improve your financial situation despite past challenges.

Each American consumer is entitled to one free credit report every 12 months from each of the three major credit reporting agencies, according to the Federal Trade Commission website. The Federal Trade Commission offers a website to consumers where they can obtain all three credit reports with one online form (see resources). Consumers can also call 877-322-8228 to order their free credit reports if they do not have access to the Internet.

To repair your credit, you need to make sure the information on each of your credit reports is accurate. Once you receive your credit reports, analyze them carefully for any errors in your personal information and in your credit accounts. If you find an error, you can use the dispute process outlined on each report to submit a request for changes, according to Dani Arthur, writing on the Bankrate website. Keep copies of all of your correspondence with the credit reporting bureaus in case your dispute is lost, or the credit bureaus make an error in executing your corrections.

You can use your current credit accounts to help repair bad credit. Do not cancel old credit accounts, because established credit is helpful in repairing your credit score. Pay down your credit accounts, and feel free to use them, but do not allow your balance to exceed 30 percent of your available credit, says Liz Weston, writing on the MSN Money website. Maintaining credit, and keeping a large portion of your available balance open, are important steps in repairing credit.

Consumers looking for bad-credit repair information may see information from debt management programs that promise to repair your credit score quickly or eliminate your credit card debt fast. It takes time and good financial habits to repair credit. There is no way to accelerate the improved health of your credit score, according to the Tennessee Department of Commerce and Insurance website article entitled "Debt Management Plans." By paying your credit card minimum monthly payments on time and in full, you are taking practical steps toward your own debt management program. The programs that advertise the quick elimination of your debt usually rely on bankruptcy as their solution, and that is a step that you should only consider as a last resort and after a consultation with a legal professional.

Can They Take Your Tax Refund for Not Paying a College Bill?

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If you decide to go to college, you may have to take out student loans to complete your tuition payments. Although loans from the Department of Education typically do not have to be repaid until you graduate or stop attending, you can find yourself with a significant debt. If you have trouble repaying the loan, the Department of Education has various programs to help you, but will take collection action if you simply don't pay.

The Department of Education has many tools to collect your debt. The Treasury Department's Financial Management Services section directs the collection efforts and one of its methods is to garnish your federal tax refund. You are considered to be in default if your monthly installment loan has not been paid for 270 days. If your loan has less frequent installment payments it is considered in default after 330 days. Whoever holds your loan must make repeated efforts to collect the debt, but if those efforts are unsuccessful, your loan holder can turn the loan over to your state's guaranty agency -- a private non-profit corporation that has been designated to administer student loans -- to assist with collection. Your loan holder can also accelerate your loan, which would require that you pay the entire balance -- principal and interest -- in one lump sum payment.

The Treasury Department has a program called TOP -- the Treasury Offset Program. Under this program, a lending agency, such as the Department of Education, notifies the Treasury Department that you have defaulted on your student loan. Your information, such as name, address and Social Security number, are given to the department so it can initiate repayment efforts. It has several options including garnishing your federal income tax refund, administrative wage garnishment, turning your case over to a collection agency, notifying credit reporting bureaus and, if you work for the federal government, a federal salary offset. Certain other benefits received from the federal government can be garnished to pay your debt.

If TOP intends to initiate offset actions, it will give you prior notice and an opportunity to review their records for accuracy. At this time, you are also given the opportunity to work out a payment arrangement that is mutually satisfactory. If you ignore the notice, TOP can offset your tax refund, earned income credits, state income tax refunds and federal benefits such as Social Security. If you prove that you did not owe the amount recovered, you will receive a refund for that amount.

If you are employed, the Department of Education can issue an administrative wage garnishment that requires your employer to withhold 15 percent of your disposable income to pay your debt, but not if you attempting to pay. If your debt is turned over to a collection agency, the agency is paid a 25 percent commission. Once collection begins, the commission is added to your debt and the balance of your debt does not get paid down until the collector's commission is paid. In the meantime, interest and penalties continue to accrue.

Help & Counseling for Credit Debt Consolidation

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Anyone drowning in debt may feel compelled to investigate debt consolidation as a path to eliminate their suffering. However, it's important to fully understand how to handle debt consolidation to utilize it successfully. Research different loan rates and budget your finances before jumping into debt consolidation to avoid some of the road blocks to digging yourself out of debt with this method.

Debt consolidation loans wrap up your existing debt under one loan with one interest rate and monthly payment. These are unsecured personal loans that are often advertised at very low interest rates, luring credit card debtors with high interest rates into believing that they will save money through consolidation. Generally, the advertised rates only apply to those with very good credit. However, debt consolidation may be worthwhile for those who have trouble keeping track of various payments.

Another debt consolidation route is to take out a secured loan or line of credit, using your home as collateral. This option is risky for the sole reason that if you fail to pay, you may lose your home. Home equity loans are generally tax deductible, but that doesn't always mean that it's the best option for getting out of debt. Bankrate's home equity debt consolidation calculator will help you figure out whether a home equity loan or line of credit makes fiscal sense for your specific situation.

Before you consolidate your debt, it may be a good idea to sit down with a credit counselor to create a plan of action for paying off your debt. With debt consolidation, you need to recognize that you're fighting fire with fire. In other words, you're attempting to get yourself out of debt by taking on even more debt. You need to be 100 percent committed to paying off your debt and keeping it paid off to avoid the temptation of spending on your newly freed credit. By sitting down with a credit counselor, you will be able to create a budget and a time line so that you understand the boundaries you need to stay within to reach financial freedom. Find a reputable credit counselor through the National Foundation for Credit Counseling website.

Debt consolidation is not the debt elimination solution for everyone. For those who tend to overspend, paying off debt through budgeting and a payment plan is less risky. People often take on debt consolidation to treat the symptom rather than the root problem of spending more than they make, which is how they end up in more debt as the result of consolidation. Carefully weigh your options to avoid ending up even deeper in debt.

Can Wages Be Garnished Over an Unsecured Debt?

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A secured debt is linked to your assets, such as your home for a mortgage; the lender can foreclose on your home if you stop making payments. Unsecured debt, such as credit card debts and medical bills, is not tied to your assets. If you default on your payments for an unsecured debt, the creditor can take certain measures, including a wage garnishment, to recover the unpaid amount.

All states except Pennsylvania, North Carolina, South Carolina and Texas allow creditors to garnish wages for unpaid debts. Specifically, if you are paid in a state that allows wage garnishments, creditors can garnish your wages. If your state does not allow wage garnishments, the creditor can obtain approval from the court to garnish monies deposited into your bank account.

If your state allows creditors to garnish wages, the creditor must first file a lawsuit against you. He must win the suit, in which case the judge grants him a judgment; thereafter, he applies for a wage garnishment with the said court. If your state does not allow wage garnishments and you owe an out-of-state creditor, in most cases, the creditor can seek a judgment and a wage garnishment in her state, if the state allows it, and garnish your wages from there. If the creditor is in the same state that you live in, that state does not allow wage garnishments, and you are paid in a state that allows wage garnishments, the creditor can seek a judgment in your home state, domesticate it in the foreign state and seek wage garnishment there.

Federal law limits the amount of your pay that your employer can deduct for an ordinary wage garnishment, such as for an unsecured debt. Your employer can withhold no more than the lesser of the total by which your weekly disposable income exceeds 30 times the federal minimum hourly wage or 25 percent of your disposable income -- your pay after legally required deductions. Your state might have different limits; your employer is supposed to use the smaller amount.

If you're having financial difficulties that are preventing you from making your payments as promised, contact the creditor immediately. He might be able to offer you a lower payment and stop your account from being submitted to a debt collector. If the creditor sues you, respond to the lawsuit if you do not agree to it -- this gives you a chance to present your side of the case to the judge. If the wage garnishment is causing you financial hardship, contact the issuing court for its procedures on filing a hardship claim, which can result in a lower garnishment amount or the judge temporarily setting aside the order.

Each state has a statute of limitations that dictates the time frame in which a creditor can seek judgment and execute it via wage garnishment.

Strategies Used To Negotiate Down a Credit Card Bill

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Sometimes it becomes necessary to close out your credit card account because you can no longer afford to pay the debt. If you have gone several months without making a payment and the credit card company is threatening legal action, your best bet is to negotiate a settlement. Such negotiation is never easy: you want to minimize and they want to maximize the balance. By understanding the procedure and your options, you'll pay as little as possible.

One way to help you get the best deal when closing a credit card account is to speak to the right person. A standard customer service representative is trained to answer the phone and read information from a script. Ask to be transferred to an account closing specialist in the retention department. Account closing specialists are trained to try to help you keep your account, but in the case of someone who is habitually delinquent, they are also trained to help close an account as efficiently as possible. This means getting you to agree to pay as much of the principal owed as possible. By speaking to the right person at the credit card company, you increase your chances of getting a better deal.

You have made it obvious through your payment history that you either do not have the resources to pay your bill, or you are not going to pay your bill in full. The credit card company is primarily concerned with getting the principal balance back, so the first tactic you should employ is to get your late fees and penalties waived. Keep in mind that they will be more apt to waive fees and penalties if they know they will be getting a larger portion of the principal paid in return, so when you are making your deal be sure to remind them that you will be willing to exchange late fees and penalties for more principal.

When you have finished negotiating your payoff amount with the credit card company, discuss your installment payment plan. Remember that debt negotiation is one step before legal action, so when you agree to a monthly payment plan, agree to something you know you can pay. Once you miss one payment on a payoff plan you will be looking at a lot of trouble, so do not take the installment plan lightly. Create a deal that allows you to pay off your balance as quickly as possible, but also at a rate you can afford.

How to Find a Financial Counselor

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Proper money management is a skill developed over time and with many stumbles in the process. When you are in a tough financial situation you are unable to fix on your own, working with a professional is a way to solve the issue while enhancing your abilities. Once you find a financial counselor to assist you, you'll know that managing finances is not impossible and you do not have to repeat your mistakes.

Instructions

Assess your financial situation. You must review your household budget and any outside factors putting strain on the finances to determine if you need help. Remember to consider your feelings about your financial situation, because anxiety or undue stress is a sign you should work with a financial counselor.

Gather your creditor statements. Make lists of the kinds and amounts of the debt you owe. Credit counselors want to know if your debt is mainly unsecured, like credit cards, or secured, like your mortgage and auto loans. Knowing which creditors charge the most interest is something else a counselor needs to know.

Ask for references. In all likelihood, you are not the first person you know to experience hard financial times. Find out about your friends' experiences with financial counseling. If they enjoyed a positive relationship with their counselor, ask for contact information.

Schedule a consultation appointment with multiple credit counseling companies. Your financial well-being justifies taking time to make a prudent decision, especially considering your relationship with the credit agency will last months, if not years.

Interview the counselor. Ask for details about her experience in the field or any specialized training she has. Multiple organizations test and train counselors, so find out which one certified your potential counselor.

Determine if you have a personality match. Your ability to get along with the counselor is just as important as his experience. If you dislike the way he treats you or his debt-management philosophy, find someone else.

Inquire about the program. How much does she charge for her service? What percent of the monthly payment goes to debt reduction? Are there any special requirements to be in the program? Every financial counseling agency works differently, so be sure to get the information you need to compare agencies before making a decision.

If a Credit Card Account Is Closed by the Lender Can It Ever Go Into a Positive Status?

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Credit card companies take the closing of an account very seriously, and when they do so the decision is usually permanent. Card companies usually close accounts because of nonpayment, and that process can take several months as the card company waits for the account holder to resume paying as agreed. When that does not happen, the card company closes the account -- with no chance for the account holder to reestablish it as a positive account.

MSN Money reports that credit card accounts are usually closed and listed as charged-off after payments are six months behind. Some card companies may close accounts sooner. Charge-off is an internal accounting term and does not relieve the account holder of responsibility for the debt. Once the account is charged-off there is no option for reinstatement. The account is usually sold or assigned to a debt collector for collection.

Charge-offs are listed on credit reports and are considered very negative information. Charge-offs can force good credit scores to plummet, with the information remaining on the report for seven years. The effect on credit is a reason some people seek to re-establish a closed account by making up the missed payments. The credit card company or debt collector will accept payments, but that will not lead to a reopening of the account. Closure of an account can create a domino effect. Other creditors may notice the missed payments and charge-off through a regular credit review and react by closing other credit cards or reducing credit limits. Credit card companies do that to protect themselves from customers who are having financial problems.

Some credit card companies encourage former customers to reapply for new accounts. Full payment is necessary on the charged-off account along with a standard credit check. Some people with charge-offs spend two or three years repairing their credit and find that they qualify for a new account with their former card company.

People wanting to keep their credit cards should communicate with their card companies when experiencing financial problems. Most credit card companies offer hardship programs that lower payments and interest rates during financial hardships such as illness, unemployment or divorce. It is also possible in some instances to skip payments for a month or two. The help could prevent a charge-off and a need to reapply. Hardship agreements are negotiated by contacting card companies by telephone or in writing.

What Should You Include in a Hardship Letter?

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A hardship letter is a letter written to your lender detailing the reasons you cannot continue making mortgage payments. While the premise appears simple, the writing and tone of the letter should not be. This is often the only document that can persuade your lender into stopping the foreclosure process. The following serves as an outline, by paragraph, of what to include.

In the left-hand margin, include your name and address along with your lender's name and the loan number. These should all be on their own separate lines.

This tells the lender the reason for your letter. Simply state in a couple of sentences that you plan to explain why you have defaulted on paying your mortgage and that you hope to work with the lender in correcting the matter.

This is where you briefly list the reason you could not pay your mortgage on time. Be concise and to the point. Also, state the date and circumstances of your hardship and whether or not your situation is temporary.

Depending on your circumstances, propose a loan modification or short sale. Lenders tend to side with those who do not avoid them because of a debt but rather are willing to work with them.

If your financial situation will improve, it is worth the investment now to take a draft to a financial planner or take a short online course. You only get one chance at this letter.

How Can a Lien Against Your Property Affect You?

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A lien is usually a last resort for a creditor whose attempts to collect payment from a debtor have been successful. A lien is a legal document the creditor files with your local county office, which states that the creditor has an interest in your property.

The most comment liens are judgment liens, mechanic's liens and tax liens. A creditor or other individuals to whom you owe money can file a judgment lien against your property if they sue you in court and win. A painter or plumber can file a mechanic's lien on your property if you fail to pay him for services rendered. General contractors usually file a mechanic's lien on a person's property as insurance they will be paid for work performed. The IRS will place a tax lien against your property for unpaid taxes.

A lien gives a creditor a stake in your property and limits what you can do with it. You will not be able to sell your property. You will not be able to take out a home equity loan on your house until your debt is repaid and the lien is lifted. Liens adversely impacts your credit rating because they are obtained as the result of a judgment filed against you. Judgments remain on your credit report for 10 years. Future creditors will view you a high credit risk. Obtaining a mortgage, car loan, apartment, insurance and even a job could will be more difficult with a lien on your credit report.

Taking control of your debt before it escalates to the point where you are facing a potential lien is the best way to avoid one. You can also avoid a mechanic's or judgment lien by filing bankruptcy. Filing a Chapter 7 discharges your debts and liens, except for tax debts, which must meet certain conditions in order to be discharged.

A Chapter 7 can only discharge tax debts if the unpaid taxes are income taxes. Payroll or tax fraud penalties cannot be discharged. You can discharge a tax debt if it is at least three years old, you filed a return for the debt you want discharged, you did not commit tax fraud or try to evade paying your taxes and your tax debt was assessed by the IRS at least 240 days before you filed bankruptcy. Filing Chapter 7 will not remove tax liens placed on your property before you filed bankruptcy. It will prevent the IRS from seizing your bank account or garnishing your wages, but you will still have to pay off the lien before you can sell your property.

How to Remove a Medical Collection

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Unpaid medical bills are often turned over to collection agencies. Once that happens, the agency reports delinquency to the credit bureaus. This negative mark can remain on a credit report for up to seven years. Getting medical bills that have gone to collections off of a credit report is difficult, and collection agencies are notorious for using deceitful tactics in pursuit of unpaid debts. Despite protective regulations enforced by the Federal Trade Commission, removing debt collections can take multiple attempts.

Instructions

Do everything possible to pay the bills first. Make sure every avenue is explored for getting the bills paid off. This will make removing them much easier. In addition, paying the bill will change the entry on your credit report from "unpaid" to "paid." Having a paid bill show up on a credit report is far less harmful than an unpaid bill. Consumers caught in the crossfire between health insurance companies and physicians often end up with the bill. Doing everything they can short of bankruptcy will help them down the road.

Dispute as many medical bills as possible. Contact the major credit bureaus (TransUnion, Experian and Equifax) to dispute the bills. A successful dispute will remove the entry, but the bureaus require that the entry be proved a mistake, such as a clerical error. Even if the dispute is unsuccessful, the bureaus may give the consumer a chance to explain the entry. The consumer has 100 words to explain the error as the result of a situational event, such as an insurer refusing to pay. The explanation will be attached to the consumer's credit report.

Check the report annually. Pull the credit reports from all three credit bureaus and go over them every year. Even after all the medical bills are resolved, sometimes they still show up. Years later, consumers may find old entries stating they owe money for medical expenses. The next time medical expenses are incurred, check the reports again and repeat the process of disputing and explaining.

How to Use a Restrictive Endorsement to Settle Debts

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A restrictive endorsement is a statement of terms that is attached with a payment or printed directly on the back of a check stipulating the conditions under which the check may be deposited, cashed, transferred or paid for imbursement of a debt, item, or service. Restrictive endorsements in regard to debts typically mean the payee sets forth conditions to retire a debt specifically, but these restricted funds do not necessary indemnify the payee from future collection attempts by the creditor.

Instructions

Validate the debt. If the debt has run the statute of limitations, engaging actions on the part of the debtor can constitute restarting the statute of limitations on the debtor's credit report. It is up to the individual debtor to ensure the debt is valid and will be updated on their credit report to show the debt as satisfied; this can be done by ordering a copy of an individual credit reports from all three credit bureaus (See Resources 1).

Contact the creditor. If the debt is valid and has not run past the statute of limitations, the debtor should phone the creditor to negotiate a settlement. Debts that have aged for a year or more are usually negotiable. The debtor should begin negotiating the debt as a percentage of the total amount owed (for instance, 10 cents on the dollar). The negotiation should continue until both parties can agree on a settlement amount.

Send the payment that includes a restrictive endorsement. Submit the payment to the creditor, and attach with the payment a written agreement detailing that the acceptance of the payment by the creditor constitutes payment in full and future credit reporting should reflect the debt to be paid in full or satisfied. It is often not sufficient simply to place the terms only on the back of a check to satisfy the debt and indemnify the debtor from future collection actions and/or credit restoration.

The check tendered for a debt settlement should contain language such as "Depositing of these funds by the creditor or its agents represents an acceptance of the enclosed settlement agreement as total satisfaction of the debt described."

How to File a Writ of Execution and a Default Judgment

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You can enforce payment of a default judgment by filing the judgment to create a lien on the debtor's real estate and using a writ of execution, a separate document that allows you to take the debtor's property to recover the judgment. A default judgment is a court award you received after filing against a debtor who did not answer or appear in court. A writ of execution allows the law enforcement agency that handles writs in the area to seize property of the debtor and sell the property at auction, with the money going to the judgment creditor.

Instructions

Chose a writ type. A general writ allows the sheriff or marshal to seize any of the debtor's property not exempt by law, while a specific writ names a particular piece of nonexempt property.

Visit the court that issued the default judgment. Ask for a filing copy, either a certified copy or an abstract, depending on where you live. Also ask for a writ of execution packet.

Read the packet and complete any necessary forms or notice to the debtor. Some states require you notify the judgment debtor before getting a writ to identity exempt property.

Complete the writ form. Forms vary by area, but you typically must provide all information you have about debtor, including home and work addresses and banks the debtor uses.

Complete the judgment calculation worksheet. Follow the instructions. The worksheet calculates the current judgment amount with the interest allowed by law added.

File the writ in the court clerk's office. Ask for a certified copy.

File the certified copy or abstract in each county the debtor has real property. Contact the county recorder or clerk's office to check the debtor's name in the land records for property ownership.

How to Eliminate Unsecured Loans

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Unsecured loans can be eliminated through debt negotiation and other methods. Collateral, such as real estate, isn't required for an unsecured loan, making the elimination of the loan easier. Secured loans, such as an automobile loan, are harder to eliminate. For example, the only way to eliminate an automobile loan is to pay the debt in full. If you fail to do so, the lender can repossess the car and sell it at auction.

Instructions

Review your available cash in checking, savings and other investment accounts to determine how much you can spend on eliminating unsecured debts.

Gather your credit account statements. Make a list of your unsecured loans. Place the most delinquent accounts -- at least three months past due -- at the top of the list. Rank the loans with the highest interest rates first. The high-interest rate loans are costing you the most money in finance charges, and should be paid off as soon as possible.

Call your creditors. Unsecured debt that is past due by 90 days or more could be eligible for debt settlement offers, according to the SmartMoney website. The site reports that debt settlement allows you to pay off unsecured debt for less than the full balance -- typically 20 to 75 percent of the balance. Offer to settle your delinquent accounts by paying 20 percent of the balance. Keep negotiating until you have an agreement that you can afford. Get the details in writing before making payments.

Make payments in full to resolve your other unsecured debts -- or wait for them to become eligible for settlement agreements.

File for bankruptcy if it isn't possible to pay off the debts in full or through debt settlement. Chapter 7 bankruptcy can eliminate unsecured debt in just a few months. Chapter 13 requires a payment plan of three to five years. At the end of the payment period, any remaining unsecured debt will be discharged, or eliminated, according to BCS Alliance, a credit and debt website.

The Responsibility for Debt When a Spouse Dies

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The death of a spouse or loved one often comes as a shock, and not everyone dies with their finances in the shape they would like. Dealing with such issues may be difficult, especially for a spouse in mourning, but their importance cannot be overestimated. In some cases, the spouse has no responsibility for the debt, but not always. The specific nature of the debt varies depending on circumstances, as does responsibility for the debt.

If the deceased left a will behind, it falls to a designated person -- called an executor -- to handle the deceased's estate, including debts. If there was no will, then the courts appoint an administrator to fulfill the executor's job. A will usually specifies who will serve as executor: a family lawyer, for example, or a trusted accountant. In some cases, the will may specify a spouse as executor, in which case he or she is charged with handling the debt from the assets in the estate. In cases of an administrator, many states automatically assign the role to the spouse, who then becomes responsible for handling the debts.

In cases where the deceased has more debts than assets, the law typically assigns priority to certain creditors. Federal law states that the U.S. government makes first claim to any debts, followed by state governments and then institutions such as banks and credit card companies. Paying off such debts doesn't necessarily affect the spouse's income, provided the estate's assets can address it. It may diminish or eliminate any assets the spouse inherits from the will, however.

In cases where the estate is insolvent, and no money is left to pay off debts, then the spouse usually is not responsible for the remainder. The debt is written off and the creditors cannot harass the spouse further for repayment of the debt. Specifics may vary depending upon state and local laws, and the rule generally applies to states that do not have community property laws.

As of 2011, 10 states have community property laws: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Within these states, debts built up over the course of a marriage may be considered jointly held, in which case the spouse must pay them off after the deceased passes. The particulars vary by state and are influenced by specific rulings within those states. If you live in one of these states and feel that you may be subject to community property laws, contact a qualified attorney for advice.

How to Build Credit Fast With Multiple Secured Loans

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Secured credit loans are excellent for building credit, and also are used by people who are rebuilding their credit. People applying for credit for the first time usually find that secured loans are very easy to qualify for, and the same is true for those recovering from credit problems. The easy qualifying exists because terms of the loan remove much of the risk for the lender. The most important key for the borrower is making sure the payment history on the loans is reported to the major credit bureaus.

Instructions

Deposit money into a savings account at a bank or credit union. The deposit acts as collateral for a secured loan. The money on deposit is held by the bank until the loan is paid off. This protects the bank if you default on the loan.

Tell a loan representative that you wish to borrow money against your savings. Confirm that the bank will report your payment history to major credit bureaus TransUnion, Equifax and Experian. Fill out necessary paperwork to borrow the money on deposit.

Deposit the proceeds from the loan into the savings account and instruct the bank to electronically draft payments each month. This guarantees on-time payments.

Open a second secured loan account after a few months, and then another in several more months following the same process. Confirm each time that credit bureaus will receive regular updates about your payment history.

Note your progress by regularly reviewing your credit report and score. Obtain your credit report from the Annual Credit Report website -- the only site authorized by the Federal Trade Commission to offer free credit reports under the terms of the Fair Credit Reporting Act. View and print your report from the website.

Order your credit score separately, for a fee by including instructions included with the credit report. You can order free copies of your credit report for free three times each year and check your credit score as well.

How to Get a new Personal CPN (Credit Profile Number) Legally

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Hey Everybody,

In a previous article, I mentioned to you that the best way to clean up your credit is with the formation of a LLC or Limited Liability Company and obtaining a CPN number as part of it. In this follow up to this story, I will share some new info that I learned about.

Instructions

The Real Story about CPN or Credit Profile Numbers

After spending much time researching the legalities of CPNs I have discovered that it is legal to have a second number. A CPN or Credit Privacy Number is a 9 digit number that credit can be built on. How you intend to use it determines its legal vs. illegal actions. It is used to give very important people in the political, government and corporate world total protection of their real personal information by keeping it in total privacy. What can border on illegal is when you intend to cheat or defraud any creditor. Defaulting on a credit card of any creditor or opening a line of credit that you opened with your CPN especially with already damaged personal credit is a fatal move and is 100% illegal

CPN's and Business Credit Profile

Now that we cleared that up, a CPN cannot be used to give you new personal credit but, you can still have a new credit profile in the form of Business Credit. As mentioned before, all you need to do is to form a Limited Liability Company and the very minute you establish the company, get it registered with the 3 Business Credit bureaus and with Dun and Bradstreet in the form of a DUNS number.If you use the CPN number legally, you will get protection by keeping your personal information private but, you will also get the same protection against personal liability through having an LLC. While there are many other types of companies like, LLP, S type and others, I prefer the LLC type of business. Please keep in mind one thing, your personal credit will be a factor in some cases of obtaining business credit and in most cases, 80 to 90 percent. The only way around it is to search the Internet for companies that will give you a program that will help you build business credit without using your personal credit. Some of these companies that offer these types of programs, may be legitimate or illegitimate. Do your leg work online and research thoroughly this option before you leap into it. Do a BBB check on the company. Check to see if they have a valid phone number and 24/7 Customer Support complete with live operators.

CPN Numbers are Free to Obtain

Many companies are selling CPNs at thousands of dollars, some for hundreds. Getting a CPN is free and you can get more information on it by going to several different sites but one in particular at www.cpnheadquarters.com

How to Get Furniture With Poor Credit

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Purchasing brand-new furniture can be very expensive. In fact, many individuals resort to using store credit to pay for large purchases so that payments can be split up over the next 12 to 24 months. Unfortunately, those with bad credit will have a difficult time obtaining credit from most furniture dealers--and if credit is granted, it will likely come with a very high interest rate. However, there are relatively affordable ways to purchase furniture even if your credit is in poor shape.

Instructions

Take a close look at your finances to determine how much money you can realistically use to purchase furniture for your home. Keep in mind that while you may want a dining room table or living room set right now, these items aren't necessities and can be put off for a few months while you put money aside.

Consider your options before spending a fortune on new furniture for your home. Good deals on gently used furniture can be found at garage sales or by scouring online furniture ads on Craigslist. You can also find great deals on furniture in secondhand shops or used furniture stores.

Keep your eyes open for furniture sales--especially during the holidays when retailers are eager to bring customers into their stores. If your state has a tax-free weekend each year, this could be another opportunity to save money on your furniture purchase and eliminate the need to use credit.

Make purchases slowly over time, giving you the opportunity to save money and pay cash for your furniture purchases. This will allow you to keep your credit report clean while you work on restoring your poor credit by paying credit card bills on time and paying down high balances.

Can Wage Garnishments Be Removed Without a Lawyer?

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Wage garnishment is a process that involves having money taken out of your paycheck by one of your creditors before you receive it. While you could hire a lawyer to try to stop the garnishment, you can also take some steps to stop the wage garnishment on your own without the legal fees.

While it may not be the most attractive option, you could stop the garnishment on your own by quitting your job. A wage garnishment is a process that involves losing part of your paycheck. Your employer essentially pays your creditor for you directly. This means that if you are no longer earning money at this particular employer, your wages cannot be garnished. If you can get another job, your creditor may have a hard time switching the garnishment over to your new employer. This is generally a temporary solution, as creditors will eventually catch up with you.

To get a garnishment on your wages, creditors must first file a lawsuit against you and receive a judgment. The judgment must be enforced to get the garnishment. If you are willing to work out a payment plan with the creditor, you may be able to get the garnishment removed. Your creditor does not have to negotiate with you once the garnishment is in place, but it may be willing to if you can stick to a payment schedule.

One of the least attractive options to remove the garnishment involves filing for bankruptcy. When you file for Chapter 7 bankruptcy, your outstanding unsecured debts can be completely discharged by the bankruptcy court. At that point, your debt is wiped clean and your creditors can no longer try to collect the money from you in any way. This includes trying to collect through a wage garnishment. While this can get you out of the wage garnishment, it will also hurt your credit severely.

When you owe taxes to the Internal Revenue Service, you may have your wages garnished. If this is the case, you will not be able to get out of the garnishment by filing bankruptcy. Tax debt is not something that you can usually get out of paying under any circumstances. The only possible exception to this is if you become disabled. If your wages are garnished by the IRS, you may be able to work out an installment agreement which will allow you to get rid of the garnishment and start making payments.

The Disadvantages of Consumer Credit Counseling

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Consumer credit counseling services are educational programs set up to help people who have made poor credit decisions learn about their credit, and how to manage it. However, while these services do offer distinct benefits for people who really need them, there are also a number of potential disadvantages to using credit counseling services.

Typically those who seek out credit counseling services already have credit scores that have been significantly damaged. But joining a credit counseling service may negatively impact your credit even further. Since the counseling services act as a buffer between the debtor and the creditors, bringing an extra player into your credit problems shows that you couldn't pay off the debt yourself, which makes you a bigger credit risk. However, if your credit is already severely damaged, then the impact of the counselor may not be enough to outweigh the benefits.

While some credit counseling services advertise themselves as being free of cost, legalmatch.com says that might not always be true. Since you make a single payment to your credit counselor, that payment may include items such as "Monthly Upkeep Fee" or "Monthly Donation." It's important that if you're going to use a credit counseling service that you make sure you know exactly what you're paying, to whom, and for what. Otherwise you might have all kinds of fees that slip under your radar.

When you use consumer credit counseling services, you're giving up your own freedom to allow them to act as your representative. A credit counselor essentially bargains with companies you owe debts to in order to lower your monthly payment to a more reasonable rate. This is something that you yourself can do without help, but most people don't know that, or don't believe that a company will negotiate with them. If you allow a counselor to do it for you, you're placing your trust and your finances in their hands.

Credit Dispute Tricks

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Credit disputes are a legal right given to consumers by a law called the Fair Credit Reporting Act. The Federal Trade Commission explains that disputes do not cost anything and force the Equifax, TransUnion and Experian credit bureaus to eliminate mistakes from your records. Often the errors involve delinquent payments and other harmful entries, according to Motley Fool finance advice writer Dayana Yochim, so disputes are an effective credit repair tool.

Dispute as many items as possible on all three of your credit reports. The FTC advises that you can check those files for free every year if you use annualcreditreport.com. The government makes the credit bureaus provide free reports through that site every 12 months to any consumer who makes a request through the online form or the toll-free telephone number listed on the site.

The credit bureaus tout online disputes through their websites as quick and easy, but the FTC recommends sending letters instead. Online forms do not always send a submission confirmation, and you have no way of knowing whether they were really received. Letters can be sent from the post office using certified mail, and you can ask for a dated delivery receipt. The FCRA gives the bureaus 30 days for their dispute investigations, and postal receipts prove the start date.

The FCRA does not force you to send any documentation of your dispute claims, but it also gives credit bureaus the right to refuse investigation of irrelevant or frivolous queries. Include document copies with your letters backing up as many of your disputes as possible. Use evidence like account statements, check or money order copies, bank statements and loan contracts. Cross-reference each piece of proof with the correct item in your letters. Always sent copies instead of the original documents, the FTC advises.

Sometimes creditors provide documentation that satisfies the credit bureaus, which keeps them from erasing the disputed item. You can redirect such challenges at the lenders if you do not believe their proof is valid. Use one of your credit bureau letters and alter it so it is relevant to a direct dispute. Ask the creditor to stop reporting the information to Experian, TransUnion and Equifax.

You have a right to include a personal statement of 100 words or less in all three credit report files if you do not get satisfaction from your disputes, the Divorcenet legal information website explains. Write a separate statement for each credit bureau that explains your side of the dispute and mail them to the address shown on the bureau websites. They are obligated to give a copy to everyone who gets your credit reports, according to the Federal Reserve Bank of San Francisco.

Is There Any Type of Relief for Senior Citizens in Debt?

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Senior citizens in debt can opt to file bankruptcy or find assistance through a government-approved credit counseling agency. While bankruptcy is always a serious undertaking, some states, including Michigan, allow people over age 65 to keep more of their assets even after filing for bankruptcy, notes Bankruptcy Action.

Senior citizens can take advantage of government-approved credit counseling services to either prepare for bankruptcy or avoid this step, notes the Federal Trade Commission. The elderly should be leery of any credit counseling agency that tries to force them into a debt management plan. While such plans can be helpful in reducing debt, they do not offer the same protections as bankruptcy, especially when it comes to assets. Sometimes a senior citizen can get out of debt through simply rethinking her budget; a good credit counselor can assist with this.

Seniors with few assets other than retirement accounts and who earn less than their state's median income level usually can qualify for complete bankruptcy, notes the book "How to File for Chapter 7 Bankruptcy." Chapter 7 eliminates many debts and prevents creditors from calling or suing someone who has filed a case. As of 2011, the qualifying income level for a single person in California was $48,009, while the same person living in Puerto Rico could earn up to $21,273 and file Chapter 7.

Chapter 13 bankruptcy enables elderly people with steady income to partially repay their debts; senior citizens are less likely to forfeit assets under Chapter 13 and can use the process to resolve any past-due mortgage problems, according to the United States Bankruptcy Court. During a Chapter 13 repayment plan, an elderly debtor cannot get any new credit without a judge's permission. Also, it takes three to five years to finish Chapter 13.

Even if you are elderly, you cannot include some types of debt in a credit counseling plan or bankruptcy. You must deal directly with the government agency to resolve tax debts incurred less than three years ago or any issues with court fines, child support and alimony, warns the book "How to File for Chapter 7 Bankruptcy." If you are severely disabled, you can petition a bankruptcy judge to forgive any federally-backed student loans you still owe. Regardless of your age or disability, you cannot include future debts or debts incurred by a crime or lying on a credit application in any type of debt relief program.

How to Type a Payment Agreement Letter

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Anytime you owe a debt, but are unable to meet the currently agreed-on payments to the lender, you can write up a payment agreement letter. This document needs to meet your needs not the lender's, according to the Fair Debt Collection website (see Resources). It offers the lender a revised repayment plan based on your current financial situation. The lender doesn't have a legal obligation to accept the new terms. It may reject your letter and demand payment in full.

Instructions

Start the letter by opening a new page in a word processing program. Type today's date at the top right hand corner of the page. Press return a couple of times, and move over to the left margin. Type your name and complete return address.

Tell the recipient what your letter is regarding. Press return a couple more times and add the name of the contact person and the lender's name and address. Skip two lines and type "Re:" and the subject of the payment agreement letter. For example, "Re: Account Number 1234567890."

Be professional. Begin the agreement letter with a business greeting. Then, state what the balance of the debt is, according to the Fair Debt Collection website (see Resources). Explain briefly that you can't make the current payments. Tell the lender how much you can afford and on what day of each month you can send the payment.

Tell the debt collector in the next paragraph that you'd appreciate a phone call confirming they accept the new loan repayment terms. Type that if they cash the enclosed check, you'll consider that act as an acceptance of your proposed plan. Add that if they reject your letter, they need to return the payment in the self-addressed, stamped envelope you provided.

Add to the next paragraph, "As a show of good faith I've enclosed my first payment in the amount of $________ ", according to the Fair Debt Collection website (see Reference). Then, tell the debt collector that if your financial situation improves, you'll contact them about increasing your payments.

Wrap the letter up. Skip a couple lines from the last paragraph. End the payment agreement letter with "Sincerely," and skip four lines. Type your name underneath. Proofread the letter; then print it out. Sign it and make a copy for your files before you send it.

I Can't Afford My Truck: Can I Just Give it Back?

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If financial problems mean that you are unable to continue paying for your vehicle, it is important to find a solution to this problem, preferably on your own terms. Giving the vehicle back to the bank is just one possible resolution. Be sure to contact the bank or finance company holding the note and let them know about your problems. They may be able to work with you toward a solution.

If you are unable to pay for your vehicle, you can arrange to give the vehicle back to the bank as a voluntary repossession. To arrange this, call the bank you owe and let them know that you cannot afford the vehicle any longer. Tell the bank employee that you would like to surrender the vehicle in a voluntary repossession. The bank may arrange for you to drop the vehicle off at the closest branch or at a local car dealer. You will still be responsible for any balance remaining on the loan after the vehicle is sold.

If giving the vehicle back is not an option, you may be able to sell your vehicle if your financial situation changes and you are unable to continue paying for it. Determine the private party value of your vehicle by using Kelley Blue Book or NADA guides. Contact your bank next and let them know that you will be attempting to sell your vehicle. The bank may allow you to sign an unsecured note for the difference between the sale amount and loan balance, and release the title for sale.

If you want to keep the vehicle, your bank may be able to make some concessions that may allow you to do so. The bank may give you a deferral on your payments and add any missed payments on to the end of the loan term. You may be able to defer the loan for one to three months. The bank may allow you to refinance your car loan and lower your payments over a longer-term loan. You may even be able to refinance at a lower interest rate depending on your credit situation.

If you are unable to make concessions with the bank, and you don't give the vehicle back in a voluntary repossession, the bank will repossess your vehicle. A repossession agent will watch for you to leave the vehicle unattended, possibly even for just a moment. When he sees an opportunity, he will tow your vehicle away. In time, the bank will sell the vehicle at auction and probably sue you for the amount of the loan that the sale does not cover.

How Do I File a Motion to Dismiss on a Time-Barred Debt?

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Getting sued for money owed can be a disaster for anyone. Depending upon your financial situation and the size of the alleged debt in question, a lawsuit to collect a debt could drive you into bankruptcy to avoid the execution of a judgment. Some debts, however, become uncollectible by operation of the statute of limitations. In order to secure the benefit of the statute of limitations, you have to correctly raise it as a defense.

Instructions

File your answer and defenses within the time allowed by your jurisdiction. Your first answer should be a motion to dismiss for failure to state a claim upon which relief can be granted under your state's version of Rule 12b6 of the Federal Rules of Civil Procedure, which most states track closely. Your second answer will contain the number of each allegation of the complaint, which you will either admit or deny. Your third answer will be a specific pleading of the statute of limitations, in clear but simple terms. All of these will be contained within the same document.

Title your document "Defendant's Answer and Defenses," using the same case caption as the plaintiff's complaint. The caption will identify the state, county and trial division of the court in which the action is pending, and it will also contain a case number and case name by which the action is identified. This information must appear on every document you file in the case.

Serve your answer and defenses on the creditor's attorney of record at the address listed on the complaint after you've filed it with the court. Prepare a certificate of service with the case caption, certifying that you mailed a copy of the answer and defenses to that address on a given date. Filing a document in a case involves going to the applicable courthouse, handing an original and any necessary copies to the clerk of court and asking that the document be filed.

Draft interrogatories, or written questions, to the creditor asking it to specifically state the date you last made a payment on the account, the date of any settlement agreement you allegedly broke, the date of your last affirmation of the debt and any other dates relevant to your case. Draft requests for document production by asking that the creditor produce any written agreements that you allegedly signed and statements from the time of filing of the complaint all the way back to the beginning of the applicable statute of limitations. Serve these by mailing them to the creditor's attorney of record.

File a summary judgment motion, which states that there is no genuine issue of material fact as to your statute of limitations defense and asks for judgment as a matter of law. Serve this, and a calendar notice setting the motion for hearing with sufficient notice, upon the creditor's attorney of record by regular mail. At the hearing, produce the creditor's responses to your interrogatories and document production requests, and show how the creditor can't possibly win at trial.

Legal Credit Help

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Consumers who suffer from credit problems are frequently desperate. Unscrupulous companies take advantage of those who need the most help by advertising credit relief in exchange for high fees, and then cannot deliver what was promised. Fortunately, there are legal solutions that consumers can use to help reestablish a good credit history.

You should order your credit report at AnnualCreditReport.com and examine it carefully. You are legally entitled to one free copy from each bureau per year. You can correct inaccuracies yourself. Educate yourself about what can and can't be on your report by calling the National Foundation for Credit Counseling (NFCC), a nonprofit consumer group, and the Federal Trade Commission. Each have websites with a wealth of free information. The NFCC also offers counseling and management programs--that require a a fee--if you have current credit card debt or require housing counseling.

Companies that offer to "remove bankruptcies" or "repair credit" are frequently illegal and a waste of money. You can clean up your own credit by yourself, for free. It's also illegal if a company encourages you to get a new taxpayer identification number--an EIN--to reestablish credit. A company that says they can convince the creditor that you don't owe the debt is acting unlawfully. In general, be wary of any organization that collects hefty fees up front.

If your credit problem is really a debt problem, you should start by calling the NFCC for consolidation or management options. They offer free consultations and can enroll you in a program so you can pay your debts back with easier terms. The NFCC does not offer loans. If bankruptcy is your only option, you should contact a reputable attorney for advice. Check the Better Business Bureau (BBB) website, which is free to use, to find safe recommendations.

You can take your own actions to improve your credit legally. One way is to get and use a credit card, a secured card if necessary, and use it regularly. Only use about 30 percent of the total credit line and pay it on time, every month. Request a small credit limit, such as $500, so you don't get in over your head.

Examine your credit report and contact the bureaus to resolve issues. For example, late payments have a seven-year life and bankruptcies have a 10-year life. Anything beyond that time frame should be eliminated from your report. Pay down loans, especially those that are in collection, as quickly as possible. Finally, settle down and wait. A long credit history with on-time payments from the same issuers is the last dose of credit medicine you'll ever need.

Can I Use My Debit Card to Buy Something on the Internet?

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Debit cards are an easy way to make purchases and have the money immediately taken out of your bank account. You can use this type of payment when shopping online with most merchants. While you can use your debit card, it may not necessarily be the safest alternative when shopping online.

One of the reasons that some consumers are hesitant to use debit cards online is because of the potential for fraud. If someone gets access to your debit card numbers, they could immediately take money out of your bank account. This is not the same as when someone runs up a credit balance on one of your credit cards. This is real money that you have in your account and it can be gone immediately.

Even though identity thieves could potentially tap into your bank account with a debit card, some protection measures are in place to help this problem. If you report the theft within two days of it occurring, you are only liable for a maximum of $50. After two days, you are liable for $500 until 60 days after the theft when you become liable for all of it. Some debit cards offered by credit card companies such as Visa even offer zero fraud liability.

If you do use your debit card when shopping online, it is important to regularly review your bank statements. If you have access to online banking, it would be to your advantage to look at your account frequently. This will allow you to ensure that only the amount of money that you spent was deducted. If you check your bank statements frequently, you can tell if any fraudulent charges have been made and fix the problem quickly.

If you do not feel comfortable shopping online with a debit card, you have a few alternatives to consider. The most common alternative is a credit card. Credit cards only have a $50 liability limit at a maximum and many of them offer $0 fraud liability. Another alternative is an online payment processor such as PayPal. With PayPal, you never have to reveal your financial information to anyone, and if any fraudulent charges are made, you can get your money back. Most online merchants today offer PayPal checkout as a payment option. You could also use one of the other online payment processing companies that are similar.

Does Adding Someone to Your Credit Account Help Their Credit?

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It can be hard to watch a loved one struggle to regain credit footing after amassing debt, especially on the heels of unforeseen circumstances such as losing a job or undergoing expensive emergency medical care. Adding someone to your credit account may seem like a quick fix to help address her credit problems, but there are risks involved, and changes to previous FICO credit score calculations may render the financial move worthless.

Your credit history provides a financial barometer of your ability to manage credit. Lenders evaluate your credit history looking for positive signs including on-time payments, maintaining low debt balances and accumulating a diverse array of credit options. These include revolving credit, such as credit cards, and installment loans such as student loans, car payments and auto loans. People with credit problems might have missed payments, high debt-to-income ratios, bankruptcy records or accounts that were turned over to collection agencies for non-payment. Before qualifying for new credit cards, apartment rentals or home loans, these consumers will need help with their credit.

Adding a risky credit consumer to a strong credit holder's account is known as piggybacking. This involves adding an individual as an authorized user to your credit account, immediately lengthening his credit history (if you've held the account for awhile), boosting his available credit and perhaps diversifying his credit portfolio. Your track record of on-time payments, payments made in full on credit balances and otherwise long-term positive standing now apply to the account's new authorized user, helping his credit.

Perhaps the most common credit score formula, the FICO score, underwent a series of changes to its views on piggybacking between 2007 and 2008. Prior to 2008, it was perfectly acceptable to add someone to your credit account to help her credit. Consumers could pay thousands of dollars to credit-improvement firms to have their name added to a stranger's account for a credit boost. As part of the FICO 2008 credit score model, however, this option was dropped because of concerns that adding risky consumers to strong credit accounts made the formula less legitimate, especially because of fraudulent use. The model was adjusted to once again take this practice into consideration when formulating scores. Some formulas, including the VantageScore model, have never taken authorized-user accounts into consideration.

Adding someone's name to your credit account to help her credit is not without risk. Authorizing another cardholder means that the individual could conceivably use your credit to rack up debt for which you'll be financially responsible. If you've added someone's name to a rarely used account and are unaware that she has charged purchases to the account, this could result in missed payments and injury to your own credit.

How to Answer a Summons While Working on a Loan Modification

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Answering a summons while negotiating a loan modification is stressful. If related, the two events could determine if you keep your home or lose it to foreclosure. A foreclosure summons is the notification of a lawsuit for unpaid mortgage debt, with the lender seeking to take possession of your home. A loan modification can refinance the loan to make it more affordable and resolve missed payments. A summons for an unrelated debt, such as credit cards, does not affect loan modification for a mortgage.

Instructions

Ask the lender to withdraw the lawsuit. There may be poor communication in the lender's organization if the lender is discussing a loan modification and filing a lawsuit at the same time. However, the lender may have decided not to agree to a loan modification and instead is proceeding with a foreclosure summons. That would make your attempts at working on a loan modification a moot point because the modification simply cannot happen without the lender's cooperation.

Hire a real estate attorney with experience in loan modification and foreclosure avoidance. You have too much at stake to attempt handling this on your own. Loan modifications are sometimes complex, and so is the legal system. If you cannot afford an attorney, contact charitable organizations such as the Legal Aid Society. The agency may represent you for free or refer you to an attorney charging a reasonable fee. Also contact charitable organizations such as the United Way or a local chapter of the National Urban League for help finding an affordable attorney.

Pay the missed payments to end the foreclosure threat. Sell a second car, home furnishings or just about anything else to raise money needed to bring the mortgage current. Ask your church or place of worship for help, if necessary. Call your lender after you've made the payments and ask the lender to withdraw the foreclosure summons. Then continue to work on the loan modification without the threat of imminent foreclosure.

Respond to the summons no matter what, or have your attorney file a response, which is called an answer. At a minimum, seek legal advice from an attorney on how to answer the summons. Procedures for answering a summons vary by state. Failing to respond to the summons could lead to a judge ordering foreclosure. If you are proceeding without an attorney, read the summons and follow all deadlines for providing information requested by the court.

Call the Homeowners Hope Hotline for help on persuading the lender to modify the loan. A national nonprofit organization, Hope Now, operates the hotline 24 hours a day.

How to Calculate the Interest Expense of a Floating Credit Line

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A floating credit line, also known as a variable interest rate line of credit, has interest expenses that change frequently. The floating interest rate is usually obtained by adding a margin, which is a certain number of percentage points to an index, such as the prime rate. The interest expense each month is based on both the current interest rate and the amount owed on the credit line. Floating credit lines are most commonly found on credit cards and home equity lines of credit.

Instructions

Look up how the floating interest rate is calculated by calling your lender or checking your line of credit origination documents. In particular, find out what index it is tied to and what your margin is. For example, your rate might be the six-month LIBOR rate plus 5 percent.

Look up the current index rate through a financial website, such as Bankrate. For example, at the time of publication, the six-month LIBOR rate was 0.40 percent.

Add your margin to the index to find your current interest rate. In this case, your current rate is 5 percent plus 0.4 percent, which makes 5.4 percent.

Divide the current annual interest rate by 1,200 percent to calculate your monthly interest multiplier. In this case, 5.4 percent divided by 1,200 percent gives a multiplier of 0.0045.

Look up your credit line balance on your most recent statement or the online account management page. For example, you might currently owe $9,241.

Multiply your current balance by the current monthly interest multiplier. For example, $9,241 times 0.0045 is $41.58, which is your interest expense for this month.

Repeat the calculations each month, taking into account the current interest rate and your revised account balance, including payments and charges from the previous month.

How Can I Stop My Salary From Being Garnished?

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When a creditor or a legal institution, such as the Internal Revenue Service, garnishes your salary, your employer is required to withhold a specific portion of your income each pay period until the issuing agency releases the garnishment. Though it can be hard to stop a garnishment once it has begun, there are ways to do so.

Before garnishing your paycheck, the debt collector sends you notices requiring you to pay the debt, or at least contact you to make some type of arrangement to pay off the debt. If you pay attention to the notices, you can stop your salary from being garnished. Contact the debt collector, and inquire about an affordable payment plan if you cannot pay off the debt in a lump-sum payment. The collector would prefer to work with you rather than going through the legal process of a garnishment.

Only a legal entity, such as the IRS, the United States Department of Education or the state taxation agency, can garnish without a court order. Anyone else must file a lawsuit, obtain a judgment and apply for a wage garnishment with the court in order to garnish your salary. When a creditor files a lawsuit, the court serves you with papers, which includes instructions on how to file an answer to suit. If you file an answer, the court schedules a hearing for you to tell your side to the judge. You can discuss why you haven't paid the debt or any objections you have toward it at the hearing. Legal institutions also send you a notice of their intent to garnish or levy your salary, which include instructions on how you can prevent it, such as by filing an appeal with the agency within the time frame specified in your notice.

If a wage garnishment is causing you -- or will result in you facing -- financial difficulties, contact the issuing agency for its procedures on filing a hardship claim. For example, you can contact the issuing court for its procedures on filing a claim of exemption, or for an IRS wage levy, complete Form 433-F and include your income and expenses. Federal law allows your employer to withhold up to 25 percent of your weekly disposable income for a wage garnishment.

If you cannot pay off the debt in a single payment, contact the debt collector to see if it will accept a settlement, which allows you to pay off the debt for less than you owe. The collector will likely agree to it if it's in the agency's best interest. The agency might also consider your ability to pay, your assets, and current and future income and expenses before agreeing to a settlement.

In some cases, you can challenge a wage garnishment. For example, if the statute of limitations to collect on the debt or enforce it has expired or if you were not served the appropriate papers, you can contact the court or issuing agency to dispute the garnishment. Filing bankruptcy is another way to stop wage garnishments, but keep in mind that it can stay on your credit for up to 10 years.

The Effects of Bad Personal Credit on Corporate Credit

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A personal credit score is a three-digit number that helps creditors determine your level of risk as a borrower. When you start a business, your individual score may be used in place of corporate credit. Corporate credit measures how well your business manages its credit accounts. Starting a business with a bad personal credit score can prevent you from opportunities to raise your corporate credit score.

Having a good personal credit score means increased access to capital when you start your business. For example, when applying to receive business loan from a bank, your personal credit score must be strong to qualify. Banks look for low-risk investments and will not make a business loan to a new entrepreneur with bad credit. Additionally, business credit cards become more accessible when you have good personal credit. When you apply for a business credit card and have no business credit, your personal credit score is used to determine whether you qualify. To expand your business credit score, you must know how it functions.

Business credit is measured on a scale of 0 to 100. The higher your credit score, the lower your risk as a borrower. For certain creditors, your company's credit activity is reported to the business credit bureaus monthly, including Equifax Business, Dun & Bradstreet and Experian Business. Having a business loan or credit card is the best way to ensure your credit activity is reported to the major credit bureaus. A good business credit score opens the door to a wealth of financial resources.

Your business credit accounts are linked to your personal credit score until you establish business credit. Each month you maintain a positive account history with your business creditors, it is reported to both the business and personal credit bureaus. Over time, your score will raise and you can detach your personal credit information from your business accounts. This protects you from damaging your personal credit score in the event the business suffers a financial loss.

The effects of bad personal credit are far-reaching. Starting a new business may prove impossible with reliance on outside financial resources if your credit is poor. For example, bad credit makes it difficult to be approved for business credit accounts, which means you are unable to build your business credit score. A high business credit score is essential for fast-growth companies as they often need access to large amounts of capital in short time frames. A poor credit score cripples the success of a fast-growing business. Strong business or personal credit is essential in the financial stability of your venture.

Can You Add Positive Information to Your Credit Report?

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Borrowing from creditors can be difficult if your credit report includes negative information concerning past due accounts and late payments. However, there are some ways to improve the information on your report as a way to rebuild your credit.

Although a credit report is based only upon the information that creditors provide to the credit reporting agencies, individuals are ultimately responsible for the way they manage their credit. As a result, maintaining a positive payment history on both revolving accounts and installment loans is the best way to add positive information to your credit report.

It is possible to add a friend's or relative's positive credit history to your credit report by having that person add you as an authorized user for one of their credit cards with a good payment history. This method not only adds positive credit history to your report, but may also give you a better utilization ratio and credit score because you will be using less credit than you have available to you.

You may not be able to add positive information to your credit report by opening a credit card account with a local business or financial institution. According to the Federal Trade Commission, some local retailers, credit unions, travel, entertainment and gasoline card companies do not report account information to credit reporting agencies.

Welcome to our website credit and debt managementr.

Saturday, December 31, 2005

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Friday, December 30, 2005

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Thursday, December 29, 2005

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Sunday, December 25, 2005

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Friday, December 23, 2005

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Wednesday, December 21, 2005

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Tuesday, December 20, 2005

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Monday, December 19, 2005

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