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New offers options to American consumers who need an effective debt reduction plan. We have settled over 150 million dollars worth of unsecured, credit card debt while saving clients thousands of dollars. AmeriGuard believes it is important to make an informed decision especially when it affects your financial health. Understanding your options can be overwhelming; that’s why we offer experienced, knowledgeable guidance along the way. provides the information you need to participate in creating a better future..

Sunday, April 30, 2006

Can They Take Your House If You Have Debt?

When you fail to make regularly scheduled debt payments, you fall into default. If you default on an unsecured debt or a debt tied to property other than your home, the creditor has no claim on your property and therefore cannot seize your home. However, if a creditor secures a debt by placing a lien on your home, then you can lose your home if you fall behind on your debt payments.

Home Loans

    Most instances of foreclosure involve mortgage companies foreclosing on delinquent borrowers. If you fail to make a mortgage payment within 30 days of the due date, your loan goes into default. Your lender can demand full payment of the entire loan balance once you go into default and if you fail to settle the matter, the lender can foreclose. The foreclosure process typically takes between three to six months to reach its conclusion.

Second Mortgages

    Paying your first mortgage on time does not protect you from losing your home if you fail to make payments on your second mortgage or home equity line. As a lien holder, the second mortgage company can foreclose on your home if you go into default. The lender files a foreclosure motion at your county courthouse, a foreclosure sale occurs and the proceeds are used to satisfy your first mortgage with any remaining proceeds go to the second lien holder. If your home sale does not raise enough money to settle both liens, the lien holders can, in some states, sue you in order to collect funds to settle the remaining debt.

Other Creditors

    When you fail to pay your credit card payments or pay vendors for goods and services, you default on your debt. Laws in many states enable creditors of all kinds to place a lien on your property when you fail to settle a debt. If the judge allows the creditor to place a lien, you must settle the debt owed or risk foreclosure. Creditors such as credit card companies can foreclose on your home even if you have made your mortgage payments on time. The foreclosure sale proceeds are first distributed to mortgage lien holders and any remaining funds go to the other creditors.

Non-Judicial Foreclosure

    In some states, homeowners associations have the legal right to foreclose on your home for non-payment of association dues. Typically, HOAs must go to court to foreclose on your home but some states have laws that allow for non-judicial foreclosures. In a non-judicial foreclosure, an HOA can foreclose simply by filing a foreclosure motion with the local county. You have no opportunity to defend yourself in court. Additionally, if you have no mortgage on your home, the HOA can sell your home for an amount equal to the association fees you owe. Therefore, you could lose your home for a few hundred dollars of debt.

How to Get a Garnishment Reduced

How to Get a Garnishment Reduced

A garnishment is a legal order that gives a debt collector the right to take your property or rights to property to fulfill a debt you owe. The Internal Revenue Service calls a garnishment a levy. A wage garnishment is one of the most common tools debt collectors use to recover debts. Federal law limits the amount an employer can withhold for a wage garnishment in a single pay period to 25 percent of disposable income. If the garnishment is causing you hardship, you can get the amount reduced.



    Establish hardship. To prove hardship, you must show that the garnishment is causing you financial duress and is preventing you from affording the basic necessities of life, such as food, rent/mortgage and utilities. Valid reasons include job loss, a medical condition that results in your inability to work or income reduction.


    Submit a hardship claim for a garnishment that is not court-ordered. Legal entities, such as the IRS and the U.S. Department of Education, can garnish without a court order. Contact the agency for its procedures on filing the claim. The IRS, for example, requires you to submit your financial details via Form 433-F, Collection Information Statement; the U.S. Department of Education requires you to request a hearing with its Hearings Branch if a student loan garnishment would cause extreme financial stress.


    Submit a hardship claim on a court-ordered garnishment. Court-ordered garnishments include those initiated by creditors for personal loans, as well as medical and credit card bills. Contact the court registry that issued the garnishment and schedule an appointment for a hearing. If you prove to the court that the garnishment is causing you -- and your family, if applicable -- financial hardship, the judge can order that you pay nothing for the time being or pay a reduced amount.

How to Deny a Breach of Contract With a Debt Collector

Typically, the complaint that a debt collector uses when suing you over an unpaid debt is breach of contract. It will claim that when you failed to make your payment, you reneged or breached your contract with the creditor. After making initial contact with you regarding the debt, the collector may sue you to collect the money it says you owe. If it sues, you will receive a summons from the court containing the collector's complaint. You must file an answer with the court within the time specified in the summons to deny the allegations.



    Look at the summons to determine how long you can wait to file your answer. The time varies depending on the state you live in, but is typically 35 days or less.


    Contact the clerk of the court that is overseeing the case to request an answer form if the summons does not contain a form for you to use.


    Fill in the top of the answer form with information acquired by reading the summons. Look at the top of the summons to find the name of the debt collector that is suing you and the docket number assigned by the court.


    Answer each point in the complaint with a denial in the space provided. States such as New York provide a check box for a general denial of all complaints that you can select to deny the breach of contract claim and any other claims by the debt collector without answering each paragraph.


    Write your affirmative defenses in the provided space. These defenses explain why you are denying the plaintiff's right to sue you for the debt such as the collector's inability to collect a debt in the court's jurisdiction or that the debt was never yours.


    Have a Notary Public notarize your statement if required by your state. Take your answer to the court clerk and request a court date. Send the debt collector --- or its legal representative --- a copy of your answer by certified mail.

Collection Agency Techniques

When you get behind on your payments, there is a strong chance that a debt collection agency will be in touch with you soon. Collection agencies are hired by companies to facilitate the collection of their outstanding accounts. If you are behind on your bills, here are some of the techniques that a collection agency might use.

Phone Calls

    One of the most common ways that collection agencies try to contact you is over the phone. They could potentially call your home phone, your cell phone or even your work phone. Collection agencies are not allowed to call you early in the morning or late at night. Some collection agencies will contact you multiple times per day while others might only call you periodically. When they contact you, they have to speak to you without using any profane or harassing language, according to the law.


    Another way that many collection agencies choose to contact people is through the mail. Sometimes you will receive a regular letter from them, while other times, they may send you a certified letter. If you choose, you could ask the collection agency to only contact you through the mail and avoid phone calls. Many times, a collection agency will contact you by phone and then send you a notice in the mail so that you can see exactly how much you owe. This notice generally will include a statement from the account in which you are overdue.


    If you fail to respond to the initial efforts of the collection agency, they may decide to file a lawsuit against you. In this case, you would be served a summons from your local court. You would then need to settle the case out of court or appear in court to argue your side of the case. In most cases, if the debt is valid, the court will rule in the favor of the creditor. At that point, they could then require you to make monthly payments or the court could garnish your wages to repay the debt.

Taking Payments

    Some collection agencies will provide you with the option to make payments. While some agencies may request payment in full, you can usually work out a payment plan with them. When you set up a payment plan, collection agencies are not allowed to charge interest on the amount that you owe. They also cannot charge any fees for taking the payments.

How to Create a New Credit File Fast

How to Create a New Credit File Fast

If your credit history has taken some hits, starting over with a new credit file can seem like a good solution. However, it's not that easy to sweep old mistakes under the rug. And there's no way to create a completely new credit file, especially in a short time. However, this reality doesn't stop businesses from trying to sell a fast, easy solution to desperate consumers.

To start fresh and bring new life to a dinged credit record, there are some steps you can take to help the process. Cleaning up credit the right way takes time and money but can show results in as little as one month.



    Scan your credit report to find errors. A significant percentage of reports contain old entries that can lower a credit score, and credit bureaus are responsible for investigating mistakes. According to the FTC, "Both the credit reporting company and the information provider (that is, the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report." Taking care of these old mistakes can lift a credit score by a significant number of points.


    Choose carefully which accounts you choose to pay off. Most old debts fall off a credit report within seven years. If a debt is very old and can't be taken care of immediately, paying in installments can start the clock once again. So tackle the debts that can be paid off the quickest.


    Call the creditor and arrange to get a "paid in full" or "paid as agreed" notation on any newly cleared debts. Although your credit score may not change, a new lender may think twice about doing business with a customer who simply has "paid" notations. To them, this shows that the debtor couldn't pay the debt in full in the time allotted. Todd Ossenfort of Creditcards.com states, "Although the account will be marked paid, it will be not be marked paid-as-agreed, which is how you want any account that has a negative listing to be resolved. "


    Add some new debt lines to your report and pay them in a timely manner. Ideally, payments on these new credit lines should take place before the payment due date, with new charges taking up less than 10 percent of available credit. Good avenues for new credit include a small installment bank loan, a store charge card or a secured credit card through a credit union or consumer bank.


    Cultivate new money habits to avoid falling into the same debt trap. Cleaning up a credit report can be an arduous process, so be diligent and spend conservatively in the future.

Saturday, April 29, 2006

How Long Do You Have to Wait to Refinance a Mortgage?

Very few, if any home mortgage agreements disallow refinancing. They can, however, require prepayment penalties for early payoff. The right amount of time before you refinance depends on what type of loan you currently have, what type of new loan you want and your personal situation. Often, just because you can refinance your mortgage doesn't mean you should.

Current Mortgage

    Read your current mortgage note. When you closed your last mortgage, your title company or attorney should have given you a copy of everything you signed. Your mortgage note will be included in these documents. Your note will disclose any prepayment penalties and their requirements. Usually these penalties are for the first two or three years, and are for a percentage of your loan's balance. If you cannot find your note, call your mortgage servicer and ask if your loan has a prepayment penalty and if so, what it is.

New Mortgage

    Decide why you want a new mortgage. There are many valid reasons for a new mortgage: You may be able to save hundreds of dollars each month; you may want to access some of your home's equity for other purposes; or you may simply want to shorten or lengthen your mortgage's term. All of these are common reasons to refinance. Comparing your goals for the new mortgage with your current loan helps you determine if you are making the right decision for your situation.

Cost Considerations

    Your current mortgage required closing costs. They were paid in one of three ways: You paid all of them upfront and received a lower than average interest rate; your mortgage lender paid all of them for you and you pay a higher than average interest rate; or your lender shared the expense with you and you have an average interest rate. No matter the option chosen, there was a cost to close your last loan. If you have not had your loan for very long, you should consider any new costs along with the costs of the last loan when determining if the new loan is worth the cost.

Refinancing Options

    You have options other than refinancing your first mortgage loan. Second mortgages are usually less expensive to obtain than a new first mortgage, as most fees are based on the loan amount. A $25,000 second mortgage usually costs less than a new $250,000 first mortgage. The interest rate is usually higher but the fees are often less. If you only want to lower your interest rate or change your loan term, contact your current mortgage servicer. They may have programs available only for current mortgage clients that might be faster and less expensive than finding a new lender.

Friday, April 28, 2006

Can a Collection Agency Put Things on My Credit Report That Are Not From the Original Creditor?

A credit report lists items from original creditors and collection agencies along with identifying information and public information. Three credit reporting agencies are responsible for compiling and maintaining the information in your credit report. Consumers are responsible for monitoring their credit report to ensure accuracy. Consumers can dispute inaccuracies with the reporting agency. If the item is deemed incorrect, it will be removed from the credit report.


    A third-party collection agency takes over delinquent account collections from the original creditor. Original creditors may have internal collection departments for recent account delinquencies --- typically within six months --- but third party collection agencies are separate companies that work on commission for the original creditor. Debt buyers are another type of collection agency. A debt buyer purchases the delinquent account after the original creditor designates it as a charge-off.


    Debt collectors can report debts to the credit reporting agencies as a collection account. Interest and other accrued fees that were not from the original creditor may also be reported. For example, if your credit card account was listed as a charge-off on your credit report by the original creditor, the debt collector or debt buyer can also report the account as a collection. The amount owed will likely be different from the original creditor as interest will continue to accrue on the unpaid balance.


    Delinquencies, collections and charge-offs can remain on your credit report for seven years from the date of the original delinquency. After seven years, your obligation to pay the debt does not disappear, but the listing on your credit report should. Collection agencies may continue to submit the data to the credit reporting agency, but you can have the item removed by filing a dispute.


    The Fair Debt Collection Practices Act --- FDCPA --- sets the rules and regulations that debt collectors must follow. FDCPA rules do not apply to an original creditor, only third-party debt collectors and debt buyers. The FDCPA regulations are enforced by the Federal Trade Commission (FTC). The Fair Credit Reporting Act (FCRA) outlines consumer's rights regarding the information in their credit report. Each person is eligible for a free credit report once each year, more often if they have been denied credit, employment or insurance based on information in the file.


    Third-party debt collectors can put things on your credit report that are not from the original creditor. They may not change the dates of the original delinquency, but they may list the account as a collection account, whereas the original creditor may have listed the account as a charge-off. Debt collectors can also report a different outstanding balance than the original creditor listed due to continuing interest and other fees being added to the account.

Debt Reduction Worksheets

Debt-reduction worksheets are available free online, but they can only be useful to people who are committed to putting their spending in check. Spending control is as big a part of debt reduction as is paying off bills. That's why debt-reduction worksheets usually require people to list their debts so that they can get a realistic picture of how much they're spending.

Snowball Strategy

    Consumer Counseling Centers of America, CCCA, offers two free debt-reduction worksheets on its site that can be used with Microsoft Excel or an OpenOffice spreadsheet. One worksheet includes a calculator that people can use to create a debt-reduction plan based on the monthly payments they enter into the calculator. The other worksheet is a printable payment schedule that helps users track their progress in reducing their debts. CCCA notes that its worksheets allow users to create a debt-reduction plan based on the snowball strategy, which involves paying off one debt and then rolling the previous payment amount for that debt into another debt to pay if off quicker.

Rates and Rewards

    The Motley Fool financial services media company has worksheets on its website to help people size up their debt situations and create debt-reduction plans. One worksheet allows users to list all of their debts along with interest rates and balances. Another worksheet helps people make a plan for reducing their interest rates by contacting their creditors to ask for lower rates. This worksheet even includes a script that shows people what to say to their creditors as they try to negotiate a rate reduction. A third worksheet can be used to schedule some inexpensive rewards for yourself each time you reach a debt-reduction goal.

Debt-free Deadlines

    The CNN Money website includes a debt-reduction worksheet and calculator that focuses on credit cards and allows users to set a debt-free deadline. Therefore, you can choose how long you want to take to pay off all of your credit cards, and the calculator will indicate how much you have to pay each month to reach your goal. You also can calculate how long it will take you to pay off your cards if you make the required minimum monthly payments or some other fixed monthly amount of your choosing.


    An article posted on the "Kiplinger's Personal Finance" magazine site says retirement-savings plans shouldn't be sacrificed to pay off debt in some cases. The article titled "Save for the Future or Pay Off Debt Now" says people who work for companies that match their contributions to 401k plans should take advantage of those plans because they can offer a 100-percent return on an employee's investment. However, the article makes an exception for consumers who are buried in debt and says those people should pay off debts before building retirement savings. The Kiplinger site includes a worksheet to help you determine whether to pay off your debts or invest in savings. The worksheet can estimate how much you'll save in interest charges by paying off debt and how much you'll earn if you invest instead.

Thursday, April 27, 2006

How to Get My Name Off of a Cosigned Education Loan

Many education loans from private lenders require student borrowers to have a cosigner. As a cosigner, you vouch for the student by putting your own money and credit on the line. If the student makes late payments, these appear on your credit report. If the student defaults on the loan, the lender will pursue you for repayment. Because your agreement to cosign is a legally binding contract, the lender has no obligation to remove your name from the loan. However, there are a few ways to do this with the cooperation of the student borrower and the lender.


Cosigner Release


    Contact the lender and ask whether the loan qualifies for cosigner release. This is a lender courtesy process of taking the cosigner's name off of the loan after the student borrower makes consistent on-time payments and has a good credit history.


    Fill out the cosigner release form with the help of the student, and mail it to the lender.


    Remind the student to continue making on-time payments while the application is processed. A late payment could cause the lender to reject the application.

Refinance Loan


    Tell the student borrower that you would like her to refinance the loan. Ask her whether she knows her credit score. If her score is good, she might be able to refinance without a cosigner. If she is still only a year or two out of college and has missed payments or maxed out credit cards, she probably will need to find a different cosigner to refinance the loan.


    Help the student borrower think of other people to ask to be a cosigner on the refinanced loan. Options include her parents, grandparents, aunts, uncles, adult siblings, spouse or close friends.


    Research potential lenders for a student loan refinance. These include not only her current lender, but also other banks, credit unions or online lenders. Choose a few with the best interest rates and terms on the loans.


    Help the student apply for a student loan refinance with one of the chosen lenders. When the refinance is finalized, the loan you cosigned will be paid in full, and you will have no further obligations.

Tuesday, April 25, 2006

How to Make Money With Credit Repair

Credit plays such an important part in our lives today that poor credit can hinder us from finding employment, an apartment, buying a home, buying a car or even taking out an insurance policy. Credit repair has become a big business, and if you are a credit repair expert, than you can make money with credit repair services.



    Counsel clients per hour or half hour. During a counseling session, teach your clients the importance of credit repair and explain the steps needed to take in an effort to repair their credit. Do some research and see what the average cost of a credit counseling session is. If your goal is to sell additional services, offer a discount if they sign up.


    Offer monthly services to conduct credit repair for clients. Since credit bureaus must verify everything within 30 days, the credit repair process can be repeated monthly until the credit report is cleaned up. If you land many clients, you can have a steady monthly income. Consider postage expenses when setting fees.


    Write and sell an ebook outlining what consumers can do to repair their credit themselves. Sell the ebook on your own website, Amazon or ebay. If you are able to market it properly and it takes off, consider adding specialized ebooks.


    Have a seminar and charge a minimal fee per attendee. Teach attendees the ins and outs of credit repair and offer your specialized services. This is a good time to promote monthly credit repair programs as well as any ebooks you might have for sale.


    Work with Realtors, divorce attorneys and loan officers to promote your services. These professionals see people all the time who need to repair credit. If you work hand-in-hand with them, you can drastically increase your business clientele and continue to gain referrals.

Can I Make an Agreement After I Got Sued for Credit Card Debt?

Can I Make an Agreement After I Got Sued for Credit Card Debt?

Some consumers ignore credit card debt until a creditor files a lawsuit. But even after being sued for credit card debt, you can make an agreement with the creditor in which you promise to pay the debt. Agreeing to pay credit card debt after being sued prevents a creditor from taking further action to collect the debt, such as garnishing your wages or levying your bank account.

Avoid a Lawsuit

    A creditor or debt collector may threaten a lawsuit before filing papers. Take the creditor's threats seriously and make arrangements to pay the debt. Failure to pay may eventually lead to a court hearing. Going to court increases the likelihood of being found guilty and having a judgment on your record for the next seven years. Past delinquencies and judgments harm credit scores and can trigger rejections if you need financing for a car or house.

Paying a Judgment

    Repairing the relationship with a credit card company entails satisfying the judgment order by paying the past-due balance. Paying a judgment will clear the outstanding balance on your account, but this move will not remove the judgment from your report. Any creditor pulling your credit history for seven years after the judgment will see this derogatory information. Establish an agreement with your creditor where it agrees to update your credit report and list the judgment as "paid."

Settlement Offer

    Creditors are usually eager to recover some of the outstanding balance owed, and some creditors work with debtors to settle the balance after a lawsuit. This is often the case when a debtor files Chapter 7 bankruptcy and petitions the court to erase his liabilities. Debtors who cannot afford to pay a debt in its entirety can make an offer for less than what's owed. Creditors then counter the offer or accept the amount.


    Settling a credit card debt after a lawsuit may trigger a credit-report update that reads, "settled for less than balance owed." This notation also has a negative impact on credit ratings because you didn't fulfill your obligation with the credit card company. This can hinder approvals for future credit cards. Talk with your credit card company and inquire as to how it plans to report the debt settlement. Push for the company to report the debt as "paid as agreed." Get this agreement in writing before writing a check for your final payment.

Monday, April 24, 2006

Facts & Figures on Debt

Facts & Figures on Debt

At the time of publication, the total outstanding debt of the United States government is $14,215,744,197,688.26 -- or roughly $14.2 trillion. That represents the equivalent of $46,000 per person living in the U.S.; $121,000 per household; and $303,000 for each household that pays more federal taxes than it receives in federal benefits. American consumers appear to be following suit, but they are getting into debt just to keep food on the table, gas in their vehicles and current on their bills paid.


    Debt has presented an ongoing problem in societies for thousands of years, from those times when you could literally be enslaved or dumped into debtor's prison for unpaid debts, to more recent times, which have seen record numbers of personal bankruptcy filings. Roughly 40 percent of American families spend more each year than they earn. When people use credit cards in fast-food restaurants, they are likely to spend up to 50 percent more than they would by using cash. In 1791, the U.S. national debt was just $75 million; at the time of publication, the national debt rises by that amount every hour.


    If you take 1 trillion $10 bills and tape them end-to-end, they would stretch around the planet more than 380 times, yet it would not be enough to pay off the national debt. By the time President Ronald Reagan left office, the United States had gone from being the world's largest creditor for other nations to the largest debtor nation. The average personal wealth -- including home equity -- for a 50-year-old American is less than $40,000 at the time of publication. One out of every 20 bankruptcies is due to medical bills, with the typical health-care debt reaching $25,000. Often, the bankrupt individual is an elderly person on a fixed income, and the debt is largely due to pricey medications paid for with high-interest credit cards.


    The average household debt in the U.S. is around $14,500, not including mortgage debt, with the average credit card debt per family at around $8,400. The average family pays roughly $1,200 a year in credit-card interest. Charging $1,000 on a credit card -- at an interest rate of 18.9 percent -- will end up costing $3,300 and take 22 years to pay off, for those making minimum payments only. In September 2009, Federal Reserve statistics revealed that Americans owed $917 billion on revolving credit lines, including $69 billion that was past due.


    For every dollar the federal government spends, it must borrow 41 cents. The national debt has grown by an average rate of 8.5 percent each year since 1938. When President Barack Obama took office in 2009, the national debt stood at nearly $10 trillion, and after two years in office, he added $4 trillion more to the debt. The most recent budget proposed by the president predicts another $5 trillion in deficits over the next five years.

How Much Interest Do You Have to Pay on a 10,000 Dollar Loan?

When you borrow money, not only do you have to gradually pay back the money you borrowed, the principal, but you also owe interest, which can make up a significant portion of your repayment. The amount of interest you will have to pay on a loan of $10,000 depends on a few factors.

Interest Rate

    The single most important factor in calculating how much interest you have to pay is the interest rate. The interest rate expresses the percent of your principal balance that you owe in interest each year. Your interest rate varies, depending on your credit score and the type of loan you got. Secured loans and federal student loans have lower interest rates than unsecured loans. Calculate your monthly interest rate by dividing your annual rate by 12. Multiply your monthly rate by your balance to find out your monthly interest payment. For example, if your interest rate is 6.8 percent, your monthly rate is 0.567 percent or 0.00567 when expressed as a decimal. In this case, your monthly interest would be $10,000 times 0.00567, or $56.70.

Repayment Term Length

    Most loans are amortized, meaning that you have monthly payments of a fixed amount for a fixed length of time. The longer your repayment term, the more interest you will have to pay overall. For example, if you repay $10,000 at 6.8 percent interest over 10 years, your monthly payment is $115.08 and you pay a total of $3,809.64 in interest over those 10 years. If, on the other hand, you stretch out your repayment over 20 years, your monthly payment drops to $76.33 but you pay $8,320.15 in interest over 20 years. This is because you are reducing the principal balance more slowly, and therefore the interest calculation each month is larger than it would be if you owed less.

Extra Payments

    If you make extra payments on your loan, you will pay less interest than if you stick to the repayment schedule. Each extra payment you make goes entirely toward paying down the principal balance. This, in turn, reduces your interest payment each subsequent month. For example, if you had a loan for $10,000 at 6.8 percent interest with a 10-year repayment term and you made an extra payment of $1,000 at the end of the first year, you will pay off the loan 15 months earlier than scheduled. Your total interest cost will be $3,042.51, which is $767.13 less than it would have been without the extra payment.

Calculate Your Loan

    Use an online loan calculator to find out how much interest you will have to pay on your $10,000 loan. To use the calculator, you need to know the interest rate on your loan and the length of the repayment term. Enter these numbers into the calculator to find out your monthly payment. View the amortization table to see how much of each monthly payment is interest and how much total interest you will pay. You can also enter extra payment amounts to see the effects they would have on your interest costs.

How to Keep a Credit Score in Good Standing

How to Keep a Credit Score in Good Standing

A credit score is the tool used to measure your financial trustworthiness. Good credit scores mean that you will be able to get a loan or credit card at a better interest rate than if you have a bad score. A high credit score shows banks, department stores and other creditors that you are less of a financial risk. Having a bad credit score may make it difficult for you to get a loan, mortgage, rent an apartment or purchase a new vehicle. It is important to maintain a solid credit score in case you need to borrow money.



    Budget your money each month. Make a simple budget in a notebook that shows the bills you owe each month, the amounts you give to charity, your savings goal and the amount needed to pay all your bills, including those that only come due quarterly, semiannual or annually.


    Pay your bills on time or before they are due each month. Whether you pay your bills online or send them via mail, you need to allow extra time for the place of business to receive and process your payment so that it is credited to your account by or before the due date. Consistent and on-time payment of your bill each month is one of the best ways to keep your credit score healthy.


    Choose a home with payments that will only require 28 to 33 percent or less of your income each year, according to the CNN Money website. (see reference 3)


    Keep your debt at an acceptable ratio in comparison to your income. Even if you have never been late on a payment, the creditors will look at how many credit lines are available to you and assess your risk of getting in "over your head" financially.


    Use credit wisely. Just because credit is available to you does not mean you should abuse it. Many people assume that a financial crisis will not happen to them or that can keep their finances under control. However, it only takes one major mishap to cause precariously placed financial blocks to tumble.


    Establish an emergency fund. Financial experts like Dave Ramsey advocate keeping at least $1,000 in an easily accessible savings account (see reference 2). This will prevent you from having to use credit cards when a financial crisis arises, thus incurring major debt that can negatively affect your score.

Sunday, April 23, 2006

The Advantages of Credit Card Usage

The Advantages of Credit Card Usage

It seems no matter where you go these days some merchant, bank or retail company is asking you to sign up for a new credit card. Some waive the application fee while others eliminate yearly fees altogether. Before you sign up for a new credit card, or decide to get rid of the ones you already have, it's time to learn what makes credit card use advantageous.

Fraud Protection

    Credit cards offer consumers protection under the Consumer Credit Act, which means every time you use your credit card, or someone who is not authorized to use it makes a purchase, those goods and services are protected against fraud. This protection is not guaranteed with other payment methods including some debit cards. If a fraudulent purchase is made, you must contact your credit card company immediately to cancel the card.

Bonus Incentives

    Credit card companies offer card holders bonus incentives such as frequent flyer miles, merchandise, cash back, reward points and affiliate discounts. A card holder is eligible for these and other bonus incentives just by swiping his card. The more a card holder spends at the register, the more bonus points or rewards he can earn. You can track each rewards programs by going to the credit card company's website or viewing your billing statement.

Proof of Purchase

    Cash is easy to lose and can attract thieves when kept in large amounts or when traveling in a foreign country. Consumers should also use credit cards in place of cash when purchasing items for work or when purchasing items for which reimbursement is required. If you lose your original store receipt, it is easy to request a billing statement or copy of the merchant's receipt from your credit card company. Either document will show proof of purchase.

How to Reduce Student Loan Rates

How to Reduce Student Loan Rates

For some, student loans are a necessity. While you're still in school, the amount you have to pay back later doesn't seem like much, but when you're facing your first bill on an entry-level salary, you'll start to wonder how you'll ever pay it all back. There are now several ways to reduce your rates on student loans, and even your payments, just by taking a couple of hours to do a little research and make some phone calls. Soon you'll be facing a smaller payment each month, and you can look forward to the day you have a zero balance on your loans.



    Research grants and scholarships before looking into financing your education with student loans. There's a lot of money available for students, and some schools will put a cap on how much you can borrow, or will help you find grants to pay for schooling. The less you borrow before leaving school, the less you will have to pay back.


    Consolidate your loans after graduating. A lot of students have multiple loans with different lenders at different interest rates. Consolidating your loans can reduce the interest rate and your monthly payment. Federally funded student loan consolidators tend to have lower interest rates than private consolidators, so use a debt calculator to compare.


    Research loan forgiveness programs. One program, the Public Service Loan Forgiveness program, will forgive loans after 10 years of full-time public service employment, and at least 120 payments. There are also other loan forgiveness programs for members of the military or the Peace Corps, as well as for teachers and medical or legal workers.


    Look into direct debit repayment. Lenders will often reduce interest rates if they can direct debit your bank account, since this will give them assurance that you'll pay on time every month.


    Pay off a little more than you owe each month if you can afford it. Lenders will estimate a repayment plan based on a fixed repayment period, so paying a little more each month will reduce your loan faster. You'll also pay less in interest this way.


    Apply for income-based repayment. Based on your income, lenders will cap monthly payments at below 15 percent of your monthly income. This does increase your interest rate in the long run and adds to the amount of time it takes to pay off your loan, but it will keep your loan manageable for the first couple of years.

Saturday, April 22, 2006

Process of Buying a Leased Car

When you first sign your car lease agreement, it may have a special condition included called a buyout option that allows you to purchase the vehicle at lease-end if you wish. So if you grow attached to the vehicle during the lease period, you can start the process of buying it from the dealership instead of turning over the keys.

Lease Terms

    The first step in the process of buying a leased car is to review the original lease. Determine the residual value listed, which is likely the amount the dealer will use to propose the final sales price. Check the agreement for any additional fees associated with the buyout option. Keep in mind that you still have to pay additional lease-end fees as well, such as costs for going over the included miles associated with the agreement.

Blue Book Value

    Investigate the Kelley Blue Book value of the car before agreeing to pay the dealer's suggested price based on the residual value. The estimated value of that particular year, make and model of the car at the beginning of the lease may change over the years. You don't want to end up paying more than what the vehicle is worth on the market.

Inform and Negotiate With Dealer

    Inform the dealer of your possible plans. Call or visit the dealer before lease-end. Make an offer based on the Blue Book value to begin negotiations on the price --- the same way you would if you were walking into a dealership for the first time to make a purchase. Keep in mind that the dealer may choose not to come down on the price and stick with the selling price as outlined in the original agreement. If the dealer won't budge on the price, you may find that you're better off just buying another car of a similar style and year at a better deal.

Find Financing

    Once you agree to a final price for the leased car, the next step is getting financing to purchase the vehicle. Don't assume that the same financing company that arranged the lease will automatically loan you money to make the purchase. You may have to call around to other lenders to seek approval for a new auto loan with standard payments containing both principal and interest costs.

What Are the Benefits of a Consolidated Credit Counseling Service?

What Are the Benefits of a Consolidated Credit Counseling Service?

According to the Index Credit Cards website, the average person has $3,752 of credit card debt, while the average household has $7,394 of credit card debt. Other debt includes student loans or personal loans. Some people find themselves burdened with debt payments, unable to escape financial trouble. Consolidating debt with the assistance of a credit counseling service offers the beleaguered consumer a variety of benefits.

One Monthly Payment

    An important advantage of consolidating your debt through a credit counseling service is that you only need to make one regular payment each month. Instead of writing multiple checks or making several online payments each month, all for different amounts, one easy to track payment is made for an amount that never changes for as long as you have that debt.

Reduced Interest

    Another advantage to consolidating your debt through a credit counseling service is that the credit counseling company will negotiate lower interest rates on all your debts. Counselors have established relationships with credit card companies allowing the credit counseling service to request lower rates that you could likely not negotiate yourself. The lower interest rates save you money in the long run by reducing the amount of money you pay to credit card companies and other creditors.

Waived Fees

    Like reduced interest rates, credit counseling companies are able to get credit card companies to waive various fees on your accounts. These charges include late payment fees, missed payment charges or over the credit limit fees. Waiving these fees reduces your debt to the credit companies and helps you get out of debt faster. If your bills are past due, you might be charged a fee every month, so getting these fees waived is advantageous.

End in Sight

    When you consolidate your debt through a credit counseling service, you are given a set monthly payment amount, as well as a schedule for when you will be out of debt, as long as you make all your payments as planned. This gives you peace of mind of knowing exactly how long it will take to be debt free. It might take a few years, possibly more, depending on how much debt you owe.

Financial Advice

    Many credit counseling services also offer financial advice and guidance as part of its service. The company can help you get out of debt and give you the resources and skills necessary to ensure you never get back into debt. Your credit adviser can help you set up a budget and develop a plan to avoid falling back into old spending habits.

Can Creditors Garnish Wages for Money?

If a person is in debt, he risks having this debt collected forcibly, through the garnishment of his wages by a creditor. Garnishment happens when a creditor gets a civil judgment against the debtor and then asks a judge to enforce this debt through the imposition of a garnishment, in which the debtor's assets are seized from the person's employers. Garnishment can happen in only some cases, though.


    All garnishment must be authorized legally through the permission of a judge. No garnishment can be conducted unless a judge first approves it. The only way is for a creditor to win a lawsuit and be awarded damages that the debtor must pay. However, there are a number of situations in which a person cannot garnish another person's wages.

People Exempt from Garnishment

    There are a number of parties exempt from garnishment. Often, according to state law, a person cannot have his wages garnished if he is not making enough money. This is particularly true if the person has children or other dependents to support. The exact income limit below which a person cannot have his debts garnished depends on state law. In no case can a person have more than 35 percent of his wages garnished.

Types of Debts

    There are only some types of debts that can result in garnishment. The rules for which kinds of debts can be garnished and which cannot depend on the state. However, in nearly all cases, debts owed to the government, either state or federal, can come out of a person's wages. A person should check with an attorney to determine whether his private debt is garnishable.

Types of Income

    There are also certain types of income that cannot be subject to garnishment. For example, many types of retirement and disability benefits cannot be garnished, nor can they be frozen and removed from a bank account. In addition, most federal benefits cannot be garnished, except by state and federal government. Sometimes tax refunds can be garnished, but generally only by governments -- except in Michigan, where private creditors can apply to garnish a refund.

Friday, April 21, 2006

How to File a Labor Lien in Oklahoma

Every state, including Oklahoma, has a law allowing contractors to place a lien against the property they are working on to secure payment for services rendered. This legal practice is referred to as a "construction lien," "labor lien" or a "mechanic's lien." Filing for a labor lien is a relatively straight-forward process.



    Prepare a pre-lien notice. The notice must say it is a pre-lien notice and contain the following information: your name, address and telephone number; the date(s) you supplied labor, materials or other services to the project plus a general description for each; the name and last-known address of the owner; the address, legal description or location of the property where you performed the work; and the amount owed. You must also sign the notice.


    Serve the owner of the property with the pre-lien notice. National Lien Law recommends serving the notice by certified mail with a return receipt requested. You must do this before you file the lien and also within 75 days of supplying work or materials. Failure to provide pre-lien notice makes the lien invalid and unenforceable.


    File the lien at the county clerk's office in the county of the project location. Some counties will charge an administrative or processing fee.

How to Buy a Computer Online With Financing for Bad Credit

In this day and age, having a computer is vitally important. Not only are they useful for surfing the web or checking email, you can use special programs to develop a budget, write your resume or research a project. Without a personal computer you would have to do these task at the library or an Internet cafe where security is not as tight.

But what if you have credit trouble? Chances are your won't be able to afford a computer outright, so you'll need some financing. But your choices may be limited due to bad credit. Not to fear. With a little legwork and common sense, you should be able to find a computer you can afford.



    You should already have a monthly budget in place, especially if you have debt issues. Determine how much you can reasonably afford to put toward a computer. In particular, try to figure out how high an interest rate you are prepared to take on.


    Save some money for a down payment. Some companies might claim that no down payment is necessary but then they ask you to make a set number of payments before they ship the computer to you. Even if you could get a computer without a down payment, you have to pay that much more with interest in the long run.


    List what you want to do with your computer. This can be as simple as surfing the net or doing your taxes. Having a good idea of what you want to accomplish will help your pick out what kind of computer you want.


    Find a company that specializes in computer sales to people with less than stellar credit. Blue Hippo and 123ComputerFinancing are some popular companies. Carefully read through all the material on the website and call their customer service line if you have any questions, but don't be pressured into making a decision on the phone. Also make sure that they report your payments to major credit bureaus. This can help build your credit in the long run.


    Find a computer you like based on your preferences and sign up.


    When the computer arrives, immediately check for any damage and keep all documentation handy in case you need a return or exchange.

How Can I Get a Loan or Grant if I'm Unemployed?

Getting a loan or grant while unemployed depends a lot on your overall financial situation. People with other forms of regular income, such as monthly retirement pay, may easily qualify for loans while unemployed. However, people relying solely on unemployment may not qualify for most loans because of insufficient income. Community-based grants are sometimes an option for unemployed people who are suffering from extreme hardships, but the help isn't widespread. Government grants are usually not an option. As of 2011, local, state and federal governments do not offer grants to people based only on unemployment.



    Contact a local charity such as the Salvation Army, United Way or a local chapter of the National Urban League. Describe your unemployment situation and financial status to a counselor. Ask for information about community grants. Churches and charities may offer one-time financial assistance to individuals and families struggling with unemployment. However, large cash payments of several hundred dollars are unlikely, as requests for help usually exceed available resources.


    Borrow against a retirement or pension plan, if possible. Review your retirement holdings and call the customer service numbers for various plans you own. Ask if you are eligible for a loan. Loans from your retirement plan may not require proof of income, employment or even a credit check.


    Apply for a loan from a bank or credit union if you have other forms of regular income. Apply anyway even if you don't have income other than your unemployment benefits. The bank could turn you down -- or approve the loan if you offer significant collateral, such as a certificate of deposit already on deposit at the bank or vacant land that you own. Approval depends on your specific situation, including your credit score, other debts and relationship with the bank.


    Take a cash advance on a credit card you already have. Cash advances are loans, but they are expensive. Credit card cash advances usually feature an interest rate higher than the interest rate on regular credit card charges. Other fees are applicable as well. Ideally you should avoid this option because excessive credit card debt can lead to bankruptcy, especially during unemployment.


    Get a payday loan. Payday loans are short-term loans with very high interest rates. Rates can exceed 300 percent, according to the Federal Trade Commission. Some online payday loan lenders offer loans without income or employment verification. However, the FTC strongly urges people to take the loans only if they have no other options. Network with friends and former co-workers in similar financial situations to find names of online payday loan companies offering loans without employment verification.

Can Financial Aid Returns Be Garnished?

Financial aid distributions arrive at a student's educational institution first, where the funds are applied to tuition and other fees required for attendance at the school. The remainder of the financial aid funds are then distributed to the student by check or electronic deposit. Federal law offers protection against the garnishment of financial aid distributions.

Garnishments Defined

    A garnishment is a legal order that instructs an employer or financial institution to withhold a certain portion of a person's money. The writ of garnishment served on the employer or financial institution includes instructions about where to send the garnished funds, such as a specific creditor or to the court. A garnishment may occur once or several times, until the amount of money granted by the court has been collected. A garnishment may also be executed by a federal agency, such as the IRS, or a state tax agency.

Student Loans

    Student financial aid, which assists students in paying for tuition, books and other costs associated with attending an educational institution, enjoy an exception that protects the funds from garnishments. Grants, loans and even work assistance that are awarded to a student, including "property traceable to such assistance," per U.S. Code Section 1095A, cannot be subjected to garnishments. This provision protects students from having to drop out of school because of garnishment actions, meaning students can continue attending school without fear of their educational pursuits being disrupted.

Federal Limits

    The federal government has placed restrictions on the amount of a person's income that can be garnished, protecting at least a portion of a person's income so he can pay for living expenses. The maximum amount that may be garnished from a person's weekly pay is either 25 percent of that person's income or the amount of the person's income that is beyond 30 times the federal minimum hourly wage, whichever amount is less. The garnishment may not consume more than 60 percent of the person's disposable income for the week.

Other Exceptions

    Any portion of a person's income that has been designated as going toward state or federal taxes owed by that person is exempt from garnishment. Money from a person's pay that is set aside for alimony and child support payments also are protected from garnishment. If a person is supporting a spouse or child, a garnishment may only take only up to 50 percent of that person's disposable income.

Thursday, April 20, 2006

Debt Reduction Compared to Consolidation

Debt Reduction Compared to Consolidation

Debt consolidation involves taking out a low-interest loan and using that to pay off your higher-interest obligations. Essentially, with debt consolidation you're moving all of your debt to a single low-interest creditor to reduce your monthly payments. While consolidation can help you get out of debt faster, it has to be seen as one part of a complete debt management strategy -- not as a magic bullet that will take care of all of your financial woes.

Debt Consolidation Companies

    There are many for-profit debt consolidation companies that seem eager to give you a loan to pay off your high-interest debts. MSN Money personal finance expert MP Dunleavy cautions strongly against using a debt consolidation company's services. In return for giving you a consolidation loan and negotiating lower rates with creditors, you'll have to pay the debt consolidation company a fee, likely rolled in with the single monthly payment that it quotes you. It's not smart to pay someone to do what you could do on your own: get a consolidation loan through your bank and talk to creditors about lowering interest rates and payments. Furthermore, Dunleavy warns that consolidation companies sometimes pay creditors late or miss payments altogether, which hurts your credit score. It's a safer move to take money matters into your own hands.

Debt Management Companies

    These outfits are similar to debt consolidation companies, minus the low-interest loan. They work to make your financial situation a bit more comfortable by negotiating lower interest rates and longer debt repayment terms. According to top-selling personal finance author Dave Ramsey, using one of these services kills your credit rating. Apply for a mortgage after going to a debt management company and you'll be treated the same as someone who filed for bankruptcy.

What You Should Do

    According finance expert David Bach on the money and personal finance website Wallet Pop, debt reduction must be accompanied by changes to your spending habits. Don't rely on debt consolidation alone to get you out of a sticky situation, but make it part of an overall debt reduction plan. Stop falling victim to "buy now, pay later" marketing schemes. Stop using your debit and credit cards altogether for awhile, until you get your spending situation under control. Create and stick to a cash budget for your regular monthly expenses. Call creditors on your own and negotiate lower interest rates. Don't be shy. If you've always made at least the minimum payment to your credit card company on time, you have grounds to request a lower interest rate. Visit your bank and see if you can qualify for a low-interest consolidation loan. Move as much of your higher-interest debt over to this loan as you can. Finally, focus on paying off just one creditor at a time. Work on wiping out your highest-interest debt first, making the minimum payment on your other loans in the meantime.

If You Need Help

    Not all organizations designed to help you get out of debt are bad. It's the for-profit ones that you need to be wary of. If you're looking for advice about what to do, David Bach suggests turning to nonprofit counseling agencies. These include the National Foundation for Credit Counseling and Association of Independent Consumer Credit Counseling Agencies, which can provide referrals to reputable financial professionals.

What Does a "Credit Line" Mean on a Credit Card?

What Does a

Whenever you get a credit card, you essentially enter into a loan agreement in which you determine how much money you borrow from the creditor by making purchases. It is up to the creditor to determine how much money it allows each individual borrower to borrow; this is typically referred to as a credit line or credit limit.

Credit Lines

    All credit cards come with a credit limit --- a specific dollar amount the credit card issuer allows the borrower. The card user can then make as many purchases as she desires, as long as the total amount does not exceed the credit limit. For example, if you receive a credit card with a $5,000 credit line, you can purchase up to $5,000 with that card, or have up to a $5,000 balance at any one time.


    Each credit card issuer has its own method for determining how much of a credit line each borrower receives. In general, card issuers use the borrower's income and credit score to make this determination. The higher the person's score and the higher their income, the larger the credit line he is allowed. Also, the credit card issuer can increase or decrease this limit over the lifetime of the credit card, as the borrower's credit score and income fluctuate.


    Your credit card's credit line not only limits how much you can use your card, but also has an impact on your credit score. When you carry a balance on the card, the percentage of debt balance when compared to your credit line is known as a debt-to-utilization ratio. According to Kiplinger, consumers should keep their debt-to- utilization ratio on each card below about 25 percent of the available credit. Any higher than this, and you risk lowering your credit score.


    While your credit card company can increase or decrease your credit line at any time, you can also ask your company for a credit limit increase. If, for example, you'd know that you will soon keep a balance over the 25 percent credit utilization threshold, you can prevent any damage to your credit score by contacting your credit card company and requesting a credit line increase.

In Debt: Please Help!

In Debt: Please Help!

Having too much debt in your life is stressful. If the debt is substantial it can cause you to feel overwhelmed or hopeless about ever getting it under control. By acknowledging that you are in over your head with debt and deciding to take steps to take charge of your finances, you can begin to fix the problems and improve your situation.

Evaluate Your Debt

    Get a complete picture of how much debt you have by creating a list. Write down every debt you owe -- whether it's a personal debt, revolving credit account or a car loan -- and the total outstanding for each one. Dig out all paperwork, bills and account statements to be sure you include every penny you must pay back and to verify the interest rates for each debt.

Income Versus Expenses

    Create one list of all income you receive regularly and one list for all of your normal expenses. Income from your job, royalty payments, unemployment and any other source all apply. An available credit balance is not income. Expenses include your day-to-day bills, the minimum monthly payments on each of your debts and variable living expenses such as groceries and gasoline or bus fare.

Balance the Budget

    Adjust spending as needed. If your total expenses are more than your total take-home income, cut back on unnecessary services such as cable TV or trim your entertainment spending until your income is equal to or more than your total expenses. This process can be difficult and it may need several adjustments as time goes on, but it a critical step in getting your debt under control.

Pay Off Debt

    Pick one debt to pay off completely and start sending extra money in with the minimum payment each month. The one you choose can be the debt with the highest interest rate, the highest monthly payment or the lowest total amount due. According to Dave Ramsey, author of "The Total Money Makeover," paying off the debt with the smallest balance first gives you a big psychological boost that helps you maintain momentum with your payoff plan. Once you have one debt paid in full, you will have spare money that you used to send to the now paid-off bill. Apply the extra money to the next debt you'd like to pay off and continue this process until all debts are paid in full.

Do Not Add New Debt

    Pledge to not add new debt. If you pay off a credit card and then go out and charge it up again, you are defeating your plan to get out of debt and ruining the budget you worked so hard to set. Agree to only spend money that you have from income that has already arrived and you will be able to avoid further debt problems.

How Does an LLC Affect a Credit Report?

Establishing a limited liability company (LLC) does not have a direct impact on the owner's credit report. The debts of an LLC are only reported on an individual's credit report if they are the personal guarantor.


    An LLC requires applying for a tax identification number, as well as filing articles of organization with the state in which business is conducted. This creates a legal entity that is separate of the individual owners.


    By establishing a separate legal entity, the personal assets of the LLC owners are protected in the event of a lawsuit or liquidation.


    It is difficult for a start-up LLC to get loans and lines of credit. As a result, many LLCs need personal guarantors on their bank loans. In these cases, the loan is reported on the personal guarantor's credit report, just as it is on the business credit report.


    If the LLC fails to make payments on loans and lines of credit, lenders will report derogatory trade lines on both the personal guarantor's credit report and the business credit report. This can make it difficult for both the business and guarantor to get future loans.

Expert Insight

    As Bankrate.com notes, even an LLC that goes bankrupt has no impact on the credit of its members, as long as none of the debts are personally guaranteed.

Will Credit Card Companies Negotiate a Lower Pay Off?

Credit card debt is a serious problem for many people, but the amount owed can be negotiated in some circumstances. However, consumers need to know the consequences of settling debt and ensure that it is done properly.

Willingness to Negotiate

    Credit card companies are most willing to negotiate pay offs with consumers who are behind on payments. As an account becomes past due, credit card companies begin to worry that the balance will not be paid and may be willing to accept a lump sum payment for less than the amount owed.


    When negotiating with a credit card company on a pay-off amount, the consumer should have the agreed-upon terms in writing before making a payment. This documentation should be safely stored.


    Though credit card companies may negotiate a lower pay off, there are reasons that a consumer may choose not to do so. Lower pay offs will typically be noted on the consumer's credit report and will negatively impact the consumer's credit score and ability to borrow money.

Wednesday, April 19, 2006

Wage Garnishment & Insurance

Wage Garnishment & Insurance

Wage garnishment occurs when a court order has been filed that requires your employer to hold a portion of your earnings. The earnings are used to pay toward a debt owed, such as child support or unpaid student loans. If you pay insurance monies, portions of the money may be protected from garnishment.


    If a judgment is made against you, a judge may release a Writ of Garnishment to your employer. The employer is then required to report how much money you make and your current deductions, including payments to taxes, insurance policies and retirement funds. An amount based on these figures will be calculated to determine how much the employer must withhold from your paycheck.


    According to the United States Department of Labor, 25 percent of disposable income is permitted to be garnished. If you earn close to minimum wage, you must be left with at least 30 times the current federal minimum wage. Disposable income is the amount of earnings that occur after required deductions are made, like taxes, Social Security and unemployment insurance.


    Certain insurance payments that are not required for law are open to garnishment. According to the United States Department of Labor, health and life insurance is not required by law and therefore can be open to wage garnishment. Any contributions you make toward these forms of insurance will be used to calculate your disposable income.


    If you are paying out large sums of money for insurance and can't afford basic expenses after the wage garnishment, you can file a Claim of Exemption through the courts. You'll be given a chance to explain before a judge your current financial situation, and he can decide whether or not to set aside the Writ of Garnishment. Also, once the judgment is paid off, you'll no longer be subject to wage garnishment.

How to Handle Bill Collectors on the Phone When the SOL Has Passed

How to Handle Bill Collectors on the Phone When the SOL Has Passed

When you fail to pay a debt, bill collectors have the right to contact you to request payment. In many cases, these creditors are persistent and call you frequently in an attempt to collect on the debt. However, in each state, there is a statute of limitations, or SOL, after which the bill collector can no longer collect on the debt. This SOL begins from the date of your last payment. While a bill collector has no right to collect the debt from you any longer, you can put a stop to the phone calls.



    Tell the bill collector that the SOL has passed on the debt and demand the company stop contacting you. The caller should make a note in the computer system to stop calling you concerning this debt.


    Ask to speak to a supervisor if the calls continue. In some cases, the caller either cannot make a note on your account or simply does not do it. A supervisor is more likely to honor your request if you have already tried to stop the calls through the initial caller.


    Send a cease and desist letter to the company demanding that all contact be stopped because the SOL has passed. Mail it as a certified letter with return receipt so you are notified that it was received. Keep a copy for your own records, in case it gets lost or the company claims the letter wasn't received. This process can take a couple of weeks, so you may still receive a few calls during that time.


    Prepare for court if the company sues you. Hire an attorney if you can afford to, because he knows the way the court system works in these cases. If you cannot afford one, though, appear in court with documentation to show when you last paid on the bill. Let the judge know that the SOL has passed on this bill. If the judge agrees with you based on the evidence, the case is dismissed.

How do I Settle Credit Card Dept?

Credit card debt can bring down your credit score and cost you much more in interest and fees than the amount you originally charged. Some credit card companies are open to settling delinquent debt and credit card debt that has been sent to collections. Some companies may even negotiate with you before your credit card account is delinquent in order to avoid the cost of collection.



    Make a list of your credit card accounts, their phone numbers, the amount owed on each card and their interest rates.


    Ask creditors if they offer a forbearance program. This will suspend your payment obligation for a set period of time. This program does not reduce your owed credit card debt but it can give you enough time to get yourself into a situation where you can catch up on your payments.


    Ask what options you have for reducing or settling the debt. Some companies may settle for a lump-sum payment, and others may cut your interest rate and waive fees. Another option is to work out a payment plan. Be prepared to make multiple phone calls to each company until you work out a plan.


    Negotiate the details of your credit card debt settlement. Common areas of negotiation include how the credit card debt settlement is listed on your credit report and the payment amount and terms.


    Request a copy of the credit card debt settlement in writing. You can use this copy of the agreement to confirm the terms of the negotiated debt settlement. Make the agreed payments only after you receive the written documentation of the agreement.

Tuesday, April 18, 2006

Do Civil Judgments Appear on a Credit Report?

Do Civil Judgments Appear on a Credit Report?

A civil judgment is a legal affirmation that you are responsible for paying a debt. A creditor typically seeks a judgment as a last resort after making numerous attempts to compel you to pay your debt. Incurring a judgment as a debtor can cause significant financial problems, and can also negatively affect your credit score.

Credit Reporting

    After a county or district court issues a judgment against you in favor of a creditor, the county or district recorder receives notification of the judgment. The judgment then enters the public record files -- these files are freely available to anyone. Experian, TransUnion and Equifax, the three primary credit-reporting bureaus in the United States, routinely review entries on public records and add judgments to credit files.

Duration of Entry

    Unlike late payment reports, judgments do not automatically fall off your credit history after seven years. If you pay off the judgment within seven years of when the credit-reporting agencies entered the judgment, they remove the judgment. If you do not pay off the judgment, it stays on your credit file until the statute of limitations expires. The length of the statute of limitations varies by state. For example, judgments are valid for seven years in Georgia and five years in Ohio.

Renewal of Judgment

    Most states permit judgment creditors to apply for renewal of judgment near the end of the statute of limitations if you have not satisfied your judgment debt. Renewal extends the judgment by a number of years equal to the statute of limitations. For example, a renewal in Georgia increases the length of a valid judgment to a total of 14 years. This can also extend the length of time that a civil judgment stays on your credit report.

Satisfying a Judgment

    If you satisfy a judgment, the creditor must notify the court within 30 days of payment that you no longer have a financial obligation under the judgment, and it will appear as satisfied in your public records file. The judgment will also appear as satisfied in your credit file. Although a satisfied judgment may still negatively affect your creditworthiness, it may have a less dramatic impact than an unpaid judgment.

Monday, April 17, 2006

How Can I Get My Ex's Debt Off My Credit Report?

Untangling your financial affairs from your ex-spouse's can be difficult after a divorce. Many couples have joint credit cards or other accounts that must be severed; failure to do so can affect your credit if your ex uses the account without paying the bill. If possible, work out a financial agreement with your ex during the divorce and close all of your joint accounts. Experian, one of the three major credit bureaus, also recommends both spouses taking out a loan to pay their portion of past debts to help sever financial ties.

Joint Accounts

    If you and your ex jointly own an account that he owes money on, you are jointly liable for the debt. The only way to remove this type of debt from your credit report is to jointly request that your name be removed from the account. You and your ex must contact the creditor together. The creditor can transfer the debt solely into your ex's name or can close the joint account and open a new account only in his name.

Authorized Accounts

    If you own an account by yourself but have authorized your ex to use the account, you will still be liable for any debt she runs up unless you remove her name from the account. Contact the creditor and explain the situation. Ask the creditor to remove your ex's authorization to use the account. You will still be responsible for any debt your ex incurred on the account prior to the date that you revoked her access to it.

Resolving Errors

    If you have already detached yourself from a joint account but new debts your ex incurs continue to affect your credit, contact the creditor. Verify that your name has been removed from the account and remind the creditor that your ex is solely responsible for new charges on the account. If the creditor insists you are responsible anyway, dispute the charges on the grounds that you are no longer associated with the account.

Court as Last Resort

    If your ex refuses to help you change joint accounts to sole accounts or does not pay her part of a debt per a divorce agreement, contact your attorney. You can sue your ex for the amount of debt she owes you or ask the court to split up the accounts for you. In many cases, you and your ex can settle the matter out of court by allowing your respective attorneys to negotiate an agreement.

How to Ask Credit Card Companies to Reduce Your Balances

If you do not pay your credit card debt, it will eventually be charged off by the credit card company. In July 2009, credit card companies were forced to charge off over 10 percent of the balances they were owed, according to Moody's. Because of the large amounts of money that are lost through charge-offs, many credit card providers are opting to negotiate with consumers to lower their balances. You can negotiate lower credit card balances yourself without enlisting the aid of a company to do it for you.



    Organize your finances in such a way that you will be capable of making a lump sum payment toward a reduced balance. You may opt to liquidate assets, dip into your savings accounts or have a yard sale. Regardless of how you acquire the funds, offering a lump sum payment will demonstrate a good faith attempt to pay off the debt if the balance is reduced.


    Call the credit card company and ask to speak to a supervisor. Although most credit card companies are willing to negotiate balances with their customers, many train their telephone representatives to tell callers otherwise to reduce the volume of settlement requests.


    Tell the supervisor that at this point in time you are unable to pay your bill because of the high balance. Do not immediately ask for a balance reduction.


    Explain to the supervisor why you are unable to pay your bill. If your credit card company has recently raised your interest rate or you have recently lost your job, say so. This will add credibility to your claim that the balance is too high.


    Mention Chapter 7 bankruptcy as an option. Even if you have no intentions of filing for bankruptcy. Credit card companies know that when a person files for Chapter 7 bankruptcy, they are unlikely to get paid at all. This will make the credit card company more eager to offer you a lower balance.


    Wait for the supervisor to bring up the possibility of reducing your balance.f he does not, call back and use the same method to elicit a settlement offer from a different supervisor.


    Begin negotiating a new balance. Always start the negotiations out at less than you can afford since a credit card company is unlikely to accept your first offer.


    Bring up your ability to make a lump sum payment toward the new balance if the supervisor agrees to your price.


    Request a copy of the agreement in writing before you submit any payments toward the debt. This protects you in case the credit card company is not willing to honor the agreement after you have finished paying the lower balance.

Sunday, April 16, 2006

The Best Way to Repair Credit and Raise a Credit Score

The Best Way to Repair Credit and Raise a Credit Score

Tweaking your credit report and building your credit score presents a host of opportunities. If you apply for a loan, your credit score will likely be used to determine the interest rate, and some employers review an applicant's credit history before offering a position. There's no secret trick to repairing credit and raising a credit score. Oftentimes, it's simply a matter of using credit wisely and managing your finances carefully.



    Monitor your rating. Manage and repair your credit by ordering a copy of your credit report once a year. Take time to look through the report, and keep an open eye for wrong information or unfamiliar accounts due to reporting errors.


    Remove reporting errors. Dispute mistakes on your credit report by writing the credit bureaus or by contacting the reporting creditors. Credit reports include the address and telephone information for creditors and the bureaus.


    Get rid of high debts. Put away your charge cards and resolve to eliminate your outstanding debts. Pay more than the minimum, and if possible, drop a lump sum on your debts each month until you erase the balance.


    Pay your bills on time. Organize your debts and bills, and stay on top of your due dates to avoid late payments and extra fees. Missed or skipped payments have a negative impact on credit scoring.


    Start using credit again. Build your credit score after a bankruptcy by applying for a prepaid credit card or obtaining a small installment loan from your bank. Be prepared to pay a security deposit for the credit card, and have collateral (such as a car title) if applying for an installment loan.

How to Get Out of Credit Card Debt in 7 Steps

How to Get Out of Credit Card Debt in 7 Steps

The benefits of getting out of debt can include a higher credit score, better interest rates on loans and increased personal savings. While many people wish to pay off their credit card balances and get out of debt, achieving this milestone is often challenging. Eliminating credit card debt requires a plan of action. Several techniques can put you a step closer to paying off your credit card debt.



    Put credit cards in a safe, secure location. Easy access to credit cards can increase the temptation to spend. Put your cards out of reach by storing them in a locked safe or box.


    Contact your creditors and ask if they will reduce your present interest rate, or shop around for a low-rate balance transfer credit card and move your high-rate balances to it. You will become debt-free sooner by reducing how much you pay in interest charges each month.


    Pay more towards your debt. It can take years to pay off credit card debt with only the minimum payment. Rework your finances in order to pay more on your debt each month. For example, if your card company requests $20 minimum payments, pay $40, $60 or more each month to knock down the principal quicker.


    Eliminate your credit card debt using your federal income tax refund or employment bonuses.


    Cut back on spending to increase extra income. The money you spend on entertainment and miscellaneous shopping can help you get rid of credit card debt. If you normally spend $200 a month dining out, eat at home and then put the savings toward your credit card debt.


    Make nonessential purchases only when you have enough in savings as opposed to using a credit cards for instant satisfaction. If you want to buy an expensive item, save your money first.


    Borrow from your home equity to eliminate credit card debt. Talk to your mortgage lender about a low-rate home equity loan to pay off high-rate credit card debt. With a lower rate, you'll save on payments each month, and with a fixed term you can pay off a home equity loan in a few years.

ABCs of Getting Out of Debt

Many people find themselves struggling to eliminate debt in their personal budgets. These debts may occur as a result of job layoffs, unplanned medical expenses or living beyond their means. Debt payments require the consumer to forgo purchasing other items they may need or want. By following their ABC's, these consumers can find their way out of debt and into financial freedom.

Acknowledge The Debt

    Acknowledge their debt. Many consumers prefer to make their monthly payments and ignore the impact the debt has on their budget. These consumers consider these payments as bills or monthly expenses rather than debt payments. When these consumers face the reality of their situation and recognize the debt, they are more likely to move forward with paying off the debt.

Budget Realistically

    Create a realistic budget. Many consumers create a budget and forget to include items they regularly spend money on, such as an occasional movie night or clothing needs. These consumers also underestimate their fuel needs or grocery expenses. These consumers need to consider their spending realistically and document these costs. After documenting these expenses, the consumer can determine the amount of money left over to pay on the debts.

Cash Only

    Use cash. At each payday, the consumer should pay the bills first using cash. After paying the bills, the cash that remains is available for other purchases. If the consumer runs out of cash, she should not make additional purchases until her next payday.

Destroy Credit Cards

    Destroy the credit cards. The consumer should cut up the cards and throw them out. The consumer also needs to write a letter to each bank from which he held a credit card requesting that the account be closed. This eliminates the temptation to use credit cards after the consumer runs out of cash. Note that this step could have a short-term negative effect on a credit score.

Eliminate Unnecessary Shopping

    Eliminate unnecessary shopping trips. Each time the consumer visits the store, sale items and aisle displays entice her to buy. If the consumer never sees these items, she eliminates the temptation provided by these displays. The consumer needs to plan shopping trips and not stop in the store just to browse.

Saturday, April 15, 2006

Is Debt Consolidation Good for Your Credit?

In some circumstances, debt consolidation loans can be a good way to patch up your damaged credit. However, turning to a credit consolidation company in desperation probably won't yield the most ideal circumstances. If you're behind in your payments or at the limit of your credit, you may not receive the best offer from any lender. Before you enter into a debt consolidation loan, know and understand the terms of your agreement.

Paying Off Debts

    In some circumstances, a debt consolidation loan may help improve your credit score. By transferring balances from credit card companies to a single consolidation firm, it appears as if you paid off old debts, a maneuver that may raise your credit score. At the end of a balance-transfer loan, you still carry the same amount of debt, but it appears different on paper.

Keep Old Accounts Open

    When your credit consolidation company assumes the debt from your credit cards, do not close those accounts if you want to improve your credit score. By keeping these cards open, you will continue to maintain your oldest credit lines, a move that helps boost a credit score. You will also have a larger amount of untapped credit in your credit history instead of a single loan, which can make it appear that you reached the limit of your credit.

Building Positive Credit

    If everything goes correctly, your debt consolidation loan will help you build additional positive credit. If you continue to make payments on time, rather than missing payments on credit card bills you couldn't afford, you will build a positive credit history that will slowly improve your credit score.

Potential Late Fees

    Some credit consolidation loan companies operate more like a debt-collection agency, and slowly repay your debt to your creditors month by month, receiving a rebate on the balance for the hassle of rounding up your payments for them. Rarely, these companies make your payments behind schedule or fail to make them in your name, according to MSN Money. When this happens, it's as if you failed to pay, and the card company will report you as missing a payment or paying late, either of which will negatively affect your credit score.

Negotiate Your Own Deal

    In some cases, debt consolidation companies may essentially renegotiate your debt, lowering interest rates and shuffling payment schedules with your creditors. Often, this is a tactic you can negotiate on your own, and improve your credit score without incurring the additional fees that come with credit consolidation loans.

What to Do After a Credit Card Company Seizes My Account?

What to Do After a Credit Card Company Seizes My Account?

When you fail to make payments on a credit card, your credit card company may opt to get the money through seizure of your bank accounts. Account seizure is incredibly disrupting, as you can't use the accounts to pay for so much as a stick of gum until the debt is paid. Thus, when account seizure happens due to credit card debt, you must take steps to protect your assets and remove the debt you owe as quickly as possible.

Stop Direct Deposits and Withdrawals

    When a credit card company seizes your bank account, they can take any additional monies that come into the account, with some exceptions like Social Security. Talk to your human resources department at work and stop direct deposit of your paychecks. If you have any bills you pay by direct deposit, you'll need to stop those withdrawals temporarily or withdraw completely from automatic bill pay systems your providers have. This way, your account won't overdraw and you won't get charged overdraft and other fees.

Talk to Your Providers

    Because you won't have access to your account, you may not be able to pay your bills on time, including rent. Talk to your providers and explain your situation. See if they can temporarily lower your minimum payment or interest or, ideally, defer your payments. In some cases, as long as your provider knows the situation and you come up with a clear plan on when you can make the next payment, providers are lenient and don't charge anything in late fees. Don't wait to make these contacts, as failure to make payments dings your credit and damages the relationship you have with the provider.

Review the Seizure and Your State's Statute of Limitations

    By law, in most states, credit card companies have to exercise due process before they seize your account. This means they need to tell you you're delinquent on the account, give you a chance to respond and notify you ahead of time that they are proceeding with a lawsuit for seizure. If you don't receive notice of the seizure, your credit card company may be acting illegally. Contact the court with any evidence you have that the credit card company didn't follow procedure with you.

    In addition to due process law, credit card companies have to follow statute of limitations regulations. Typically debts expire after three to 15 years, depending on the debt type and the state in which you live. If your bank accounts were seized for a debt that has expired, take evidence showing the expiration to the court and try to have the seizure lifted.

Get a Prepaid Debit Card

    Because you won't be able to access the account the credit card company seizes, you'll need a way to pay for items conveniently until the debt is settled -- some vendors don't accept checks anymore. Even if a vendor takes checks, you won't necessarily be able to use your checks to pay for what you need if they're connected to the seized account. You also don't want any cash you get from paychecks or other sources without protection from theft or loss. Putting your funds on a prepaid debit card solves these issues.

Review Your Finances and Negotiate

    Your account, if justly seized, will remain frozen until you take care of your credit card bill. Review your finances and, if necessary, get debt counseling from a nonprofit agency to develop a budget that permits quick repayment. Refinance and consolidate as necessary and possible given your credit. During this process, contact the credit card company in writing and ask for a reduction in your interest rate, or make them an offer to settle the debt for less than what you owe. Because you want to pay off the debt as soon as possible, asking for a lower minimum payment isn't helpful in terms of getting the account back into action, as this usually means spreading out your debt repayment over a longer period.

How to Prevent Social Security Benefit Garnishment

Federal statute exempts Social Security benefits from garnishment of any kind by private creditors, such as credit card companies and other lendors of unsecured debt. However, your Social Security benefits may be inadvertently garnished, if a creditor obtains a judgment against you in a court of law. Here's how to avoid Social Security garnishment before it even begins, and what to do if your benefits have been garnished.



    Know the law. Federal statute exempts Social Security benefits from garnishment by private creditors, so your check cannot be garnished. The government is the only entity who can garnish your benefits, and they may do so if you are delinquent in federal taxes, a student loan, alimony or child support, or a federal business grant. A private lendor cannot touch your Social Security benefits in any way, even if you owe a legitimate debt--but this can still accidentally happen, if you don't pay attention--and it usually happens when you have your Social Security check directly deposited into a "co-mingled" account that contains non-Social Security monies.


    Know how Social Security garnishment occurs by a credit card company. If a private creditor has a judgment against you, they may resort to getting a court order to "freeze" the assets in your bank account. Upon receipt of such an order, a bank must comply. By law, you are required to receive a copy of this order, which will include instructions to inform the court if the bank account that the creditor wishes to garnish contains money from Social Security. If you don't receive a copy of the order or if you ignore it, or if the bank receives the order before you, you may find your assets frozen.


    Immediately contact the court, the creditor and your bank to inform them that your bank account contains Social Security benefits. You will probably be required to submit proof of your direct deposits. Alternately, if you know that a creditor judgment is headed your way, plan in advance (see Step 4).


    Have your Social Security check mailed to you directly rather than direct-deposited. You can cash the check and use money orders to pay for your bills, or you can open another account strictly reserved for Social Security monies. Account garnishment is tricky, because by law, creditors may be permitted to garnish a bank account with co-mingled moneys (for example, your spouse is still working and deposits his or her earnings into the frozen account), as long as your Social Security monies are exempt. The number for the Social Security Administration is 1-800-772-1213. According to SSA.gov, you can speak to a representative Monday through Friday from 7 a.m. to 7 p.m. (the site fails to note to which time zone this applies, so you may want to call during regular business hours in your state).