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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..

Saturday, March 31, 2007

How Does a Person Consolidate Loans Without Collateral?

Consolidating your debt can give you the financial flexibility you need to get your bills back under control. With many debt consolidations, collateral such as a home's equity is used to secure the loan. If you do not have collateral, the goal of debt consolidation is not dead, as some other options exist.

What Is Debt Consolidation?

    The purpose of debt consolidation is not necessarily to pay off debt but to move it from multiple accounts into a single account. You borrow money from one source that is large enough to pay off every debt account you have. Then you take the money and use it to pay off each of your accounts. The goal of this process is to make it easier to make your payments each month and to potentially save some on interest.

Credit Card Balance Transfers

    One way that you could potentially consolidate your debt without any collateral is to use credit cards. When you open a new credit card, you are typically given the opportunity to transfer balances to the account. You can use this opportunity to pay off all of your accounts. This moves the balances of the accounts to your new credit card account. In many cases, you get an introductory interest rate of zero percent that gives you several months to pay down your debt without interest accumulating.

Personal Loans

    If you do not want to use credit cards to consolidate your debt, you could also pursue a personal loan. With a personal loan, you can borrow money without having to put up any kind of collateral. Once you borrow the money, you pay off your debts and then worry about paying down the balance of the loan. With this strategy, you usually have to pay a higher interest rate than you would with a secured loan.

Loan Consolidation Companies

    You may also consider working with a debt consolidation company in this situation. Debt consolidation companies work to help you consolidate your debt accounts into a single loan. In some cases, the company simply helps you find a loan while other companies actually provide the consolidation loan for you. Working with a debt management plan could also provide you with a form of consolidation. With a debt management plan, you make one monthly payment to a credit counseling service and then the service pays all of your creditors for you. Before working with any of these companies, you need to review their fees and terms. Some companies in this industry are scams and should be avoided. Check consumer reviews to find out which companies are reliable.


    The advantage of not using collateral is that it does not tie any of your property to the debt. If you cannot afford to pay off the debt in the long run, you can file bankruptcy and have the unsecured debt eliminated. By doing this, you can help protect your assets and still have the chance to consolidate your debts into a single account. When you consolidate, you have to be careful not to run up any more balances on your paid-off accounts.

Friday, March 30, 2007

Student Debt & Spending

Student Debt & Spending

Many Americans endure their first debts when transitioning from high school to college; with higher education comes higher costs and with increased freedom comes the freedom to spend. Between the one-two punch of student loans and tempting credit cards -- coupled with spending on common expenses such as lodging, food and textbooks -- student debt saddles the majority of graduates the moment they throw their caps.

Student Loan Debt

    Because lenders are willing to loan vulnerable students more money than they can comfortably repay, the "Wall Street Journal" reports that half of all graduating students carried loan debt in 2010. According to 2009 data from The Project on Student Debt, the average graduating college senior carried an average of $24,000 in student loan debt, a 6 percent increase from 2008. Loan debt varies greatly per state; according to the same report, the District of Columbia was home to students deepest in dept with an average loan debt of $30,033 per student while Utah students experienced an average debt of only $12,860.

Credit Card Debt

    Be wary of high interest rates and pay your balance each month to avoid credit card debt.
    Be wary of high interest rates and pay your balance each month to avoid credit card debt.

    A 2009 study by Sallie Mae reports that one in five graduating college students owes a least $7,000 worth of credit card debt. The same study says that 17 percent paid their bills in full each month, 22 percent made only the minimum payment and 82 percent -- as compared to the national average of 50 percent -- carried the balance every month. That same year, nine out of 10 students used credit cards to pay for school expenses.

Spending Habits

    According to a nationwide study released by Westwood College for the 2008-2009 academic year, the average university student spends 26 percent of her budget on room and board, but a whopping 40 percent goes to discretionary spending such as entertainment, travel and clothes. Nineteen percent of the average student's budget goes toward tuition and fees. Students spend 8 percent of their remaining budget on health care and other expenses, 4 percent on books and supplies (the average college textbook cost $57 during the '08-09 school year) and 3 percent on transportation . The same report notes that students received a mean of $312 per month from home and earned a mean of $453 per month.

Financial Help

    As the cost of being a student rose dramatically in the first part of the 21st century, so did the availability of grants and financial aid. Federal student aid serves as the most prominent source of financial help. The federal government offers Pell Grants, which need not be repaid; these grants helped nine million students in 2009. Students can take advantage of Pell Grants, federal loans, the American Opportunity Tax Credit and other assistance by filling out the Free Application for Federal Student Aid. Each college and university also offers its own individual aid programs, from scholarships to meal plan stipends. Inquire at your admissions office for details and application materials.

Federal Debt-Relief Grants

Whether on the web, in the backs of magazines, or on late-night television, ads proliferate for "free government grant" debt-relief assistance. Unfortunately, 2011's difficult economy has caused many otherwise-savvy consumers to fall for these federal debt relief scams. While the federal government does provide mortgage debt assistance through the Making Home Affordable program, it doesn't provide relief from debts such as credit cards.

What Grants Do

    While the federal government does spend millions of dollars every year on grants spending, the money is used to support legislation that improves the common good. For example, if you are researching and building inexpensive yet efficient solar panels, you may be eligible for a grant. However, the federal government doesn't consider your personal debt relief to be "common good." Health and Human Services, the department that administers grants, notes that "federal grants are not federal assistance or loans to individuals."

FTC Consumer Alert

    State attorneys general have received so many complaints about federal debt relief scams that the Federal Trade Commission, the agency that protects consumers' rights, issued a strongly-worded alert. "Grant assistance" companies often operate businesslike websites, hire professional-sounding telephone personnel, and may even direct you to a legitimate grant -- for a fee. The worst companies will use your personal information to steal your identity. A real federal government grant application will never ask you for your financial account numbers or passwords.

Protecting Yourself

    Don't give out your bank account, credit card or Social Security numbers to a grant "specialist" over the phone, through the mail or on the Internet. The government won't reach out to you to "award" you a grant, either. If you receive a phone call stating as such, it's a fake. If you've already given out personal data, check your credit reports immediately. Report false activity, and file a complaint with the attorney general and the FTC. Remember that legitimate federal grants never charge a fee for applying.

Legal Debt Relief

    Great, you're thinking, now what? The good news is that you have options. Try using the "debt avalanche" to reduce your balances on your own by focusing on one debt and using the payment savings to pay off the next one more quickly, and so on. It's free, and it works. You also can try credit counseling; several top nonprofit agencies exist to help you get out of debt. The National Foundation for Credit Counseling has an excellent reputation. Although settling your debts causes your credit rating to plummet, it's another legal option. Bankruptcy -- the worst choice for your credit rating -- is another. Regardless of your approach, you can be debt-free without succumbing to a federal debt relief scam.

Thursday, March 29, 2007

You Can Sue a Former Spouse for Damage to Your Credit Report

Almost everyone who has taken out some form of credit has a credit report. This report, which is used to determine your credit score, contains information about your lending habits. If you have a higher score, one correlated to positive information about your lending habits, you can expect to receive lower interest rates on loans. If a spouse damaged your credit report illegally, you can sue him for the money such damage will cost you.

Credit Reports

    Each person has her own credit report. Spouses each have their own separate credit report. Your credit report contains records of all loans that you have taken out, as well as a record of whether you paid these loans back on time. The report should only contain information about loans taken out in your name. Loans taken out in your spouse's name will not appear on your report or affect your score.

Co-Signed Debts

    Some spouses take out loans jointly. For example, a married couple may co-sign for a loan. In this case, the debt will be listed on each person's credit report. Whether the loan is paid back or defaulted on will be listed on both reports. If you have a loan that you co-signed with a spouse and the spouse fails to pay it back, you cannot sue for this failure to make payments, as you have both taken responsibility for the debt.

Fraudulent Debts

    Loans can only be taken out in your name with your approval. If a former spouse took out loans in your name that you did not approve of, then the person has committed financial fraud. If your credit rating is harmed by his failure to pay off these loans, then you can sue the person in court. A judge will attempt to determine if your spouse did in fact commit fraud and, if so, how much damage was done to you financially.


    In some cases, a judge may order someone to continue to make payments on a former spouse's loan. For example, as part of a settlement in a divorce case, a judge may order a husband who is earning a salary to continue paying the mortgage that was taken out in his wife's name. If he fails to do so, the husband may be liable for damages, although he did not commit fraud.

Wednesday, March 28, 2007

Credit Protection Programs

Credit Protection Programs

A credit protection program is an optional insurance feature that certain lenders provide to cover loan payments on behalf of borrowers under certain circumstances, such as when they become ill, lose their jobs or become deceased. The cost of the insurance is usually a small percentage of the amount borrowed. In the Federal Deposit Insurance Corporation's, FDIC, view while certain classes of individuals may benefit from credit protection programs, other forms of insurance may be better for most consumers.

Qualifying Event

    While each lender designs their own program according to their specifications, credit protection programs usually cover events such as involuntary job loss, certain disabilities and/or accidental death. Other events may be covered as well. For example, under Chase Bank's Payment Protector Plan, if a credit cardholder is called to military reserve or guard duty, gets married, has or adopts a child or incurs a business hardship, relief under the plan may be available.

Plan Benefits

    If a qualifying event occurs and the borrower has purchased the creditor's protection plan then under most plans the monthly payments, interest and associated fees are waived. It should be noted that the insurance does not cancel any of the borrower's debt.

Cost of Insurance

    The cost of insurance varies by provider but generally amounts to a small percentage of the amount borrowed. For example, under the State Farm Bank Credit Card Protection program, the insurance costs $0.74 per $100 of the cardholder's monthly balance. Chase's Payment Protection Plan costs $0.89 per $100 of the monthly balance, as of 2010.

Suitable Consumers

    According to the FDIC, credit protection programs are likely only suitable for individuals that are older, who are ill or who are otherwise concerned about potentially losing their jobs.

FDIC Recommendation

    The FDIC concludes that other forms of insurance may be more cost effective for most individuals and may yield higher returns. The federal agency considers a debt of $4,000, where consumers would likely pay anywhere from $150 to $350 a year under a credit protection program, as of 2010. The FDIC finds that consumers would likely be able to purchase a larger term life insurance policy or simply add to their emergency savings which could be used to pay off any obligation, not only credit card debt.

My Charge-off Was Sold to a Collection Agency

When a person does not pay back a debt to the creditor, the creditor will often charge the debt off, declaring to a credit reporting agency that it will not be able to collect on it. While this will hurt the person's credit score, the person may think that it is the last they will ever hear of the debt. However, this is incorrect, as charged-off debts are commonly sold to debt collectors.

Charge Offs

    When a company seeks payment of a debt and fails to receive it, it may choose to "charge-off" the debt. This means that it is listing the debt as uncollectible on its balance sheets. It will also report the debt as such to a credit reporting agency, which will likely harm the debtor's credit score severely. However, once a debt is charged off, it does not mean that the company is relinquishing the right to sell it.

Debt Collection Agencies

    Many debt collection agencies earn money by buying old debts from creditors. Because these debts are usually not easily collectible, the collection agencies may be able to purchase them for pennies on the dollar. These debt collection agencies then attempt to collect on the debts themselves. Under U.S. law, the debt collection agency has just as much right as the original creditor to attempt to be paid the full amount owed on the debt.

Debt Collection

    Debt collectors may take a number of tacts in attempting to get paid for the debt. Among these is filing a lawsuit against the debtor, alleging a breach of contract of the debt contract. If the debt collector wins the suit, he may be able to convince a judge to garnish the debtor's wage or freeze his bank account. However, these debt collectors are not allowed to pass on any costs they incur to the debtor.


    The collection agency will be able to continue to seek payment until one of two events occurs. First, the debtor may be able to settle with the collection agency, either by paying them off entirely or by convincing them to take a lesser sum in payment. Or, the statute of limitations on the collection of the debt may expire. The length of this statute will depend on the laws of the state in which the debt was incurred.

Tuesday, March 27, 2007

Can I Be Sued by a Credit Card Company for Non Payment?

Can I Be Sued by a Credit Card Company for Non Payment?

Credit card debt arises from a legally binding contractual agreement between the cardholder and the credit card company. In the event the cardholder fails to make payments, the creditor could file suit against the debtor for breach of contract.


    In general, most credit card companies will file suit against a debtor only if attempts to reach a mutually satisfactory payment arrangement have failed or would prove futile.


    In the absence of a legitimate defense to repayment, most credit card companies will usually prevail in their suit against a debtor for recovery of the default balance. In addition to the balance owed, a credit card company may also be awarded reasonable attorney's fees as well as its court costs.


    Once a judgment is entered for a credit card company, the creditor may then seek to enforce the judgment against the cardholder by garnishing his wages, attaching his bank account or placing a lien on his real property.

How to Place a Fraud Alert With the Credit Bureau

Identity theft remains a major concern all over the world, and there are ways for those in the United States to protect their credit information from abuse. Concerned consumers can place a fraud alert on their Equifax, Experian, and TransUnion credit reports. This means that each time someone applies for credit, whether it is you or someone who has stolen your identity, the bank must confirm that you actually made the request before granting or denying credit. This is a good way to help prevent people from getting credit and other types of accounts in your name.



    Requesting a 90-day fraud alert can usually be done online. Visit Equifax Online Help (see Resources section) to fill out the form for a 90-day fraud alert. Equifax will also communicate your fraud alert to the other two credit reporting agencies (Experian and TransUnion) so you only need to fill out one form. A 90-day fraud alert will make it so potential and existing creditors must contact you before making any credit-granting transactions. In the case of existing creditors, they must check with you before increasing your credit limit, issuing new cards or changing addresses.


    Getting a 7-year fraud alert requires a more involved process, because this is usually reserved for people who have actually been victims of identity theft. For this, you must apply in writing to each credit reporting agency (see Resources section) and have a federal, state or local law enforcement report showing that you have reported suspected crimes in order to apply for this type of fraud alert. This report also removes you from receiving credit offers in the mail for up to five years. The credit bureaus will require you to send copies of your identifying information, such as a government photo ID and recent bank statement. This could take a few weeks to process, but in the meantime, you have the protection of a 90-day fraud alert during the approval process.


    Obtaining a 1-year active duty alert can be done online through Equifax Online Help. This is for overseas military service members who want to make sure no one gets credit in their name or changes to their accounts without consent while they are deployed. Like the 90-day fraud alert, filling out the Equifax form online also ensures that Experian and TransUnion issue the alerts onto your credit reports.

Monday, March 26, 2007

How Can One Secure a Loan?

When a person takes out a loan from a lender, the lender expects to be paid back. Few lenders make loans without some assurance that they will receive back what they lent -- plus a small profit. To make a loan more secure, a lender often demands that the borrower put up some form of collateral that the lender can seize in the event that the borrower defaults on the loan.

Secured Loans

    A loan that is backed by collateral is known as a "secured" loan. The exact kind of collateral that a lender will require will depend on the type of loan and his policies. Some lenders, such as many credit card companies, will not allow an individual to secure the loan with any type of collateral. However, other lenders allow a loan to secured with various forms of collateral, often in exchange for dropping the interest rate.

Real Estate

    Certain loans are often secured with real estate. For example, in a mortgage loan, the loan is secured through the house or other piece of property that the loan is being used to buy. If the person fails to make payments on the house, then the house may be seized by the lender. Real estate can secure other kind of loans, such as home equity lines of credit.

Financial Assets

    Other types of loans may be secured by a fungible financial asset. When taking out a personal or business loan, the lender may ask the borrower to provide a list of his financial accounts and other assets that are easy to sell. The borrower may then propose to secure the loan with one or more of these assets. Common assets used as security include financial securities, cars, jewelry and pieces of art.


    In rare cases, cash may itself be used to secure a loan. Typically, cash is not used, as it defeats the purpose of the loan -- why would a person borrow money when he already has it on hand? However, the person may wish to borrow money simply to improve his credit rating. For example, many people with poor credit take out secured credit cards -- credit cards secured by cash -- to show they can borrow money and pay it back on time.

How to Stop Credit Card Companies From Taking You to Court in Illinois

Credit card companies will close your account and consider you in default of your credit card agreement if you stop making payments as agreed. Illinois Legal Aid reports that the credit card company will eventually have two choices: It can forget about the bill and consider it noncollectable, or it can send your account to an attorney, who will begin the process of suing you. Contacting the credit card company before your account is assigned to an attorney could help you avoid being taken to court in Illinois.



    Contact the credit card company to ask about the status of your account. Call the number on the back of your card or look for it on an old billing statement. Ask for the collections department. The card company may have assigned the account to its internal collections department, or the account may have been transferred or even sold to a debt collector or attorney. The card company can tell you if the account is still being held internally or provide a number for you to call if it has been assigned or sold.


    Offer to settle the debt for less than the full amount owed -- a process called debt settlement. Make the offer to the credit card company if it still owns the debt, or make the offer to the debt collector or attorney handling the account. The SmartMoney website reports that credit card companies and debt collectors often will settle delinquent accounts for 20 to 75 percent of the balance. Make 20 percent your opening offer and continue to negotiate until you have a deal.


    Get the terms of the agreement in writing. Insist that the terms stipulate that the debt will be considered "settled" upon receipt of your payment. Make your payment to end the threat of being taken to court.

Mortgage Modification Solutions

If you find yourself unable to make your mortgage payments, you may be eligible to apply for a mortgage modification. This can be a workable solution if you are unable to bring your account current. Federal government guidelines under the Home Affordable Modification Program say a mortgage is sustainable if payments are 31 percent of before-tax income. A mortgage modification can make your notes more affordable based upon your income.

Mortgage Modification

    A mortgage modification is a permanent change in the terms of your mortgage loan. The lender can reinstate the loan under new terms, such as a lower interest rate or a longer time to pay it back. The mortgage company will sometimes forgive the amount you are behind or add these missed payments to the principle balance of the modified loan. These changes may help you to make your mortgage payments and avoid foreclosure.

Requesting Motgage Modification

    Contact your mortgage company if you find you cannot make your payments or make up payments you have missed. Ask the lender if you might qualify for a mortgage modification. The lender will ask you for some basic information, including your loan number and details about your current financial situation. This will include your monthly income and expenses, proof of income, income tax returns, and a copy of your W-2 form. The mortgage company will send you an information packet to complete and return. Based upon the information you provide, the lender will determine if you qualify for a mortgage modification.

Home Affordable Modification Program

    The federal government sponsors the Home Affordable Modification Program. To be eligible, you must occupy a single-family residence. You cannot apply for the program if you have a second mortgage on your home. You must not have had more than one previous mortgage modification. You must provide proof of financial hardship and proof of current income. Lenders can consider homeowners for the program even if they are in foreclosure. This will suspend foreclosure proceedings while the lender determines your eligibility for this program.

Mortgage Counseling Services

    If you are unsure if mortgage modification is the right solution, consider using the services of a housing counselor. The counselor can represent you and approach the mortgage company for the best workout plan available. Some options the housing counselor may recommend include a mortgage modification, repayment plan or forbearance options. A counselor can also help you create a personal budget, which will help you avoid future situations making you unable to pay your mortgage.

Sunday, March 25, 2007

How Much to Pay to Reduce Credit Debt

When you are in debt, the last thing you need is extra fees on top of what you already owe. You should not have to pay anything to reduce credit card debt. Anyone can negotiate with a credit card company, without having to pay an agency to act as a middle-man.


    Credit card debt is made up of the amount that you have borrowed plus interest and any late payment penalties. It's difficult to reduce the first part, but you can negotiate with the credit card company to lower the interest rate and erase penalty fees.


    Late payment penalties are punitive. They are designed to strongly encourage you to make payments by the deadline. Avoid paying unnecessary fees by setting up an automatic monthly bank transfer to pay the minimum monthly amount.


    You can save a fortune in interest fees by transferring the balance from a high-interest credit card to a low-interest one. Once you've done that, do not close the old card account. Simply put it away somewhere where you won't be tempted to use it.


    If you're struggling to make minimum monthly payments, it may be time to talk to the card company. It's in their interest, as well as yours, that you do not default on your debt. Credit card companies can be surprising willing to reduce your debt by as much as 50 percent, depending on your financial situation.


    You don't have to hire a company to reduce your credit debt. You can negotiate directly with credit card companies and debt collection agencies and apply for a debt consolidation loan without a broker.

Can a Landlord Garnish Wages for Unpaid Rent in Washington, DC?

When someone fails to pay rent after occupying a space in Washington, DC, he may be sued by his landlord for the money that he did not pay. Generally, this legal action will follow an eviction of the tenant. In Washington, DC, people who are found liable for a debt in a court of law can have an order of garnishment levied against them if they fail to pay back the debt as ordered.

Unpaid Rent

    If a person fails to pay rent on time in Washington, DC, he should not worry about facing a garnishment order immediately. Rather, the person will first have to make his way through the district's housing court, if the landlord chooses to pursue payment. Only after the tenant has been evicted will the landlord potentially pursue payment of back rent through a separate lawsuit.

Civil Lawsuit

    If a landlord has evicted a tenant for unpaid rent, then he may choose to launch a civil suit afterward in which he seeks compensation for the time in which the tenant occupied the property without paying the rent that had been previously agreed upon. Filing a lawsuit and winning it must occur before a landlord can seek garnishment of wages. Extrajudicial garnishment is entirely illegal.


    In Washington, DC, a debtor can face garnishment for all types of debts, including civil judgments. If a person has a civil judgment levied against him, he will be given instructions by the judge as to when he must pay the debt by. It is only if the debtor fails to comply with the judge's instructions that he may see his wages garnished -- not immediately after receiving the judgment.


    There are many federal laws that restrict how much of a person's wages can be garnished. In certain cases, a person who makes too little money cannot have his wages garnished at all. In addition, there are a number of different types of income, such as government payments, that are entirely exempt from seizure by private debt collectors, and thus could not be seized for unpaid rent.

How to Contact Experian

Experian is one of the three major credit reporting agencies in the world, and there may be several reasons why you may want to contact them. In order to correct any inaccuracies in your credit report with closed accounts, dispute accounts, correct personal information or clean up any other part of your credit report, it is more efficient to get it done directly through Experian rather than trying to work through the creditor directly.


Contacting Experian


    The first place that credit consumers in the United States should look for information regarding their credit is the Experian website found at Experian.com. At the website a consumer can order a credit report, dispute a credit report entry and request changes to be made to their personal information or personal history. There is an online dispute form and an area where a consumer can place a credit watch on their account to help fight identity theft.


    Initial contact with Experian through their website saves time and is convenient. Many consumers prefer to follow up with Experian via the telephone. The general toll-free number for credit consumers based in the United States is (888) 397-3742. When contacting Experian by phone, have your Social Security number ready and any paperwork you will need to discuss in front of you. Make notes on who you spoke with and what was discussed. In order to speak to a representative, you must already have an Experian credit report number that would appear on the credit report you ordered. A consumer credit representative is on hand 24 hours a day. Businesses can call in disputes from 8 a.m. to noon, Monday through Friday PST. Business technical support is available by phone Monday through Friday from 4 a.m. to 7 p.m. PST, and on Saturday from 5 a.m. to 3 p.m. PST.


    Experian has offices in more than 40 countries throughout the world. To find the phone number and address for an office in a foreign country, just visit Experianplc.com. Any international customer can contact the world headquarters located in the United States at the toll-free number mentioned previously, but for local service it may be more beneficial to contact a local office.

Saturday, March 24, 2007

Can Creditors Garnish Social Security Disability Payments?

Can Creditors Garnish Social Security Disability Payments?

When individuals become temporarily or permanently disabled, they may be eligible to receive Social Security disability payments. The two Social Security disability entitlements are Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Each entitlement has its own rules for eligibility and whether a creditor may garnish payments. Generally, creditors cannot garnish payments from either entitlement. However, exceptions exist for SSDI.


    Creditors typically garnish wages to recover debts owed once a borrower defaults. There are two types of garnishment. Bank account garnishment occurs when a creditor obtains a court order to freeze a bank account until the debtor pays the debt owed. Wage garnishment that would apply to Social Security disability payments occurs when a creditor seeks to have the court order a debtor's employer to allow the creditor to intercept portions of the debtor's wages. Most creditors (except the IRS and some other federal agencies) must obtain an order from the court to garnish a debtor's wages.

Social Security

    Social Security is a social welfare and insurance entitlement funded by payroll taxes. All individuals who are employed pay dedicated payroll taxes or FICA taxes. In addition, employers pay additional payroll taxes for these benefits. The program is referred to typically on paystubs as the Old-Age, Survivors and Disability Insurance Program (or OASDI). These taxes help fund disability insurance for people who become temporarily or permanently disabled and cannot work.


    The SSDI program provides disability payments to individuals who have worked for a certain period of time and paid their OASDI taxed while they worked. Therefore, the eligibility requirements are based on whether the individual is considered "disabled" under federal regulations and whether they meet certain prior work requirements. However, the IRS, custodial parents owed child support, and other federal agencies are exempt from this rule and can therefore garnish SSDI payments.


    SSI is different from SSDI. SSI eligibility depends on whether the applicant meets the definition for disability under federal regulations and if she meets certain low-income requirements. SSI is based on a person's disability and their financial need. SSI payments cannot be garnished. There are no exceptions to this rule. Not even the IRS can garnish SSI payments.


    Please contact a qualified attorney to find out how the facts of your situation apply to Social Security disability benefits.

Definition of a General Ledger

Definition of a General Ledger

A general ledger is a paper based journal or electronic program that is used to record every transaction that a company makes. It helps a company to assess its financial condition.

Recording Entries

    The opening balance is the first item entered into a ledger, and then, depending on the types of transactions the company makes, entries are recorded as debits (expenses) or credits (revenue) under the appropriate general ledger categories.


    The categories in a general ledger vary according to the bookkeeping style of the company. Common categories include assets, liabilities, owner's equity, revenue, expenses, loan payments and profits and losses.

Sub Ledgers

    A general ledger may include several sub ledgers. Sub ledgers are ledgers within the general ledger that expand on the detail of a particular category. For example, an accounts receivable sub ledger may record accounts receivables, accounts payable and cash transactions. All entries recorded in a sub ledger are also recorded in the general ledger.


    Electronic general ledgers can vary widely in their capabilities. Some electronic ledger programs have the ability to create graphs and reports out of the recorded entries, while others may support multiple currencies and exchange rates, or have the ability to integrate with the Internet.


    The two primary financial documents of any company are the income statement, which shows a company's revenues and expenses over a specific accounting period, and the balance sheet which shows a company's financial position (assets, liabilities, and owner's equity) at a specific moment in time. Both of these documents are derived from the general ledger, and are required by lenders and banks to determine credit limits.

Fun Fact

    A general ledger is also known as a nominal ledger.

How to Write Settlement Letters to Creditors

How to Write Settlement Letters to Creditors

Debt settlement can help people lower the amount of debt they owe by renegotiating the terms of the debt or the total debt due. Many creditors will agree to debt settlement offers, because they see them as a chance to recoup at least some of their money. Although people can hire professional debt settlement companies to deal with creditors a simple debt settlement letter will often work just as well, if not better. Your debt settlement letter must be professional, clear and short.



    List your monthly expenses and income to determine how much money you have each month to pay off the debt. If you have cash-on-hand, determine how much of it you can use for a lump-sum payment. Write down the monthly and lump-sum amounts for future reference.


    Write your name, address and account number on the top-right side of a blank sheet of paper. Write the creditor's name and address on the left side.


    Begin the letter with the current debt balance and tell the creditor that you cannot afford to pay the total amount in full. Give the reasons why you cannot pay the debt but do not try to invoke sympathy. If you are on the verge of bankruptcy, make note of it, because creditors may not get any money if you file bankruptcy and may be more willing to work with you.


    State that you are willing to make monthly payments or, if you have the cash, a lump-sum payment and give the figures.


    Request that the creditor send you an agreement in writing in the third paragraph. This will ensure the creditor does not take your money but fail to hold up its end of the bargain.


    Close the letter by thanking the creditor for considering your settlement. Sign the letter.

Friday, March 23, 2007

What Can You Do When Bill Collectors Are Harassing You at Your Workplace?

The Fair Debt Collection Practices Act forbids debt collectors from harassing debtors at work or at home. When it comes to the workplace, debt collectors may not call the debtor at work if he requests they refrain from doing so and may not repeatedly call the debtor so that his work day is unreasonably disrupted. If a debt collector is harassing you at work, hiring an attorney allows you to take legal action to stop the harassment.

Cease and Desist Letter

    You or your attorney can send debt collectors a cease and desist letter telling them not to call you at work or not to call you at all. By law, bill collectors may not call you at work if you tell them not to do so. You may not want to tell them to cease and desist calling you at all because bill collectors are more likely to sue you if they are barred from getting in touch with you to try to settle the debt.

Document Everything

    Always document any harassment or abusive behavior. Write down what the bill collector said, when he said it and how often he said it. Unreasonably frequent phone calls can be considered harassment; in addition, bill collectors are not allowed to verbally abuse you, use foul language or make threats that they are not legally empowered to carry out. Calling you at work after being told to contact you only at home is also considered harassment. Thus, write down each instance as soon as it happens as evidence of the harassment.

Hire an Attorney

    If you hire an attorney to handle your debt collection issues, you may refer all bill collectors to that attorney. Bill collectors may not continue contacting you directly after being told to contact your attorney regarding the matter. In addition, your attorney can help you take legal action against bill collectors to stop them from harassing you or advise you of the best course of action if you are being harassed.

File a Lawsuit

    If you have proof that a bill collector is harassing you, you can sue her in civil court for damages resulting from her violation of the Fair Debt Collection Practices Act. The bill collector may choose to settle the case out of court rather than go to trial; if so, your lawyer will help negotiate a fair settlement for you. You can also report debt collectors for bad behavior to the Federal Trade Commission.

Cleaning Up My Credit Rating

Cleaning up your credit rating takes work and patience. Bad habits such as late payments and overspending contribute to a poor rating, and it can take several months or years to undo the damage. But bad credit doesn't have to last forever; and with effort, you can realistically improve a low rating in six to 12 months.

Payment History

    Your payment history significantly impacts your credit rating, and improving a bad rating involves paying your bills on time. Every late payment or missed payment reduces your rating; and in some instances, credit card companies may increase your interest rate, which results in higher minimum payments. Recognize the importance of timely payments and pay your creditors on or before the due date. If you are unable to pay a creditor due to financial hardships, contact the creditor immediately and ask to set up a payment arrangement.

Reduce Credit Card Debt

    Excessive credit card debt or a high debt-to-income ratio damages your credit rating, even if you pay your bills each month. Lenders reviewing your application for an auto loan or mortgage will take your debts into consideration, and they may deny your request due to a high debt-to-income ratio. Rather than accept excessive debt, resolve to reduce your debts or become debt-free. You can't achieve this overnight. But with determination and a realistic strategy, you can pay down your debts and clean up your credit rating. Cut back on spending and use your disposable income to get out of debt. This may involve forgoing shopping, dining out, vacations and other extras. If feasible, get a second job to bring in additional income.

Dispute Errors

    Along with regular payments and lowering debts, annually reviewing your free credit report can have a positive impact on your credit rating. Click on the Annualcreditreport.com link in the References section below and request a copy of your personal report. Creditors make mistakes, and they may erroneously include negative information on your report. These negative remarks can reduce your FICO score and make lenders question your credit habits. Get a copy of your report once or twice a year, and dispute unfamiliar accounts and other mistakes.

Thursday, March 22, 2007

Advantages & Disadvantages of Consumer Credit

According to the Consumer Federation of America, 80 percent of households in the United States have a least one credit card. About 60 percent of those households have a balance on at least one credit card that is carried over each month. The availability of consumer credit can be an advantage for financially responsible consumers. Consumer credit, however, can also be dangerous.


    One advantage of consumer credit is the convenience it provides. With lightweight credit cards, it is not always necessary to carry around a large wallet or purse filled with cash. You can purchase items without carrying your checkbook everywhere. Credit cards are accepted in most retail and grocery stores.


    Many people live paycheck to paycheck. If the car breaks down or a child becomes ill, these families could quickly find themselves in a financial crisis. One small emergency could ruin a family's finances. With consumer credit, you can have the purchasing power that can see you through these emergencies. Handled responsibly, credit cards can keep you from stress and worry about how your family's financial needs will be met.

Large Purchases

    Without consumer credit, large purchases would not be possible for many people. The ability to pay cash for a car or other big-ticket items isn't available to everyone. Consumer credit allows a family to afford the necessities and use the purchased item while paying for it. If the family car breaks down, consumer credit allows you to replace it immediately instead of saving for years and doing without the transportation you need.

Builds Credit

    For young people, using a small amount of consumer credit helps to establish a good credit rating. A good credit rating becomes important if you need to borrow money for a financial emergency or large purchase. In some instances, a poor credit rating can also cost you a shot at a job or apartment. A good credit rating helps you to stay out of financial trouble, and you can build your credit by making small credit card purchases and paying the bill in full every month.


    A major disadvantage of consumer credit is the false sense of empowerment it provides. If you have a line of credit, you are more likely to be tempted to make purchases that you cannot afford. You may be tempted to overspend at the grocery store if you aren't sticking to a tight budget.

More Expensive

    When you pay cash for an item, the item's cost is obvious. When you purchase the item with a credit card, however, you may continue to pay for the interest on that purchase for months to come. Credit card interest is compounded--often daily. Therefore, a purchase that is not paid in full becomes more expensive every day.

Unrealistic Lifestyle

    Consumer credit can get you used to living a lifestyle that is beyond your means. If you do not handle consumer credit responsibly, less of your income will be available in future years. Living above your means now will result in a lower standard of living later. The stress of paying off debt and the loss of financial freedom can cause even more of a strain on your financial life.

Wednesday, March 21, 2007

How Far Back Can You Collect on a Debt?

There is no set time period that governs attempts by a creditor to collect a debt that has aged beyond the initial date of default. A creditor seeking to legally enforce the debt however may run afoul of the statute of limitations that precludes a plaintiff from filing a lawsuit against a defendant after a specified period of time has elapsed from the date the cause of action first accrued.

Established by State Law

    The statute of limitations period for each distinct legal cause of action, e.g., fraud, personal injury, or breach of contract, is established by each state. The statute of limitations period for the same cause of action may vary from state to state.

Actions to Collect on a Debt

    Since most debt arises from a legally binding contract, the applicable statute of limitations for most actions to collect on a debt would be determined by the limitations period established for breach of contract actions for the state in which the creditor resides. Some jurisdictions may have specific statute of limitations periods for debt arising from promissory notes or contracts under seal, or for debt arising from revolving credit cards, which are frequently characterized as "open account."

Starting the Clock

    An action to collect on a defaulted debt must be filed in court within the period established by the applicable statute of limitations. The clock commences on the date the cause of action accrued, which for most actions to recover monies owed, is the date when the contract underlying the debt was breached or the date the account first went into default.


    When a creditor files a civil suit to enforce payment of a default balance owed, it is the responsibility of the debtor to raise the defense of the statute of limitations. Should the debtor fail to raise the affirmative defense, he will be deemed to have waived it. The rules of civil procedure in most states require a debtor to raise the defense in his answer to the creditor's complaint at the time the action is filed in court. A debtor who properly raises the statute of limitations defense can then request that the court dismiss the action.


    A civil action for repayment by a creditor that is filed outside the specified statute of limitations period is characterized as "time-barred." If the debtor raises the defense in a timely manner, a court must dismiss the lawsuit. An action to recover a default balance owed that is dismissed for failing to comply with the statute of limitations does not extinguish the debt; rather, it means that the creditor has no further legal recourse against the debtor.

Are There Any Dental Payments Plans Without a Credit Check?

Are There Any Dental Payments Plans Without a Credit Check?

Some dental procedures can have a large price tag. Many dentists have payment plans to help patients offset the initial cost of fillings, crowns and bridges, but most are subject to credit approval. Patients with challenged credit still have options.


    There are two available options for dental payment plans: credit-based payment plans and plans made directly with the dentist requiring no credit check. Credit-based plans will extend credit to borrowers, sometimes even credit challenged borrowers, for their procedures. Payment plans are worked out in advance with a dentist.

Payment Plans

    Dentists who offer in-house payment plans with no credit check also require that patients schedule appointments for recurring treatments, so the dentist can collect on the balance. For example, a patient who needs a crown and several fillings might be scheduled for the crown first---the most expensive part of the treatment---and pay portions on the crown in recurring required visits for the fillings.

Dental Insurance and Discount Plans

    Some dentists are more inclined to provide payment plans if you have good insurance or a dental discount plan, which guarantees partial upfront payment by the insurer. This possibility varies based on provider and plan.


    Not all dentists will work out a payment plan for patients with challenged credit, because payment isn't assured for completed services. When credit is a concern, discuss payment plans with your dentist before the appointment to find out the available options.

Tuesday, March 20, 2007

Will Debt Consolidation Work With a Bill in Collection?

Will Debt Consolidation Work With a Bill in Collection?

Consumers sometimes turn to debt consolidation loans to pay back their bills. You can use the money from a consolidation loan to pay back a bill in collection, though you should carefully consider your other options before taking a loan to pay back another loan.

Debt Collections

    When you are late in paying your bills, your creditors can initiate collections processes. Usually, these efforts come in the form of written or phone communications either from the creditor itself or a collections agency it has hired. These collections efforts are persuasive in nature, meaning the creditor is simply trying to convince you to pay. You can use any method you wish to pay back the debt in this stage, including using a consolidation loan.

Judgment Collections

    Regardless of the kind of debt you've incurred, a debtor has to sue you in court before it can take certain actions, such as freezing bank accounts or garnishing your wages. If the creditor wins, it can then come after you using these tactics but may also opt to continue the persuasive collection efforts. Regardless of the state of the lawsuit, you can pay back the bill to settle the case, and you can use funds from a consolidation loan to do so.

Loan Consolidation

    Debt consolidation essentially means getting a loan to pay off one or more other laoans. By getting a new loan, you pass on the obligation to pay back your other loans to the new lender. While this might be an effective for some borrowers, it does nothing to eliminate your debts. If you obtain a consolidation loan to pay off a bill in collections, you will stop the calls and communications from that bill collector, but you will still have to pay off the consolidation loan.

Other Concerns

    Paying for a debt in collections will end the collections process, but that doesn't mean you always have to pay the entire debt. Some consumers can negotiate a debt settlement that allows them to pay a portion of the debt as final satisfaction of it. Debt settlements have their own pitfalls, such as further damaging your credit report, but are a viable option for those who cannot otherwise pay the bill.

How to Add Accrued Interest to Your Judgment

How to Add Accrued Interest to Your Judgment

If a debtor owes you money and you previously won a lawsuit against the individual, the court awarded you a judgment. Not only does a judgment provide you with more powerful collection options, such as garnishment and liens, each state allows creditors to add annual interest charges to the judgment amount that remains unpaid. The court that awarded your judgment does not add interest charges automatically each year. Thus, you must annually file a claim with the court to ensure that the debtor is responsible not only for the original debt, but for the accrued interest.



    Read the judgment collection statutes for your state. The collection statutes will inform you how much interest you can add to the unpaid portion of the judgment each year. If your state's collection statutes are not available online, request a copy from the court that originally awarded the judgment.


    Visit the courthouse and ask the court clerk for a Memorandum of Costs After Judgment form. The exact title of this form may vary, depending on your state of residence.


    Fill out the form. List your name, the debtor's name, the case number, the unpaid judgment amount and the interest charges that have accrued since the court awarded the judgment or since you last updated the judgment's interest. Make a copy of the completed form for your own records.


    Attach copies of any documentation you have proving the unpaid judgment amount if your state requires it.


    Return the completed form and supporting documentation to the court clerk. The court will then review the case and update the legal judgment amount to reflect the new interest charges.

Does It Go Against Your Credit Record if You Cancel a Credit Card?

In the battle to get out of debt, you may be inclined to cancel one of your credit card accounts. While this can help you avoid accumulating more debt, it could also negatively affect your credit score. Before canceling your card, there are a few credit score issues to consider.

Credit Utilization Ratio

    When you cancel a credit card, it could potentially hurt your credit utilization ratio. This is a ratio that is calculated by looking at your credit balances in relation to the total amount of credit that you have available. If you cancel a card once you pay it off, you are also losing all of that available credit. This could raise your credit utilization ratio and lower your credit score as a result of this change.

Length of Credit History

    Your credit score is made up of several factors in relation to your credit history. One of the factors that plays a role is the length of your credit history. When you have had credit for many years, it looks more attractive than if you just opened up your first credit card account. If you cancel a credit card that you have had open for the longest amount of time, this can shorten your available credit history and hurt your credit.

Number of Cards

    Even though canceling your credit cards can have negative effects, it can also help your score in other regards. One of the most common problems that people have is that they hold too many credit card accounts. If this is the case, canceling one of your card accounts may actually improve your credit. This would lower the total number of credit card accounts and help you get down to a more reasonable number.

Stopping Credit Card Use

    When you decide that you no longer want to use your credit cards any longer, you may wish to cancel your account. Instead of taking this approach, you may want to simply cut up your cards. When you cut up your cards and just leave the accounts open, you will not use your card to accumulate more debt. At the same time, you leave your account open and maintain the length of credit history that you have on your record.

Monday, March 19, 2007

Georgia Debt Reduction Laws

Under Georgia law, lenders can sue customers who do not pay their debts. Usually, the lender has four years to sue the delinquent consumer under Georgia state law. Credit-related lawsuits can lead to devastating financial consequences. Some debt reduction programs, including the federal bankruptcy process, can prevent the consequences of unpaid consumer-oriented bills.

Credit Counseling

    Some credit counseling programs can help state residents get out of debt faster, notes the Georgia Department of Banking and Finance. But Georgia citizens should carefully research a credit counseling agency before using its services. Some agencies offer debt management plans, which allow a consumer to repay his debts at reduced interest rates. Also, credit counseling with a federally-approved agency is required before any Georgia resident can file a bankruptcy case.

Chapter 7 Bankruptcy

    People earning less than Georgia's annual median income level can request elimination of many pre-existing bills under Chapter 7 bankruptcy. As of 2011, the qualifying income for a single Georgia resident was $39,384, while the figure for a couple was $52,024, according to the U.S. Trustee Program. A family of three could earn up to $56,682 a year, while a four-member household could bring in up to $69,239 annually. While Chapter 7 reduces a consumer's debt load, it does damage credit ratings for 10 years from the date of filing.

Chapter 13 Bankruptcy

    Georgia residents who did not qualify for Chapter 7 or simply want to partially repay debts can file for Chapter 13 bankruptcy. A Chapter 13 plan takes three to five years to complete. During a Chapter 13 plan, a debtor cannot get new credit accounts without a Georgia bankruptcy judge's permission. Also, no type of bankruptcy covers recent tax bills, child support, alimony, court fines or bills charged right before requesting debt reduction. Only in rare cases of serious disability or a college's negligence will a Georgia bankruptcy judge forgive federally-backed student loans.

Asset Considerations

    If you have resided in Georgia for at least two continuous years before filing bankruptcy, you can invoke state asset exemption laws to protect some of your property. As of 2011, you could keep up to $10,000 of homestead equity if you are single and up to $20,000 if you are part of a legally-recognized couple, notes Bankruptcy Action. You can also retain up to $5,000 in household goods, a motor vehicle worth up to $3,500 and $500 worth of jewelry.

How to Stop Stressing Over Money

Money, or the lack thereof, can be a major cause of stress and anxiety. As the economy continues in a downward spiral of spending, debt, increasing interest rates and joblessness, it is difficult to keep one's mind from straying toward negativity. Take a few steps to clear your mind of monetary worries and make a plan to fix your finances for the future.



    Plan a budget. To ease your mind about your personal finances, you must know your current financial status. Determine your level of debt, minimum monthly payments and expenditures and try to learn about your spending habits. By analyzing what money you spend and why you spend it, you can help keep unnecessary spending under control and potentially eliminate it to help get out of debt.


    Make a plan and know what you need and what you do not need. Try to check yourself when shopping and only buy what is on your shopping list. If you eliminate unnecessary spending, you will find the amount of money you save is significant. If you feel that you have to go shopping for stress relief, try to make it into a game. Go online shopping first and bargain hunt. Check out sites like eBay, Craigslist and other major retailers to see where you can get the most bang for your buck. After researching, you may find that you just needed the "thrill" of shopping or finding a good bargain -- not just the actual acquisition of goods.


    Use coupons. Using coupons can make any shopping trip feel more productive. By buying the things you actually need and using coupons to buy them, you will feel more at ease with your purchasing decisions and can help decrease your debt-causing habits and patterns.


    Step away from the computer. Staring at your bank account and mounting debts can increase a person's anxiety in virtually no time. If you find that your hands are clammy, your heart is racing and your head gets foggy when you start to look at your bank account, try to step back, clear your mind and focus on something else for a little while. The best time to consider your finances is when you are cool, calm and collected. Analyzing your financial woes when you are in a panic will do nothing but increase your anxiety levels and keep you from seeing the real overall picture of your situation.


    Put aside some fun money. Give yourself a little bit of fun money to use every month. Working only to get out of debt can keep you focused on the negatives of money and can detract you from the benefits of having it. If you are only focused on getting out of debt, your money will not seem like a reward, but a curse. Try to keep a set amount of money in your budget to play with so you feel rewarded at the beginning or the end of the month for all of your hard work.


    Don't be afraid to ask for help. Talk to your friends, family or seek professional advice about your financial situation. Sometimes an outsider's perspective can be exactly what you need to ease your worries and come up with a solution.

Saturday, March 17, 2007

The Best Debt Management Solutions

The Best Debt Management Solutions

With credit card balances and interest fees consuming your financial resources and sanity, you may look to a third party debt management firm to help you get back on track. When it comes to choosing a debt management service, there are many providers and types of companies -- and many operate programs as unique as each of our financial situations. Consider various factors when choosing the group best able to work with you to help alleviate your debt load.

Inspire Confidence & Comfort

    Working with a debt relief agency is no different than having a business relationship with any other service provider. First, you need to feel comfortable working with this firm and your account contact. The best debt management firms will not push you if you say you are uncomfortable or unclear about what they expect of you. If you feel uneasy about the tactics used by your debt management firm, this particular group may not be the best fit for you and your needs.

Have Low Fees

    You should expect to pay service providers fees for their time. However, it is important to understand the fee structure to be a fully informed customer. The best debt management groups will be upfront about their fees and should not have any unreasonable charges that would preclude you from most effectively paying down your debt. Expect some fees, but if you find that administrative costs are chewing up your dollars rather than paying down your debt, you may want to look to another debt management firm.

Be Clear on the End Result

    Being debt-free is certainly a goal worth pursuing. But when you expect concessions from credit card companies, prepare to find some strings attached. Debt management programs operate toward the same goal, but depending on the techniques employed, they might affect your credit score and limit your future borrowing ability. Customers that enroll in a credit-counseling program often see their accounts closed with restrictions on obtaining new credit until the plan is complete. Debt settlement firms may provide lower total balances, but at the cost of having charge-offs listed on your credit report. The best debt management groups will tell you what to expect each step of the way. And they will tell you about the potential impact the program may have on your credit profile.

Empower You for the Future

    Turning to a third-party debt management service is not something anyone puts on his list of goals to accomplish. Once you complete your debt-management plan and have paid down your debt, commit to never letting it get out of control again. You may need some guidance to stay true to this objective. The best debt management groups will provide education and support to help you establish a budget and identify warning signs that your debt is again spinning out of control.

The Best Ways to Improve Credit: Revolving Lines of Credit

Improving your credit file can help you get approved for financing easily and save money on it once you do. You could use many techniques to help boost your credit score, but focusing on your revolving credit lines can be extremely beneficial to the process.

Revolving Credit Lines

    Debt is actually broken up into several different types, including installment loans, mortgage loans and revolving debt. Revolving debt is essentially a term for credit cards or similar accounts. With this type of debt, your balance can increase or decrease by the month. You are responsible for making a minimum monthly payment on your revolving debt. An example of installment debt would be paying a car loan, while mortgage debt is associated with paying your home loan.

Paying Down Balances

    One of the quickest ways to boost your credit score is to pay down the balances on your revolving debt. When you carry maxed out balances on your credit card, it will negatively affect your credit score. If you want to boost your credit score, you need to get the balances on your credit cards down to below 30 percent of their available credit limit. If you can do this, it reflects positively on you when your credit score is calculated.

Making Payments

    You can also use your revolving credit accounts to help boost your score by making your payments on time. The most important aspect of calculating your credit score involves the timeliness of your payments. Your credit card companies will report each payment to the credit bureaus and if you make them all on time, this will eventually boost your credit score. If you miss even one payment, it can hurt your credit significantly in a short amount of time.

Regular Use

    Regularly using your revolving credit accounts can also help boost your credit score. Many people mistakenly believe that they should not use their credit cards if they want to help their credit score. While you do not want to accumulate a large balance on your credit cards, regular light use can be extremely beneficial. If you make a small purchase with your card every month and then pay off the balance in full, it will increase your score.

Thursday, March 15, 2007

How to Reduce Debt Today

How to Reduce Debt Today

According to Kiplinger, a publisher of business finance advice, the average credit card debt alone for cardholders in their mid-20s to mid-30s exceeds $5,000. Many households are paying interest on auto loans and mortgages in addition to credit card debt. If you procrastinate in reducing your debt, you will just pay more in interest. Start today to reduce your debt and establish better habits for a secure future.


    Start paying cash today.
    Start paying cash today.

    Pay cash or use your debit card for today's purchases. Stop charging. Jane Bryant Quinn, author of "Making the Most of Your Money Now," says that this simple step contains the key to debt reduction. After all, if you pay off $100 in debt today but charge another $100, your total debt stays the same. You can only reduce your debts if you stop charging.


    Get a clear picture of your debts. List each debt including name of creditor, amount and interest rate. Plan to start by paying off the debt with the highest interest rate, Kiplinger suggests.


    Raise money today to put on your debt. Have a yard sale, Quinn suggests, or return unused items to the store for a refund. If you have the sales slips, many stores will give you cash for items you return within a reasonable period. Deposit the cash from your sale or returns in your checking account and use it for debt reduction.


    Transfer savings to your liquid account for debt reduction. You probably are making way less in interest than you are paying for your debts. Quinn says you should not touch your retirement accounts, however. Financial planner Ric Edelman, author of "The Truth About Money," says you should even sell other investments such as mutual funds or U.S. Savings Bonds to reduce your debt. In some cases, you will not receive your cash immediately, but you can begin the process today.


    Use the money you have gleaned from all sources to reduce the debt with the highest interest rate. If you have enough to pay this debt off, use the balance to pay down the debt with the next highest interest rate.

    Plan for a secure financial future.
    Plan for a secure financial future.

    Resolve today to continue living on a cash basis tomorrow and every day. Plan to use the surplus from your frugality to pay your debt with the highest interest rate until all your debts are paid off. Consider today just the beginning of new financial habits for a secure future without debt.

How to Settle a Spouse's Credit Cards When the Spouse Dies

After a spouse dies, one of the more difficult aspects of squaring things away is settling his credit card debt. As a rule, debts are paid from the decedent's estate, which is handled by an executor (if there is a will) or a court-appointed administrator (if your spouse died intestate). If you're the designated party responsible for handling your spouse's estate, this means contacting his creditors to inform them of his demise, as well as paying the debt from the existing estate. However, there are also circumstances that may make you personally liable for your spouse's credit card debt; these are established by your state's laws. Always consult with an attorney if you are unsure whether the debt your spouse has incurred can be passed down to you.



    Assess your own personal liability for the credit card debt. Generally speaking, if the credit card belonged only to your spouse and you were only an authorized user of the account, you're probably not liable for shouldering the debt. However, if you were a co-signer on the credit card, both you and the estate may be held liable. However, it's important to note that if you reside in a community property state, you may inherit the credit card debt, even if you were not a co-signer on the account.


    Inform the credit card company of your spouse's death in writing while his estate is being settled, advises CreditCards.com, a consumer education website. If you're handling your spouse's affairs as executor or administrator, mail the credit card company a copy of your spouse's death certificate, as well as a note that contains the name and account number attached to the credit card. Send all documentation by certified mail and keep copies for your own records. If you're not responsible for your spouse's affairs, his executor/administrator will take on this duty.


    Handle calls from credit card companies cautiously, the Federal Trade Commission advises, especially if you're unsure that the debt they are contacting you about is valid. Con artists often scour obituaries and legal notices to see who has died so they can pose as debt collectors. Don't give out your own personal information (such as your Social Security number or banking information) if you have doubts. Doing so could make you the victim of identity fraud.


    Pay the credit card debt from your spouse's estate. If the debt exceeds the amount of the assets, usually the creditor will simply write off the debt. Exceptions apply if you are legally responsible for the credit card debt. Because state laws can vary dramatically on these issues, it's wise to consult a probate attorney if you are unsure whether you are personally liable for the debt.

Can I Lose My Home if I Co-Sign for Someone Else and They Default?

If a close friend or family member has asked you to cosign for a loan, there are a number of things you should consider before agreeing to act as a cosigner. A cosigner essentially has full responsibility for the loan, in most cases. If the primary borrower defaults on the loan, the lender can attempt to collect from you. In some cases, a lien could be attached to your own home for the amount due on the loan.

Why Would You Need To Cosign?

    If someone applies for a loan and the lender does not feel that she meets the qualifications for it, she may be asked to secure a cosigner. While each lender has its own qualifications and each situation is different, there are two common reasons why a person may be required to secure a cosigner: either the borrower does not meet the income requirements for the loan, or she has a poor credit history. Regardless of the reason, if a lender requires a cosigner it is because the lender is not convinced that the borrower will repay the loan.

Cosigner Liability

    When you agree to cosign for a loan, that typically means you are legally liable for the entire debt, including interest and any costs associated with collecting the loan. Furthermore, in some states, the lender is not required to attempt to collect the debt from the primary borrower before coming after you to collect the debt. The debt may not even need to be considered officially in default before the lender can attempt to collect from you. In other words, if the primary borrower misses a single payment, the lender may be able to immediately contact you for the payment. State laws vary with regard to whether or not the lender must first attempt to collect from the primary borrower, but in all states the cosigner is ultimately liable for the entire debt.


    If the primary borrower defaults on the loan, the lender may file a lawsuit against both the primary borrower and you, as the cosigner. If the lender obtains a monetary judgment as a result of the lawsuit, it will be against both of you. Since the lender likely knows that the primary borrower is unable to pay the debt, and has few assets, the lender will likely turn to you to satisfy the judgment. In many states, a creditor may attach a lien to your home if it has a judgment against you. Most states allow a homestead exemption which exempts your home from attachment up to a certain dollar amount; the amount varies widely by state. If, however, you have more equity in your home than the homestead exemption allows, you may find a lien attached to your home.


    Cosigning for someone can have serious financial consequences if the person defaults. While you may not actually lose your home, you could wind up with a large lien attached to it that you are forced to repay. In addition, if you cosign for a large loan, such as a mortgage, it may affect your ability to acquire your own loan or refinance an existing loan, because you are considered responsible for the entire amount of the loan for which you cosigned.

Liability of Debt

Debt is a necessary part of maintaining good financial health for many businesses and individuals. But debt also puts the borrower in a position of accepting liability for the borrowed money. The liability of debt, including who is responsible for paying it back and under what circumstances, involves many areas of law and is important or both lenders and borrowers to understand in order to make fiscally responsible decisions.

Loan Agreements

    Liability of debt falls under legal regulations based on the type of debt as well as the loan agreements lenders and borrowers sign. These agreements define the liability for debt and include terms, such as how long the borrower has to pay back the debt, what the rate of interest will be and under what conditions the lender can take possession of any property the borrower puts up at collateral. Loan agreements are subject to contract law, which means neither party can attempt to defraud the other without risking the validity of the loan agreement.

Limiting Liability

    Several types of business structures offer limited liability for a business's owners. Corporations and LLCs, or limited liability companies, have legal protection that shields the owners' personal assets and keeps them separate from business debt. This allows owners to take risks on behalf of the business without risking their personal finances. Business structures also prevent personal debt from affecting a business' standing.

Piercing the Corporate Veil

    In some cases, a court may hold a business owner personally liable even if there is a limited liability arrangement. This process is known as piercing the corporate veil and it can only occur when the owner is directly involved in fraud or other illegal activity that causes a business to incur debts or to be unable to pay off legitimate debts. In these cases, the owners may be liable for business debts and their assets, including property and investments, may be seized to repay the business' lenders.


    When an individual or business files for bankruptcy, the issue of debt liability determines how the court discharges debt and what it means for the borrower. Upon filing for bankruptcy a borrower receives a stay, which means lenders can't take legal action against the borrower regardless of liability. Bankruptcy courts must honor the correct order of repayment based on the borrower's liabilities; for example, the first lenders to be repaid are those with secured debts backed by property the borrower still owns, while unsecured debts have a lower order of liability and are paid back later, if at all.

Wednesday, March 14, 2007

Benefits of Financial Statement Disclosures

In modern economies, a new era of government accountability emerges. Public officials attempt to set sound procedures to monitor, measure and disclose economic information. Businesses and non-profits also have jumped on the bandwagon of clean, complete financial reporting. This increased level of accounting openness benefits the public and investors, as they can read financial-statement disclosures to gauge such factors as liquidity and profitability.

Regulatory Compliance

    When a business is forthcoming with performance data, it cultivates better and tighter relationships with regulatory authorities. By doing so, the firm can potentially preempt government inquiries and expedite corrective actions. Regulatory compliance goes a long way toward preventing significant operating losses, which typically stem from such adverse actions as fines, temporary suspensions and penalties. To avert negative regulatory initiatives, publicly traded companies follow disclosure requirements that government agencies, such as the U.S. Securities and Exchange Commission, have established.

Improved Corporate Reputation

    Companies rely on various tools, mostly technological, to analyze their operating data and determine the best way to disclose performance information. They may rely on mainframe computers -- as well as financial and accounting software -- to reveal to the public the company's ins and outs. A business may use computer programs to track operating data over several years and show the public how it has evolved over time, financially speaking. Firms with straightforward, clean reporting processes often enjoy a good reputation in the marketplace, which usually translates into increased market share and customer loyalty.

Financial Transparency

    To combat fraud in financial reporting, organizations often hire forensic specialists -- such as accounting-crimes experts and fraud investigators -- to root out instances of illegal activities in corporate operations. These specialists may use auditing programs to analyze the way bookkeepers record operating activities, as well as other history-sniffing software to detect potential vulnerabilities in corporate financial reporting. The goal here is to ensure "back-to-back financial transparency," meaning forensic experts want to set appropriate procedures from transaction recording and entry verification to financial reporting. Increased financial transparency eases the disclosure of performance data in accounting statements.

Increased Investor Interest

    Corporate financiers usually side with a business that consistently reports clear, positive operating results. Corporate management may not draw a standing ovation and congratulatory handshakes when times are bad, but investors would put negative results into perspective and look at a five- or three-year span instead of one year. Companies that adequately disclose financial information generally see an increase in their share values, especially those listed on a public market, such as the New York Stock Exchange.

Tuesday, March 13, 2007

Definition of Outstanding Debt

Definition of Outstanding Debt

According to the Business Dictionary, outstanding debt is the "unpaid portion of a debt that may include interest accrued on the balance." In other words, outstanding debt includes all of the money a person owes. In addition to the amounts borrowed, outstanding debt also includes the interest that is charged on the debt on a daily basis.


    Because outstanding debt includes money owed to all sources from which it was borrowed, people carry many different types of outstanding debt. One of the most common ones is credit card debt, as anybody who uses a credit card has at least a small amount of outstanding debt. Even if the card is paid in full every month, the debt is outstanding during the part of the month before it is paid. Other types of outstanding debt include auto loans, student loans, mortgages and home equity lines of credit.

Principal Balance

    The principal balance is the main portion of an outstanding debt. Once all the payments a person has made on a loan have been applied to paying interest charges and repaying the money borrowed, the principal balance is the amount of the money borrowed that still remains to be repaid. For example, if a person has a $200,000 mortgage on a home, after five years of payments the principal balance may be down to just $183,350.

Interest Owed

    Interest is typically charged on a daily basis, so if any days have elapsed since making the last payment on a debt, then a person also must include some amount of interest owed when calculating the amount of outstanding debt. For example, say a person has carried a balance of $3,500 on a credit card at 14 percent annual interest. Divide 14 percent by 360 to calculate that 0.039 percent interest is charged every day. If it has been 20 days since making the last payment, then the interest owed is $3,500 times 0.039 percent times 20, or $27.22. Therefore, the person's outstanding debt on the credit card is actually $3,527.22.

Paying Off Debt

    When paying off outstanding debt, people should consider how much of their monthly payments are going toward interest and how much is decreasing the principal balance. Especially during the first few payments on a loan, a large portion of the monthly payment will cover interest, and the principal balance will hardly decrease at all. Making extra payments that go directly toward the principal balance greatly decreases the amount of interest paid over the life of the loan. Paying off debt quickly also reduces the total outstanding debt and can help you get better interest rates on new loans.

Federal Debt

    Another major type of outstanding debt that does not fall within the category of personal debt is the outstanding debt of the federal government. Many people know this as the "national debt." This amount is the total of all the money the government has borrowed but has not yet repaid, both to its citizens and to foreign governments. The Bureau of Public Debt within the Department of the Treasury manages the treasury bills, notes and bonds that make up the federal debt.

Grants Program Information

Grants Program Information

By definition, a federal grant is money that is awarded for a specific purpose. The grant money is tax free, and there is no repayment required. Federal grants are awarded by individual government departments. The United States Federal government awards billions of dollars each year for a multitude of reasons.

Catalog Of Federal Domestic Assistance

    Grants Of All Sizes
    Grants Of All Sizes

    Catalog of Federal Domestic Assistance (CFDA) is a publication to assist the public as a guide through the multitude of Federal domestic grants. CFDA provides a complete "listing of Federal programs." Included in the CFDA is information about programs, agencies and regional and local agencies offices.


    Tax Free Money
    Tax Free Money

    The grant awards described in the CFDA for federal grant monies navigational is broken down into nine (IX) user step by step instructions. Starting with the instructions on how to view each program's complete details. To how to perform keyword searches, sort searches by column headers, number of programs the display per page, and instructions on how to save the information or print a copy of it. There is a screen shot showing exactly what to do, where to do it, and in what order.

Executive Order 12372

    TThe Executive Order 12372 dictates that the federal agencies will provide assistance to interview those elected officials. This executive order outlines how states are to coordinate with federal agencies on plans that will best utilize the funds. The Office of Management and Budget (OMB) will coordinate with the states and maintain final approval on Federally funded State development projects.

Who Is Eligible

    Under the current grant guidelines, any American citizen, and even United States visa residents, are authorized to apply for, and receive, federal government, state government, and even private foundations' funded loans and grants. Furthermore, these programs don't require background credit validations, collateral, or co-signing sponsorship. Even a credit history with bankruptcy is not a deterrent to obtaining grants.

Finding Grant Opportunity

    Once a specific purpose had been determined to apply for a Federal Grant, the job has just started. The complete process will take many hours of research, writing, proofreading, re-writing, building a business plan, computation, and ensuring the guidelines for this specific purpose are followed to the letter.

How to Write a Settlement Letter for a Creditor

How to Write a Settlement Letter for a Creditor

If you've fallen behind on your credit card bills, negotiating a settlement with your creditor may be an option. A settlement allows you to clear debt by paying less than what you owe, giving your creditors a chance to reduce their losses. While you can hire a debt settlement company to negotiate on your behalf, you can typically achieve the same results by drafting your own settlement proposal.



    Calculate how much you can afford to offer as a settlement. The amount a creditor will settle for varies but you can expect to pay anywhere from 25 percent to 75 percent, depending on how much you owe and how delinquent the account is. Typically, creditors prefer to receive a lump-sum payment but some creditors may be willing to accept a payment plan.


    Open a new word processing document on your computer and type your name and address in the upper right-hand corner. Insert a space and return to the left-hand side of the document. Type the creditor's name and address, insert two lines and type the date.


    Insert an additional line after the date. Type the account number in the following format: RE: Settlement of Account XXXXXXXX. Insert a line and type the salutation.


    State your name and account number in the opening paragraph. Explain to the creditor why you have been unable to pay i.e. unemployment, illness, divorce, etc. Offer to provide supporting documentation if it's available.


    Outline the terms of your settlement proposal. State the amount you are willing to settle for and whether you prefer to make a lump-sum payment or multiple monthly payments. Explain to the creditor why you feel a settlement arrangement would be beneficial for both of you.


    Close the letter by thanking the creditor for considering your offer. Sign the letter and make a copy for your records. Send the letter via certified or registered mail in case its receipt is disputed.


    Wait for the creditor's response. If the creditor agrees to your offer, contact them to make payment arrangements. Offer to pay via money order, cashier's check or wire transfer.

Monday, March 12, 2007

How to Qualify to Rent a House

To rent a house you will need to meet certain requirements. The landlord will review your personal information and verify your information to determine the likelihood that you will be a good tenant. Each landlord will have their own standards and criteria that you will have to meet. When you apply to rent a home, you may want to apply for several, if you think there is a chance that you could be denied.



    Visit a landlord and submit an application. When you find a house you would like to rent, make an appointment to see the landlord. Submit an application with your name, address, phone number, social security number, date of birth and your place of employment. The landlord will also need your previous landlord's name as well as copies of recent paystubs. The application will also ask for personal references. When you have signed the application the landlord will get a copy of your credit report and verify the information on your application. These factors will determine if the landlord will rent to you.


    Wait for approval or denial. The landlord wants to make sure your income is enough to make the rent payments. Once the landlord calls your previous landlord he will be able to see if your rent payments were timely. If you were always late paying your rent or nearly evicted, your application may not be approved. Your credit report will be instrumental when it comes to making a decision about your rental application. If you have a number of judgments, liens, collection accounts and other derogatory credit, the landlord may reject your application. Another factor to consider is how long you have been on your job. If you have had several jobs, for two or three months, within the last year, the landlord may decide to pass on your application.


    Sign the lease agreement, if approved. You will receive keys after you sign the lease agreement. The lease agreement will outline the terms and will include the amount of your rent and when it's due.