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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..

Friday, November 30, 2007

Debt Recovery Solutions

Debt Recovery Solutions

When it comes time to turn your commitment to financial freedom into action, you may be confused about where to start. The answer is different for everyone, depending on each person's specific financial situation. However, everyone attempting to get out of debt must begin at the same starting point: getting on a budget.


    Any way you go about recovering from debt, you need to create a budget. A successful budget measures your income versus your spending so that you can determine where to cut back to contribute more to other areas. To create a budget, write down everything you spend for a week, then multiply it by 4.3 to get an estimate of the amount you spend monthly. To that total, add any recurring monthly expenses, such as bills and your rent or mortgage payment. Find ways to cut back, such as bringing your lunch to work or taking advantage of your company's public transportation reimbursement, so you are able to contribute more to your debt each month.

Debt Consolidation

    Once you've created a budget, you may find a debt consolidation loan to be a good way of making your payments more effective by finding a loan with a lower interest rate than your current debt carries. However, be warned that most debt consolidation lenders advertise their loans at very low interest rates, which only those with stellar credit qualify for. Debt consolidation does make payments easier, allowing you to make one monthly payment rather than payments to each individual lender. However, they may be dangerous for those who have a hard time reigning in the spending. Since consolidation loans wipe out your existing balances, it's up to you to avoid spending on those accounts again, or else you may end up in more debt than you were previously.

Debt Management Plan

    You may only use a debt management plan if your credit counselor recommends one for your specific financial situation. Under a DMP, your counselor negotiates with your lenders to get lower interest rates or payoff balances. The counselor then lays out your payments over a time frame---usually 48 months or longer---by the end of which you will have paid off your debt. Lenders may view your DMP negatively because you weren't able to pay off the entirety of your loan; however, if you are responsible with the repayment, it may be a fast route to get you to the point of rebuilding your credit score. To find a reputable credit counseling organization, visit the National Foundation for Credit Counseling website, which allows users to search for counselors by location.


    The last option for debt recovery is bankruptcy, of which there are two types: Chapter 13 and Chapter 7. In Chapter 13 bankruptcy, individuals with steady income may maintain their assets, such as their home and cars, in exchange for payments made over a period of three to five years. At the end of that period, some of the individual's debts are discharged. Chapter 7 is viewed as a straight bankruptcy, involving liquidation of the individual's assets in exchange for discharge of certain debts. Both types of bankruptcy generally cover unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs; however, they generally do not cover child support, alimony, fines, taxes and some student loan obligations.

What Are the Statute of Limitations for Business Debt in Missouri?

Borrowing money to help you open your business can be risky. If your business doesn't make enough to pay back its debts, your creditors can take action against the business and, in some cases, against you personally. You and your business may have to file for bankruptcy to end the financial stress due to your business debts. In Missouri, the statute of limitations on either business or personal debt is five to 10 years, depending on the type of loan.

Type of Debt

    As of 2011, Missouri's statute of limitation on debts depends on the type of debt the business incurs. All credit card accounts, whether business or personal credit, have a statute of limitations of five years, while any debts involving contracts such as business loans have a statute of limitations of 10 years. If a creditor sues your business and wins, the statute of limitations for collecting a judgment is 10 years from the date of judgment.


    The statute of limitations refers to how long a creditor has to collect a debt using the legal system after the debtor --- in this case, a business --- defaults on the debt. The statute of limitations refers only to court actions. Creditors are still free to contact the debtor by mail or telephone or give a debt collection agency the power to do so even if the Missouri statute of limitations has expired on the debt.

Bankruptcy and Debt Collection

    If a business is unable to pay its debts, one way to stop debt collectors from hounding business people is to file for Chapter 11 bankruptcy. Chapter 11 allows businesses to liquidate assets or set up a structured repayment plan to repay creditors. In Missouri, if a business files for Chapter 11 bankruptcy, debt collectors may not continue to take collection action against the business while the bankruptcy is being settled.


    If your business cannot pay its debts, Missouri creditors may hold you personally responsible. The federal and state government consider business owners personally liable for nonpayment of payroll taxes and can take collection action against you individually as well as against your business. The statutes of limitations for personal debts are the same in Missouri as for business debts; your creditors can sue you personally as long as they stay within the Missouri statutes of limitation for debts.

Thursday, November 29, 2007

Debt Repayment Options

Consumers who find themselves deeply in debt may feel that repaying the amount they owe is impossible--especially if interest charges and fees continue to accrue on the debt. Struggling to make minimum payments, while only making minimum progress on paying down the debt, isn't the only option consumers have to meet their obligations and regain their financial freedom.

Chapter 13 Bankruptcy

    When an individual files for Chapter 13 bankruptcy, he must present a repayment plan to the court. His repayment plan must include a viable way for him to repay all of his creditors over a three to five year time frame. If the individual's debts are too high to manage comfortably within the allotted time frame, the court may reduce the balance of the debts or eliminate additional charges from creditors to allow the consumer to pay what he owes more easily.

Debt Settlement

    Individuals have the option to contact their creditors and attempt to negotiate high balances, interest charges and fees in the hopes of obtaining a debt settlement. Through debt settlement, both the creditor and the debtor compromise on the amount owed. This not only allows the debtor to make payments that she can afford, it ensures that the creditor receives a partial payment on the debt--which is more than it would have received had the individual stopped paying altogether. Some creditors, however, will not accept debt settlement proposals from an individual until the debt is overdue and classified as delinquent. In addition, not all creditors will agree to a debt settlement.

Voluntary Wage Assignment

    A debtor may opt to have a portion of his paycheck withdrawn by his employer and remitted to his creditor each pay period. This is known as a voluntary wage assignment. Unlike a wage garnishment, which is involuntary, a voluntary wage assignment reflects better on the debtor since it illustrates that he is repaying his debts without being forced to do so. Not all employers will agree to a voluntary wage assignment. Thus, it is important that a debtor discuss his intention with his employer before proposing a voluntary wage assignment to creditors.

Credit Counseling

    For those who are struggling to repay debts, credit counseling may be a viable option. Through credit counseling, an individual submits payments to a credit counseling agency rather than her creditors. The credit counseling agency then allocates portions of each payment that the consumer makes to her creditors. Credit counseling agencies often negotiate with creditors to reduce balances in the process--leaving the debtor with less to repay. The Federal Trade Commission recommends credit counseling as an alternative to bankruptcy for those who wish to repay the debts that they owe.

Tuesday, November 27, 2007

Debt Reduction Vs. Debt

Debt Reduction Vs. Debt

It's easy to find things you would rather spend money on each month than your debt, but if you don't reduce your debt, your interest payments will end up costing you precious money that you could use to meet your financial goals. By choosing a method of debt reduction and sticking with it, you will pay off your debt in a far shorter period of time, freeing your future income for things you really want to invest in.


    If you allow your debt to accumulate or stay stagnant, you're likely doing a disservice to your credit score. The amount of debt that you have in relation to your credit limit is called your debt utilization ratio, and it makes up roughly one-third of your credit score. By failing to take action to reduce your debt, you're keeping yourself from having the best credit score possible, even if you're making minimum payments on time each month.

Debt Reduction

    When you reduce your debt, you're taking the necessary steps to boost your credit score and you're also reducing the amount you end up spending overall. For example, Kiplinger writer Kimberly Lankford points out that a $5,000 balance with an 18 percent interest rate has a minimum payment of $200 per month; however, by just paying those minimums, you're going to pay an additional $2,916 in interest alone over the 12 1/2 years it would take to pay off the card. With this example, it's easy to see how reducing your debt means that you're freeing up your money for better use.


    Many options exist for reducing your debt, but all paths begin at simple budgeting. After comparing your spending with your income, figure out where you may cut back to contribute more to your debt. Consider utilizing either the debt snowball plan, where you pay off the debt with the smallest balance first, or the highest interest rate plan, where you pay off the debt with the most damaging interest rate first.


    If your debt situation feels unmanageable, visit a reputable credit counseling service. The National Foundation for Credit Counseling website contains listings of reputable credit counselors. A counselor will help you to create a budget and make recommendations for ways to pay off your debt. Your credit counselor will help you understand how utilizing a debt consolidation loan, debt management plan or settlement will affect your credit both in the short- and long-term future.

Statute of Limitations on Credit Owed According to the Fair Credit Reporting Act

Statute of Limitations on Credit Owed According to the Fair Credit Reporting Act

Prior to 1970, consumers were on their own with respect to the information provided to almost anyone by credit bureaus and credit reporting agencies. In 1970, Congress enacted the Fair Credit Reporting Act with the primary objective of protecting consumers against the release of inaccurate information by these agencies. Since that time, lawmakers have revisited and enhanced the FCRA, fine-tuning its fundamental principles to ensure even more protection for consumers with regard to the content and release of information in their credit report.

Negative Information

    Making late payments, defaulting on a loan, repossessions and foreclosures are just a few types of negative information that stay in your credit file for seven years. Since lenders and employers routinely check credit reports, harmful details in them may keep you from negotiating a lower interest rate, buying a car or home and, in some cases getting a job.


    There are exceptions to the seven-year rule. Bankruptcy stays on your report for 10 years. Criminal convictions stay on a credit report indefinitely. No time limitation applies to information reported in response to an application for a job with a salary of over $75,000 or when you apply for more that $150,000 in life insurance or credit. An unpaid judgment or lawsuit in your past can stay on your report longer than seven years if the statute of limitations associated with it exceeds that time frame.


    While the FCRA limits access to your credit report, if a credit reporting agency deems the requester has a legitimate business need, it releases the information. Besides applications for credit, these agencies release your credit history because of court orders, for account review by banks and other companies you do business with, for professional licensing requests and for child support payment determinations. When investigating terrorism or counterintelligence, law enforcement personnel may secretly access your credit report. In the case of employment, including hiring, promotion and retention, a prospective or current employer may request your credit report if given your permission to do so.

Protect Your Report

    Protect your credit report by requesting a free copy every year. Because each of the three major credit reporting agencies may publish different information, get your report from all of them. Inspect the reports for errors. If you find mistakes, take steps to correct the inaccuracy. Since Equifax, Experian and TransUnion have different procedures for handling challenges to entries on a credit report, contact each one to determine what steps you should take to correct the errors. For a nominal fee you can get a copy of your credit score as well. As with the credit report itself, each credit reporting agency's score may differ; invest in one from each agency. Although the hit on your credit score from pre-screening queries is minimal, eliminate these queries altogether by opting out of the practice through a verbal request. Make the opt-out permanent by sending a letter detailing your request to the three national credit reporting agencies. Protect yourself even further by filing a formal request with each credit reporting agency asking them to withhold the last five digits of your Social Security number when supplying your credit report.

Monday, November 26, 2007

How to Stop Creditor Harassment in Writing

Creditors are often relentless in their debt collection efforts. They may telephone you several times a day, leave threatening voice message and send countless correspondences. Paying a debt is the best way to get them off your back. But if you don't owe a particular debt, or if you simply want the harassment to stop, writing a letter can produce results. According to the Fair Debt Collections Practices Act, bill collectors must stop calling upon your request.



    Get the name and address of the creditor. Keep copies of correspondences sent from creditors, bill collections or attorneys. You'll need this information to draft a letter to the creditor asking them to stop calling you.


    Write a letter to the creditor or bill collector. If a debt isn't legitimate, write the creditor or collection agency and ask them to provide documentation verifying that you owe the debt within 30 days. If unable to provide this information, they must cease harassment and collection attempts.


    Ask collection agencies and attorneys to stop calling you. In your letter, include a sentencing asking the collector or attorney to stop phoning you at home and work. Mention the Fair Debt Collections Practices Act, and remind them that they're required by law to stop phoning upon your request.


    Include copies of cancelled checks. If you've paid a debt, include a copy of the check in your letter to stop harassment.


    Mail a certified letter. Take your letter to the postal office and send it as certified mail. The postal service guarantees that the collection agency or creditor will receive the letter, and you'll receive a mail receipt upon delivery.

Does Getting a Cosigner Help Your Credit?

If you have poor credit or have not established a credit history, you may need to obtain a cosigner to obtain a line of credit, car loan or other form of credit. A cosigner is a person named on the loan who is responsible for repayment if you cannot make your payments, but typically does not directly benefit from the loan. This can help you obtain the items you need to obtain on credit, but it can also help you build or rebuild your credit.

Access to Credit

    Obtaining a cosigner can help you qualify for a loan that you might not otherwise qualify for alone. As you make your payments on the loan, your lender will typically report your on-time payments to Experian, TransUnion and Equifax, the main credit reporting agencies in the United States. On-time payments can help establish positive credit, which can help you obtain future credit without a cosigner.

Cosigner Qualification

    In order to obtain a loan with a cosigner, you will need to find a person who is willing to accept responsibility for the repayment of your loan if you cannot make your payments. However, the cosigner will also need to have a sufficiently high credit score to qualify on the loan. Your lender will typically want to know that the cosigner can handle the loan payments alone if you default.

Required Disclosure

    If a lender agrees to approve a loan with a cosigner, federal law requires the lender to disclose the cosigner's responsibilities. The disclosure notifies the cosigner that he may have to pay the full balance of the loan, plus any collection costs and late fees you accrue, if you fail to make your payments. It must also state that default on the loan may appear on the cosigner's credit report, and that the creditor may execute collection actions against the borrower such as a lawsuit and wage garnishment.


    Although responsibly maintaining a loan guaranteed by a cosigner may help your credit, it can cause credit damage if you cannot make your payments. Review your finances to make sure you can make your loan payments -- a lender's approval may not necessarily mean that you can handle repayment of the loan. Also, defaulting on a cosigned loan can create ill-will between you and the cosigner responsible for paying your debt.

Direct Debt Ratios

When you're applying for a mortgage loan, auto financing or personal loans, your lender will look at your direct debt ratios to determine whether you have enough money coming into your bank accounts every month to afford your loan payments. If you have too much debt and too little income, most financial institutions won't want to lend you money.

Debt and Income

    Lenders look at both your monthly debt obligations and your gross monthly income when determining whether you can afford the payments on the loan for which you are applying. Your gross monthly income is any income that comes into your household on a monthly basis. For most people, salary makes up their gross monthly income. Monthly debts include everything from mortgage loan and auto payments to minimum monthly credit card payments and student loan obligations.

Debt-to-Income Ratio

    One of the most important direct debt ratios that lenders consider is your debt-to-income ratio. In general, lenders don't want your total monthly debt obligations -- including your monthly mortgage payments -- to be higher than 36 percent of your gross monthly income. If this ratio is too high, lenders argue, you'll struggle to make your payments when taking on any new debt.

Front-End Debt Ratio

    Your lender might also consider your front-end debt ratio when considering whether you're able to handle any new loan payments. This ratio compares the relationship to your housing costs -- including your mortgage payments, taxes and any housing fees you have to pay -- to your gross monthly income. In general, lenders don't want your housing costs to exceed 28 percent of your gross monthly income.

Fixing Your Numbers

    If your direct debt ratios are encouraging lenders to reject your loan applications, you have two choices: You can improve your debt ratios by either increasing your gross monthly income or lowering your monthly debts. Be honest with yourself, even if you do lower your debts or boost your income, ensure that you can truly afford any new debt that you take on, no matter what your ratios say.

Can Wages Be Garnished in the State of Texas for Nonpayment of a Debt?

If you are a Texas resident and you have failed to make payments as agreed on a debt, your creditor may file a lawsuit against you in a Texas court. Unless you can demonstrate that the creditor filed the lawsuit wrongfully or that you paid the debt, the court will grant a judgment to the creditor. But In most cases, a judgment creditor in Texas cannot garnish your wages.

Prohibition of Wage Garnishment

    Texas is one of only four states -- South Carolina, Pennsylvania and North Carolina are the others -- that do not permit garnishment for private debts. Texas law only permits garnishment of wages for debts involving unpaid child support and student loans. This means that if you only earn income through traditional employment in Texas, the creditor cannot get a court to order your employer to withhold any portion of your income to pay toward the judgment debt.

Redomestication of Judgment

    Although a creditor with a valid Texas judgment typically cannot garnish your wages, Texas case law provides an alternative strategy for creditors to execute a wage garnishment in limited circumstances. If you live in Texas but derive wages from employment in another state, the judgment creditor may pursue redomestication of the judgment to the state where you are employed. If the creditor's efforts are successful, it may execute a wage garnishment order under the laws of your employer's state.

Other Income and Assets

    Texas law permits garnishment of certain non-wage income to satisfy your judgment debt. If you receive income from rental properties you own, royalty agreements with book publishers or other income such as earnings derived from self-employment, the creditor may garnish these funds. A creditor can also garnish funds held in Texas bank accounts you own. However, it may not garnish income derived from Social Security benefits, worker's compensation, insurance proceeds, unemployment benefits or government employee pensions.


    A Texas judgment for an unpaid debt can significantly lower your credit score, decreasing your ability to obtain loans and credit cards in the future. Regardless of whether you pay the judgment amount, the judgment will stay on your credit report for seven years. The impact on your credit score depends on the presence of other negative entries in your credit file; however, a judgment will typically cause more credit damage than a missed debt payment.

Sunday, November 25, 2007

Debt Cures and the Government

There are many government programs available for those who want assistance in paying off their debt. Depending on your situation, you will find programs that can help make paying off credit card debt a little easier, relief from having to pay taxes on a foreclosure and repayment options for student loans. Government and state grants are also available for those in dire financial trouble.

Credit Card Debt Relief

    The Credit Card Act of 2009 includes new regulations in credit card billing procedures. Under the new regulations, credit card companies must bill customers 21 days in advance of their due date and must give customers 45 days notice before changes to their account will be made (changes may include higher interest rates, changes in privacy notices, credit card limit changes). These new regulations give you additional time to prepare to pay your credit card bill.

    If changes are made to your account, you now have the option to reject these changes. For example, if the credit card company wants to increase your interest rate, you can reject this without penalty. You will have up to 5 years to pay off the balance of the card at the current interest rate. Keep in mind that your credit card may be canceled if you choose not to accept the new interest rate.

    For those who are struggling to pay off credit card debt, additional government regulations have been proposed that would prohibit credit card companies from raising your interest rates while you have an existing balance. This would allow you to pay down the balance in less time.

Mortgage Forgiveness Debt Relief

    The Mortgage Forgiveness Debt Relief Act of 2007 protects homeowners from having to pay taxes on the remaining amount of their mortgage. This act is in effect until 2012. When a home goes into foreclosure, the mortgage amount that remains is filed as a canceled debt by the lender. This amount is usually considered as part of the homeowner's income and is taxable. For example, if you borrow $100,000 for a home and pay off $75,000 before foreclosure, the remaining $25,000 is considered taxable income.

    Under the Mortgage Forgiveness Debt Relief Act, you will not have to include canceled debts as part of your income. This could save you a lot during tax season.

Student Loan Consolidation

    Student loan consolidation allows you to combine all federal student loans (Federal Perkins Loans, PLUS loans, Stafford Loans, subsidized and unsubsidized loans, SLS Loans) to create one monthly payment. This payment may be lower than making payments on several small loans each month.

    Consolidating your student loans also lengthens the time you have to repay them. Most consolidated students loans include a 30-year repayment plan. While this may increase the amount you pay in interest for the life of the loan, you will be able to enjoy lower monthly payments. A variety of payment options are available including interest-only payments (pay off interest first, then the principle), income-sensitive payments and graduated payments (payments increase over time).

    Before consolidating your student loans, consider repayment options, job outlook, monthly payment amounts and current interest rates. Student loans consolidated by the federal government typically have a lower interest rate than those consolidated by private lenders.

Is it Good Financial Practice to Consolidate With an Unsecured Loan?

Is it Good Financial Practice to Consolidate With an Unsecured Loan?

A consumer choosing to use debt consolidation faces a variety of choices. While there is no easy answer as to what kinds of debt consolidation loan is best for everyone, choosing an unsecured loan does have advantages and disadvantages. You should speak to a credit counselor or financial advisor if you need specific advice about choosing the appropriate loan for you.

Secured vs. Unsecured

    Loans are typically divided into two main classes: secured and unsecured. A secured loan is one where a creditor takes collateral or some other form of security interest, while an unsecured loan is one where the creditor does not. Secured loans typically come with lower interest rates and more beneficial terms because the creditor has some form of security to protect itself against a potential default by the borrower. Unsecured loans, on the other hand, do not afford this protection and typically have higher interest rates and fees.

Unsecured Consolidation

    One of the most common forms of unsecured loan debt consolidation is the credit card balance transfer. In this method, a borrower uses a loan from one credit card company to pay off the debts owed to two or more other lenders. Because credit cards are usually forms of unsecured debt, a credit card balance transfer is an unsecured form of a loan consolidation.


    Unsecured debt consolidation has some benefits. When you use an unsecured loan to consolidate other loans, you do not have to provide a security interest or collateral. For example by using a credit card balance transfer, you do not have to give your new creditor any collateral in any of your property. If you use a secured loan as a means of consolidation, such as a home-equity loan, you typically must give the lender a security interests in your property, such as a mortgage on your home.


    The primary downside of an unsecured debt consolidation loan is that it comes with a much higher rate of interest and will potentially cost you much more money than a secured loan. The average unsecured credit card loan differs significantly, but rates of 12 percent or more is common. This is significantly higher than the average secured loan rate, which is often closer to five or six percent. It costs the consumer more to use an unsecured loan than it does a secured loan.

How to Negotiate a HELOC Collection

How to Negotiate a HELOC Collection

A home equity line of credit (HELOC) is financing secured by the equity in your home. For example, if the home's market value is $300,000 and you owe $250,000 on the home, you have $50,000 equity in the home. Since the financing is secured by your home, it's important to settle default situations right away. Otherwise, the lender has a right to foreclose on the home. Working with the lender to get caught up on payments and make future payments more affordable will relieve financial stresses.



    Offer a cash settlement. Once a loan moves to default status, the lender will usually accept a cash settlement. This means that you offer a lump sum payment, less than the loan's value, to settle the debt obligation.


    Negotiate a catch-up plan. If you can't afford to settle the HELOC, ask the lender to create a catch-up plan. With a catch-up plan, you make a small additional payment each month. Over time, this will catch you up on missed payments. It will also move your account out of "default" status. This will preserve your credit score.


    Apply for forbearance. Forbearance programs allow borrowers to stop making HELOC payments for an agreed upon period of time. These programs are usually reserved for people struggling with serious illness or financial difficulty. Apply with your lender.


    Covert the HELOC to a home equity loan. A HELOC typically has an adjustable rate. The product may offer a low introductory interest rate; however, payments get more expensive over time. Lower monthly payments by requesting a home equity loan. This will lock in a fixed rate and payment for the life of the loan. Negotiate this conversion when arranging a catch-up plan with the lender.

Saturday, November 24, 2007

How to Get Rid of Credit Card Bills

Credit card bills can quickly pile up and, without a plan, debt can accumulate and ruin your personal finances. Getting rid of credit card debt is possible. However, this usually requires some sort of sacrifice. The disadvantages of high credit card bills include higher interest rates on future loans, decreased credit score and lack of disposable income. However, with patience and diligence, you can erase credit card bills and fix your finances.



    Stop hiding from your debt. Pull out a calculator and all your credit card bills and compute the sum total of your debts.


    Check your finances to see if you have extra money after paying bills. Write down your monthly expenses and deduct this amount from your monthly income to determine your extra or disposable income.


    Establish a date to pay off your debts based on your extra income each month. If you have $500 left over each month after paying your essential bills, you can pay off a $5,000 credit card bill in approximately 10 months--providing you stick with a budget and eliminate extra spending.


    Negotiate a better interest rate on credit cards to pay off the bill sooner. High interest rate credit cards are difficult to eliminate because a large percentage of your minimum payment isn't applied to the principle balance. Talk with creditors to see if they'll lower your rate. If not, consider a balance transfer to a low-rate card.


    Raise your payment amount. Not everyone can afford to put hundreds of dollars toward their credit card bill each month. Do what you can. Rather than submit a $20 or $25 payment each month, double or triple your payments to help pay down the principle balance.

Can a Collection Agency Charge Interest?

Often a creditor will choose to either hire a collection agency to help him collect on his outstanding debts or, in some cases, sell his debt to the agency outright. In such cases, the agency has all of the rights that were given to the original creditor. This means that the agency can charge any interest called for in the debt contract but cannot charge any additional interest, such as for the costs it incurs.

Collection Agencies

    A collection agency legally enjoys the exact same rights as the creditor to whom a debtor owes money. In effect, a collection agency is acting as the creditor's proxy or, if it has bought the debt, as the creditor himself. The debtor must merely pay his money to a different party: the terms of the original contract or agreement from which the debt stems, however, remain unchanged.

Debt Contracts

    A debt contract is the contract that a buyer and a seller agree to when a debt is issued. This contract is usually written, but in some cases it may be agreed to verbally. In either case, the buyer is legally obligated to pay back the money according to the contract's terms. This contract will spell out if the borrower must pay back interest on the loan, in addition to the principal.

Interest Payments

    If a contract does call for interest payments, it will spell out exactly how much interest is owed. A collection agency is legally allowed to charge the borrower any interest called for in the contract. However, an agency cannot arbitrarily add more interest if the debt is not paid. For example, even if a debt is a year overdue, an agency cannot charge interest for this default unless the contract calls for it.

Fair Debt Collection Practices

    Creditors who do attempt to charge interest not called for in the original contract are in violation of the Fair Debt Collection Practices Act. This act forbids creditors from passing on costs to debtors. The only way a creditor could charge an additional fee to the borrower would be by suing the borrower in court and receiving an award from a judge for damages in excess of the amount called for in the contract.

What Can Creditors Legally Do When Collecting From a Deceased Spouse?

When your spouse dies leaving behind debts, your spouse's creditors have the right to try to collect those debts from your spouse's estate, the property your spouse left behind. In general, the creditors cannot pursue you for your spouse's debts, though there are some exceptions. Talk to an attorney for legal advice about what actions a creditor can take in any debt situation.

Probate and Debts

    If your spouse dies leaving debts, her creditors can recover the unpaid debt from her estate. An estate is all the property, both assets and debts, that a person leaves behind after death. In order to recover unpaid debts against an estate, the creditor has to file a timely claim with the estate administrator, who is sometimes known as a personal representative or executor. Probate laws differ among states, but in general a creditor has a limited time to file a claim against an estate once the estate administer publishes notification of the debtor's death.


    A creditor can take property from an estate to satisfy an unpaid debt, but not all property the decedent owned is included in the estate. An estate generally consists of the decedent's individual, not joint, property. Also, some individual property may be exempt from creditors. For example, according to Poyner Spruil LLP, a North Carolina law firm, a "year's allowance" is exempt from creditors in North Carolina as of this article's publication. A year's allowance is an amount of assets between $10,000 to $20,000 to which the decedent's surviving spouse and children are entitled and which creditors may not take.

Joint Debts

    As long as the debt is an individual one your deceased spouse owed, you are generally not responsible for repaying it. However, if you and your spouse had a joint debt, the creditor does not have to file a claim against the estate. Because you are alive and are a co-debtor, the creditor can hold you responsible for the debt. For example, if you have a joint credit card with your deceased husband, you are still responsible for paying the credit card bill after he dies even if you never used the card and didn't make the purchases.


    A handful of estates have "community property" laws that apply to married couples. Essentially, these laws mean that spouses may be joint owners of the other spouse's property and debts. In these states, a creditor may be able to pursue the surviving spouse for the debtor's property, though community property laws differ.

How to Buy a TV Computer Monitor on Credit

How to Buy a TV Computer Monitor on Credit

TV computer monitors are sold at department and specialty stores, many of which offer easy in-store financing with their own credit cards. You can apply for and receive instant credit approval, or provide your own financing.

Bank Cards

    One option is to purchase the TV computer monitor using a credit card you already have, such as a MasterCard or Visa. Check your billing statement or call customer service to review how much available credit you have. Then go make the purchase. Most retailers accept major credit cards.

Installment Loans

    An installment loan from your bank or credit union may offer a lower interest rate than a credit card. Taking out an installment loan to buy the TV computer monitor will enable you to reserve your credit card for emergencies.

Secured Credit

    Secured credit could be an option if your credit is bad and you cannot qualify for regular credit. Secured credit requires you to place money in a bank savings account. The money is held as collateral against a secured installment loan or secured MasterCard or Visa. The secured loan or credit card will help you rebuild or establish your credit as you make on-time payments against the purchase of your TV computer monitor.

How Do Credit Counseling Services Make Money?

A credit counseling service makes money in a variety of ways. It needs a source of funding to cover expenses such as supplies, rent and salaries. The amount of funding it receives will vary by source.


    When a customer enrolls in a consumer credit counseling program he may have to pay a one-time set-up fee of $50. This can vary from company to company.


    Consumer credit counseling agencies receive grants from various foundations and organizations that believe in their cause.


    The bulk of the income for consumer credit counseling agencies comes from creditors, who offer a voluntary contribution that could be as much as 15 percent of the payment amount collected by consumer credit counseling.

Debt Management Plan

    A consumer credit counseling organization provides a variety of functions, including debt management, credit education and budgeting for its clients. If the consumer credit counseling service does not solve the problem, the consumer is referred to the debt management program. Consumers pay a lump sum to consumer credit counseling each month and they disburse funds to the creditors.


    A repayment plan is usually set up for 36 to 60 months. A consumer credit counseling service will lower interest rates and waive fees for customers. A customer's monthly payments are decreased as a result and become more affordable.

Friday, November 23, 2007

Who Is Responsible for Paying Off a Charge Card Once the Card Holder Dies?

Balances on charge cards and credit cards don't go away when someone dies. Sometimes companies aren't as patient as it seems they should be in such a difficult situation. The executor of the estate, or an attorney, if you've secured one, should be the main point of contact while you're sorting out who is responsible for paying the debt.


    Generally, the deceased person's estate is responsible for paying any debt. If the deceased has an outstanding balance on a charge card, the executor of the estate pays it from the estate's assets. This process can take some time; submit a death certificate to the charge card or credit card company so they're aware of the death, and why payment is delayed. If there aren't enough funds in the estate, then the deceased's spouse may be responsible for paying the card, particularly if the deceased lived in a community property state.

Spousal Responsibility

    Widows and widowers are responsible for a deceased spouse's debts, including charge cards and credit cards, in two situations. If the deceased person's spouse cosigned the charge card or credit card application, the spouse is responsible for paying if the estate can't. If the widow has a card with her name on it, that doesn't necessarily mean she cosigned; she may be an authorized user. If there's uncertainty as to who cosigned, contact the charge card or credit card company.

    A widow is also responsible if she lives in a community property state, and if the charge card or credit card was taken out during her marriage. Washington, Texas, Arizona, California, New Mexico, Nevada, Idaho, Wisconsin and Louisiana are all community property states. In Alaska, couples can choose to use community property law.

Other Cosigners

    Anyone else who cosigned the charge card or credit card would be responsible for paying the debt, if it wasn't covered by the estate. Even if a parent was cosigning for a card for a college student, for example, the college student would be legally responsible if the parent died and the estate couldn't cover the debt. If the person responsible for paying the debt can't afford to pay, he should contact the charge card company to set up a repayment plan that's affordable.

Fair Debt Collection Practices Act

    Charge card or credit card debt that isn't paid in a timely manner may be sold to a collection agency, regardless of the circumstances. The Fair Debt Collection Practices Act protects consumers from being harassed by collection agencies. Collection agencies can only speak to those responsible for the debt. It can also speak to family members to determine who is responsible for the debt, but that's the extent of their contact. If you're responsible for charge card debt after someone's death, and you're receiving collections calls, you can write the collection agency and request them to stop calling.

How to Remove Someone From an Automobile Lease

How to Remove Someone From an Automobile Lease

Removing someone from an automobile lease can be a cumbersome process depending on the circumstances leading to the person's removal. In the majority of cases, the lease agreement will need to be renegotiated with the lender. In addition, you may have to go to court to address these financial issues with the person you are tying to have removed from the automobile lease.



    Contact the originator of the lease for your vehicle. Explain the circumstances of your lease agreement and why you would like to have this person removed from the lease.


    Follow the instructions from your lease originator regarding sending in any copies of required paperwork. In the case of a death, a copy of the death certificate will be required and the lease agreement will need to be redrafted.

    In the case of a divorce or separation, legal settlement paperwork will be required if property has been dispersed between the two parties. Keep in mind that a court separation or divorce agreement that "gives" the car to one person will not necessarily release the other person from the lease agreement with the lender. The court can only rule who gets to keep the car for driving purposes, but legally the other party would still have a financial obligation to the car if it remains in their name--even as a co-signer.


    Have the lease agreement modified to include only your name. In order to accomplish this, you will need to show that you are able to pay the full terms of the lease obligation on your own through a credit check and also obtain your own financing through the lender. In addition, you may have additional fees charged to you for having the lease agreement modified. These fees can range between $100-$500, or more.


    Register the car in your name. You will be responsible for any additional state DMV fees for this process.

Thursday, November 22, 2007

Are There Any Government Grant Programs to Pay Off Credit Card Debt?

The government isn't going to bail you out on credit card debt. As of 2011 there are no government grants for paying off credit cards. There also are no major nonprofit or private groups offering grants for paying off personal credit card debt. Fortunately, there are other resources available to help you manage excessive debt from credit cards.

Credit Counseling

    Nonprofit credit counselors certified by the U.S. Department of Housing and Urban Development offer free initial counseling sessions to discuss options for managing credit card debt. The counselors also offer workshops and classes in financial management. Find a counselor near you by checking the HUD website or seeking a referral from a local charity such as the National Urban League.


    Bankruptcy is another option provided by the government. Chapter 7 bankruptcy allows you to eliminate all unsecured debt such as credit cards in as little as three months. Individual states set income limits for filing for Chapter 7 and usually only people with modest incomes qualify. Others can choose Chapter 13, which also eliminates credit card debt but requires a payment plan lasting three to five years.

Social Services

    County social services agencies won't pay your credit card bills but you may qualify for other services if you are struggling financially. For example, you may qualify for food stamps or discounted public housing. The money you save on food and shelter could be used to pay down some of your credit card debt. Grants for necessities may be available from other public and private organizations as well.


    Debt settlement isn't a grant and isn't available through the government. However, you can negotiate directly with your credit card company to pay your credit card debt for less than the full balance. Settlements generally range from 20 to 70 percent of the balance. A significant discount through settlement has some of the same benefits as a grant, although you may be taxed by the Internal Revenue Service on the amount forgiven.

What Happens If I Turn in a Leased Car Early?

Leasing an automobile can provide you with a car for use on low-mileage trips and travel around town on a short-term contract, which is typically cheaper than an auto loan. Auto lease agreements can be filled with fees for turning in a vehicle over its mileage limit, with existing damage or for terminating the lease early. Early termination of the lease in particular can be financially damaging in the short and long term.

Fees and More Fees

    Turning a leased vehicle early can cause the activation of early termination fees in your lease contract. These fees can cost several hundred dollars and may be charged in addition to other fees like vehicle re-stocking and detailing. It's important to check your lease contract to determine which fees the dealership charges for early termination of the lease, since these fees are due the moment you turn the vehicle in.

The Balance of the Lease is Due

    Your auto lease is a legally binding agreement, which means the dealership is within its rights to demand full payment of the contract if you attempt to terminate your lease before its end date. This could cost you thousands of dollars depending on how far into the lease contract you are when returning the vehicle. If you refuse to pay the balance on your lease contract, the dealership or other lender could sue you in civil court to recover the debt owed to them.

Damage To Your Credit Report

    According to financial information website Bank Rate, terminating an auto lease early is viewed by credit bureaus in the same light as a breach of contract or loan default. This can severely damage your credit score, making it more difficult to secure an affordable auto loan in the future and may altogether prevent you from securing some forms of secured credit, like a home loan. Once reported, this information can remain on your credit report for up to 10 years.

Rollover Payments

    If you're unhappy with your current leased vehicle or simply wish to turn it in early for a more economical car, your dealer may be receptive to rolling your existing lease into a new contract for a car you'd rather drive. This can allow you to terminate your existing lease early without damaging your credit or being pursued for a debt. This will make your lease payments higher than with your previous contract, so employ this strategy only if you're financially stable enough to afford it.

Can You Garnish Wages of a Spouse If the Debtor Doesn't Pay You Back?

A debtor's debts are his alone. A creditor is not allowed to seek payment from another party for a relative's debt, nor is a relative obligated to pay it. Only the person who legally agreed to take on the debt is required to pay it. This means that a debtor cannot seize the wages of a person for a debt owed solely be her husband.

Debt Obligations

    When a person takes on a debt, he will either secure the debt in an oral or a written agreement. In either case, the lender and the debtor will specify who has guaranteed the payment of the debt. A person cannot have another person guarantee his own debt without that party's permission. Therefore, a wife cannot have her husband guarantee or be responsible for her debt unless he agrees to do so.

State Laws

    Although spouses may share a number of things, including the management of household finances, a spouse is responsible for her debts alone. Although some states may interpret property as being commonly owned, a spouse's debt is his own. This means that a creditor cannot legally hold a person responsible for her husband's debts unless the spouse was a co-signer on the loan contract.


    Garnishment of wages can only be pursued with the permission of a judge. Wages can only be garnished against the person who owes the money to the creditor filing a lawsuit. If the creditor wins a lawsuit against a debtor, then the creditor may be allowed to file a motion for garnishment. However, a creditor cannot garnish the wages of the debtor's spouse.

Bank Accounts

    Although the wages of a spouse cannot be legally intercepted by a creditor for her husbands debts, this does not mean that the money will remain safe. Many creditors will also seek to have a bank account controlled by the debtor frozen and money seized from it. If this happens, then money earned by the non-debtor spouse but used by the debtor could be taken by the creditor.

Wednesday, November 21, 2007

How to Refinance a Mortgage with a Low Credit Score

How to Refinance a Mortgage with a Low Credit Score

Refinancing your mortgage with a low credit score will require an approval process similar to the application for your first mortgage. The Federal Reserve Board says the lender will review your credit score, debts, income and assets and the current value of your property. You may receive a lower interest rate--and lower monthly payments--if your low credit score has improved since you purchased the property. On the other hand, you should expect a higher interest rate if your credit score has dropped.



    Get a copy of your credit report and score. Order a free copy of your credit report from the website Annual Credit Report. It's the only website authorized by the Federal Trade Commission to offer entirely free reports as required by the Fair Credit Reporting Act. Then order your credit score separately by following instructions on the credit report. A credit score of at least 500 is generally needed for approval on a mortgage refinancing, according to the website Bank Rate.


    Review the credit report and resolve old debts including charge-offs, liens and judgments. Satisfy the debts by making payments. Also make sure all your current bills are up to date, including your mortgage. Addressing these issues is critical because your low credit score will invite close scrutiny of your overall credit and financial status. Cleaning up your credit report could increase your credit score, qualifying you for a lower interest rate. Allow about 60 days for updates to your credit report and score.


    Calculate the loan-to-value ratio on your home. Do this by subtracting what you owe on the home from its current market value. Generally, lenders specializing in refinancing prefer that your home be worth at least 20 percent more than you owe on it, according to the Federal Reserve Bank. You may be required to have even more equity in your home because of your low credit score. However, there are no hard and fast rules on this. A licensed home appraiser can conduct an appraisal of your property. Get a referral for an appraiser from a real estate agent. Or delay this step until you actually apply for the new mortgage. At that time, the lender will choose an appraiser. However, ordering an appraisal of your own could help you decide whether to proceed with the application--or wait for property values to increase in your neighborhood.


    Determine your debt-to-income ratio by totaling your gross monthly income along with all your incurring monthly expenses. Those expenses should include your estimated new mortgage payment, auto loans, student loans and minimum payments on credit card debt. Your monthly recurring debts should not exceed 35 percent of your income, according to the Utah Department of Financial Institutions.


    Apply for a new mortgage if you meet the standards for credit score, debt-to-income ratio and loan-to-value ratio. Start by applying to your current mortgage company. The relationship you have already established could be an advantage, despite your low score. Also, apply for refinancing through other lenders comfortable with borrowers with low credit scores. Get referrals from your bank or credit union.

How to Find Good Payday Loan Rates

Some payday loan rates are better than others, but none of them can compare to rates available on standard loans from traditional banks and credit unions. A good rate on a credit card from a bank is less than 18 percent. However, payday loan rates can exceed 300 percent, according to the Federal Trade Commission. Finding a "good" rate on a payday loan means shopping around for the most favorable terms available on that type of loan.



    Learn your rights under the federal Truth In Lending Act. The act requires all lenders, including payday loan companies, to provide you with the exact cost of a loan, including the interest rate, finance charge, amount financed and total number of payments. This provides the best apples-to-apples comparisons as you shop for good payday loan rates. Ask for a sample Truth in Lending Act disclosure form at your bank or credit union to learn more.


    Contact traditional banks and credit unions about short-term loans before considering payday loan dealers. Some traditional lenders may offer cash advance loans for regular customers that work like checking account overdrafts. The bank may approve a temporary overdraft if you have regular direct deposit of a paycheck or retirement income.


    Contact payday loan companies in your community and online. Tell them how much you wish to borrow while requesting a Truth in Lending Act disclosure showing the complete terms of the loan. By law, you are allowed to request the disclosure before accepting the loan.


    Call, visit or tap into the websites of as many payday loan firms as is reasonable to find the best rates available. Use the Truth in Lending Act disclosures to determine the exact costs.

Non Profit Debt Advice

You have probably seen ads that promise consumers debt relief through counseling if they are struggling to pay their credit card bills and mortgages. The people behind those ads may tout that they are working through nonprofit organizations. However, nonprofit organizations can make money on the debt counseling that they provide, and some of them may do so at the expense of people who can least afford to rack up more debts.

Credit Counselors

    A credit counselor at a nonprofit organization should help you set up a plan to pay off your bills. Among other things, counselors can contact your creditors to try to get your interest rates reduced and get late fees waived to help you pay debts faster. Counselors can negotiate such deals because creditors often prefer to work through a credit-counseling organization to get debts repaid than to have debts erased in a bankruptcy filing. A counselor also should help you set up a budget to keep you on track with paying off debts. Counselors usually contact clients over several months to find out how well they are managing their spending plans.

Home Loan Advice

    People who need advice on getting a home loan or avoiding foreclosure can contact a state housing agency that is sponsored by the U.S. Department of Housing and Urban Development. Such agencies provide free or low-cost advice to clients. According to HUD, foreclosure-prevention counseling is available free of charge through its Housing Counseling Program. Agencies that participate in the program shouldn't charge clients for the service. The agencies are allowed to charge what HUD calls "reasonable and customary fees" for other services, which include home-buying advice and reverse-mortgage counseling.

Assessing Services

    The U.S. Federal Trade Commission advises consumers to ask a credit-counseling organization if its counselors are trained in consumer credit, debt management and budgeting. Counselors should examine a client's entire financial situation to help develop a personalized debt-management plan that addresses current financial problems and prevents future ones, according to the FTC. The FTC warns that some organizations have defrauded clients by enrolling them in debt-management plans in which clients deposit their payments with the organization to be forwarded to creditors. In some cases, creditors haven't been paid. If you enroll in a debt-management plan, the FTC recommends checking with your creditors to ensure your bills are being paid.


    Don't assume that a nonprofit debt counseling organization offers its services free of charge, some do and some don't. Some organizations charge high fees while others urge clients to make voluntary contributions to their organizations, according to the FTC. In either case, clients can end up deeper in debt with an organization that should be alleviating its clients' debt problems.

Tuesday, November 20, 2007

Can More Than One Creditor Garnish My Wages?

Wage garnishment is the taking of a percentage of your wages by your employer to be forwarded to a creditor to whom you owe a debt. Once your wages are garnished, a second creditor can take money as long as the total amount deduced from your pay does not violate federal or state laws.


    The purpose of a wage garnishment is to repay a debt you owe in full to a creditor over time. The money is taken directly out of your paycheck to ensure the cash gets to a creditor who has a valid debt. Your employer must comply with the garnishment and federal and state laws once he receives legal notice.


    Various creditors and agencies can garnish wages, including private, state and federal entities. Private creditors, such as a credit card company, must get a money judgment against you in court and a wage garnishment order. Both orders are sent to your employer, who takes the money out of your check and forwards the cash to the correct party.

    Federal and state creditors do not have to go to court to garnish wages. The Internal Revenue Service sends its own garnishment notices to employers for tax debt, while the procedures for state creditors vary.


    A second creditor cannot garnish your wages if doing so would result in more than 25 percent of your earnings after taxes, under federal law. State laws differ, and the creditor must follow state law if the law dictates a smaller garnishment percentage.

    Some creditors, such as the IRS, have preference over private creditors. An order from the IRS would take precedent over a private creditor already receiving some of your wages, and the payments to the private creditor are halted until the IRS is paid.


    Federal law forbids firing a worker because she has a wage garnishment from a creditor. However, the law does not grant protection against a second garnishment, per the U.S. Department of Labor. Some states, like Texas, do not allow private creditors to use wage garnishment.

    Not all states have an exemption for a worker experiencing financial hardship to temporarily stop the collection of the debt through his income. Some states have a minimum amount of income you must earn before wages are garnished, such as $217.50 weekly in New York.

How Can I Settle My Credit Card/Personal Loan Debt?

Many people have a lot of debt. If you are working and can pay your bills, everything is fine. However, sometimes unforeseen circumstances come up and you get behind on your bills or cannot pay them at all. This causes a lot of problems for you and your family financially. There are ways to settle your credit card and loan debt and help you get back on your feet.



    Assess your bills and put them in order of least to greatest. Settle the smaller ones first.


    Call the credit card or loan company directly and explain your situation to them. Ask if you can make a settlement deal with them, which you can usually pay in one lump sum or split up into two payments.


    Find a debt settlement company if you have a lot of different debts. Work with the settlement company, who will in turn work with the credit card and debt companies to take a decreased amount in payment and/or lower your interest rate drastically.


    Research the company a little bit before you make any arrangements, as some charge you an exorbitant amount of money to help settle your debts or charge you a lot of money up front. Find a company that is on good terms with the Better Business Bureau.


    Gather all your most recent statements from your debts. Call the company you decide to work with. Give them all the information about your debts including the companies' names and addresses, your account numbers and the total amount of the debt.


    Follow the debt settlement company's instructions for monthly payments or setting aside a certain amount of money a month until you have enough to pay off one loan at the settled amount. Make sure you keep up with this or the debt settlement company may charge you more or the loan and credit card companies may not be so willing to settle with you.

What Is the Advantage of Student Credit Cards?

What Is the Advantage of Student Credit Cards?

Having a student credit card is important because it teaches the user financial responsibility and the importance of establishing credit history. It also gives the user a sense of autonomy. While a student credit card comes with many advantages, it also comes with many considerations.

Credit Cards

    Students can become responsible with credit.
    Students can become responsible with credit.

    According to the Young Money website, a student credit card is only very slightly different from a standard credit card. It offers the student ways to build her credit history by allowing her to make purchases and pay them back in a timely manner. Credit cards are important tools for ensuring financial security in the user's financial future. According to Wells Fargo, credit card history can determine a person's ability to purchase a car, rent an apartment or buy a home.


    The student credit card has advantages.
    The student credit card has advantages.

    According to the Student Credit Cards website, students who use a credit card learn about financial responsibility. Because parents tend to help students for most of their lives, using a credit card can provide a transition into monetary freedom and adulthood.

    Credit cards are also great when students face emergency spending situations---if books, medicine or student expenses arise, the credit card can provide a financial net that can be trusted. Many cards come with special student discounts and promotions on textbooks, clothing and various other student-specific goods.


    Money mangement is important for students.
    Money mangement is important for students.

    According to Student Market, student credit cards offer many monetary benefits. Many cards carry special lower interest rates so that students don't have to pay a great amount of money. Many also allow students a grace period with which to pay back their charges. Others also come with no annual fees and text messaging services that let students know about their balance.


    Make sure to read the fine print.
    Make sure to read the fine print.

    Use Card Ratings to search for student cards. Many cards give students perks and bonuses when they keep under their balance and pay their bills on time. According to Card Offers, some credit cards offer bonuses for students who maintain a high grade point average and others offer students points with each dollar purchase. The points are later redeemable for merchandise in popular retail or online stores.

Pre-Paid Credit Card

    Fiscal responsibility is necessary.
    Fiscal responsibility is necessary.

    A pre-paid student credit card may be a good option for a student as well. According to Creditcard.com, prepaid debit and credit cards allow users to spend an amount they have deposited onto the card. Many of these cards help to establish credit history and also offer student bonuses. A list of these cards and their details can be found at Creditcard.com.

What Is a Goodwill Request?

What Is a Goodwill Request?

One way to improve your credit rating is to write a goodwill request to a creditor asking for a change to an account reported to the credit bureaus. The request outlines why you were delinquent or missed payments, and usually is written after several on-time payments.


    A goodwill request is usually reserved for a rare or out-of-the-ordinary late payment, or for one missed payment after months of on-time payments. Goodwill requests are not usually made after multiple late payments.


    You must request a goodwill adjustment in writing to the creditor. Write a letter to explain the circumstances around the late payment and request that the company change the information in the credit file.


    Your chances for getting a goodwill adjustment improve the better your track record is with the company and the better your credit score is overall. Make sure to mention in the goodwill request your past payment history.

How to Bump Up Credit

How to Bump Up Credit

Giving your credit a bump increases your personal FICO score. And, if you want to purchase a new home, finance a new automobile or acquire the lowest insurance rates, a good credit history and score is key. Bad credit habits factor into low personal credit ratings. Understand the components that play a role in credit scoring and then take steps to bump up your credit.



    Report incorrect data on your credit report. Familiarize yourself with the Annual Credit Report website and get a free copy of your report from TransUnion, Equifax and Experian annually. Check to see that listed information is accurate and file an online dispute to correct mistakes.


    Allow creditors to withdraw payments from your bank account. Automatic payment withdrawals help you avoid score-lowering late payments. Timeliness makes up 35 percent of credit scores.


    Use credit only if you're committed to paying off balances on a monthly basis. Accumulating high debts and carrying balances can hurt your personal rating. Amounts owed to banks, lenders and credit card companies make up 30 percent of scoring. Maintain few debts to help bump up your score.


    Limit your applications for additional credit. Credit checks or inquiries made by credit card companies and lenders can reduce your rating.

How to Find Out If I Was Approved or Denied for Unemployment Benefits

Filing for unemployment benefits requires entering an application in person, over the telephone or online. After that there is a waiting period while the state agency conducts an investigation to determine eligibility. People unemployed through no fault of their own -- such as through a layoff -- usually receive benefits if they otherwise qualify under state guidelines. However, people who voluntarily resign from their jobs or are fired for a legitimate reason may not receive benefits. Agencies managing the benefits provide an answer as quickly as possible.



    Check your mail. The state agency will send a letter telling you if your application was approved or denied. You can appeal if the state turns down your application.


    Get the Web address and telephone number for the agency in your state handling unemployment benefits claims. Check other correspondence the agency sent you.


    Visit the Web address and look for a menu tab for checking the status of a claim, or something similar. Click on the tab and follow the prompts to determine if your application was approved or denied.


    Call or visit the agency as an alternative. Provide your Social Security number or claim reference number for an update.

Monday, November 19, 2007

How Your Credit Can Influence Your Purchasing Power

Your credit score is one of the most important numbers in your life because it can directly impact your purchasing power. If you are interested in trying to get financing for something, it will be difficult unless you have a solid credit history. Things like late payments, delinquent accounts and high balances on credit cards can strongly influence you ability to purchase the items you want.

Credit Score

    Your credit score is a numerical calculation based on your past credit history. The credit score formula was developed by FICO and it is used by the major credit bureaus. Any activity that you engage in related to credit will usually be reported to these bureaus. The bureaus then calculate your score and anytime you try to obtain credit, the lenders can access your report and your credit score. This aids them in their decision to extend you credit.

Importance of Score

    Anytime that you try to obtain financing, the lender will look at your credit score first. For example, when you try to buy a new car, the car dealer will pull up a copy of your credit report within minutes. If you try to get consumer financing at a store, the system will be able to access your credit score and make a decision within seconds. Mortgage lenders also look at your score to determine if they want to help you buy a home.

Credit Limits

    Your credit score has an impact on how much you are able to buy with credit. The higher your score is the more likely creditors are to provide you with high credit limits. When evaluating your applications for credit, the lender will look at how much debt you already have in relation to how much open credit you have. If you have a high debt ratio, the lender will be less likely to loan you the amount of money you want.


    When you try to get a loan for something, the monthly payment will be largely affected by the interest rate that you get from the lender. The interest rate that the lender offers you will be based specifically on your credit history. If you have a good credit history, you can get a lower rate. This will have a large effect on the size of your payment. Since you only have a limited amount of money every month for payments, your credit score has a direct affect on how much you can afford to buy with credit.

Debt Consolidation Service Help

Many people become curious about debt consolidation because of advertisements with low interest rates, but for many these loans may be a dangerous way of sinking even further into debt. However, if you have chosen to use a consolidation loan, it's important to understand what kind of interest rate you qualify for and choose the right lender, then make a firm decision to keep your debt paid off.

Credit Report

    Find out where you stand financially so that you have a better grasp on what type of interest rates you can get. You're entitled to a complimentary copy of your credit report each year from the three major credit bureaus, Experian, Equifax and TransUnion. By logging onto the Annual Credit Report website and providing your information, you'll gain access to your credit reports. If you find any discrepancies, it's vital to report them to both your creditor and the reporting credit agency immediately to get your score to its healthiest point. The credit report does not contain your credit score; however, you will be given the option to purchase your score for a nominal fee after viewing your report.

Choosing a Lender

    Although you may have received advertisements in the mail or online about qualifying for ultra-low interest rates on consolidation loans, those rates are generally reserved only for those with high credit scores. It's important to shop around for a consolidation loan to make sure you're getting the best interest rate possible. Look not only to banks, but also to credit unions, which may have better offerings. Lenders should be able to pull up an estimate offer based on your consumer credit report without making a hard inquiry so that you may shop around while avoiding damage to your score.

Utilizing the Loan

    Many people abuse their consolidation loans and end up back in debt in a short amount of time. A debt consolidation loan eliminates your current balances, which means that the accounts that are paid off are open for spending again. Rather than racking up balances on those accounts again, you must remember that your debt has simply shifted places, not been paid off. You must make a firm commitment not to spend on those accounts if you want to dig yourself out of debt for good.


    For those who have a difficult time managing their money, a credit counselor may be able to assist in not only finding a consolidation loan, but also in creating a budget and helping you to avoid ending up in a bad situation again. In addition, a credit counselor may offer you alternatives to debt consolidation that are more appropriate for your financial situation. To select a reputable credit counseling organization, find recommendations on the National Foundation for Credit Counseling website.

How Do I Work Out an Electricity Bill Myself?

Electric companies use computers to calculate charges based on the number of kilowatt-hours (kWh) a consumer uses. Typically, the computers are accurate and create no errors. Problems arise when, because of computer or human error, a customer receives a very high bill. If you do not know how to work out your bill and calculate what your charges should be, you can face difficulty explaining the problem to the electrical company.



    Enter the amount of energy used. Power companies list this in kWh. Typically, companies provide comparison usage for the previous month and the previous year so you can see if your usage changed.


    Multiply your company's charge per kWh times the number of kWh you used. For example, if you used 1,000 kWh and your company charges $0.0850 per kWh, your usage charge is $85.


    Add the service fee to your usage charge. Some power companies charge customers a monthly service charge. For example, if your service fee is $8, add $8 to $85 -- the amount calculated in Step 2 -- to get a subtotal of $93.


    Multiply your subtotal by your state and municipality tax rate. For example, if your state tax rate is 7 percent and your city tax rate is 0.25 percent, multiply $93 -- the amount calculated in Step 3 -- times 7.25 percent to get your total charge of $99.74.

Can a Payday Loan Place Tell If You Have Another Outstanding Loan Elsewhere?

A payday loan company will often grant payday loans -- loans typically issued for less than a month for a high rate of interest -- to people with bad credit. However, the person must generally provide some proof of an ability to pay, such as a bank account or a check made out to the company. However, some payday loan companies may check to see if the person has any other outstanding loans.

Payday Loans

    Unlike most lenders, payday lenders do not typically care if a person has any loans outstanding to current lenders. While most lenders will require some measure of creditworthiness before issuing an unsecured loan, payday lenders often specialize in lending to people who do not meet the qualifications for normal loans. Therefore, an investigation into the person's lending history is unnecessary.

Credit Report

    However, some payday loan lenders may, like other lenders, check a person's credit report before issuing a loan. A credit report will show many of the person's outstanding loans, as well as loans from her recent history. However, many of these loans will not be reported to the credit reporting bureau -- sometimes a lender will only report delinquent loans -- that compiles these loans, so this record will be at best incomplete.

Sharing Information

    Some states require that lenders not provide more than a certain number of payday loans to a borrower at any given time. To maintain compliance with this rule, payday lenders may share information about who they have given loans to. In such an instance, a payday lender would be able to check if a person has an outstanding payday loan, but not another type of loan, as this would be irrelevant.


    A payday loan company may also ask you if you have previously taken out a payday loan or if you have any payday loans currently outstanding before you take out a new loan. If you are asked this question, you are legally obligated to tell the truth. This question is generally asked so that the payday loan company can remain compliant with state guidelines for the business.

Saturday, November 17, 2007

How to Calculate Interest on Credit Card Debt

How to Calculate Interest on Credit Card Debt

Credit card interest is pretty simple to calculate given knowledge of the interest rate. Finding the monthly interest rate might be as easy as determining 1/12 of the annual percentage rate. Depending on how your credit card company charges you, however, as well as on your balance and the number of days in the billing cycle, the interest rate might be lower or higher than the APR.



    Credit card companies calculate interest in different ways, the most common of which is the average daily balance method. Other methods of calculating interest include adjusted balance, and previous balance. Take a look at your credit card statement. Under account summary or rate summary, you should be able to discern what method your credit card company uses.


    Look at your credit card statement and note the APR. Use an 18 percent APR as an example. Divide it by 12:

    18 / 12 = 1.5. So the monthly interest rate is 1.5 percent, which may appear on your credit card statement as the monthly periodic rate.


    Figure your average daily balance by adding the balances for each day in the cycle and dividing the total by the number of days in the cycle. Using an average daily balance of $500 as an example:

    500 x 1.5 percent = 7.50. So for that billing cycle, your interest would be $7.50.


    The adjusted balance method is takes into account any payments that you make throughout the billing period. This method charges the lowest finance charges. For example, if you made a $100 payment on your balance of $500 during the billing cycle. Your interest charge would be as follows: 400 x 1.5 percent = 6. So your interest for that billing cycle would be $6.


    The previous balance method can be the most costly. It charges you interest on your previous balance. Any payments and purchases you make during the current month aren't included in the equation.

How to Boost My Credit in Days

Your credit can be boosted in just days -- but you should allow at least 30 to 45 days for changes to be updated on your credit report. Your credit score is a three-digit number ranging from 350 to 850, and information contained on your credit report is used to determine your score. Generally, your credit score rises as positive credit information is added to your report, and your score often declines when negative information is added. To improve your credit in just days you should quickly add as much positive information as possible.



    Obtain your report from AnnualCreditReport.com. It's the only Internet site officially endorsed by the federal government to offer free credit reports under the terms of the Fair Credit Reporting Act. Follow instructions included with your credit report to order your credit score separately, for a fee.


    Make payments to bring all your accounts current, if necessary. Refer to your billing statements or credit report to identify accounts reporting as past due. The MSN Money website reports that it is impossible for your credit score to improve significantly if you are behind on your payments. Bringing the accounts current could provide a quick boost.


    Pay down balances on your revolving credit. According to MSN Money, your balances should not exceed 30 percent of your credit limit on each account. Creditors like to see a large gap between the amount of credit you are using and the amount you have available. Pay down your balances to at least 30 percent and preferably even lower.


    Resolve any charge-offs, liens, judgments or other negative credit entries on your credit report. Granted, it might take more than a few days to negotiate the payment of a judgment or a lien. But any progress you make could have a positive effect. Contact original creditors or debt collectors to pay off delinquent debts. Start by offering a lump payment for the full amount in exchange for the creditor or debt collector removing the negative information from your credit report. If that doesn't work, try to settle for less than the full amount and insist that your credit report be updated immediately to indicate that the account has been paid. Negotiate only with the entity currently managing the delinquent account. For example, an old credit card charge-off may have been assigned or sold to a debt collector. Check your credit report for current contact names and telephone numbers.


    Review your progress by ordering another copy of your credit report and score 30 to 45 days after making your payments. You're entitled to three free credit reports a year from AnnualCreditReport.com, but you must order your credit score separately each time for a fee.

Can a Creditor Place a Lien on Property in Texas?

If you are a Texas resident and have failed to make payments on a debt, Texas law affords creditors a variety of options to collect from you. A creditor will typically use collection strategies, such as sending you demand letters by regular or certified mail and calling you to try to convince you to pay your debt. However, if you resist paying your debt or avoid your creditor's contact attempts, your creditor may resort to more aggressive strategies, including placing a lien on your personal property.


    Before a private creditor can place a lien on your personal property, it must obtain a legal judgment against you for your debt. The creditor will typically hire an attorney to file a civil suit against you in the county where you live. You will then receive a summons from the court, and you will have an opportunity to raise a defense against the lawsuit. If you can show that you have already paid the debt or the creditor improperly filed the suit, the court may dismiss the lawsuit. However, if you cannot raise a valid defense, the court will award a judgment in the creditor's favor.

Creation of Lien

    Under Texas law, a judgment awarded to a creditor for debt creates a lien on any personal real estate property that you own. The creditor does not need to take any additional action to obtain a real estate lien. Your judgment creditor may also petition the court for a lien on other personal property, such as a vehicle, boat or household valuables.

Effect of Lien

    A lien created as a result of a civil judgment in Texas gives the creditor an interest in the property you own. This means that you cannot sell or transfer the property until you satisfy the judgment by paying the debt, including interest permitted by the Texas court and the creditor's costs associated with obtaining the judgment. The lien may also permit the creditor to seize and liquidate the personal property to pay your judgment debt, particularly if you attempt to avoid paying the judgment.

Length of Lien

    The lien created by a civil judgment ends when you satisfy the judgment by paying off the debt, plus interest and costs. If you do not pay off the judgment, the lien is subject to the 10-year statute of limitations on judgments in Texas. However, Texas law permits creditors to renew unsatisfied judgments. If the creditor renews the judgment, the lien can last an additional 10 years or until you satisfy the judgment.

Friday, November 16, 2007

Help to Resolve Debt

There is a connection between high debts and a lower credit rating, even when you never miss a payment. But by working to resolve debt and manage your finances responsibly, you can improve your credit score, increase your amount of spendable income, and more easily qualify for loans and other new accounts.

Proper Budgeting

    Write out a monthly budget and be realistic about what you're able to spend each month to help resolve debt and prevent new debt. Creating a budget involves writing down every recurring monthly expense such as housing costs, transportation costs, food costs, utilities and insurance. You'll next take this figure and subtract it from your take-home pay (after taxes). Set aside a modest dollar amount for entertainment each week (perhaps $30 or $40 depending on your disposable income), and use the remaining income for debt repayment. Adhere to your budget closely to help improve your personal finances and be honest with yourself.

Underlying Issues

    Keep a record of all your credit card statements to uncover any spending trends that contribute to debt. The inability to resolve debt may result from uncontrolled spending or maybe your present income isn't enough to meet everyday demands. Check statements to see where the bulk of your money goes. If the majority of charges come from restaurants or retail shops, scale back in order to save money and pay off your debt faster. If you use credit cards to pay other bills, perhaps it's time to seek other employment opportunities or look for a part-time job to generate additional household income.

Interest and Payments

    Resolving debt quickly is often a matter of acquiring a lower interest rate and increasing monthly payments. The interest rates on credit cards are negotiable, and some credit card companies offer immediate reductions if a cardholder requests one. Getting a better rate generally entails a good payment history with the company, wherein you don't have a history of missing or sending in late payments. Once you've negotiated a better rate, start increasing your monthly payments. These two factors together result in paying less interest each month and bringing down your principal balance faster.

Debt Management Help

    Debt help is available to people who can't seem to manage their debt balances on their own. These companies work with consumers to help them consolidate their debts into one bill and receive a lower rate and payment on debt. Debt management and consolidation companies aren't for everyone, and some companies only work with consumers who owe several thousands of dollars of credit card debt. But if eligible, debt management companies take over repayment of debts; and after reviewing a consumer's debt, the company devises a new payment strategy. Consumers begin forwarding one monthly payment to the company each month. The company takes this payment and pays the consumer's individual creditors. Follow up with your creditors to ensure payments are credited properly and only work with debt management companies with good reputations.

What Kind of Credit Rating Do I Need to Get Approved for a Loan?

What Kind of Credit Rating Do I Need to Get Approved for a Loan?

About one-quarter credit reports contain errors, some serious enough to get you denied for a loan, according to CNN.com. In addition, if you've ever had trouble paying your creditors, your rating will include legitimate blemishes as well. FICO scores, the system used by lenders to calculate whether you are a good or poor credit risk, range from 300, which is very bad, to 850, which is exceptionally good. Anywhere in the 600s or 700s is average.

Prime Loans

    Auto lenders look for a rating of at least 620 for a new car at a reasonable interest rate, 740 for a very good interest rate. Credit card companies are usually willing to advance up to $5,000 with a credit score of at least 670, and the best cards, with limits up to $10,000 or no limits at all, are usually only extended if your credit rating is 720 or higher. To achieve an interest rate on a mortgage in the area of 6 percent or less, you would need a credit score of 660 to 850, as of 2011.

Subprime Loans

    You can qualify for a subprime loan if your credit isn't good, but isn't very bad, either. Unless you've filed for bankruptcy in the last year or two, or have several open accounts that are past due at the time you apply, credit card lenders will generally give you a card based on a score in the 500s. Auto lenders and mortgage companies usually place a score under 620 in the subprime category. With a 620 credit rating, a mortgage will cost you approximately 8.5 percent interest as of 2011. A subprime car loan will also require paying higher interest rates, and possibly more of a down payment. Auto lenders begin worrying about the resale value of your car if they should have to repossess it, so you're more limited as to what you can buy.

Poor Credit Loans

    If your credit rating is in the 400s, you can expect to have a hard time getting a loan, though it's not entirely impossible. Your credit card options will be limited and companies may require you to secure them by depositing money equal to your line of credit. If you default, they reclaim what you owe them from the deposit. You won't be able to buy a new car, and you'll probably have to pay a high rate of interest on an older vehicle. You generally cannot get a mortgage with a credit rating lower than 500.


    If you're concerned about your credit rating or have been turned down for a loan, get a copy of your credit report. Make sure yours isn't one of the 25 percent that contain errors. If there is a mistake, contact the agency immediately. If there are problems on your report that you can explain, you have the right to submit a written statement and the agency is obligated to include it with your credit file. If a lender asks for your credit report, they will receive a copy of your explanation as well.

    Late payments and defaults usually matter less as time goes by. If you can make timely payments for a year or two, your score will begin rising. If necessary, take out a secured credit card and make the payments regularly to start establishing better credit.