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

Saturday, January 31, 2009

How to Remove Charge-Off Accounts After 7 Years From Your Credit Report

Evidence of financial problems doesn't stay on your credit report forever. Credit bureaus should remove most types of derogatory information, such as charge-offs, from your credit report after seven years. If your credit report still lists outdated charge-offs, you should contact the issuing credit bureau and request a deletion.



    Request your credit report from each credit bureau. You can get one free copy of your credit report from TransUnion, Experian and Equifax every 12 months through Annual Credit Report. If you've already received your free credit reports for the year, you can order fresh copies from the individual credit bureaus for a fee. Under some circumstances, the federal Fair Credit Reporting Act, or FCRA, requires the credit bureaus to send you additional free credit reports if you ask for them. If you apply for credit and get turned down because of something on your credit report, the creditor must give you the name of the credit bureau that provided your information. That credit bureau must give you a free copy of your report if you write and ask for one. The same principle holds true for landlords or employers who used your credit report to deny you employment, a promotion or housing. You can also ask for an additional report each year if you are both unemployed and job hunting, or if you receive welfare benefits.


    Review your credit report, paying special attention to the original delinquency date on your charged-off accounts. If your original delinquency date is more than 7 years old, you should dispute the listing.


    Dispute the old charge-off information with the credit bureau that provided the report. If the charged-off account is on all three of your reports, then you'll have to dispute the account with all three credit bureaus. If the information doesn't appear on one or two of your reports, you don't need to file a dispute with those credit bureaus. You can dispute the charge online using the credit bureau's website, or your can send the credit bureau a letter that explains that the information on your report is out of date and request a deletion.


    Wait for a response from the credit bureau. Under the FCRA, credit bureaus have 30 days to investigate your dispute. The credit bureau should send you a letter detailing the results of its investigation, along with a new, accurate credit report. If you don't hear from the credit bureau within six weeks of disputing the outdated information, follow up with a letter or email asking for an update on your dispute.

I Am Being Sued for Old Credit Card Debt

I Am Being Sued for Old Credit Card Debt

If you have old debt on which you have defaulted, there may come a day when you get a court summons in the mail --- the creditor is suing you. This can happen often with credit card debt. Knowing your rights when being sued for old credit card debt can help you navigate the situation with as minimal a hit to your credit score and your wallet as possible.

Do Not Contact the Credit Card Company or Defendant

    If you have been served in a lawsuit claiming that you owe old credit card debt, it is important that you handle the situation promptly but delicately. Have all of your background research completed and speak with a lawyer prior to responding in any way to the suit. Anything that you say, admit to or promise the defendant will be used in his suit against you.

Research the Amount Actually Owing

    Go through your files and pull out any documentation related to the credit card that you can find --- old statements, payment receipts, demands for payment, etc. The amounts listed in the lawsuit may not match up exactly with what you think you owe because the defendant has likely added on legal and collection fees. The more documentation you can find, the better you can defend yourself against the suit.

Check Your State's Statute of Limitations

    Every state has a statute of limitations that restricts a creditor from pursing collection and legal action on a debt after a certain amount of time has passed. Statutes of limitation typically range from three to 15 years. If your default occurred prior to the limitation period, you are likely to be able to defend yourself successfully against a lawsuit. One of the largest risks of contacting the defendant or credit card company, however, is that it can potentially re-start the clock on the statute and re-activate the debt.

Consult with an Attorney

    Once you have compiled all of the documentation on your debt, speak with a law firm that specializes in credit management. It will be able to review the suit and the facts of the case to determine if you even need to respond to the suit. If the debt is owing and the statute has not run out, an experienced attorney can help you work out a settlement with the defendant out-of-court. You may be able to settle the debt for less than you owe or you may be able to make payments over time.

Friday, January 30, 2009

How to Clean Up Credit Card Debt

Cleaning up credit card debt is difficult. According to Bank Rate, it's important to take getting out of debt one day at a time. Paying down credit card debt takes time. Making changes such as developing a realistic budget, negotiating lower interest rates and settling with creditors will help. It's also important to realize when you need extra assistance cleaning up credit card debt. Debt counseling and debt management plans can provide assistance.



    Develop a budget. First, list all of your monthly expenses. Then, list your income. Look for opportunities to cut back on expenses to pay more towards your credit card balance. For example, if you eat out frequently, trimming these expenses could save you $100 or more a month.


    Negotiate a lower interest rate. With a high interest rate, you're paying more towards interest and less towards principal. If your lender won't negotiate a lower rate, consider balance transfer offers. These offers allow you to lock in a low rate for a set term.


    Settle with debt collectors. If you have credit card accounts in collections, contact the debt collector and set-up a payment plan. Some collectors may be willing to settle the debt for a cash settlement (lower than what you owe). Handling collections will also help raise your credit score.


    Attend credit counseling. If you're having challenges sticking to a budget and paying down credit card debt, credit counseling may help. Credit counseling is available at a variety of organizations, such as the local housing authority, credit unions and universities. Counseling will help you create a plan to payoff debt and create a realistic budget.


    Enroll in a debt management plan (DMP). Debt management plans help consumers negotiate with credit card companies and create realistic repayment plans. With a DMP, you deposit an agreed amount each month (with the DMP) and the DMP pays the creditors. This keeps borrowers more accountable and helps pay back debt sooner.

Can an Ex-Landlord Garnish Wages From a Judgment in Florida?

When a tenant does not pay the rent agreed upon in his contract with a landlord, the landlord is legally allowed to pursue collection of this debt whether the tenant remains on his property or has moved on. The landlord has a number of ways to collect the debt, including garnishing the former tenant's wages. In Florida, before garnishing a debtor's wages, a creditor must first receive a civil judgment against the debtor and then a writ of garnishment.


    Because debt derived from delinquent rent derives from a legally enforceable contract, the creditor is allowed to pursue collection of that debt through garnishment, if a court so orders it. To receive an order of garnishment, a creditor must file a suit against the debt. If the judge hearing the case agrees that the creditor's claim has merit and orders a judgment against the debtor, the creditor can then file a motion to garnish the debtor's income.


    Who exactly in eligible to have their wages garnished is determined by state law. In some states, certain people, particularly those with low incomes, are ineligible to have their wages garnished. In Florida, however, no such state laws exist, though certain federal laws apply. For example, if the debtor is the head of a household, his wages cannot be garnished. In addition, a maximum of 25% of a debtor's income can be taken out of each paycheck.

Extrajudicial Garnishment

    Before a creditor can attempt to garnish wages, he must first receive authorization from a judge. Once the creditor has received authorization, he must then approach the debtor's employer and request that the employer set aside a certain amount of the debtor's paycheck. Extrajudicial garnishments -- garnishments made outside of the legal system -- are patently illegal. If a landlord attempts to garnish wages without a court order, he can be sued for damages.

Statute of Limitations

    Florida, like all states, has a statute of limitations on how long a creditor can pursue collection of a debt. According to Florida state law, if the debt derives from a written contract, the creditor can only seek to collect the debt within five years of the date that the debt went delinquent. After five years, the debtor is no longer obliged to pay and an order of garnishment will no longer be valid.

Wednesday, January 28, 2009

What Is Government Credit Counseling?

What Is Government Credit Counseling?

If you feel that you no longer can manage your debts without help, or if you are considering bankruptcy, you might wish to seek credit counseling. Credit counseling services work with your creditors to lower your balances and interest rates while helping you learn more efficient debt management skills.


    The U.S. government does not provide credit counseling for individuals. It does, however, provide consumers with a list of government-approved credit counseling agencies.


    Credit counseling through a government-approved credit counseling agency is required if you are planning to file for either Chapter 7 or Chapter 13 bankruptcy.

Time Frame

    A credit counseling session with a government-approved credit counseling agency can take anywhere from 60 to 90 minutes.


    Credit counseling agencies that have been approved by the federal government are guaranteed to offer legitimate services. When you seek credit counseling through an agency that has not been approved by the government, you might be at risk of a scam.


    Although government-approved credit counseling agencies are nonprofit companies, you still will be charged a fee for their services. If you are suffering from an extreme financial hardship, however, you might be eligible to have this fee waived.


    You can locate government-approved credit counseling agencies in your area by visiting the website of the U.S. Trustee's office and viewing the list of approved agencies by state; see Resources for the website. You then can call to make an appointment for counseling or, if there is no credit counseling center close to your home, you can undergo counseling either over the phone or online.

What Are the Conditions for Student Loans?

What Are the Conditions for Student Loans?

When borrowing money for college or any other further education, many students fund their studies by taking advantage of federal student loans. These loans have a range of conditions such as interest rates, grace periods and conditions during repayment. The specific conditions associated with these student loans depend on the loan package the student is receiving.

Loan Conditions

    The conditions set out for federal student loans depends on the type of federal student loan awarded. One of the more common types of student loan, the Stafford loan, is broken down into two types. Subsidized Stafford loans do not accrue interest while in school, during deferment periods and during grace periods. Unsubsidized loans, however, do accrue interest during these times. PLUS loans have similar conditions to unsubsidized Stafford loans. When applying for a loan, a student agrees to such terms when signing a Master Promissory Note.

Grace Periods

    After graduation, a grace period sets in on federal student loans. For Stafford loans obtained through both the Direct Loan Program and the Federal Family Education Program, there is a six-month window before repayments set in. For federal Perkins loans, this grace period is nine months. Payments may still be made during this grace period, but they are not mandatory. For other student loans such as PLUS loans, repayment is due 60 months after the last loan installment. However, for some PLUS loans, such as those taken out by graduate students, a deferment of up six months is available for loans disbursed after July 1, 2008.

Repayment Conditions

    The interest rate set on federal student loans depends on the type of student loan and when it was disbursed. The interest rate is fixed at 4.5 percent for all undergraduate direct and FFEL student loans except for PLUS loans disbursed between July 1, 2010 and June 30 2011. For graduate students, this is fixed at 6.8 percent. For PLUS loans, this interest rate is larger at 7.9 percent. Interest rates may change depending on the dates of disbursement. Payments are made on a monthly basis. Those who fail to pay on time run the risk of being in default. Defaulting on a student loan may hurt credit ratings, tax refunds may be withheld, and further student loans may not be available.

Payment Plans, Deferment and Forebearance

    A standard federal student loan is repaid over 10 years. However, loans that have an outstanding balance of $30,000 or more may have their repayment extended over a 25-year period. This will reduce monthly payments, but will increase the amount of interest accrued over the lifetime of the loan. Payment may also be postponed through both deferment or forbearance. Those who are unemployed may apply for deferment. Interest will accrue on unsubsidized loans while in deferment. Forbearance may be applied for if deferment is no longer available. However, interest accrues on both subsidized and unsubsidized loans.

Tuesday, January 27, 2009

Definition of a Personal Consumer Loan

Definition of a Personal Consumer Loan

A consumer loan, commonly referred to as a personal loan, is a loan that establishes consumer credit and is usually granted in either a secured or unsecured manner. It is granted based on a consumer's integrity and ability to repay the loan.


    Loans are taken out for a variety of different reasons including: education, medical expenses, vacation, and repairs.


    If you do not have the necessary credit, or the necessary income to indicate you'd be able to pay back the loan, you can have someone co-sign on the loan to improve your chances at receiving it.


    Payments are usually made on a monthly basis. There is a minimum amount that must be paid each month and often the loan must be repaid over a fixed period of time.


    The lender makes money off the loan by adding interest over the life of the loan. The interest rate can either be fixed or variable, meaning it can change over time.


    All banks give out personal consumer loans. Simply go to your local bank to fill out a personal consumer loan application and talk to a loan officer.

Sunday, January 25, 2009

Credit Card Debt Modification

You can make modifications to your credit card account through negotiation. You can handle the negotiations or enlist the services of a nonprofit credit counselor certified by the U.S. government. People seeking modifications of their credit card accounts often want to control excessive debt. A job loss, illness or runaway spending may have led to credit card accounts charged to their limits as interest rates increased. Fortunately, there are ways to get the situation under control through modification and payment plans.

Credit Counseling

    Credit counselors approved by the U.S. Department of Housing and Urban Development are available in most communities nationwide. An initial consultation with a counselor is usually free, and virtually all of them specialize in credit card management. The agencies offer a variety of resources for handling credit card debt, ranging from classroom training to ongoing help from a specific counselor. Find a counselor in your area by visiting the HUD website.

Debt Management Plans

    Counselors can seek modifications to your credit card accounts after you enroll in a debt management plan offered by the counseling agency. Debt management plans allow counselors to take complete control of your credit cards; these plans are for people who are ready to stop using credit as they pay off their balances. The counseling agency will contact all your credit card companies to seek modifications of your card agreements. Counselors will negotiate lower monthly payments, lower interest rates and will even ask the credit company to reverse some finance charges. The negotiations will be ongoing, as the counselors work with you on a plan to pay off your credit card debt within five years.

Lump Sum Payments

    Debt management plans require you to make a lump sum payment to the counseling agency each month covering the monthly payments for all your credit cards, along with a management fee for the counseling agency. The Federal Trade Commission endorses debt management plans as an effective vehicle for eliminating credit card debt. The government-approved counselors leverage their experience, knowledge and working relationships with the card companies to negotiate favorable modifications to your credit card agreements.

Do It Yourself

    Not all people are pleased with debt management plans. The plans can be restrictive because the counseling agencies place you on a strict budget, with as much of your disposal income as possible going to the card companies. Some people prefer managing that themselves, and it is possible for you to contact your card companies, individually, and negotiate modifications. Ask for lower interest rates, lower minimum monthly payments and more by calling the customer service number on the back of your card. If you're serious, tell the representative that you want to close the account and enroll in a self-directed debt reduction plan. Terms of the plan may be similar to modifications that the counseling agency would ask for.

Saturday, January 24, 2009

Does Filing Chapter 7 Stop a Judgment?

Chapter 7 bankruptcy is one of simplest forms of bankruptcy, and it is also one of the most powerful. Chapter 7 can stop a judgment, but it has even broader powers. Chapter 7 can completely eliminate the judgment and other secured debts in only a few months. Other forms of bankruptcy, such as Chapter 13, aren't nearly as fast, with Chapter 13 requiring a payment plan over three to five years, according to legal website Nolo.com.

Automatic Stay Provision

    Chapter 7 and other forms of bankruptcy are designed to give people relief and protection from creditors as they seek to reorganize their finances. Filing for Chapter 7 or another form of personal bankruptcy immediately results in a bankruptcy judge issuing a legal order called an "automatic stay." The stay stops the judgment and prevents debt collectors from collecting from you on the judgment and other delinquent debts.

Wage Garnishment

    Chapter 7 bankruptcy and the automatic stay also immediately stop wage and bank garnishment. "The New York Times" reported in 2010 that wage garnishments were on the rise around the country as credit card companies increasingly turned to lawsuits to collect delinquent debts. After winning judgments many creditors ask the court for permission to garnish your wages and bank accounts. Many people file for Chapter 7 bankruptcy for the sole reason of ending the pay garnishments.

Bankruptcy Attorneys

    You can file for Chapter 7 bankruptcy protection on your own, but the paperwork and the process is extensive. Bankruptcy attorneys will represent you for a fee, and you may be eligible for free representation through your local chapter of Legal Aid. Most bankruptcy attorneys offer initial consultations for free, offering an opportunity for you to learn about the process. You can learn even more by scheduling free consultations with two or three bankruptcy attorneys and asking different questions each time. That will help you decide if bankruptcy is for you.

Pre-Bankruptcy Counseling

    Formal pre-bankruptcy counseling can also help you decide. Nolo.com reports that before filing for Chapter 7 you must present a certificate showing you have completed a counseling session with a trained credit counselor. The counselors are available in cities across the country and are certified by the U.S. Trustee program of the U.S. Department of Justice. The counselors will discuss the advantages and disadvantages of Chapter 7 bankruptcy, including its crushing effect on your credit. Alternatives to bankruptcy and other options for resolving your judgment will also be discussed.

How to Change the Name on an IRS Bank Levy

The IRS places levies on bank accounts when an outstanding tax bill has not been addressed. It is possible to have the levy placed on your account incorrectly. This might happen when a couple marries, but one party had an outstanding IRS debt before the marriage. When the levy is imposed, it might be placed on all joint accounts. Getting your name removed from the levy requires diligent documentation that you are not the responsible party.



    Obtain a copy of the levy served on the bank and other financial institutions to confirm you are named on the levy. A levy allows the IRS to seize assets they move into the account. If you are not named on the levy, open an individual account to separate your assets from the party being levied. If you are named on the levy, this might not be effective, since the bank is required to impose the levy on any account in the institution.


    Call the IRS and request the history behind the levy. If your are named as a debtor, you have the right to this information. The IRS is available via phone at 800-829-1040.


    Gather all pertinent historical information regarding your financial history, marital history and anything that demonstrates that you are not responsible for the IRS debt.


    Make an appointment with an IRS representative to review the levy. Provide all documentation to the representative. If you don't have an IRS office close by, request the help of a tax adviser, tax attorney or write a letter to the IRS with all the details.

Friday, January 23, 2009

Does Being Over the Credit Limit Hurt Your Credit Score?

Carrying a credit card balance that exceeds your credit limit hurts your credit score. It suggests you are having financial problems, especially if several of your accounts are maxed out. Your credit score will suffer each month as accounts continue to report as over the limit. Other creditors will see this if you apply for new credit, making approval difficult or even impossible, even in an emergency.


    Maxed-out credit cards are a huge drag on your credit score, although no one can say exactly how much they hurt. Individual credit situations are different and people with higher credit scores are likely to lose more points than people with poor scores. Paying your bills on time while keeping balances low are considered the most important factors for maintaining a good score.


    Allowing accounts to remain over the limit causes fees to be applied each month, increasing the balance even more. The card company may also increase your interest rate as it views you as more of a credit risk. A snowball effect can ensue with fees and additional finance charges pushing you deeper in debt.


    Paying down balances will end the fees and repair damage to your credit score over time. Try making biweekly payments if you cannot pay a large lump sum. Paying every two weeks allows you to make 26 payments in a year instead of 12 when paying monthly. Paying at least the minimum payment on a biweekly payment plan also means your payment will never be late.


    Also call your credit card companies and ask for help getting back under your limit. You may find that the company has programs available to help you. For example, the company may agree to lower your interest rate for a short period, allowing more of your biweekly or monthly payments to be applied to the principal. Stay with it as the balances drop. Set a goal of paying down all of your revolving debt to no more than 10 percent of the credit limit. Keeping debt at that level while making timely payments will help your score.

Thursday, January 22, 2009

8 Smart & Easy Debt Reduction Tips

8 Smart & Easy Debt Reduction Tips

Debt reduction requires determination, a realistic plan and possibly a willingness to get by with less for a while. The payoff is a more stable financial profile and less of your money going towards carrying costs every month. Simple habits maintained over time can add up to reformed spending patterns and continuing reduction of your debt.

Reduce Impulse Spending

    Many debts are related to spending habits that are unplanned and impulsive. Train yourself to plan for spending and avoid buying things for yourself or others on a whim. You may find that the next day you don't even want the item anymore, and you've saved the money you would have spent on it.

Consolidate Credit Cards

    Reduce the number of credit cards you have to one. Borrow money on your lowest interest credit card and use that money to pay off the others, then cut up those cards and close the accounts. Leave your one credit card at home and only take it out when it is needed.

Increase Mortgage Payments

    Increase your monthly mortgage payments and/or make prepayments to reduce your principal more quickly. A mortgage that is paid off at the normal schedule will cost you many thousands of dollars in interest over the years. The more quickly you can pay it off, the more money you will have in the long run.

Make More Money

    This step is easier said than done for most people, but it is definitely effective in reducing debt. If you are in a position to meet with success, ask your employer about a raise, or work more hours. Consider taking on another job and devoting all the money from it toward your debt.

Sell a Car

    Selling a car gives you a large cash sum immediately, and removes the insurance, registration, gasoline and maintenance costs that you pay for it every year. If your household has more than one car, a bit of extra planning and coordination may be able to help you to cope with a single car.

Maintain a Budget

    Gain control of your spending habits by maintaining constant awareness of how much money you are making and how much you are spending. Dedicate a notebook to keeping track of your budget over the long term. Consult the notebook periodically to identify spending patterns that you can reduce.

Downsize Your Home

    Moving out of your house is a radical way to reduce your debt, but if your debt is debilitating, it can be very effective. Moving to a smaller home in a less expensive neighborhood that is cheaper to maintain can leave you with a financial windfall from your home sale which can be used to pay your debts.

Find Inexpensive Activities

    Reform your leisure spending habits by developing interests that don't cost a lot of money. If you've been getting into debt by vacationing in Europe, try camping in nearby parks. Replace expensive restaurants with the pleasures of cooking at home.

Is Bankruptcy or Debt Settlement the Best Route to Go?

Choosing between bankruptcy and debt settlement is deeply personal and the answer isn't the same for everybody. For example, a 19-year-old college student who racks up significant credit card debt could file for bankruptcy and start recovering in just months---with the bankruptcy erased from credit reports before the age of 30. Meanwhile, a 45-year-old homemaker with excessive debt may choose debt settlement, rather than commit to a Chapter 13 bankruptcy, which requires three to five years to finish.


    Credit cards and other secured debts are often resolved through debt settlement. Settlement allows for full payment of the accounts for less than the amount owed. Savings usually range from 20 to 70 percent, according to SmartMoney. Creditors are not required to settle delinquent debts, but it is a common practice, according to the Federal Trade Commission. The agency recommends debt settlement over bankruptcy because it is less damaging to credit.

Chapter 7 Bankruptcy

    Chapter 7 is one of two popular forms of bankruptcy. It is the quickest form of bankruptcy, with completion possible in as little as three or four months. It is considered a "straight" bankruptcy as it quickly liquidates non-exempt assets to pay creditors. Chapter 7 bankruptcy filers keep most assets through exceptions called exemptions. A primary residence and cars are usually protected in Chapter 7, while other assets such as valuable art collections are at risk. Income requirements for Chapter 7 vary by the state, and usually only people with low incomes qualify.

Credit Card Debt

    Some people with modest incomes and few assets to protect consider Chapter 7 ideal, especially if they have lots of credit card debt. Chapter 7 completely eliminates credit card debt. Theoretically, someone with $65,000 in assorted credit card debt and few assets could wipe out the debt in 90 days without paying a penny towards the debt and without losing any personal property. For some people that is a better alternative than debt settlement, which requires payment of some of the debt, sometimes in a lump sum.

Chapter 13 Bankruptcy

    Chapter 13 is similar to Chapter 7, and all people qualify regardless of income. However, Chapter 13 requires a payment plan of three to five years. Any unsecured debt remaining after the plan is eliminated. Some people struggle with the many restrictions of Chapter 13. The bankruptcy court must approve living expenses, with any money left over used to pay creditors. Some people who don't want the oversight opt for debt settlement instead.

Credit Impact

    Debt settlement and bankruptcy both ruin credit initially, but bankruptcy carries a greater stigma because it is the most negative credit information possible for credit reports. Bankruptcy information is listed on credit reports for 10 years, while settlement information is listed for seven. However, it is possible for credit scores to recover from either within two or three years of completion of the respective programs.

Why Do Credit Reports Vary by Type?

The variations among credit reports are partly due to the way that consumer credit information is collected. Furthermore, creditors and lenders report information about their customers' accounts to credit bureaus on a voluntary basis. Creditors and lenders are only required to report accurate information about their customers' accounts, but when and if they report that data is up to them.

Account Activity

    The national credit reporting companies are Equifax, Experian and TransUnion. Auto lenders, credit card issuers, mortgage lenders and others subscribe to those companies' services and report their customers' account activity to them. According to Experian, the U.S. Fair Credit Reporting Act doesn't require creditors and lenders to report account activity to the national credit bureaus. In some cases, your creditors may report your account activity to one or two of the national companies. Other creditors may not report your account history at all. That's partly why different credit reports don't have the same information.

Account Updates

    Your credit reports change frequently because creditors and lenders choose when to report their customers' account activity to credit bureaus. The bureaus usually receive the information one time each month from creditors and lenders who choose to report account activity. However, Experian indicates that the day of the month that creditors and lenders send account updates varies. Therefore, your credit report not only varies from bureau to bureau, but it also may vary from day to day at the same bureau.

Public Records

    The credit reporting companies collect their own information from public records to add to consumers' credit files. The public records information on credit reports includes bankruptcies, foreclosures, wage garnishments and other credit-related actions. Each of the credit reporting companies gathers its own information on such things, and each one is responsible for its own updates. They gather information on thousands of consumers, and they have their own methods for doing updates. Therefore, the public records information on consumers' credit reports may vary from company to company.

Report Format

    The national credit reporting companies also choose their own formats for the credit reports that they send to consumers and businesses. The companies make notations on the reports in different ways to specify things such as late payments. However, consumers who order a credit report from a bureau usually receive information on what the various sections of the report mean. Consumers shouldn't expect to see a credit score on a credit report. The information in a credit report affects people's credit scores, and consumers who want to see their scores usually have to request them from bureaus separately.

Wednesday, January 21, 2009

How to Report a Private Loan to Credit Bureaus

Consumers should know what private loans are, where you can apply, and the ways you can have a private loan reported to credit bureaus. One may choose to have any loan reported a credit agency, all you need to do is request that this be done.



    Private loans describe a loan taken out from a private source such as a bank or investor. Some consumers may choose a private loan over a government educational loan.


    Request an application at your bank or online from one of the many companies offering private loans. Some of these companies include Virgin Money, Fynanz, Want-private-loan.com and Greennote, among others. Fill out and submit all required paperwork and wait to be notified of you approval.


    Private loans can be better if you have good credit because you can lock in a low interest rate.


    Virgin Money offers optional credit reporting. This credit reporting has to be turned "on" by the borrower. The borrower must also authorize this by faxing a signed consent form. If you have a private loan through a bank or other source, this loan can be reported to a credit agency at the consumer's request.


    You may have any debt repayment item reported to a credit agency, simply by requesting that the lender report it. This can refer to a utility bill, a payment for financing (such as for furniture or jewelry), and a personal or private loan, among other things.

Can a Credit Card Debt Be Collected From a Retired Person in the State of New York?

When a person takes on a credit card debt, he is legally obligated to pay it back, just as he would any other kind of debt. The rules by which he must pay this debt back will vary depending on both the wording of the credit card contract and the laws of the state. In New York, retirees must pay back credit card debts, but creditors cannot seize certain types of income from them.

Credit Card Debt

    A credit card debt is a loan drawn against a line of credit. If a person fails to pay back the loan under the terms of the contract, the credit card company will generally issue various late fees. If the person is in default for too long, the account will be closed, but interest will still be assessed against the debt. Being retired does not exempt a person from paying back this loan.

Retired Person

    When a person is retired, he may draw his income from a number of different sources in lieu of receiving money for the performance of a job. Many retirees, if they are old enough, receive Social Security payments. Others, however, live off of savings accounts, while some receive pensions from their former employers. Many of these forms of income are protected against garnishment or seizure under both New York and federal law.

Debt Garnishment

    Often, when a debtor refuses to pay, a creditor will attempt to seize the amount of debt directly from the person's income stream or bank account. This process, known as garnishment, involves siphoning funds from the person's account or directly from an entity that pays him money. Garnishment is harder to levy against a retired person, as federal law protects many types of retiree income, such as Social Security payments, from garnishment.

Statute of Limitations

    In addition, if the debt is old enough, a creditor will no longer be able to sue for its recovery. In New York, the statute of limitations for filing a lawsuit against a debtor for the recovery of a debt is six years from the day on which the person first defaulted and never got straight with the creditor again. If the creditor does not file suit before this day, he cannot attempt to garnish the person's income.

Tuesday, January 20, 2009

Arkansas Credit Card Debt Statute of Limitations

Arkansas Credit Card Debt Statute of Limitations

If a credit card company or debt collector contacts you about paying an old credit card debt, double-check the date on which the debt went into default. In Arkansas, as in other states, the statute of limitations may protect you from your creditors getting a court judgment against you. However, your credit remains affected by the default even after the Arkansas' statute of limitations expires.

Statute of Limitations Definition

    A statute of limitations on debt is the period of time during which a creditor can successfully sue a debtor to collect on a debt. According to the Bank Rate website, once the statue of limitations has past, the debtor still technically owes the debt, but can defend himself against a lawsuit by arguing that the debt is no longer within the time period specified by the statute of limitations.

Statute of Limitations on Filing a Lawsuit

    Arkansas law gives a credit card company or debt collector 3 years to file a lawsuit against you after you default on the credit card. The default date is 6 months from when you stopped making the minimum required payments on the account.

Statute of Limitations on Collecting a Judgment

    If a creditor wins a lawsuit against you, Arkansas law gives it 10 years to collect the judgment. If the judgment isn't paid at the end of 10 years, the creditor can ask a judge to renew the statute of limitations. During this time, your creditor can continue collection efforts, and can both garnish your wages and seize your assets to satisfy the debt.


    Don't confuse Arkansas' statute of limitations on debt collection with federal credit reporting laws. According to the Fair Credit Reporting Act (FCRA), creditors can place most types of negative information on your report for up to 7 years. A credit bureau can report an unpaid judgment for the longer of 7 years or the length of a state's statute of limitations on judgment collection, according to the Federal Trade Commission.


    Some debt collectors will try to sue you for a debt that is past the statute of limitations. If you receive a summons to appear in court, don't ignore it. If you don't show up to defend yourself, the judge can award a default judgment to the debt collector, and an unpaid judgment may show up on your credit report. While you may be able to get the judgment vacated, it is best to avoid the hassle by responding to the summons.

Am I Responsible for My Deceased Husband's Debts?

Am I Responsible for My Deceased Husband's Debts?

Handling the debts of a deceased spouse can be tricky. A few accounts, such as federally governed employer-sponsored retirement plans, 401k plans, 403b plans and traditional benefits plans are covered by federal law. Any other debts and assets, however, are covered by state law and every state handles debt incurred by a deceased spouse differently. A spouse's responsibility for the deceased's debt is determined by the state in which they were living when the spouse died.

Community Property States

    Ten states in the U.S. have community property laws. In Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, any assets accumulated while a couple is married are considered joint property. In some states, debt incurred by either spouse during a marriage is considered joint property. In those cases, the debt may be the responsibility of the surviving spouse. Laws are not consistent among the states, however, and variations exist due to circumstances. In community property states, it is advisable to obtain the advice of an expert.

States Without Community Property

    In states without community property laws, debt is the responsibility of the person who incurred it. If debt was incurred solely by the deceased person, it cannot be inherited by his spouse or children. All debts are paid by the deceased person's estate. If the assets of the estate are not sufficient to pay the debt, most entities must write off the debt. Credit card law is particularly specific since legislative changes passed in 2010. It is now illegal for credit card companies to delay informing the estate of a debt or for credit card companies to add fees or penalties during the time it takes an estate to be settled. Other creditors do not have these specific requirements but the general rule applies: If the surviving spouse did not personally incur the debt, she is not personally responsible to repay it.

Joint Accounts

    Rules are slightly different if the married couple had joint credit accounts. If spouses were co-signers on loans, each person is equally liable for the debt. In that case, a surviving spouse may be responsible for the debt along with, or instead of, the estate. If you were merely an authorized user and did not sign the credit application, you are not responsible for the debt.

Federal Retirement Accounts

    Federally insured retirement accounts, along with life insurance payouts and brokerage accounts, do not go through probate and, therefore, cannot be garnished or taken from a surviving spouse to pay off debt. If you are liable for your spouse's debts, your insurance money and retirement funds cannot be forcibly taken and used to settle those debts. Avoid taking advice from creditors or collection agencies. If you have questions, consider consulting an estate attorney.

Monday, January 19, 2009

Can the Bank Charge Off My Mortgage?

A bank can list your mortgage loan as charged off if you stop making payments. A charge-off is an internal accounting term used to describe a bad debt. However, the charge-off does not end your financial obligation for the mortgage loan. After listing your mortgage as charged off, the lender likely will begin foreclosure proceedings, if it has not already done so.


    A charged off mortgage is serious, because it means the mortgage company has given up trying to collect from you. The charge-off permanently closes the account, eliminating possible solutions for avoiding foreclosure. The Bills website reports that if an account is officially charged off, the lender will not consider reopening it. As a result, foreclosure avoidance programs, such as loan modifications and payment plans, would no longer be available to you.

Credit Report

    The charge-off is listed on your credit report for seven years, and it includes the amount due at the time of the charge-off. Your credit score drops when the charge-off is posted, making it difficult to be approved -- at least for a while -- for any type of loan at a competitive interest rate. Creditors view a mortgage charge-off as a sign of financial trouble, because the mortgage payment usually is the last bill people stop paying when they are in a crisis.


    The charge-off eventually allows the bank to receive a tax break, because it records your mortgage as a bad debt. However, the foreclosure process can begin as soon as you miss your first payment, with most foreclosures completed within six months. Once your house is foreclosed, it will be sold by the bank, and you could be held responsible for any remaining balance on the mortgage. For example, assume the balance remaining on your mortgage is $150,000 at the time of foreclosure, and the house is sold at auction for $120,000. That leaves a final balance due of $30,000. As of 2010, laws in 30 states allow banks to file lawsuits against former owners to collect any balance remaining after the completion of a foreclosure, according to CNN.

Avoiding a Charge-Off

    Several options are available to avoid a charge-off or foreclosure. However, it is important that you communicate with your lender as soon as you begin experiencing financial problems. You should contact the lender even before you start missing payments. Letting the lender know about your problems while your account is current clearly indicates you are handling your problems responsibly. By being notified early in the process, the lender may offer more solutions for your situation, possibly including an option to skip payments for a few months.

Definition of a Debt to Credit Ratio

Your credit situation may be mystifying if you don't understand the terminology used in the literature and by finance professionals; however, the term "debt to credit ratio" actually means what it says. Lenders and creditors look at how much debt you have, and compare it to how much room you've left yourself before you reach your account limits, and use this ratio to assess how much of a credit risk you are.


    Your debt to credit ratio is how much you owe in proportion to how much credit you have available for use. For example, if you have a $600 balance on a $1,000 credit card, your debt to credit ratio is $600 to $400, or 60 percent to 40 percent. Your debt to credit ratio is used to determine how financially responsible you are.

Credit Score

    Your debt to credit ratio is one of the key factors in determining your credit score. According to Fair Isaacs Corporation, known as FICO, your debt to credit ratio, called the utilization ratio, accounts for one-third of your overall credit score. FICO recommends keeping balances below 30 percent to get your credit score as high as possible.


    If your debt to credit ratio is high, you may have difficulty obtaining new credit. Consumers with lots of revolving debt have problems getting approved for new credit because it demonstrates to lenders that you may have problems managing your money. When your balances are low, lenders see that you are responsible and have the means to pay back any loans or new credit.

Expert Insight

    To get your debt down and your available credit up, you must start paying off your balances. You may either choose to pay off the lowest balance first, in what is called the snowball plan, or to pay off the card with the highest interest rate first. The benefit of the snowball plan is that you'll see the effects of your increased payments sooner, since the card will be paid off quickly. By paying the card with the highest interest first, you save money by decreasing the time frame in which you are paying the interest.


    Your credit report details your debt to credit ratio. Each year, you may obtain a free copy of your credit report from each of the three credit bureaus (Experian, Equifax and TransUnion) through the Annual Credit Report website. Also, to reduce your debt to credit ratio faster, call your credit card companies to request lower interest rates. If you are having difficulty making payments and want to get out of debt, consider working with a credit counselor to create a budget and a payoff plan.

What Should My Credit Score Be to Refinance?

What Should My Credit Score Be to Refinance?

When consumers refinance a loan, typically either a mortgage or a car loan, they use a new loan to pay off the old one. They do this because the new loan offers better interest rates and, in turn, lower monthly payments than their old loan. When applying for a refinancing loan, you need to make sure your credit score is as good as it can be or you may not be able to get approved.

FICO Score

    While each creditor has its own process for determining who is eligible to receive a loan, most lenders use the FICO score as a part of their evaluation process. Your FICO score is a score between 300 and 850. The higher the score, the better your chances of getting a loan. Also with a higher score, you're more likely to get the best interest rates, increasing the money-saving effects of the refinance loan.

High Score

    Every lender determines what the ideal borrower looks like, but in general, lenders consider any borrower with a FICO score of 720 or above to have excellent credit. If your score is 720 or above, and as long as you have a steady income, you're most likely to receive the best possible interest rates on any loan you apply for. Also, a high score will let you shop around more effectively, as lenders are often eager to lend money to reliable borrowers.

Average Scores

    The Federal Citizen's Information Center reports that anyone with a credit score between about 620 and 720 has average credit reliability. While creditors will not fall over themselves to offer you a loan, nor will they give you the best interest rates they can offer, you can still probably get a refinancing loan. However, you need to always evaluate if the terms of the new loan are different enough to make it worth it.

Low Scores

    Creditors often refer to borrowers with a 620 or lower credit score as "subprime," meaning they represent a significant risk of defaulting on the loan. Lending Tree reports that borrowers with a credit score as low as 500 can still get a loan, though these come with stricter controls, such as proving your income by producing your W-2's and, of course, higher interest rates.

How to Deal With a Civil Summons With Asset Acceptance

How to Deal With a Civil Summons With Asset Acceptance

Asset Acceptance is a limited liability corporation that specializes in debt collection. The company purchases old debts from retailers, credit-card companies, utilities and other creditors. Asset Acceptance, like any collection agency, will pursue any lead to find you, contact you and notify you of your debt. The company will pursue debtors through the courts to collect money if necessary in order to collect the money and make a profit. Always defend a summons from this company, never communicate directly with any Asset Acceptance representative except via certified mail, and never miss a court date.



    Review every piece of correspondence and every summons from Asset Acceptance as soon as it is received. Make a note of any deadlines and court dates on your calendar.


    Check the statute of limitations for debts in your state. Compare the statute of limitations with the date of the original debt listed on the correspondence from Asset Acceptance.


    Review your personal financial records to find evidence of the original debt. Look to see if it was ever yours. Pay close attention to the payment history in your records. Compare your information with that in the correspondence to check for accuracy.


    Respond to the initial summons. Challenge every discrepancy you find in the information Asset Acceptance provided to you and the court. Challenge the statute of limitations if appropriate. Request that the court force Asset Acceptance to prove the validity of the debt as well as that company's claim to the monies.


    Appear at court. Do not meet with representatives from Asset Acceptance for negotiations before the hearing. State your case clearly and honestly. Do not admit to owing a debt that is not yours. Do not let the Asset Acceptance attorneys confuse you into admitting or signing anything.


    Ask the judge to dismiss your case with prejudice. That means that Asset Acceptance will never be able to take you to court for this debt again.

How to Access a Retail Services Credit Account

Retail services credit accounts are lines of credit extended specifically for the purpose of purchasing one item, at one specific retailer. Other credit cards allow for purchases at thousands of retailers, but retail services accounts are designed to drive business into one store. Accessing these accounts is normally simple.


How to Access a Retail Services Credit Account


    Determine the bank financing the purchases on the account. Most retail services accounts are affiliates of larger lending institutions (HSBC and Citi are common banks). If you cannot immediately find the bank controlling the account, refer to your original contract agreement or your account statement and look for a contact number. One phone call to customer service will give you your answer.


    Look up the bank online. Online services help you avoid waiting in long customer service phone queues. Make sure you have your username and password for your online account -- or create them if it's your first time logging into your online account. Make sure you have the following: account number, your name as listed on the card, the date the account was opened, and recent activity (for which there might be challenge questions).


    Use the account. Some retail services accounts are credit lines that allow you to purchase additional items, not just the original item. Retail services accounts generally only allow you to use your credit at one specific retailer. Make sure to use your account at that particular retailer.


    Contact the retail outlet itself for account servicing. Sometimes the bank supporting the retailer will allow the retailer itself to manage customer accounts. If this is the case (and you'll know when you try to access your account at the bank), either go to the store in person or call to get information on the account. Remember to have all account details ready.

Sunday, January 18, 2009

Is Student Loan Money Exempt During Bankruptcy?

Student loan money follows a different guideline than other debt when it comes to bankruptcy. These loans will not be discharged or forgiven during bankruptcy. The government backs federal loans and requires you to make payments on them. Private student loans now have the same protection when you file bankruptcy. If student loans are the reason you are declaring bankruptcy, you will need to look for another option.

Student Loans and Bankruptcy

    Student loans are protected during a bankruptcy. This means that you will rarely be approved for a student loan to be discharged during bankruptcy. The federal government backs all federal student loans and wants you to make the payments on them until they have been paid off. Private student loans are rarely forgiven as well. You may have credit card debt, and other consumer debt discharged during bankruptcy, though.

Student Loan Forgiveness

    There are programs available for student loan forgiveness. The programs focus on people who work in the public sector for the government or as teachers. Many teachers can have their loans forgiven after five years of service as a teacher. People who work for local or state governments may qualify for student loan forgiveness after 10 years of service. Contact your lender to see if you qualify for the program. However, to qualify for forgiveness you need to make on time payments the entire time you are in the program.

Student Loans and Disability

    The only way to have student loans completely discharged is to be declared permanently disabled. This is an extensive process, and it is very difficult to complete. If you have a debilitating accident or illness, you may qualify for disability. Once you qualify for disability checks, you will need to send a copy of your approval letter to your student loan lender and go through the process again with your lender. This rarely happens and the most difficult part is qualifying for disability benefits.

Working with Your Lender

    If you find that you are having difficulty making your payments, there are several options available to you. Student loan lenders are more likely to work with you if you cannot afford to make payments. You can defer payments by applying for a hardship deferral. You can also have income-based payments, which can lower your monthly payment to something you can afford. If you are having difficulty with making payments, contact your lender instead of skipping payments to see what you can work out.

Saturday, January 17, 2009

How Can I Stop Creditors From Calling If I Am in the Process of Filing Bankruptcy?

How Can I Stop Creditors From Calling If I Am in the Process of Filing Bankruptcy?

Once you file for bankruptcy, creditors are obligated under the law to cease their attempts to collect on your debts. Normally, creditors will stop their attempts to collect once this happens, because if they fail to do so, they violate the federal Fair Debt Collection Practices Act, which can result in the debts becoming invalid. However, you must inform your creditors of your bankruptcy filing promptly to enjoy the protections of the law.



    Make copies of all correspondence related to your bankruptcy filing. The actual document of the filing created by your bankruptcy lawyer may be important in proving to your creditors that they must stop their collection attempts.


    Look through your records of communications to find the contact information for the relevant collection agencies and creditors. The original creditor or collection agency assigned to each account may not be the same agent that currently owns your debt. If you have trouble tracking down that information, order copies of your credit report from each of the three chief credit-reporting bureaus (Equifax, Experian and TransUnion) to find out current contact information for each debt.


    Mail copies of your bankruptcy filing and associated information to each of your current creditors using return receipt mail so you know when they have received it. Once they receive it, they should send a confirmation notice. If your bankruptcy filing fails to go through, the creditors are authorized to resume their collection attempts.

Friday, January 16, 2009

How to Rotate Consumer Debt

How to Rotate Consumer Debt

When it comes to owing debt, high interest rates on debt can be frustrating. The higher the interest rate, the more money goes into the lender's pockets instead of paying down the principal balance. This makes the lender more money, and keeps you in debt for a longer period of time. By moving debt from one lender to another, you may be able to reduce the interest that is owed on that debt. Here are some tips on how to rotate your consumer debt.



    Read your account statement. Before you rotate your debt to a new lender, you want to check the terms that you already have with your current lender. Check to see the interest rate you are being charged on your debt. For discussion purposes, consider that someone owes $10,000 at 20 percent on a credit card.


    Shop for a new lender. In the same way that people refinance their mortgage payments when a new lender offers a better rate, you are in essence refinancing your consumer debt. Look for a lender who is offer better rates. Such lenders are other credit card companies, banks offering home equity lines or credit unions offering personal loans.


    Apply for the loan. After filling out basic personal information, the new lender will probably ask for your Social Security number so that it can look up your credit report. Based on your credit history and financial health, the lender will approve your deny your loan request. If your request is approved, you can rotate the debt.


    Move the money. Instruct the new lender who has approved your loan that you'd like to pay off the other lender. The new lender will then send the check to the old lender, paying off that debt. You will now make monthly payments to the new lender. For the example listed above, if someone reduced his $10,000 loan from 20 percent to 10 percent, the minimum monthly payment would be reduced from $265 to $183. The extra $82 per month will allow you to pay down your principal debt much faster.

Pennsylvania Statute of Limitations for Collection of Utility Bills

Utility bills are a necessary evil when owning a home or renting property. Paying these bills on time can help your credit, keep the lights on and the water running. Failing to pay utility bills on time can hurt your credit and cause the shut-off corresponding utilities. The statute of limitations for utility bill collection in Pennsylvania provides a specific time period for companies to pursue utility customers for debts.

Utility Debt Status

    Pennsylvania considers utility bills as written contracts for debt collection purposes. A written contract lasts for a finite period of time. In this case, the contract lasts for as long as the debtor lives in her current address or closes the utility account. Utility bills bear some similarity to revolving accounts, like credit cards, in that a debtor may carry a balance from month-to-month though utility companies do no usually charge interest on the accounts as credit card companies do.

Statute of Limitations

    The statute of limitations for debt collection of utility bills in Pennsylvania is four years. Utility companies have this length of time to pursue a debtor for money owed from utilities before the ability to sue the debtor in civil court expires. Utility companies have an advantage in the collection process in that these companies can shut off utilities tied to delinquent accounts until the debtor decides to bring the account current. No running water or electricity is a powerful motivational tool in compelling a debtor to bring utility accounts current.

Wage Garnishments/Property Liens

    Wage garnishment for a utility bill is illegal in Pennsylvania. A utility company's ability to turn off a delinquent customer's access to a utility somewhat mitigates the lack of wage garnishment since it can help to limit the company's financial loss. A utility company may attempt to secure a property lien against a debtor through a civil court judgment. The lien attaches a debtor's property and entitles the utility company to a share of the profits from the sale of the property either through the debtor's own voluntary sale or through bankruptcy.

Alterbative Collection Methods

    Pennsylvania law requires all utility companies operating in the state with annual revenue exceeding $40 million to offer Customer Assistance Programs (CAPs) to help delinquent utility customers with low incomes pay utility bills. These programs allow customers to make monthly payments in proportion to family size and gross income. Customers make these lower monthly payments, which may be lower than actual monthly charges, in exchange for continuation of service. This allows utility companies to keep more accounts out of collections and encourages more customers to make payments.

Does Florida Have a Requirement for a Repayment Plan in State Law for Payday Loans?

With payday loans, a borrower writes a postdated check to a payday lender in exchange for a short-term cash advance. Florida sets strict fee limits on payday loans and prevents borrowers from having more than one outstanding loan at a time. In addition, Florida lenders may not rollover a payday loan, a process which involves extending longer payment terms to loan customers. Instead, borrowers who cannot pay back their payday loan at the end of the loan period can opt to participate in a state-approved repayment plan.


    Under Section 560.404 of the Florida Statutes, all Florida payday lenders must inform borrowers of their rights to a repayment plan, if they cannot pay off a loan by the due date, and clearly disclose all loan terms. Each provider must list these terms in 14-point font in capital letters with the borrower signing at the bottom to show that he understands the repayment options available to him.


    A payday lender must extend the terms of the payday loan for 60 days if the borrower completes consumer credit counseling by a state-approved provider. The lender must provide to the delinquent borrower a list of approved credit counseling agencies affiliated with the National Foundation for Credit Counseling and their respective phone numbers and locations. An agency will work out a budget or plan for the debtor to pay off the loan, which the debtor must then submit to the payday lender. Per Florida law, debtors may complete credit counseling over the Internet, in person or by telephone.

Time Frame

    Delinquent debtors must notify the payday lender of their intentions to complete credit counseling no later than seven days after the due date of a payday loan. Debtors must set an appointment for credit counseling within this seven-day window and complete the program within 60 days. Florida does not set a time limit on how fast the debtor must pay back the payday loan.

Repayment Plan Forfeiture

    If borrowers fail to provide seven- or 60-day notice to the payday loan company, do not complete credit counseling and do not set an appointment for counseling, they waive their right to a repayment plan. According to Section 560.404(22)(b)(3) of the Florida Statutes, the payday lender may deposit the payday check on the due date, resulting in an insufficient funds bank fee. Florida payday lenders cannot charge extra interest or fees for late or delinquent payments, but these organizations may use all legally available civil means to collect the money owed to them, such as hiring a collection agency to enforce the debt.

Thursday, January 15, 2009

The Best Ways to Pay Off a Credit Card

Credit cards can be a reliable way to manipulate cash flow, and they're more convenient to use than cash. However, credit cards are not free money. The debt acquired on the card has to be paid back, and you can do that by following a few straightforward principles.

Minimum Balances

    Pay more than the minimum balance due each month. Paying only the minimum balance lengthens the amount of time needed to pay off the debt and puts most of your payments toward interest instead of principle. Consequently, you will pay more to the company than if you shortened the debt term length.


    Consolidate your debts. Many people who use a credit card have multiple credit card accounts as well as other debts, such as car loans or mortgages. These different debts often involve different rates of interest, many of which can be high. When you consolidate these debts, you usually get a lower interest rate than the original rate on your credit card. A lower interest rate means less money is paid to interest over time and the credit card debt is reduced more quickly.

Cut Up the Card

    Stop using the credit card. Even if you are using the credit card for necessary expenses, this will increase the amount of money you pay to the credit card company over time and take longer to eliminate the debt. See if you can cover your expenses another way instead of using the card out of convenience. If you must use the card, try using it only for small expenses, such as paying your electricity bill.

    Do not continue to rack up debt on the card merely to obtain a perk the company offers you, such as airline miles. You'll end up paying for that perk through the interest you'll pay.

Wednesday, January 14, 2009

How to Find and Use the Best Secured Credit Card

How to Find and Use the Best Secured Credit Card

If you have moderate to severely damaged credit, finding the best secured credit card is one important way to rebuild your credit. A secured credit card is a card that is backed by a deposit.



    Validate that the credit card company reports to all three credit bureaus. Otherwise, you are just wasting your time. The only reason to even have this type of credit card is to rebuild your credit.


    Search for secured credit cards online at a reputable source. See the link below for safe offers. Some banks require an extra insurance policy with a steep monthly fee. Do not be lured into this offer. Also, don't answer unsolicited secured credit card offers or ads as there are scams out there. Initiate the search for a good card yourself.


    Research the terms. A minimum deposit of $200.00 is usually required but the bank will allow you to increase the deposit amount for a proportionately higher credit limit. The higher the credit limit, the greater impact on time payments will have on your credit score. It's okay to begin with $200.00, but that amount will need to be increased to fully realize the benefits to your credit score. You will also have to pay an annual fee with these type of cards so try to get the best rate you can.


    Pay the amount in full off each month. You do not want to pay the credit card company interest on your own money!


    Pay on time and never miss a payment date. Many banks allow you to set up a pre-payment schedule automatically. Put the date on your calendar and be rigorous about paying on time. You can also frequently pay by phone although there is a charge associated oftentimes. Find what works best for you and stick with it.


    Call the credit card company to find out the amount of time it will take to get your deposit back and to have the card converted into a regular, unsecured card. Also, while you are on the phone, obtain the interest rate paid on the deposited amount.

What to Expect From a Debt Settlement Company

Debt settlement services work with people who have a considerable amount of unsecured debt and either do not have the means to pay at their current rates or are likely to have problems paying in the future. Unlike credit counselors or debt management programs, settlement companies attempt to settle your debt, promising you savings. This may cost more than you had planned, however.

Debt Consolidation

    When you enlist a debt settlement company to help solve your debt problems, you will consolidate your debt into a single account for a lower monthly payment than you currently are paying in combined bill payments. That action can save you several hundred dollars per month, which can alleviate your short-term financial woes. According to a National Consumer Law Center (NCLC) report, a minimum debt amount usually is required to hire a debt settlement company, and the minimum typically is between $5,000 and $10,000. However, agencies such as the NCLC and the Better Business Bureau note concern regarding the course of action taken by some debt settlement companies on your behalf.

Debt Advice

    According to the NCLC report, debt settlement companies often require consumers to place money into an account, building the account balance with monthly payments until enough equity is deposited to make a cash settlement to the debtors. However, in the meantime, according to NCLC, the debt settlement company often urges consumers to stop paying their debts, opening them up to law suits and damaging their credit for the short term. Late fees and debt continue to rise as the debts remain unpaid, and creditors may turn those debts over to collection agencies. Consumers could receive letters, calls and other forms of harassment from collection agencies attempting to collect the unpaid bills.


    Debt settlement companies, according to a report on MSN's Money Central, promise a wide range of services, including lowering interest rates, reducing your debt and fielding collection calls. The company may offer to assume debt management, whereby the debt settlement company takes over the debt, and the consumer makes payments to the company directly. However, according to both the Better Business Bureau and the NCLC, these services may not be accomplished as promised, and, in some cases, may not be performed at all.


    Whether or not debt settlement companies follow through on their promised services, you will pay a fee. Fees vary, but the Better Business Bureau and the NCLC report some companies charge from 15 percent to 25 percent of the settlement savings in addition to a monthly service fees. Consumers sometimes discover that the savings of a debt settlement plan vanish with the payments required from the debt settlement company. As a result, many consumers never complete the program, dropping out before a settlement is reached and making the debt problem worse.

Tuesday, January 13, 2009

Can Bank Accounts Be Garnished?

When you have to deal with a creditor to repay an outstanding debt, you may face the possibility of having money taken directly out of your bank account. When this happens to you, it can quickly deplete any savings that you may have built up in your account.

Garnishment vs. Levy

    A garnishment is a process by which creditors take money out of your paycheck before it goes to you. A levy is a process that involves taking assets from you. This can occur by physically taking assets from your home or by taking money out of your bank account, depending on who sets up the levy.

Levying a Bank Account

    If you find yourself in the position of owing an outstanding debt to a creditor, you do not have to worry about the creditor randomly taking money out of your account. Before the creditor can take money out of your bank account, it has to go through a specific legal process. This involves the creditor filing a lawsuit against you and then getting a judgment. Once the judgment is obtained, the creditor can then get a writ of execution which allows it to take money out of your account.

Amounts Taken

    When a creditor decides to take money out of your account, you could potentially lose all of the money in your possession. Once the creditor looks at your bank account, it can take any amount up to the judgment against you. The creditor does not have to leave anything in your account to help you pay the rent or utilities. The creditor can tap all of the money as long as it does not exceed the judgment amount.


    Although a dollar amount limit may not exist for how much money can be taken out of your bank account, certain types of money cannot be taken. For example, if you receive money from Social Security, the creditors cannot take this money. If you get money from disability, child support or alimony, this money cannot usually be taken by the creditor. To avoid having some of the money taken by mistake, you may want to keep it in a separate account.

How to Fight a Collection Agency Without Hurting a Credit Score

Debt collection agencies work with creditors to collect unpaid balances. An agency may call or write and threaten to sue you in court for a debt. Going to court and receiving a guilty verdict can result in a credit judgment on your credit record. However, if you don't owe the collection agency money, you can fight back and avoid possible credit damage from a lawsuit.



    Review bank records to show evidence that you don't owe a debt. Collection agencies may attempt to collect on a balance that you've already paid. Visit your bank branch or review your account online and print copies of canceled checks. Fax or mail this information to the collection agency.


    Fight a collection agency by disputing unknown debts. Write a debt validation letter, which essentially asks debt collection agencies to provide written proof that you owe the outstanding balance. Forward your debt validation letter by certified mail. Tell the agency to stop contact if they can't provide this evidence. Keep a copy of this letter.


    Talk to a lawyer about filing a lawsuit. Because debt collection agencies can report collection accounts and receive a judgment against you, consult an attorney if you don't owe the money and the collection agency continues their collection attempts. You can sue for damages if an agency violates the law.

Sunday, January 11, 2009

How to Avoid Wage Garnishment (Legally)

How to Avoid Wage Garnishment (Legally)

Wage garnishment is done to satisfy debts with creditors, pay taxes to the IRS or to the State and in child support cases. Before anyone can garnish your wages, a court has to authorize the process. The court sends a notification of wage garnishment to you and to your employer once a decision is reached.

People try to avoid a history of wage garnishment because it may raise red flags with future creditors. These are some ideas on how to legally avoid wage garnishment if you are falling behind in debt repayments.



    Understand the nature of all your outstanding debts and be proactive if you think you'll be falling behind in the payment schedules. List your credit cards, loans, mortgages, child support and taxes with their full amounts. You'll need this information for negotiation.


    Know who your creditors are. Many times mortgages, student's loans and credit card debts are sold to third party companies. Find out who owns the debt presently.


    Prioritize your creditor's rank. Try to repay all your debts, but there are debts such as taxes that you should place high on the repayment list. Another way to prioritize debts is to know how much room for negotiation the creditor allows.


    Contact your creditors, starting with the one in first priority. Negotiate a new payment plan. Generally, credit card companies, banks and other financial institutions will rather restructure a debt than go to court for wage garnishment. Contact the IRS, negotiation can be done with tax authorities also. They offer tax relief support and services in many cases.


    Be honest in dealing with all creditors; give them as much financial information as possible so that you can end up with a new plan that is affordable.


    Keep your promises in order to avoid wage garnishment. After negotiations and agreement to new payment plans, pay on time. Adhere to the terms of new the contracts.


    Inform your creditors of any changes in your financial conditions. Let them know ahead of time if you are going to fall behind the new terms, keep them engaged.

Saturday, January 10, 2009

How to Reduce & Consolidate Credit Card Payments

How to Reduce & Consolidate Credit Card Payments

Reducing and consolidating your credit card debt requires a level of responsibility with spending that many people find difficult to master. All too often, consumers find themselves finally paying off debt only to have some emergency arise which completely reverses all progress made with eliminating their credit debt. For this reason, it is vitally important to properly budget how much is used to pay off credit debt and still leave enough cash to take care of emergencies or other unexpected expenses as they occur.



    Begin your credit consolidation process by writing down how much you owe to individual credit card and loan companies. These can be divided into two categories which denote what they are. Into one category, figure your mortgage and vehicle loans, school loans and personal loans such as home improvement loans, emergency loans (pawn loans) or loans which you might have taken for a vacation. Into the other category note your credit card balances along with their interest rates and minimum monthly payments.


    Remove all the credit cards from your wallet or purse. If necessary, destroy them by shredding them with an appropriate credit card shredder. When the balances have been cleared, you can order a new card from the issuer. But for now, remove the temptation to use them.


    The credit card with the highest interest rate is the card you will pay off first. When creating your budget, first figure out your fixed expenses from the category that includes your mortgage and vehicle loans as well as living expenses. These should be taken out of your monthly net income first. Next, determine your needs for entertainment and other unnecessary expenses. The next to be deducted from the net income is the minimum monthly payment of the lowest interest credit cards you carried. The remainder of your budget will be allotted to your highest interest rate credit card and personal savings.


    Pay above the minimum monthly payment on your highest interest rate card first. After you have paid that card off, determine the next highest interest rate credit card and pay that card off while maintaining the same dollar amounts spent in your budget. This will allow you to put the additional money you paid toward the credit debt you just paid off in addition to the minimum monthly payment toward the balance on that next highest interest rate card.


    Call the customer service line of the credit card which you just paid off. Request that they reduce your overall interest rate. You must be willing to cancel that card if they do not want to lower their interest rate, but do so if you must. If they do, utilize a balance transfer to that card for any of your credit cards which have higher interest rates than the new interest rate on the paid-off card. In many cases, credit card companies will offer as much as 12 months with a reduced interest rate for balance transfers, but pay attention to the fine print to learn when the introductory balance transfer rate increases, and how much it will increase. Continue in this fashion until all the credit cards are consolidated under a lower rate or are paid off.

How to Pay Off Debt in 12 Months

How to Pay Off Debt in 12 Months

Being debt free is an admirable goal and one many people hope to achieve. Whether you have credit card debt, student loan debt, car loan debt or other obligations, paying off the last of your debt can be one of your greatest financial achievements. If you set a goal for yourself to pay off debt within 12 months, you can get there even faster.



    Determine the total amount needed to pay off all your debt. You can do this by adding up the balances owed on your accounts and also listing the interest rate. Don't forget that when you make a payment, it must go to interest first. Add up the amount you owe, determine the annual interest on that amount and add that in too, and then arrive at the total amount of money you will need to pay off all your debt.


    Divide the total amount of money you need to pay off by 12 so you can find out how much you need to pay each month. You will need to pay at least that much in order to get your debt paid off by the end of the 12 month period.


    Compare this number to your income and set up a budget. If you make more than the amount you have to pay off to be debt free in 12 months, then you may be able to easily achieve your goal. Set up a budget, factoring in paying that amount each month, and be sure you can pay that amount and still afford other necessities such as rent and food. You can cut out unnecessary expenses, such as cable TV packages and dining out, in order to fit your debt payment into your budget.


    Increase your income if necessary. If your debt number that you need to pay off in 12 months was $500 a month and you only have $500 per month to spend, you may not be able to achieve your goal (since you can't go without food and other such necessities of life). If you need to have more money than you bring in to pay off the debt, then consider getting a part time job or looking for other sources of income, such as overtime. There are many different jobs you can do around your regular work schedule- you could deliver papers or pizzas, or work at a shipping company packing boxes at night for example.


    Automate the process. Once you know you can make enough money to make the debt payment necessary each month, set up the payments to deduct automatically. That way you will be sure they are getting where they need to go and you won't be tempted to spend the money on something else.

Friday, January 9, 2009

Debt Collection Advice in Illinois

Debt Collection Advice in Illinois

The Fair Debt Collection Practices Act and the Illinois Collection Agency Act give you the right to be treated fairly as debt collectors attempt to collect money from you in Illinois.

Legal Proof

    The Illinois attorney general's website says you have the right to dispute a debt, in writing, after first being contacted by a debt collector. After receiving your letter, the debt collector cannot continue collection efforts until proving he is legally entitled to collect from you by producing a copy of your bill or similar documentation.

Telephone Calls

    You also have the right to demand that debt collectors contact you only by mail, according to the attorney general's website. This allows you to avoid telephone harassment at home and at work. Send your request to the debt collector in writing.

Credit Counseling Agencies

    Nonprofit credit counseling agencies in Illinois, such as Consumer Credit Counseling Service of Greater Chicago, can help you deal with debt collectors. The agencies can consult with you for free on all of your options, including debt management plans, hardship plans, debt settlement and bankruptcy.

How Much Should I Pay on My Debt Monthly?

Deciding how much to pay on your debt is an important question that many people struggle with. Get a grasp on your debt, realize that it can be crushing in many ways, and understand that the sooner you can get rid of it, the better off you'll be.

Types of Debt

    There are different types of debt, and you need to consider which debt you are paying on. Some people prefer to have no debt at all; this is not necessarily a bad thing, as debt can weigh you down. However, some financial experts say there is such a thing as good debt. Good debt is debt that helps earn you credit and reduce your taxes. For example, a car loan might be beneficial to have to help you build credit so you can buy a house. A house loan also might be considered good debt, because the interest is deductible and usually the loan has a low interest rate.

Pay What You Can

    The more you pay on your debt the sooner you will be free of it, and the less you will pay overall because of compound interest. Make a budget to ensure you cover all of your monthly bills, as well as saving for irregular expenses such as vacations. After your budget is satisfied, pay as much as you can toward your debt. Pay at least the minimum you owe but strive to pay more. Some experts recommend putting more money toward one particular payment; this can be more cost-effective by paying off high-interest loans first and narrowing down the amount of individual debtors.

Alternative Opportunity

    Consider what else your money could be doing other than paying down your debt. If you can invest your money and get a 10 percent return every year, you might decide that is better than paying off your 6 percent mortgage. You will, however, have to figure in taxes and realize that no investment is guaranteed. Your monthly debt requirements are virtually guaranteed as long as you owe money to someone. Most other debt is going to hurt you, and the negative credit rating you may get along with interest payments will not likely be outweighed by anything else. However, make sure you have some money set aside for an emergency situation.

Principles of Debit & Credit

Debit and credit are very common terms in accounting, and continue to be important throughout all levels of the accounting industry. For those unacquainted with the terms they can be complex concepts. Credit and debit can seem interchangeable because of the way both can increase and decrease money in accounts, but they operate based on a clear set of accounting principles.

Debit Actions

    In accounting terminology, money is credited and debited to specific accounts, not to the business itself. To say that a business was "credited" money it receives is largely meaningless when it comes to accounting principles. In accounting, money credits certain accounts and debits others at the same time, keeping the accounts balanced. Every transaction has both a debit and a credit.

    As a general rule of thumb, accountants debit what comes into the company. This means, for instance, that if a business was to increase its assets, this would be a debit to the account. If a business buys office furniture, then the business assets are increased (a debit) just as a liability to pay the furniture company is created (a debit). The normal balance of asset, expense and dividend accounts are all debit: In other words, they increase as they are debited.

Credit Actions

    The general rule of credit is to credit what goes out of the business. When inventory leaves the company, it is "going out" while cash is received for the items. This increases accounts receivable (a credit) while also increasing the cash account (a debit). Liabilities, revenues and equity are increased with credits. These are the "credit" accounts that decreases when they are debited.

Increases vs. Decreases

    Because different accounts increase and decrease when comparing debit and credit, many people become confused. However, the theory remains sound: Money only changes accounts, it does not stop existing, so credit and debit show the redistribution of money, and if it is coming into or leaving the business.

    A debit decreases a liability account when it is paid (and the liability no longer exists) but increases an asset account when it is received. Sometimes two accounts increase. For example, if investors buy stock, the profit the business makes will increase the cash account as a debit, but will also increase the equity account by the same amount (signifying outgoing value), balancing out.

Creditor and Debit Cards

    There is confusion about the terms due to their common use in certain circumstances. Creditors collect money and when something is credited to an account, it is often increased. However, this only reflects particular aspects of credit: Creditors represent money that has already gone out of the company and now exists as a borrower liability.

    Likewise, a debit card is used to immediately transfer money from a cash account, signifying an immediate increase to expenses (a debit account) and a credit to the cash account.

How to Deal With Collection Companies

When debts fall past due 180 days a creditor will usually forward them to a collection agency, also know as third party debt collectors, for further collection activity. Some collection agencies abide by the rules and some don't. According to MoneyCentral.com, consumers reported threatening and harassing phone calls made during times which are prohibited by collection agencies. There are, however, ways to stop overly aggressive collection agencies in their attempts to collect a debt.



    Study the Fair Debt Collection Practices Act, (FDCPA). Congress signed this act into law in 1978 to govern the activities of third-party debt collectors. Once you are familiar with the terms and conditions, you will be able to challenge activities that violate these policies.


    Make arrangements for payments based on your budget. Never let a collection agency force you into paying more than you can afford. If you cannot pay, let them know you will contact them when your situation changes or when you can make a payment.


    Notice the time you receive phone calls. According to the FDCPA, a collection agency must call you between the hours of 8 a.m. and 9 p.m., unless they have your permission to call at different times of the day. Some collection agencies have a tendency to violate this rule. According to the FDCPA, you can submit written correspondence requesting that a collection agency not communicate with you and they have to comply with your request.


    Check to see if the statute of limitations has expired on your debt. It can vary from state to state. When the statute of limitations has expired, a collection agency can still sue you, but they will not win a judgment if you show up in court and provide proof of the expiration.


    Watch out for threats and harassment. Collection agencies cannot make threats, such as legal action and garnishment of wages, that they have no intention of carrying out or don't have the authority to carry out. Harassing and abusive phone calls are prohibited by the FDCPA.


    Make sure you don't volunteer too much information. A collection agency could use it against you in the future. If they have your checking account information, they could get a bank levy after a judgment is received.


    Contact the Federal Trade Commission to report violations. Whenever a collection agency violates the FDCPA you should contact the FTC. Your claim or report will be investigated. You can reach the FTC at 1-877-382-4357.