May 2009 ~ Credit And Debt Management

Sunday, May 31, 2009

How to Get Guaranteed Instant Approval With High Limit Credit

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No credit card or loan company can guarantee you an instant approval if you already have high credit limits. If you need a way to get an automatic approval to help raise your credit score--even with a high credit limit---get a secured credit card. With a secured card, you give the company a deposit and they give you a card.

Instructions

Find a reputable credit card company that issues secured credit cards. Orchard Bank is one example. According to Bankrate, your own bank or credit union is a good place to start.

Complete the pre-qualification form online. This form allows the company to determine what cards they can offer you before you officially apply. If you are pre-approved for the secured card, then you will have a guaranteed approval when you officially apply for the secured card. If want a card from your bank, you can visit the nearest branch and ask your bank representative to pre-approve your application. If you are pre-approved, you will get the card after you pay your deposit and fees.

Complete the official credit application either online--after your pre-approval for the secured card--or at your local bank branch, if you are getting a card from your bank. Even if you receive a pre-approval, you still need to formally apply after your pre-approval.

Select a credit limit. Choose an amount that lies between the company's set minimum and maximum. For example, Orchard Bank has a credit limit of between $200 and $15,000.

Obtain the credit approval. Print it and send it to the company along with your deposit by check or money order. This amount will be equal to the credit limit that you selected for your card.

Wait for your card and use it wisely once it arrives.

The Difference Between a Line of Credit & a Credit Card

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When an individual realizes he has a need for money without the means to supply it, he typically resorts to obtaining some form of credit which allows him to borrow from a lender. There are several available options for a potential borrower to choose from, including a credit card company and his bank, which can issue a line of credit. No matter which he chooses, he should be careful in managing the amount he uses.

A line of credit (LOC) is an extension of money, similar to a bank account, which a bank grants to an eligible applicant. It is a revolvable source of credit, meaning that when the balance is repaid, the owner has the right to the entire balance of the account. Interest only accrues on funds that the borrower withdraws from the LOC. Banks offer several different types of LOCs, which may be secured or unsecured.

An unsecured line of credit is not backed by any type of asset, with approval usually only relying on the potential borrower's credit score, history and existing debts. Interest rates on an unsecured LOC are usually higher than a secured LOC. The reason for the higher rate stems largely from the fact that a secured loan is at least partially guaranteed by an underlying asset, such as a home or a portfolio. Should the person fail to make timely payments toward amounts withdrawn, the bank reserves the right to collect by seizing and selling the asset.

Credit cards are an available option for borrowing, except that the institution supplying the funds does not necessarily have to be a bank. Interest rates on credit cards are generally much higher than those on a line of credit when the customer fails to pay in a timely manner. Secured credit cards require the customer to pay a deposit; unsecured cards do not. Approval depends on the customer's credit score, history and ability to repay.

Whether a person has a line of credit from his banking institution or a credit card from an issuing company, it is important that he makes payments in a timely manner. Interest rates on each form of debt rise in accordance to missed payments. For many credit cards, this interest rate will not decline after the initial increase. Failing to pay a HELOC could result in the loss of the person's home.

Can Debt Collectors Freeze Your Bank Account?

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It's embarrassing and inconvenient to try and make a purchase with your debit card or extract money from the ATM only to discover a hold on your bank account. If you have unpaid debts currently owned by a collection agency, an unexpected bank account freeze is a possibility. Although bank account freezes are only temporary, they indicate an impending account garnishment.

After suing you, a debt collector requests a writ of garnishment from the court and serves the writ on your bank. Once your bank receives the garnishment order, it places a freeze on your bank accounts. According to the U.S. Department of the Treasury, a bank account freeze doesn't prevent you from depositing money, but it does prevent you from withdrawing funds. Your bank has the right to charge you fees for any checks and debits that fail to clear during the freeze.

The bank account freeze serves two purposes. Its main function is to prevent you from withdrawing money from the account. Because of this, you aren't likely to receive formal notice of the garnishment until your bank account has already been frozen. The freeze also gives you time to either contest the garnishment before it occurs or notify your bank if your account contains any funds that are exempt from seizure by a debt collector.

Debt collectors can garnish funds from your checking account, but a debt collector's court judgment doesn't entitle it to garnish certain types of military benefits. The Federal Trade Commission (FTC) notes that certain funds in your checking account, such as Social Security payments, military annuities and retirement pension payments, are exempt from being either frozen or garnished by debt collectors. Notify your bank of any exempt funds within your checking account to have those funds released early.

Unless the debt collector is the federal government, its ability to freeze your checking account rests solely on the validity of its judgment against you. If you contest the judgment and successfully prove your case to the court, the court vacates the original judgment. When this occurs, your bank must release your frozen account. If the debt collector has already garnished your account, you can appeal to the court for the return of any previously garnished funds.

After the debt collector garnishes your account and your bank lifts the freeze, this doesn't mean that a subsequent checking account freeze won't occur. If the debt collector wasn't able to recover the full amount of the judgment through one garnishment, it can wait until you deposit more money into your checking account before serving your bank with a second writ of garnishment and beginning the process anew.

How to Eliminate Credit Card Debt Legally

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Eliminating debt is an important step in building financial stability. There are some concrete steps you can take to eliminate credit-card debt legally and start creating a more sound financial future for yourself.

Instructions

Stop using credit cards. The best way to legally eliminate credit-card debt is not to keep creating more. Don't sign up for new cards, and cut up your existing cards.

Create a plan to pay down your credit-card debt. Make minimum payments on larger cards and work to pay off smaller balances in full, or at least first. Once you've paid off a balance, move the next highest balance to the top, and start whittling away at that balance in larger chunks.

Communicate with your credit-card companies if you are having financial difficulties and have fallen behind on payments. Some credit-card companies will be willing to place a hold on interest charges for a set amount of time, or may work out a plan with you to settle the entire balance for a discounted amount over a set period of time. If you are concerned with negative credit reporting, however, you may not want to initiate a discounted settlement. This will appear on credit reports as "settled for less than full amount."

Consolidate debt, if possible. Investigate the opportunities for getting a consolidation loan or a home-equity line of credit. Of course, this would be another credit account; however, you can ask for a limit that is close to your debt balance, then close the line of credit once you have paid it off. It will only work, however, if you can control your spending habits and cut up all other credit cards.

Transfer high-interest-rate balances to the card with the lowest interest rate, if you have sufficient available credit to do so. If you are a good cardholder, always paying on time and never incurring overlimit fees, you can ask about getting a raised limit on the card with the lowest interest rate. This will eliminate the necessity of getting a consolidation loan or home-equity line of credit, and still allow you to get all of your credit-card debt in one location.

Take on some part-time work and devote all of those earnings to paying off your credit-card debt. Sell unused and unnecessary items on eBay, Amazon or craigslist. Hold a garage sale. Devote all extra earnings to your credit-card debt.

Have patience. It will take time to legally eliminate what you owe. Make a plan and stick to it. Focus on life without credit-card debt and work together with your family to make it a reality.

How to Eliminate a Credit Card Debt to Avoid Going to Court

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A substantial number of credit card holders have defaulted on the credit card accounts. According to creditcards.com and the National Foundation for Credit Counseling, in the 2009 Financial Literacy Survey, approximately 15 percent of adults in the United States make late credit card payments. That's about 34 million people. When you make payments late you will receive phone calls and letters from your credit card company. If the delinquent payments are not resolved, in a timely manner, you could wind up in court fighting a lawsuit or judgment. There are ways to avoid going to court.

Instructions

Review the writ of summons. When a credit card company is going to take you to court, it's done so as a last resort, and you will receive a writ of summons in the mail. This document will state something to the effect of, "you are summoned to appear for trial at the date listed above, along with the time and location listed" When you receive this notice you can call the creditor and make satisfactory pay arrangements, instead of going to court, unless you plan on attending court because you have a legitimate defense. Creditors are usually lenient when it comes to making arrangements for payment.

Make sure the payment arrangement you agree to is satisfactory. You should not agree to payment arrangements that you cannot afford to meet. The arrangements should not put unjust stress or strain on your budget. You can also request that the creditor send you written confirmation of your payment arrangements.

Organize your other creditors. List all of your credit card balances in a prioritized list. If you have not made any payments in three or four months, you may want to prioritize your list based on the date last paid. If you have an account that has not had a payment in five months and another that has not had a payment in three months, the account with no payment in five months should go to the top of your list. This account becomes a top priority. The longer your credit card accounts go without payment the more likely it is that a creditor will start legal action, which requires your attendance in court.

Call your credit card accounts and make arrangements. All accounts with a top priority listing should be called first. Let the creditors know you will start making monthly payments. Once again this should not stress your budget. You should also look for credit card accounts with small balances, such as $500 or less. If you get extra cash to pay them off, do so. Wiping out a debt gives you a feeling of accomplishment.

Pay consistently. Start making your payments on a regular basis, month after month. Don't skip any payments and when your financial situation gets better, increase your payments. Eventually your credit score will improve. This procedure will keep you away from the litigation process. You will be able to eliminate credit debt and avoid going to court. Use any extra money such as bonuses, incentive, overtime and tax refunds to pay down your debt.

What to Do When I Get a Credit Card Judgment?

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If you are more than six months behind in your credit card payments and you have made no attempt to work out a solution with your lender, you may face a judgment against you. Although the situation may be troubling or even frightening, you still have options. The only option you should not take is to do nothing and hope the judgment will go away. It won't.

Once you are more than six months late with your credit card payment, your credit card issuer typically sells your account to a collection agency. One option the collection agency has is to file asuit against you. The agency hires a lawyer who contacts you, giving you another chance to pay your bill. This is a possible chance to negotiate for less than what you owe. If the collection agency agrees and you pay, you stop the judgment process.

If you cannot pay or if the collection agency does not accept your terms, such as making payments to them, the judgment process moves on, and you receive a notice from the court informing you of your debt and that the collection agency is suing you. You now have a court date. You have a chance to defend yourself in court to a judge, who determines how you must repay the debt. Do not be a no-show for court. If you miss court, the best-case scenario is that you automatically lose your case, and the court grants your creditor a legal judgment against you. The worst-case scenario, depending on where you live, is that you could be arrested and do jail time. In Minnesota, for example, if you don't show up for court, a warrant is issued for your arrest. If you are stopped for a traffic violation, for example, and the officer sees your warrant, you could go to jail. Other states that have this policy include Arkansas, Arizona and Washington.

After your creditor has a judgment, you receive a Notice of Judgment, which tells you that you have 30 days to pay your debt. If you still don't pay, your creditor seeks a judgment execution order against you that allows the creditor to put a lien on your property, garnish your wages, levy your bank account or seize your property, depending on the laws in your particular state. Judgments remain active for up to 10 years, depending on the state; after that, the judgment is typically over, and your creditor cannot try to collect any more unless he renews the judgment, which he can do two times. Before you decide to wait it out, understand that having a judgment against you probably means that you won't be able to get credit, and you may be passed over for a job.

Your other option when you have a judgment against you, particularly a large one, is to file bankruptcy. However, bankruptcy is generally the last resort option because it stays on your record for 10 years and generally looks even worse to creditors than having a judgment against you does. But a bankruptcy gives you a fresh start. The court will probably discharge your credit card debt, meaning you won't have to pay it back.

What Is a Loan Charge Off?

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Confusion over the meaning of a loan charge off can lead to financial problems if you unknowingly take the wrong course of action. Know the facts before ignoring a loan that might be charged off.

Debt Help explains that a bank charges off a loan by taking it from its assets column and listing it as a loss on their tax return. They do this when they come to the conclusion that the loan will not be paid, usually six months after the last payment was made.

A loan charge off is one of the worst marks that can be on a credit report. It shows that, in the end, you did not meet your obligation to pay the debt.

A loan charge off is not a forgiven loan, according to Debt Help, and finance companies will continue to try to collect the full amount if possible.

Often, a loan company will sell the debt to a third-party credit agency. You are still responsible to pay the debt.

It is to your advantage to pay off a charged off loan, advises Bankrate's Debt Adviser Steve Bucci. Contact the original finance company and make arrangements to pay off the debt to them or the company that bought the loan and have its status changed to "paid charge off" by the credit bureaus.

According to MSN Money's Liz Pullman Weston, there may be times when it's detrimental to pay on your charged off loans. One is when you try to settle for a lesser amount. Another is paying after the statute of limitations is over.

Time Frame for Repairing Bad Credit

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There is no quick fix for a bad credit score. This is because a credit score is a reflection of a person's credit history. In formulating the score, credit reporting agencies draw information from the past decade of a person's lending. Although many near-term improvements in a person's lending habits can definitely help hike up a score in a short period of time, serious, lasting improvements in a person's score can take years to accomplish.

The surest near-term fix to a credit score is to pay off overdue debts that are dragging down your score. When you become delinquent on a loan, this late payment is reported to credit reporting agencies. Your score will suffer particular damage if your account is listed as being in collections, meaning that the company believes you are no longer actively servicing the debt and has sent the debt to the collections department or to an outside agency.

After paying off overdue debts, start paying down your balance. Your credit score is affected in large part by the ratio of your outstanding debt to your credit limit. The higher this ratio ascends, the more depressed your score becomes. By paying off some of your outstanding balance, you can push this ratio back down. According to Bankrate.com, its best to try to keep this ratio at least under 30 percent. These efforts should take effect relatively quickly, usually within a month.

A longer-term fix to bad credit is to take out new loans and to then consistently repay them on time. The length of time that establishing a new, positive credit history will take to balance out your past sins will depend on factors including how much damage you did to your credit score and how consistent you are in paying off new loans. Your score should begin ticking up within six months and continue indefinitely.

Good credit can takes several years to establish, while top-tier credit may take seven years. To regain a score that will entitle a borrower to the lowest interest rates on loans -- meaning that he is an extremely safe bet to loan to -- a borrower may have to wait for the negative information to be wiped off his report. According to U.S. federal law, most negative information can remain on the report for a maximum of seven years, and bankruptcies for 10 years.

Help With Credit Card Debt in Utah

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Utah adheres to the Fair Debt Collections Practices Act, which prohibits a creditor from employing any abusive actions to collect a debt owed them. Other than this, the Utah legislature does not have any other state law that differs from this federal act, enacted in 1977. However, there are nonprofit and other associations and debt counselors that can help any Utah resident eliminate or pay off insurmountable debt.

This is a federal law that protects consumers in all states against abusive or deceptive debt collection practices. This act prohibits a collector from lying, calling at work if the employer disapproves, using profane language and requires that a collector protect a debtor's privacy. If a creditor does this and it can be proved, the collector loses the right to collect the debt.

This option allows Utah residents to lump all of their debt together and seek a loan from a bank or debt consolidation company. This is used to pay off the total of all other loans, and the debtor only need make the one monthly loan payment to pay off the debt. This monthly payment is usually lower than current credit card payments.

Like debt consolidation, debt settlement involves getting a loan to pay off all the debt and also offers the advantage of only having one payment instead of many. But unlike consolidation, a debt settlement company negotiates the total debt with your creditor, eliminating high interest rates, penalties, late fees and, in some cases, some of the actual debt in exchange for a onetime lump payment. After all the debt is negotiated, a loan is taken out to pay off all of the creditors, giving the debtor one monthly payment. This option is often offered by nonprofit organizations that also offer other credit counseling and budgeting services in Utah.

In cases where neither consolidation or debt settlement work, then bankruptcy can be filed at U.S. courthouses located in Utah federal districts of Ogden, Saint George or Salt Lake City. When you initiate a bankruptcy filing, you need the help of a qualified bankruptcy attorney registered with the Utah state bar. Discuss your bankruptcy options with your attorney and choose either Chapter 7 or Chapter 13 bankruptcy. List all of your creditors and the amount you owe to each. You will also need to give other information regarding your income and monthly expenses. The state of Utah will require you to attend state-approved credit counseling. You can find approved credit counseling agencies through the U.S. Justice Department in Utah.

How to Remove Accounts From a Credit Check

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There are few options for preventing certain accounts from being visible during a check of your credit. Generally, you would want only negative information removed from your credit report, although some people might also want to hide accounts showing the full scope of their personal debt. However, there are no provisions under the Fair Credit Reporting Act for arbitrarily removing items from credit reports. Credit information that is positive can remain on your report indefinitely, while most negative information can be reported for at least seven years -- 10 years for bankruptcies. Federal law does allow for the removal of account information that is wrong or outdated.

Instructions

Obtain a copy of your credit report from annualcreditreport.com. The website is the only site authorized by the federal government to offer free reports under the terms of the Fair Credit Reporting Act. Visit the website to view and print your report.

Review the report to find accounts that are outdated or contain inaccurate information. These accounts can be challenged and removed before your credit check.

Write a letter to the credit bureau at its address on the credit report. In your letter, ask that the inaccurate or outdated information be removed because it is in violation of the Fair Credit Reporting Act. Include your name, address and Social Security number. Allow about 30 days for a response while the credit bureau investigates. By law the credit bureau must remove the information if it confirms that it is inaccurate or outdated.

Dispute inaccurate or outdated information online if you would prefer not to write a letter. Major credit bureaus TransUnion, Equifax and Experian allow for disputes to be entered through their websites. Enter your dispute online by navigating to the credit bureau's website (see Resources). Equifax and TransUnion also accept disputes by telephone. After obtaining your credit report, call the customer service number on the report to speak to a representative to submit your dispute. In December 2010, Experian's website did not list a customer service number or option for disputing by telephone.

Types of Debt Relief

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Debt relief is becoming more common across the world. The economy runs largely on the process of consumerism: citizens purchase goods and services furnished by producers and service providers. More recently, customers have become more involved in the consumer culture by utilizing credit. The result has been an increase in the need for debt relief for those in overwhelming debt.

Consolidation is the most common form of debt relief. Many lenders offer consolidation loans. These loans aggregate loans with high payments and interest rates into a new loan. The result is a loan that is far easier to repay. Consolidation loans can be used for most types of credit, but are most common when consumers have vast amounts of credit card debt.

For consumers with real estate, obtaining a mortgage to pay off outstanding debts can be a viable solution. The only problem with having a mortgage is that the individual is putting his or her home at risk to solve debt problems. The benefit is that mortgages often offer the lowest rates on loans--since they are collateral loans (thus, less of a risk for lenders), lenders are willing to offer better rates and fees than on unsecured loans.

Credit counseling is the process by which a consumer works with a credit counselor to reduce debts and payments through consolidation, settlement, and forgiveness. Normally this process is only recommended for those who cannot obtain a lower-interest consolidation loan. The downside to credit counseling is that it negatively affects credit. The upside is reducing debt without going through bankruptcy.

Bankruptcy is the last resort in debt relief. It is a process in which borrowers work with the court system to eliminate some debts completely and restructure others. Bankruptcy places a stain on a borrower's credit report for at least seven years, so this should be the absolute last resort for debt relief. However, for consumers with no other options, bankruptcy can provide peace of mind.

With the increased need for debt relief, there have been attempts by dishonest and unethical lenders to take advantage of vulnerable borrowers. Before proceeding with any type of debt relief program, it's best to get recommendations, research the company's customer service record, and check with the Better Business Bureau (see Resources) to make sure the company does not have a long history of dissatisfied customers.

How to Stop a WAMU Foreclosure

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Washington Mutual Inc., also known as WaMu, filed for bankruptcy on Sept. 26, 2008 -- a day after it was sold to JPMorgan Chase for $1.9 billion, according to Bloomberg.com. Before failing, WaMu had more than 2,200 branches, including mortgage loan offices. The company's mortgage and other banking business was taken over by Chase Bank. Stopping a foreclosure on a former WaMu mortgage will require working with officials at Chase.

Instructions

Contact a housing counselor specializing in foreclosure prevention. Find a counselor in your area by checking the website for the U.S. Department of Housing and Urban Development (see Resources). HUD maintains a list of government-approved counselors who are trained in legal and ethical methods for stopping foreclosures.

Visit with the counselor in person to talk about your foreclosure issues. Bring copies of all current information related to your foreclosure issues, including notices from the bank and account statements. Tell the counselor the mortgage was originally granted by WaMu.

Authorize the housing counselor to contact Chase on your behalf and offer a proposal for stopping the mortgage. Options include asking the bank to modify the terms of the loan so that the missed payments are tacked onto the end of the loan and that the terms of the loan -- such as the interest rate -- are changed so that you can afford the payments. Or the counselor may negotiate a special hardship plan, resulting in reduced payments over a temporary period while you recover from a setback. After that the plan may allow for you to make up for the missed payments by paying a little more each month.

Participate in a three-way telephone conversation with Chase officials and the counselor to form an agreement for stopping the foreclosure and bringing your account current.

Statutue of Limitations of Child Support in Arkansas

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When a biological parent does not pay child support for their child after being ordered to do so by the court, the custodial parent can get a judgment against the other parent to force them to pay.

As with other debts, child support debt may have a statute of limitations. A statute of limitations stipulates how long you can be sued for a particular debt or how long a judgment against you can be enforced.

In Arkansas, the statute of limitations on non-adjudicated child support debt is five years after the child turns 18 or finishes high school, whichever comes last. Adjudicated child support debt can be enforced for an additional five years. This type of child support debt can also be revived every 10 years.

If you have a child support judgment against you in Arkansas but move to another state, the original statute of limitations from Arkansas still applies to your debt. If your support judgment is from another state, then the Arkansas statute of limitations will not apply to your debt.

What Are Alternate Solutions to Student Debt?

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Student debt is a separate category from regular loans, because many student debts are based in government loans that do not follow the same rules. For instance, in a bankruptcy, student debts are likely to remain or be paid off fully if they are federal in origin, since federal debts take priority. This, combined with college student finances soon after graduation, can put pressure on students to pay off their debts. If students are struggling and do not want to fall behind on their debt, there are several options for debt aid they can pursue.

Deferment occurs when a student applies to the government or a lender for a pause in the loan. Essentially, the lender agrees to halt the monthly payments that student loans require for a specific period of time, usually at least several months. This does not remove or cancel any debts on behalf of the student. Instead, it gives the student a chance to find a job, pay off other debts and increase income until the loan can be dealt with properly.

Loan forgiveness is another option students can seek through negotiations with a private lender or through government programs designed to help struggling students. A lender will forgive or cancel part of the debt to ease the debt burden, as long as continual payments are made. This has its advantages; part of the debt is permanently removed. But students will still have to pay income taxes on this forgiven amount.

Consolidation refers to replacing one loan with another. This is a useful option if the student can find a government consolidation program or owns a house that has enough equity for another home loan. The purpose of consolidation is to pay off the student loan entirely by creating a new loan with more favorable terms, such as a lower interest rate (which can be difficult to get with federal student loans) or lower monthly payments, which students can obtain by getting a loan with a longer term.

Alternative repayment programs do not forgive any debt, but they do alter the terms of the loan slightly so that students do not struggle as much. The goal of an alternative repayment system is to lower monthly payments without resorting to consolidation. The lender is often willing to lower the rate or lengthen the term of the mortgage to make payment easier.

How Is Credit Restoration Done After Debt Consolidation?

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Debt consolidation programs can help you get your debt under control and create a payment plan that you can afford. Debt mismanagement that leads to the need for consolidation can damage your credit. Consolidating your debt is only the beginning of restoring your credit. Consumers who follow a credit restoration plan can recover their good credit over time, according to credit expert Dani Arthur writing on the Bankrate website.

Your spending habits after consolidation need to be altered to make your consolidation a success. Do not destroy your old credit cards and close your old accounts. Closing old accounts can lower your credit score. Use your old cards, but only in amounts that you can pay off each month. Continued positive activity on your old credit accounts will start to repair your credit rating.

Develop a monthly budget that makes sure your bills are no higher than your income and also helps you to plan on using cash. While you want to use your old credit cards to an extent, get into the habit of using cash rather than building up more credit card debt. Follow your budget closely and revise it each month to accommodate new bills or to set aside money for future purchases.

Nearly 35 percent of your credit score is based on whether you pay your bills on time. Use your budget to create a payment schedule for your bills so that you pay them on time each month. The more consistently you pay your bills on time, the faster you begin to restore your credit.

Your credit reports hold all the credit information that future creditors will see, and that has an effect on your credit score. Every American consumer is entitled to a free copy of his credit report from each of the three major credit reporting agencies every 12 months. Get copies of your credit report -- order them at annualcreditreports.com -- and make sure your personal information is correct and that all your current and past credit account information is correct. This includes credit limits, accounts paid off in good standing and payment histories. If you see information that is incorrect, use the dispute process outlined on each credit report to correct them. For incorrect information on current accounts, contact your creditor to have them corrected.

If Something Goes on Your Credit History & You Pay it, How Does it Affect You?

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Your credit history reflects your entire experience with debt. When you make payments late or skip payments altogether, subsequently paying the debt may not positively impact your credit score immediately. However, over time, it will help, assuming all items remain paid on time. If you have not already paid off a problem debt, there are steps you can take to lessen the damage.

Everyone who establishes credit can obtain a free copy of his credit report once each year through AnnualCreditReport.com. You can get copies of your credit report from all three major credit reporting agencies: Equifax, Experian and TransUnion. You also can obtain these directly from the reporting agencies for a fee. If you detect any errors on your credit report, such as a debt you paid that is not reported as paid, you can file a dispute with the credit bureau or the creditor. Having inaccurate negative items removed from your credit report will improve your credit score.

Try to arrange to pay off debts if you are contacted by the creditor's collections department or a third-party collection agency. If you are contacted, it usually means the creditor took a charge-off on your debt, or wrote it off as uncollectible, which typically occurs after the payments have been missed for an extended period. A charge-off is one of the worst stains on a credit report, aside from bankruptcy. A charge-off does significant damage to your credit score.

The advantage of direct discussions with the collecting party is that you sometimes can negotiate a deal to pay less than the full amount to settle the debt. If an agreement is reached and you pay the agreed-upon amount, the collection party will list the payoff as "paid as agreed" or "settled." The latter designation hurts your credit score, while the former favorably impacts your credit rating. You can request that the creditor report the payment as "paid as agreed" as part of your negotiation, although the creditor may not agree to do so.

You may decide to pay off a problem debt in full without making contact with the creditor or credit collection agency. That helps your score, especially if you make on-time payments thereafter. The Fair Isaac Corporation (FICO), whose credit scoring model is the most widely used in the United States, reports, "The longer you pay your bills on time after being late, the more your FICO score should increase. Older credit problems count for less, so poor credit performance won't haunt you forever." Items drop off your credit report after seven years, except bankruptcies, which remain for up to 10 years.

What Non-Exempt Property Can Be Taken by a Creditor With a Judgment?

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Debtors have two types of property -- exempt, meaning it's protected from creditors, and non-exempt, meaning creditors can seek judgment against it. A creditor may take possession of non-exempt property as repayment towards a debt. In chapter 7 bankruptcy, debtors can choose between a federal package of exemption or state exemption. Depending on state rules, state exemption may allow certain non-exempt personal items in the debtor's home to fall under exempt status.

It is possible to have your bank accounts garnished in a bankruptcy proceeding to satisfy what you owe to creditors. Creditors must get an order from the courts for garnishment to occur. The order goes directly to your bank who then places a hold on the money until the courts make a final decision regarding repayment to your creditors. The Federal Trade Commission advises you to seek legal consultation if you receive a garnishment letter. All stocks, bonds and retirement accounts are non-exempt assets. If you receive federal benefits from the federal government, those assets are protected except in the case of unpaid taxes or student loans.

When you file for bankruptcy, you must give an account of all your personal assets to the trustee. Valuable family heirlooms are non-exempt items. Although your family heirlooms are non-exempt, a trustee may decide not to sell them if the administrative costs related to the sale exceed the value of the proceeds. Bankruptcy trustees are more apt to sell items that are worth a lot of money.

Your primary vehicle is typically considered exempt property, but a second vehicle is non-exempt. However, in chapter 7 and chapter 13 bankruptcies, you can keep a second vehicle only if your income is greater than your expenses. If this is not the case, the courts will sell your second vehicle to repay your creditors. In some instances, it is possible to structure a new loan agreement with the lender to keep your vehicle.

Depending on your state's bankruptcy laws, your primary home and the equity within your home are usually protected from creditors. If you have non-exempt equity in your home, your may benefit more by filing chapter 13 bankruptcy instead of chapter 7. However, if you have a second home or vacation home, your creditor may seek a court order against your home to have it seized and sold. Although your second or vacation home is non-exempt property, you may have the option of entering into a reaffirmation agreement and maintaining your home. A reaffirmation is an agreement between you and the lender to re-establish the loan that was in place before the bankruptcy proceedings.

Leaving Debt When You Die

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Preparing for your death is a responsible, mature step towards making sure your family and loved ones suffer as little as possible. If you have a lot of outstanding debts when you pass away, there is a chance your spouse or heirs could be held liable for repaying those debts. Specific laws and procedures vary based on the state you live in, the type of debt you have outstanding when you die and what assets you leave in your estate.

In most states your estate will be sent to probate court after you die. The probate court will list all of your personal assets including cash, retirement funds and property, and all of your outstanding debts. The court will use part or all of the assets to pay off valid debts. If any portion of your assets still remain after all debts have been paid, then the remaining assets will be distributed according to your will. If you do not leave a will, the assets will be turned over to the state for a decision on how to distribute them.

You may designate an estate administrator before you die or the probate court may designate one for your estate after the fact. The account administrator, or executor, is responsible for notifying all creditors of your death, arranging and paying for the funeral and ensuring all of the legal paperwork is in order.

In a community property state, the assets and liabilities of married couples are treated legally as belonging to both the husband and wife regardless of whether both names are on the paperwork. This means even if you have outstanding debts in your name only, your spouse will be held legally liable for those debts after you die if you live in a community property state. For tangible assets such as a home, the probate court may decide to order the sale of that asset so that it's corresponding debt can be paid.

If you do not live in a community property state, the probate court normally takes care of liquidating assets to repay all of your outstanding debts. If you have a joint account holder or co-signer on a debt however, such as having a joint credit card with your wife, the other account holder will have to pay off that jointly held debt after you die.

Colorado Law Regarding Debt Before Marriage

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Colorado is not a community property state for divorce. This means the court divides property and debts in an equitable fashion among both spouses. Property and debt distribution regulations also apply to debts acquired prior to the marriage. The court may require spouses to pay pre-marital debts depending on how the couple handled these debts over the life of the marriage.

In Colorado, assets acquired before the marriage count as marital property in a divorce if those assets appreciate in value over the course of the marriage. These assets are subject to equitable division among the spouses. Division of any debts tied to these pre-marital assets is also necessary under Colorado law even if the debts stem from before the marriage. This property division is most commonly seen when appreciating real property like a home, investment property or place of business.

Unsecured pre-marital debts like credit cards usually remain the responsibility of the individual spouse. The court does not divide these debts in divorce as with pre-marital debts tied to assets. The court usually considers unsecured debts acquired before the marriage as separate property. This means a spouse doesn't have to fear a court ruling requiring her to pay a portion of debts which existed prior to her marriage. This rule does not apply to credit cards opened over the course of the marriage.

The equitable distribution of debt in a marriage does not mean the court divides debt equally among spouses. The court seeks to divide debt in accordance with how much each spouse can comfortably repay over time. The court also assigns a larger portion of debt to spouses who retain real property from the marriage like a home or automobile. Spouses not receiving property generally receive monetary compensation to offset the loss of assets. Spouses retaining property are responsible for paying spouses a monetary settlement as determined by the court.

It is the right of each spouse to contest the court's decision regarding equitable distribution of debt in divorce. A spouse who receives a ruling requiring him to pay a portion of his ex-spouse's pre-marital debts may appeal on the grounds that he received no benefit from these debts over the course of the marriage. He may even be able to pursue a judgment for compensation for any amount he paid towards these debts during the marriage. Alternatively, the court may rule that because the spouse paid on these debts during the marriage, the expectation of payment continues after divorce.

How to Stop Gambling Online Right Now

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Online gambling is becoming more and more popular as a hobby, but it can also be problematic for many individuals. If you suspect that this form of gambling has started to become a problem for you, it is probably time for you to consider stopping. After all, many people go into debt because of gambling problems, and you certainly don't want to find yourself buried in debt as a direct result of making bets online. If you are interested in learning a step by step way to stop betting via your computer, please read this article.

Instructions

Your first step is to acknowledge and admit that you do indeed have a problem with online gambling. Even if you never gamble offline, if you make bets online every day or several days a week, this could be a sign of a real problem, and you want to nip it in the bud before it gets out of hand.

After acknowledging that you have been doing too much online gambling, your next step is to stop visiting online gambling sites. The best way to do this step is to stop visiting gambling websites cold turkey (rather than slowly cutting back). After all, if you do not stop visiting these gambling websites completely, you may be tempted to resume gambling.

Your third step will be to take a break from getting online at all. If you have a laptop, ask someone you trust to hang on to it for you. If you have a desktop, unplug it for a while. In addition, do not allow yourself to get online at the library or on a college campus or at internet cafes or at a friend's house or anywhere else for that matter until you feel you have had enough of a break and you can really trust yourself to get back online without gambling.

Once you have been offline for a while and you feel you are finally ready to get back online without visiting gambling websites, your fourth step is to get back online using baby steps. In other words, only spend a few minutes online at a time. If you find yourself feeling tempted to visit gambling sites, get offline immediately in order to steer clear of temptation.

Options to Avoid Bankruptcy

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Bankruptcy may seem like the only alternative when you're drowning in debt. Yes, bankruptcy can eliminate debts and free up your cash. A bankruptcy proceeding will, however, stay on your credit file for 10 years and reduce your credit score. Rather than file bankruptcy to discharge your debts, consider ways to get rid of debt on your own.

Creditors don't want you to file bankruptcy because they'll likely never recoup the money owed to them. If considering a bankruptcy to eliminate debts, contact each of your creditors beforehand and negotiate a debt settlement which allows you to pay back a percentage of the money owed. Creditors agree to accept the smaller amount to satisfy the debt, and they stop collection attempts. Knowing your plans to file bankruptcy may prompt a creditor to allow a debt settlement. In their eyes, something is better than nothing.

Bankruptcy is an easy fix for debt problems. You don't, however, have to file bankruptcy to get rid of high debts. It can take years to pay off high balances. But in the end, you'll be debt-free without a bankruptcy blemishing your credit report. Start by adding up all your debt balances. Next, review your budget to determine how much you have extra each month. Divide extra income by your balances to learn how many months it will take to pay off debt. With $300 extra dollars a month, it will take about 66 months (five and a half years) to pay off a $20,000 credit card.

Many people do not want to downsize their life and get rid of their material possessions. But if an expensive lifestyle contributes to high debts, now's the time to face reality and alter your living and spending habits. Start by downsizing your cars and house. Sell your big house and move into a cheaper rental or purchase a less expensive property. Trade in your car for one with a lower car payment. Next, go through your house and look for personal items to sell. Drastic measures of this sort can save you money each month and create additional income. Put extra money toward debt payments to avoid a bankruptcy

Living off credit cards and impulse spending can play a role in debt and bankruptcy. When your full-time employment isn't enough to pay down debts, perhaps it's time to sacrifice your free time and acquire a second job on weeknights and weekends. If you're self-determined, look into starting a home-based business to create additional income and help eliminate debts without a bankruptcy.

Types of Public Debt Relief and Debt Forgiveness

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The federal government offers public debt relief and forgiveness to people struggling with payments on their loan obligations. Qualifying for these programs generally requires an assessment of need -- homeowners and other debtors who are capable of making their loan payments usually are not eligible for public help. Debt relief programs are available to both struggling homeowners and those with large student loan burdens. The government may be able to modify a home loan, refinance a home loan, consolidate student loans and forgive the loans of those who perform public service.

The Home Affordable Modification Program is a federal government initiative designed to help struggling homeowners with debt relief and debt forgiveness. The goal of this program is to design a solution to mortgage problems by working with both the lender and the borrower making it possible for borrowers to meet their monthly payments. Assistance from this program is only available to struggling households -- homeowners whose mortgage payments exceed 31 percent of their monthly income before taxes.

The Home Affordable Refinance Program is similar to the Home Affordable Modification Program. Like HAMP, HARP is run by a joint partnership of the Department of the Treasury and the Department of Housing and Urban Development. The main difference between the two programs is that HARP provides assistance mainly by working with the lender to adjust the interest rates -- not principal or the term -- of a home mortgage. To qualify for this program, a homeowner must have a loan guaranteed by the Fannie Mac or Freddie Mac mortgage companies that is larger than the amount their home is actually worth.

The government also provides public debt relief assistance for educational loans. This is especially important because many of these loans cannot be relieved by bankruptcy. One of the these options is the Department of Education's loan consolidation program. In this program, those struggling with student loans can roll together loans from multiple creditors and lower their monthly payments. This has the effect of reducing the number of loan bills they have to pay and reducing the amount they have to pay to student loan lenders.

Many former college students struggling with student loan repayments may also be able to get assistance through public debt forgiveness. In many cases, the federal government and other public agencies will pay off the remainder of a student's loans in exchange for public employment, volunteering or military service. Generally speaking, these programs benefit those with large student loan obligations and few financial resources with which to meet them. Those who benefit most from this federal loan forgiveness are people who work full time in public service.

How to Get a Temporary Credit Card

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A temporary credit card is a unique credit card number you can use for online purchases. It is an online security measure if you don't feel comfortable using your own card. Your credit card company issues you a temporary card number to be used for one transaction. The number is of no use after that transaction, so if it is stolen by phishing or other means, it will be useless.

Instructions

Inquire at your bank or credit card company about getting a temporary credit card. You should not have to set up a new account. You should be able to use your existing credit card account. The temporary card is normally just a new card number to be used for one transaction.

Download any software necessary to use the temporary credit card. You might need a desktop app or browser app.

Make your purchase using the temporary credit card. Make sure to complete the purchase and receive confirmation from the seller that the payment went through.

As another option, obtain a unique password to attach to your existing Visa or MasterCard for some purchases. Be aware that only some retailers participate in this program, so use is limited.

How to Remove Inquiries on Credit Reports

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When you apply for credit, the lender or business may view your credit history to determine your creditworthiness. The lender has to make sure that you are capable of repaying your debts in a timely manner. Each time a lender or business views your credit history, it will display as an inquiry on your credit report. However, sometimes a business can access your credit report without your permission. Unfortunately, too many credit report inquiries can lower your score. If you have unauthorized inquiries listed on your credit report, there is a way to legally have them removed.

Instructions

Order your credit report online. You can receive a free copy of your credit report by visiting AnnualCreditReport.com. You will need to request a copy of your credit report from all three major credit bureaus--TransUnion, Equifax and Experian. Please note that you cannot order your credit report online if you have a security freeze or fraud alert on your credit file--or if the credit bureaus are unable to verify your identity. In that case, you will have to submit your request over the telephone with a credit bureau representative or through postal mail.

Review the inquiries listed on your credit reports. Each credit report will display a list of companies that viewed your credit history over the past two years. Decide which inquiries were unauthorized, and make a list of the company's contact information and the date of the inquiry.

Submit a dispute form to each credit bureau. You can submit your dispute form online by visiting TransUnion.com, Equifax.com and Experian.com. You will need to complete a separate dispute form for each unauthorized inquiry that appears on your credit reports. You may also download the dispute form and mail it to the credit bureaus.

Give the credit bureaus time to research your disputes. It can take 30 to 45 days for the credit bureaus to complete their investigation. Each credit bureau has to contact the creditor or business listed on your dispute form to find out if you gave them permission to view your credit report. The credit bureaus will contact you with the results of their investigation. If the credit bureaus discovered that any of the inquiries were unauthorized, they will remove that specific inquiry from your credit report.

Confirm that the inquiries have been deleted from your credit reports. Give the credit bureaus at least 30 days to update your information. After 30 days, order a copy of your credit report and make sure the appropriate inquiries have been removed.

How to Keep Your Personal Identity Safe

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There are articles and shows everyday that speak about the pitfalls of identity theft. There are many ways that scam artists can get a hold of your personal information. Identity theft can ruin your credit rating. It can also be a hassle to try and clear up any case of identity theft that may appear on your credit report. The best thing to do is to avoid identity theft be keeping your personal identity safe.

Instructions

Shred all paperwork before you put it in the trash. Many people shred some of their documents before they put it in the trash. To truly keep your personal identity safe it is best to shred everything. Scam artists can use any bill of yours to get personal information that they will use to steal your identity.

Give out your personal information over the phone only if you initiated the phone call. Many scam artists will call your home posing as one of your utility companies trying to update their records. You can give personal information over the phone if you are sure of the person that you are talking to on the other end. The best way to do this to keep your personal identity safe is to do this when you have made the call.

Lock your social security card in a steel box and keep it at home. There is a misconception that you should carry your social security card on you. To prevent identity theft, it is better to keep your social security card in a safe place at home. If your wallet or purse was ever lost or stolen, your personal identity would be available to whoever would find it to do as they deem fit.

Nonprofit Free Debt Reduction

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If you're drowning in debt, it can be difficult to know which step to take next, or who can help you to make financial decisions. There are plenty of companies that refer to themselves as free nonprofit debt reduction specialists, but knowing which ones you can trust can prevent you from making mistakes that can result in deeper debt and destroyed credit.

The phrase "nonprofit" in front of an organization's name can give you a false sense of security. Just because a company is nonprofit does not mean the services it provides are free, or even low cost, and nowhere is this more evident than in the debt reduction and debt counseling world. Plenty of credit counseling companies advertise themselves as "nonprofit," but for the consumer, this is an empty claim; while they may not turn a profit, per se, they are in the business to make money through fees for their services.

The claims made by nonprofit debt reduction companies are tantalizing. Often, these organizations offer to help you settle or reduce your debt, while minimizing the cost to you. While these organizations may or may not advertise their services as free, the financial reality is often buried in small print or included in the payments you will make toward your debt by way of payments to the credit counseling agency. In the end, the service you thought was free or low cost ends up costing you more than you bargained for.

Consumers can find free help with debt reduction without fearing companies that make misleading claims. The National Foundation for Credit Counseling can help you find a reputable credit counselor in your area that can provide you with debt help that may be free, depending upon your financial status. In most instances, even if the debt reduction help offered by reputable credit counseling agencies is not free, it is reasonable enough that you can fit it into your budget.

A reputable credit counselor will work with you to determine whether it would be best for you to negotiate with your creditors by yourself by asking for lower payments, or whether you are a candidate for a debt management plan. If you qualify, the credit counselor will work with your creditors on your behalf to reduce your payments and or interest and come up with a repayment plan that will allow you to be out of debt in three to five years. Often, these plans come with a small fee attached; however, if you qualify, the agency may waive your fees.

How to Find Out if a Creditor Filed a Judgment Against You

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Depending on the laws in your state, a creditor with a court judgment against you may have the right to attach a lien to your personal property, seize your bank accounts and garnish your wages. Creditors lack the right simply to "file" judgments. To obtain a court judgment, your creditor must sue you and win. Although creditors must serve you formal notice of a lawsuit, some states allow plaintiffs to serve notice to your last known address -- and then grant the creditor a judgment by default when you do not appear in court. You can find out if a creditor has a judgment against you by reviewing your credit report and checking public records.

Instructions

Pull a copy of your credit report from TransUnion, Experian or Equifax. Any judgments against you will appear in the "Public Information" section of your credit report. You can request a free copy of your credit report online from each credit bureau by visiting the AnnualCreditReport website, which is the only one approved by the Federal Trade Commission to provide consumers with free annual credit reports. You can also access your reports by signing up for monitoring with any of the three major credit bureaus.

Visit the PACER website and create an account. PACER is the government's Public Access to Court Electronic Records database and provides you with immediate access to court records nationwide. Not all courts upload their records to PACER. However, if your court participates in the program, you can access information about any cases filed against you by searching national records using your name or searching your local court district's online database through the PACER system.

Visit your county courthouse's court records department. Inform the clerk at the counter that you are trying to find out if there are any current judgments against you. The clerk will then access the information by computer and can provide you with copies of any documents noting the existence of a judgment.

The Effect Interest Rates Have on the Decision to Lease vs. Buy

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While the interest rate that a person receives on a loan depends largely on their credit score, the average interest rate available to lenders will depend on a number of economic and political factors. The movement of these interest rates has a number of wide-ranging effects. Among these is whether prospective home buyers choose to lease or buy their residences.

A rise in interest rates makes taking out a loan more expensive. As the interest rate increases, the amount of money that a borrower must spend paying interest on the principal of his loan will increase also. This can dissuade people from taking out loans, such as the mortgages necessary to purchase most homes, and encourage them to save their money, to allow it to collect interest.

A fall in interest rates will generally encourage people to take out more loans, as the price of taking out the loan will drop. This is because the person may be able to lock in a lower interest rate on a fixed-rate loan -- a loan where the interest rate never changes. Also, low interest rates provide an incentive for people to take their money out of their savings, as they are collecting less interest.

Generally, when interest rates rise, prospective home owners are more likely to lease homes, as they will be forced to pay more in interest rates on mortgages, making leasing appear a better option, at least temporarily. When interest rates are lower, borrowers will be more likely to buy homes, as they will be able to secure a mortgage at a lower price.

The decisions made by borrowers may vary depending on their reasoning. For example, when a person leases a home, he is not building up any equity in a property. Therefore, the person may choose to take out a home loan even when interest rates are high because then he is at least purchasing a property rather than paying a landlord.

What Should You Do If Someone Used Your Credit Card Number?

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As devastating as it is to think about, credit card fraud occurs all the time. There are two major ways your credit card account can be used fraudulently. The first is that your card is physically stolen. The other way is your credit card number can be stolen. This usually happens when you enter your number into an unsecure website. If you are the victim of credit card theft, there are some quick steps you should follow to protect your account from further activity.

Call your credit card company immediately and tell them you want to immediately cut off use of your credit card. This number is found on your credit card account statements, as well as the paperwork they send you in the mail when you received your card. It is usually an 800 number.Calling immediately will prevent any other unauthorized uses of your credit card. Ask for a new card, and the company should send one out fairly quickly.

Credit card companies vary, but most carry a policy that allows you to be covered in the case of theft. Some companies do not hold you reliable on fraudulent purchases made, while others hold you reliable on a certain percentage. If you are unaware of your company's policy, ask the representative while you are on the phone with her. This information can also be found in the paperwork the companies send out when you received your card.

Look over each credit card statement to make sure you do not see any unauthorized purchases. If you do, call the credit card company back and give them notice. Checking your statement every month can protect you from racking up a lot of charges. The quicker you can catch it, the better.

Protect your card and number. Never enter your card information into a site that is not secure. If you are making a payment online, look at the "http" in the address bar. There should be a letter "s" in this area: "https." This signifies the site is secure.

Do Debit Overdrafts Affect My Credit?

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Debit cards offer instant access to a checking account, but because a checking account isn't a credit account, spending patterns -- including occasional overdrafts -- usually have no bearing on a credit report. However, a few unusual circumstances related to the habitual misuse of a checking account can feed a negative credit record.

A credit account requires a lender to provide access to cash -- even cash secured with a deposit -- and the borrower to pay back that loan, usually with interest. A demand deposit account (DDA), by contrast, requires no loans. DDAs are better known as checking accounts; the funds are wholly owned by the account holder. Because the bank provides no money to a DDA account holder, there is no credit relationship at stake that could be affected by overdrafts.

Some banks allow customers to overdraft their accounts, usually for a fee of $20 to $40 per occurrence as of July 2011. These overdrafts are usually recovered at the next deposit into the customer's account. Some banks allow a customer to overdraft using a debit card to avoid embarrassment at the point of sale. An overdraft in itself will have no impact on the account holder's credit score.

If an overdraft results in a reversed transaction -- that is, if the debit "bounces" and the original vendor doesn't get paid -- the checking account could be referred to a clearinghouse like ChexSystems, making getting paper checks accepted at retailers more difficult and reducing the reported person's ability to open checking accounts at banks that joined the clearinghouse. In addition, a retailer could send the reversed debit to a collections agency or even to the police department, a turn of events that could significantly impair his credit score.

When a bank closes an overdrawn checking account, it may refer the account to a collections agency to seek repayment. If the account does hit collections, a valid debt does get reported to the credit bureaus. So even though the overdrafts didn't affect the account holder's credit, having the checking account closed and sent to collections -- if reported to the bureaus -- may have a significant adverse impact on her credit score.

If I Am Paying Monthly on a Medical Bill Can They Turn it Over to a Collection Agency?

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When a person undergoes medical treatment, he will often accrue considerable expenses. These bills resemble any other debt in that the medical care provider has a legal right to receive payment on them. If a former patient does not pay his bills, the medical care provider has a right to seek payment through a number of different means, including through the use of a collection agency. However, this agency cannot change the bill payment terms.

Medical bills take the form of a contract between the medical care provider and the patient. Under this contract, in exchange for the medical care provided, the patient is obligated to pay the provider a certain amount of money. This contract also specifies when this money must be paid. While some medical care providers demand immediate payment, others allow the patient to pay over a longer period of time.

If a person fails to pay his bills on time, the medical care provider may choose to turn his debt over to a collection agency. This collection agency has all the rights of the original medical care provider in regards to seeking payment of the debt. The debtor is required to either make immediate payment to the collection agency or work out an alternate payment plan.

Some medical care providers will allow a person who owes them month to pay in installments, such as through monthly payments. However, a person call only pay this way if the medical care provider agrees to it. Even if a person cannot afford to pay his medical bills in one payment, the medical care provider still has the right to require payment according to the contract.

If a person has worked out a payment plan with his medical care provider in which he makes monthly payments on the debt, the medical care provider still has a right to transfer the debt to any party it wishes, including collection agencies. However, selling the debt does not grant the collection agency the right to modify the terms of the current payment plan, so long as this plan is in writing. This means the collection agency must abide by the monthly payment schedule.

How to Transfer Someone Else's Debt to My Credit Card

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The process of transferring someone else's debt to your credit card is paying the other person's creditor with the money that is available to spend on your credit card. You cannot pay most creditors by giving them your credit card number, therefore you must do either a cash advance or a balance transfer in order to pay the other person's creditor.

Instructions

Learn your credit card's available balance. Do this by signing on to your account on your credit card's web site or by calling the customer service telephone number. The available balance must be more than the debt that you want to transfer along with any related fees. If it is less, you will need to be approved for a credit line increase or use a different credit card.

Perform the cash advance by using your credit card's PIN to withdrawal cash at an ATM or a bank. Some companies (such as Chase) allow you to call customer service and request that the funds from the cash advance be directly deposited into your bank account. Alternatively, you can use a cash advance check from your credit card company, which can be written out directly to the person or institution of your choice; if so, skip step 3 and go directly to step 4.

Verify the cash advance funds are available in your checking account. If you got cash from an ATM or a bank, deposit the cash into your checking account. If your credit card company electronically deposited funds into your checking account, verify that the funds have cleared and are available.

Write either a cash advance check or a personal check from the account your cash advance was deposited into. Make the check payable to the other person's creditor and write the other person's account number in the memo line. Deliver or mail the check to the other person's creditor.

Research which methods your credit card company uses to complete balance transfers. Get this information by visiting your credit card's web site or by calling the customer service telephone number. Some credit card companies (such as Chase) let you perform a balance transfer by filling out a form on the internet or by speaking to a customer service representative over the telephone. Other companies may require you to fill out, sign, and return a paper form; if so, you can either mail or fax the form to your credit card company.

Supply your credit card company with pertinent information related to the balance transfer. Your credit card company needs to know the other person's account numbers and how much of each of their account balances you want to transfer onto your credit card. Write this information on the cash advance form or provide it to the customer service representative on the telephone.

Execute the balance transfer. Submit the information and read and agree to your credit card company's terms and conditions. As long as you have a large enough available balance and your account is in good standing, the credit card company will approve your balance transfer.

How to Answer a Foreclosure Summons in Illinois

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Illinois Legal Aid reports that receiving a foreclosure summons means that your mortgage company is attempting to take your house from you through a lawsuit. However, the agency advises that you should not panic -- and that you should not move out of the home. The foreclosure process takes several months to complete in Illinois, giving you plenty of time to consider your options. After receiving the summons it is important to seek reputable advice while avoiding so-called "foreclosure rescue" companies.

Instructions

Read the foreclosure summons. Illinois Legal Aid suggests that some people fail to even read the notice, possibly because they are so stressed out by their financial problems. However, the summons offers important information, such as deadlines for responding.

Hire an experienced real estate attorney. You can defend yourself in a foreclosure lawsuit, in Illinois but your chances for success are better with the help of an attorney.

Prepare legal documents called an "appearance and answer" within 30 days of receiving the summons. Ideally, have an attorney handle this. Or do it yourself by visiting the Illinois Legal Aid website, which offers the forms and instructions on how to fill them out and return them to the court within the deadline. The appearance document informs the court that you are aware of the lawsuit and intend to participate in the court process. The answer is a written response to the foreclosure lawsuit. The lawsuit is called the complaint and is sent along with the summons. Illinois Legal Aid reports that the answer allows you to deny all or some allegations made in the lawsuit.

File the appearance and answer at the courthouse listed on the summons. Filing the forms completes your answer to the summons, allowing you to begin focusing on a hearing before a judge. At the hearing you must provide a successful defense for the lawsuit, such as allegations of fraud by the mortgage company. An experienced attorney can offer other possible defenses, depending on your situation. Competent legal representation is critical at this point.

Can Debt Collectors Garnish Wages?

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When a debtor is seriously behind on payments to a creditor, the creditor may choose to hire a professional debt collector to collect on the debt, or simply sell the debt to the collector. Debt collectors use a variety of methods to compel debtors to pay the money they owe, ranging from phone calls to wage garnishments. Although the debt many not have been issued by the debt collector, the collector is still empowered to use all legal means to receive payment, including garnishment.

To legally garnish a debtor's wages, a debt collector must first receive a judgment from a court that legally certifies that the debtor owes money to the collector or the creditor for whom the debt collector is working. The debtor will then be given a chance to pay what he owes. If he fails to do so, the collector may petition to allow the collector to garnish the debtor's wages, an action requiring a court order.

Seeking a garnishment order is an expensive process. Unless the debt collector is especially skilled in the law, he will likely have to procure the services of an attorney to seek a legal judgment for the debt and to receive a petition order. While a debtor may be ordered by a judge to pay the creditor's court costs, it may be difficult to force him to pay the debt, let alone additional costs. For this reason, a collector may not bother to garnish a debtor's wages.

While a debt collector is legally allowed to seek a garnishment, this does mean that a judge will grant it. Each state has its own laws about who can legally have wages garnished. Many states have means tests for garnishment, in which a debtor must earn more than a certain amount of money or have a certain amount of assets in order to be eligible to have his wages garnished. Ineligible debtors are exempt from garnishment.

A debt collector can only garnish a debtor's wages after he has petitioned for and received a court order. A debt collector who attempts to garnish wages without this order is acting in contravention of federal law and can be sued by the debtor for damages. In addition, as soon as a debtor files for bankruptcy, all garnishment orders are nullified and debt collectors must immediately cease all collection actions, including all forms of garnishment.

What Are Two Debt Reduction Strategies?

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If you are looking for a way out of debt, there is some good news and some bad news. You can find that there are about as many methods to get out of debt as there ways to get into debt, so there is not a lack of strategies to try. The bad news is that not all the strategies presented actually work. Whatever plan you decide to implement, one thing is certain -- don't deviate from the course until you have met your financial goals.

Debt can be an overwhelming burden to live with but, with proper techniques, it can be controlled and eliminated. One strategy, according to the University of Wisconsin, is utilizing the "power payment" method. The temptation, when looking at debt, especially credit or department store card debt, is to pay the minimum or maybe just a few dollars more, if your budget allows. In the "power payment" method, you would make a "power" payment above the minimum and continually apply this payment for the life of the debt, no matter how much the minimum decreases. The math on this method is flawless. According to the University of Wisconsin, you can shave nearly 15 years off a $3,200 credit card bill with 14.9 percent interest charge using the power payment method compared to paying the minimum. The extra payment cuts the principal down, thereby lessening the impact of the interest accrued over time.

While the "power payment" strategy for paying debt set forth by the University of Wisconsin is sound mathematically and logically, you have to work at maintaining this plan. To make this strategy work, you need to compile all your debt. List all the minimum payments and then determine how that total number fits with your family's budget. Decide which card you want to target, how much over the minimum you can afford to pay, and continue paying the minimum on the rest. You cannot blink when utilizing this strategy. As the minimum payment goes down over the course of several months, the temptation is to ease up on the power payments, but that strategy can derail the plan quickly. Instead, you need to find the discipline and room in your budget to keep the strategy going long term.

The "debt snowball" strategy, courtesy of Christian financial counselor Dave Ramsey, is similar in many ways to the "power payment" strategy presented by the University of Wisconsin but with a different take. Ramsey recommends choosing your smallest debt first, regardless of interest rate. Choose a payment above the minimum, and then attack the smallest debt while paying the minimum balance on the rest. According to Dave Ramsey, this method is successful since paying off small debts provides you with a sense of accomplishment and you are more likely to stick with the program. After you have paid off that debt, you add the payment on the first debt to the minimum on the next debt in line and apply until all debts have been removed.

Like the University of Wisconsin debt reduction strategy of the "power payment," the snowball strategy makes use of a sound mathematical formula and must be played out with discipline and precision. Budgeting, again, is a key to success. You need to know how much you can spend and you need to stick to the plan. Once you have paid off a bill, the temptation is to relax and not spend that money on bringing down debt. This plan also requires perseverance, especially when you begin tackling your largest debt. In the first few months, paying down the extra principal may seem a fruitless endeavor as the balance seems to not move at all but, over time, as interest stops accruing as fast, even the largest balances will tumble. However, this method takes time and courage to make it work.

Bad Credit Loan Alternatives With Consolidation

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There are loans for people of nearly every level of credit worthiness---including those with bad credit. People with bad credit generally have credit scores in the 500s and lower, according to the website Bank Rate. At that level, borrowers often have to resort to loans from lenders comfortable with so-called sub-prime borrowers. Those lenders generally charge very high interest rates and sometimes onerous fees. There are, however, a few alternatives.

Credit unions are owned by their members and often have lending standards that are more flexible than those held by banks. Your credit union may lend to you even with your poor credit score---especially if the purpose of your loan is to reorganize your debt so you can get back on track financially. Of course you'll have to have a steady job and show an ability to repay. Also, when you borrow the money the credit union may insist on mailing the payments directly to your creditors, along with a signed letter from you asking that the accounts be canceled. That's the credit union's way of making sure that the money is used for the purpose intended and that you will emerge with lower overall monthly payments.

Some finance companies do a majority of their business with people who have poor credit scores. The representative will ask you about your salary, employment and credit score, among other things. Note that borrowing from a finance company can result in much higher interest rates than on loans from banks or credit unions. Before you apply or call check your credit by getting a free copy of your report from the website Annual Credit Report (see Resources). The site was established by the three nationwide credit bureaus to provide free copies as required by law. The credit report will include instructions about how to separately order your credit score.

Borrowing from family and friends could be an ideal option. Granted, you'll have to find a family member or friend who trusts you and is willing to make the loan. But borrowing from someone you know could result in terms that are far more flexible and favorable than any provided by typical lenders. Also, the loan from friends or family members does not have to be informal. There are companies specializing in managing loan transactions between friends and family (see Resources). The company acts as a middleman by drawing up a legal loan agreement and collecting monthly payments. After collecting from you each month the management company sends a check to your friend or family member. Other companies will even facilitate loans between strangers, as they match investors with potential borrowers (see Resources).

You may be able to get a bill consolidation loan at a bank or from another lender by offering to have someone co-sign. This isn't a lot different than getting a direct loan from a family member or friend. The co-signer will be on the hook for the loan if you default and that additional assurance may be enough to convince the bank to grant approval. Note that your co-signer will be required to have excellent credit.

How to Find a Spouse's Hidden Debt

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Most people bring some sort of financial baggage to a relationship, whatever their age. It's usually best to be open and straightforward with your partner about the amount of debt you're in from the beginning, but there are those that refuse to face reality and bury their head in the sand. If you suspect your spouse is hiding debt problems from you, it's best to get things out in the open.

Instructions

Search your property for your spouse's financial paperwork. Although it's illegal for you to open your partner's mail, you can technically read any documents you find around your home that aren't under lock and key. Although the ethics of this type of activity is questionable, it may provide you with the information you're seeking.

Tell your spouse that you plan to get a good overview of your household's finances and need to run credit checks with the three major credit reference bureaus to find out exactly how much you both owe and make sure there are no inaccuracies in either of your reports.

Reassure your partner that you have his best interests at heart by trying to get a grip of your financial situation. If it appears that he's reluctant to apply for his credit report, gently explain that it's in your best interests as a couple to be honest and open with each other about your financial past and look to resolve any problems together.

Apply to the three main credit bureaus for your credit reports. Make sure you make an application for yours as well so as not to appear as though you're victimizing your spouse. Again, explain that you're both in this together and can work towards addressing any unexpected issues that may arrive form the contents of either of your reports.

Review the contents of both your reports and discuss your next move. If it transpires that your partner has been hiding a high level of expensive debt that you can't refinance and cannot pay, you should contact a nonprofit debt management agency for help and advice.

Should I Borrow From My Retirement to Pay Off Credit Cards?

12:06 PM No comments

Dealing with credit card debt is one of the most difficult financial problems that many consumers have to handle. One option that some people consider is borrowing money from a retirement plan to pay off the balances on these cards. While this can eliminate the balances, it could also lead to big financial problems in the future.

The purpose of this method is to pay off your credit cards as quickly as possible. Most 401(k)s allow you to borrow money from them through a 401(k) loan. If you have an IRA, you would not be able to borrow money from it directly. You take the money that you get from the loan and use it to pay off your balances. Then you would have to start making loan payments to retire the 401(k) loan.

One thing to consider when making this decision is the interest rates that you will be dealing with. With credit card balances, you often have an interest rate that is very high. For example, you may be paying 20 percent interest on some of your credit cards. With a 401(k) loan, you would potentially only have to pay 7 percent or 8 percent interest. From a simple numbers perspective, you would save more money on interest by going with a 401(k) loan.

Even though it may make sense to retire the credit card debt, it will not be easy to replace the money in your retirement account. The money that is in your retirement account is money that has not had any taxes taken out of it. When you try to replace the money, you will be doing so with after-tax dollars through loan payments. This can make it very difficult to get back to the point where you were to begin with.

One of the issues with taking out a loan on your retirement to pay off credit cards is that it may only temporarily fix the problem. If you have large credit card debt, it is generally because you have been living above your means. If you do not fix the behavior that got you in this situation to begin with, it will not do you any good. You may run up large credit card balances again and then have a 401(k) loan to deal with as well.

The ultimate decision should come down to how much money you could save over the long term and your current budget. If you cannot afford to make your credit card payments, but you could afford a 401(k) loan payment, it may make sense to go ahead and borrow the money. Another option to consider is a debt management plan or a consolidation loan so that you can keep your retirement dollars intact.

Measure of Personal Debt to GDP

3:22 PM No comments

Many analysts compare the rates of personal debt as a percentage of a country's gross domestic product (GDP). Specifically, such ratios are used to describe the stability of an economy, especially during times of economic crisis or recession. At high debt-to-GDP levels, a loss of income may result in further losses in GDP by means of reduced consumer, government and investment expenditure.

Personal debt may be defined as all debts accrued on the individual level. Such debts may include mortgage debt, credit card debt, student loan debt, car loans, and any sum that may be defined as an outstanding sum to be paid to a creditor. All these debts per citizen are added up to obtain a total of all personal debt within a county. According to the U.S. Debt Clock, as of May 18, 2011, the total amount of personal debt was over $16 trillion.

Measuring personal debt to GDP typically has been accomplished using a chart. The chart, published by the Federal Reserve, illustrates GDP on the y-axis and years on the x-axis. Thus, changes in GDP may be observed over a continual basis. This GDP chart also shows personal debt as a percentage of GDP. Dividing the total amount of debt by the total amount of GDP provides the debt-to-GDP ratio, which is used by many analysts when determining the overall health of an economy.

If a large proportion of a country's GDP is composed of personal debt, it may affect the ability of households to repay their debts. This is especially true if there is a shock to the financial system. A large spike in unemployment may put many indebted families out of work, which in turn makes it more difficult to repay their debts. A large amount of defaulted debts in turn make it more difficult for other people to borrow, as lenders increase their interest rates to cover their losses. Businesses may also have difficulty borrowing, which in turn decreases the investment rate. Investment is one component of GDP, and when GDP falls, the ratio of personal debt to GDP increases further.

Many economists believe analyzing the debt-to-GDP ratio is ambiguous and that the origin of personal debt should be taken into account, rather than personal debt as a whole. If mortgage debt is significantly high, this may have a profoundly negative impact on the welfare of families during times of default. However, student debt is high among some members of the population, and such debt could help advance an individual's career and income. Higher incomes lead to higher levels of GDP. Thus, the personal debt-to-GDP ratio could exclude "good" debt from "bad" debt.

Welcome to our website credit and debt managementr.

Sunday, May 31, 2009

Instructions

Line of Credit

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Warning

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Instructions

About Judgments

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Bankruptcy

Saturday, May 30, 2009

Banking Term

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Friday, May 29, 2009

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Thursday, May 28, 2009

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Wednesday, May 27, 2009

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Credit Reports

Tuesday, May 26, 2009

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Monday, May 25, 2009

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Instructions

Sunday, May 24, 2009

Discuss Settlement Options with Creditors

Pay Off Debt Gradually

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Home Affordable Modification Program

Home Affordable Refinance Program