Difference Between a Letter of Credit & a Standby Letter of Credit

A letter of credit and a standby letter of credit are similar services offered by banks to aid financial transactions between buyers and sellers. The bank issuing either of these letters guarantees payment to the seller if certain requirements are met. Differences The difference between these two services is the role of the bank. In a letter of credit, the bank essentially acts as the buyer, providing payment once the seller meets the deal...

Read More

Do Secured Credit Cards Rebuild Your Credit History?

Secured credit cards are a special type of credit card that uses the money in a savings account or similar type of account to set the credit limit for the card. Some companies offering secured credit cards give you a higher limit than your deposit. You may also have the option of unsecuring your card to convert it into a normal card after proving you can pay off the card on a consistent basis. These type of cards are a good way to rebuild your credit history after bankruptcy. Definition A secured card has to have some sort of collateral...

Read More

How to Set Off and/or Discharge Debt

Discharging debt is possible through successfully declaring bankruptcy or allowing a debt to expire through the statute of limitations in the state from which the debt was issued. Debt set-off occurs when a collector seizes funds or property from a debtor to reduce the overall owed balance. These two processes are entirely different, and require an alternative set of actions to enact them. All of these courses of action carry significant risks. ...

Read More

Consumer Credit Report Guide

Your credit report is an indication of how well you've managed your finances. Your credit files are complied by credit-reporting companies that get your financial information from creditors and lenders. You can work to maintain a good credit history by knowing what type of information creditors and lenders examine in your files to determine your creditworthiness. Identifying Information Your credit report will have a section known as identifying information. It includes your name, current and past addresses, your place of employment, Social...

Read More

How to Deal With Debt Collectors and Erroneous Debt

Debt collectors may claim that you owe an unrecognized amount. You don't have to pay erroneous debt. However, debt collectors will continue collection efforts until you take steps to prove that you don't owe the money. Several techniques can help you deal with debt collectors and stop mistaken collection attempts. Instructions 1 Answer all letters written by the debt collector. Turning a deaf ear to collection attempts does not stop the problem. Speak with collectors to resolve legitimate debt or dispute erroneous debts. Ignoring collection...

Read More

Can a Judgment Force Me to Sell My Home?

If a creditor or collection agency cannot compel you to pay past due amounts on a debt, it may file a lawsuit against you in your county for a judgment. Once a creditor or collection agency obtains a judgment against you, it obtains the legal right to try to recover the debt through freezing your bank accounts and garnishing your wages. A judgment may also allow the judgment creditor to force the sale of your home. Certificate of Judgment Usually the judgment creditor obtains a Certificate of Judgment after winning a judgment suit against...

Read More

Rules for Garnishing My Paycheck

Having your paycheck garnished by your creditors for unpaid debt can make you wonder if the proper rules are being followed and the correct amount is being taken out. Wage garnishment is regulated by federal and state government laws, and you should know what they allow before your employer gives any money to your creditors. Consumer Credit Protection Act Title III of the federal Consumer Credit Protection Act (CCPA) ensures that employers do not fire workers for the sole reason of having their wages garnished. The act also gives a limit...

Read More

How to Work Out Credit Card Debt When Unemployed

Unemployment is a frightening time, especially if you do not have an emergency fund. With money tight and no income coming in to keep everyone fed and the lights on, prioritizing what must be paid in order to survive becomes the top priority. Typically, credit card debt is not on that list of essentials. Working out credit card debt while unemployed is not impossible, but your lenders do need to see that your financial hardship will affect them and that you are willing to negotiate. Instructions 1 Trim and prioritize your budget. Stop spending...

Read More

California Credit Card Fraud Penalties

According to the California IC3 Internet Crime Report, 7.6 percent of all Internet crime perpetrated in 2010 was credit card fraud. California has strict laws against credit card fraud. Those who commit the crime can be charged with a felony or misdemeanor, depending on several factors, including the dollar amount of the fraud. Penalties for credit card fraud can include fines and imprisonment. Definition Several crimes constitute credit...

Read More

Which is Worse for Your Credit, Unsecured Debt or Revolving Credit?

Unsecured debt and revolving credit affect credit scores for the better and sometimes the worse. The type of debt someone has adds up to about 10 percent of the score, according to the Privacy Rights Clearing House. Revolving credit carries more weight than unsecured debt from a finance company, making negative payment history on a revolving credit account worse. Types Consumers borrow different types of credit. Unsecured debt has no collateral....

Read More

Why Should You Check Your Credit Report Periodically?

Your credit report is a personal financial summary compiled by each of the three major credit bureaus: Equifax, TransUnion and Experian. Each bureau has its own separate report, and the information you find in each of them can vary. You can get a free copy of your credit report from each one of the credit bureaus at annualcreditreport.com. To Check for Inaccuracies The information on your credit report is very important, and small mistakes...

Read More

The Best Non-Profit Credit Counseling

Many people feel overwhelmed by their credit card debt. They may struggle to make the monthly minimum payments, fall behind on their bills or feel unable to handle to get out from under the debt alone. Nonprofit credit counseling agencies help people develop a payment plan and pay their off their credit card debt. However, not all counseling services are created equal and consumers should consider factors like fees, the effect on their credit score and the benefits of using the agency before signing up. Benefits A nonprofit credit counseling...

Read More

Can a Creditor Garnish Student Loans?

Many students receive loans secured by the federal government to attend college. These loans, typically provided at a low rate of interest, allow the student to attend school and pay the loans back when he receives a job and income after school. In most cases, these loans are protected from garnishment by private creditors. This is because student loans are not a form of income per se, but are a loan that the student must pay back. Garnishment To garnish a person's wage, a private creditor must first be awarded financial damages in a court...

Read More

How to Apply for Grants

Grants are wonderful ways of obtaining funding for projects, business, schooling and even housing. A grant is a program that is offered by the government or by organizations or even private people who wish to fund these different types of things. Unlike a loan, a grant doesn't have to be paid back, so you can get started on your project or schooling without having to worry about being in debt. Although the application process for grants varies...

Read More

Do Debts Die With the Debtor?

Unpaid debts may follow you to your grave and then the question arises of whether they will live on without you. Most debts will indeed die with the debtor, or at least once the debtor's estate has been settled. Some debt may even be forgiven if you pass on. In a few special cases though, a debt may persist beyond your death. Student Loans Should you die, the federal government will forgive any outstanding student loans. This includes both subsidized or unsubsidized Stafford loans and any Plus loans your parent's may have taken out on your...

Read More

How to File a Foreclosure

For many homeowners, foreclosure is their worst nightmare. It can be traumatic both to your finances and your family to lose your home out of an inability to make payments. Sometimes though, homeowners, in realizing foreclosure is imminent, will seek to file a foreclosure and cut their losses where they can. You will have to prove your situation is irreconcilable, if you want your foreclosure filing to be accepted. Instructions 1 Meet with...

Read More

If I Choose to Not Renew a Credit Card, Will It Lower My Credit Score?

It is true that having many open credit accounts can be bad for your credit score. Lenders may think you have too many liabilities and too much opportunity to borrow beyond your means. However, not renewing a credit card may not be the best solution to this problem. Once the account is opened, you're in something of a Catch 22, because allowing it to lapse can actually be worse for your score. Age of Credit Lenders like to see a credit history...

Read More

Post-Foreclosure Help

A foreclosure can be financially and emotionally devastating, but you can recover and get on with your life, according to the Federal Home Loan Mortgage Corporation, also known as Freddie Mac. The agency says there are programs to help foreclosure victims rebuild their credit and even find a place to stay. Significance A foreclosure will be reported on your credit report for seven years, according to the Federal Trade Commission. Your credit score could drop significantly, but the negative impact will lessen over time. Good credit management...

Read More

How to Tackle Debt with Limited Income

When you're on a strict budget, it can be difficult to get rid of your debt. If you're only making minimum payments on your credit cards, it can take years to pay them off. If you want to tackle debt with limited income, you have to make a serious commitment. You might have to do without some extras for a while, but the benefits of being debt-free can far outweigh the sacrifices. Instructions 1 Lower your interest rates. If you can decrease your interest rates, a higher percentage of your monthly payment will go toward the principal balance....

Read More

Help Me Settle My Debt

Accumulated debt from student loans, credit cards or medical bills doesn't simply go away. The type of debt determines how it is handled; for example, student loans from the government must be repaid and cannot be cleared away by filing bankruptcy. Reach out to your debtors and attempt to negotiate either a payment plan or a settlement agreement, which decreases the total amount of debt and could improve your credit score in the process. Student Loans Federal student loans are slightly more flexible than private student loans and typically...

Read More

Can a Promissory Note Be Voided for Fraud By Filing a Release of Obligation?

Holders of promissory notes can release them for any reason. Promissory notes can also be legally abrogated, or nullified, for several reasons, including fraud. While filing a release of obligation document releases the promissory note maker from any future responsibility or liability for the debt, abrogation of the promissory note for reasons such as fraud do not. Promissory Note A promissory note is a document that states that an individual...

Read More

How to Settle Debts Without a Debt Settlement Company

If you are dealing with unmanageable debt, you may consider using a debt settlement company to work on your behalf. Unfortunately, many debt settlement companies charge substantial fees, and there is no guarantee that they can resolve your debt problem. You may be able to settle your debts on your own as well as any debt settlement company could, and you can save the fees along the way. Instructions 1 Determine how much money you have available...

Read More

How to Fix and Watch Your Credit

A credit bureau is a company that collects and reports information about your credit accounts to others. In the United States, the three major credit reporting bureaus are Experian, Equifax and TransUnion. In most cases, only time will remove accurate, negative information from your credit reports. However, you can dispute and request removal of all inaccurate information from your credit report. Several companies also offer credit monitoring services that allow you to watch your watch and will notify you of major changes to your credit profile....

Read More

How to Negotiate a Debt Repayment Fee Rate

If you owe large amounts of money to credit card companies or the servicer of your student loan, it's easy to panic. You might wonder how you'll pay all of what you owe. If you've lost your job during a difficult financial time and have had to take a lower-paying one, this challenge can be even more daunting. Fortunately, you might be able to negotiate lower monthly fees from your creditors. To do this, though, you'll have to prove that you have...

Read More

How to Collect Bad Debts

If you own a small business and frequently deal with clients, you might encounter a few late payments and non-payments. But fortunately, there are ways to deal with unreliable clients. Rather than write-off non-payments and lose money, take steps to collect the money owed. You can employ several tactics, which may persuade clients to submit their past due payments. Instructions 1 Notify the customer by phone or letter. Often times, a simple...

Read More

5 Ways to Dump Your Credit Card Debt

Getting rid of your debt is an excellent way to raise your credit score and give you peace of mind; however, you must choose the strategy that works best for you specific financial situation. In other words, debt elimination methods are not one size fits all. By understanding the pros and cons of each method, you will be able to make an informed decision about your plan of attack. Payment Plan One way to dump your credit card debt that doesn't involve applying for a loan or damaging your credit is by paying all of your debt off by yourself....

Read More

How to Get Out of Debt After Divorce

Getting out of debt is hard for any individual, but sometimes after a divorce, it is even harder. Bills pile up, and sometimes expenses are unevenly split because of a rough situation. Emotions run high, and sometimes, debt piles up before the consumer even knows it. However, through proper budgeting and planning, you too can get out of debt after divorce. Instructions 1 Check your credit. Go to a website, such as AnnualCreditReport.com, and get a free tri-merge credit report. You will have to provide the company with your date of birth,...

Read More

Statute of Limitations on Credit in Indiana

Credit card companies have a limited amount of time to file a lawsuit against you for a charged-off debt. Indiana, like all states, has a statute of limitations on debt collection: Once it has passed, a creditor has to either accept the loss or try and persuade you to pay the bill without a court judgment. Indiana Statute of Limitations In Indiana, a credit card company or debt collector has six years to sue you for unpaid credit card debt. After the six years is up, if you are sued for the debt, you can ask the court to dismiss your case...

Read More

Bankruptcy Vs. Debt Consolidation in Pennsylvania

Bankruptcy is a tough choice to make. On the one hand, it gives you an opportunity for a fresh start. But it comes at a price: a damaging effect on your credit score. Alternatively, if you are concerned about salvaging your credit, debt consolidation is another available option. Bankruptcy All states adhere to the U.S. Bankruptcy Code. Whether you file a bankruptcy petition for Chapter 7 or Chapter 13, all states interpret the law the same....

Read More

Define Unsecured Bankruptcy

In a personal bankruptcy case, debtors receive a discharge of a portion of their debts. The bankruptcy code distinguishes between secured and unsecured debt. Only unsecured debt can be discharged in a bankruptcy case. Debtors must work with their creditors regarding secured debts. Out of all possible unsecured debts, certain debts cannot be discharged. Secured Debt Collateral makes the difference between secured and unsecured debt. Secured...

Read More

Can My Wife's Debt Be Garnished From My Paycheck?

A creditor may legally obtain a garnishment through the court system, allowing that creditor to take a portion of a person's paycheck until the debt owed to the creditor is satisfied. If you do not personally owe a creditor a debt, the creditor cannot garnish your wages, even if your spouse owes money to the creditor. Garnishment A garnishment allows creditors to take funds owed to them using legal methods. A creditor must present its case that an individual has not paid a debt legally owed to be granted a writ of garnishment. The writ...

Read More

How Do Debt Repayment Programs Work?

If you have an excessive amount of credit-card debt you may need the services of a debt repayment program. A number of services are available from both profit and nonprofit organizations. Some repayment programs both provide counseling services and settle your debts. Get as much information as possible, and try to avoid those companies that charge a fee. Interview To pay down debt you may want to contact the National Foundation for Credit Counseling, which is a nonprofit organization. Call the toll free number, 1-800-388-2227, and you...

Read More

Help Fix My Credit Score

If you haven't paid attention to your credit score, it may be time to start, particularly if you are looking for a new loan or even a new job. Your credit score affects how banks see you as a credit risk. The higher the score, statistically the less likely you are to default on a new loan or credit card. If your score is low, find out the reasons and start to fix the problems now. Get a Copy To fix your credit score, you must first order a copy of your credit report, preferably from each of the three major credit reporting agencies. By...

Read More

What Are Charge-Offs on Credit Reports?

After a certain amount of time has passed without paying a debt, the creditor will report the account as a charge-off or as a bad debt on your credit file. A charge-off can lower your credit score, which means that some creditors will deny your request for request or charge you a higher rate of interest for credit products when you apply. Write-Off If you don't make a payment on a loan or credit card debt for 6 months, the lender will charge your account off as a bad debt. This means they have determined that your account is uncollectable....

Read More

Monitoring After a Personal Bankruptcy Discharge

Filing personal bankruptcy and having your debts discharge can eliminate overwhelming balances and give you the opportunity to make a fresh start credit-wise. But just because you get rid of balances doesn't mean you should stop worrying about your credit. Ongoing credit monitoring is essential to improving and keeping your credit in good shape. What is Bankruptcy Discharge? Filing bankruptcy doesn't guaranteed the discharge of your debt. Discharging refers to no longer being liable for these balances. A judge hears your case and considers...

Read More

What Is the Statute of Limitations for Collecting a Debt in Maryland?

Creditors, debt collectors and debt buyers must follow the guidelines and procedures outlined in the Fair Debt Collections Practices Act---FDCPA. The FDCPA is a federal law that pertains to each state, but it does not dictate the state statute of limitations for civil collection. Individual states retain the right to set time limits for debt collection. The statute of limitations for collecting a debt in Maryland is outlined within state law 5-101. Definition Statute of limitations is the specific period of time that the law allows for...

Read More

New Credit Problems

While credit can help you buy a house, car or make purchases without having to use cash or checks, you may run into problems with new credit. People with problems obtaining new forms of credit can often improve their chances by first understanding what causes lenders to deny credit. Once you know how the system works, you can use that knowledge to help yourself obtain new credit. Creditors When you apply for a loan or new form of credit,...

Read More