Ideal Range for Consumer Debt

Consumers' ideal debt range is linked to their income, current amount of debt, and future plans, which may include a home purchase. People have to determine for themselves whether they're carrying too much debt by taking an inventory of their monthly expenses and comparing those costs with the amount of income they earn each month. Generally, consumers can avoid financial problems if their debt payments take up less than 20 percent of their income.

Debt-to-Income Ratio

A Rutgers Cooperative Extension Service article titled "How Much Consumer Debt is Too Much?" recommends calculating your consumer debt-to-income ratio by dividing your monthly debt payments by your after-tax monthly income, which is your take-home pay. Multiply the resulting number by 100. The calculation shouldn't include mortgage, rent, utility or tax payments, but it should include things such as car and credit-card payments. Someone who has a monthly after-tax income of $2,500 and monthly bills that add up to $500 has a consumer debt-to-income ratio of 20 percent. Therefore, 20 percent of that person's take-home pay is being spent to pay debts.

Interpreting Debt Ratios

It's important to interpret what your consumer debt-to-income ratio means after you calculate it. According to the Rutgers Extension Service article, a ratio of 15 percent or less signifies good debt management and that a consumer likely can handle his monthly debt obligations. The article says a ratio of 20 percent should be considered a "danger zone" because one-fifth of a person's take-home pay is consistently consumed by debts each month. Remember that the ratio doesn't include your other expenses for housing, utilities, groceries, transportation and other everyday costs.

Front-End Ratio

A Bankrate.com article titled "Debt-to-Income Ratio Important as Credit Score" points to another consumer ratio that signifies people's ability to pay for their current home or to buy a new home. It's called the front-end ratio, and it's calculated by adding up the monthly principal paid on a mortgage, along with its interest, taxes and insurance costs. The resulting number should be divided by your pre-tax, or gross monthly income, and multiplied by 100. The Bankrate article indicates a consumer's home generally is considered affordable if the front-end ratio is not more than 28 percent.

Considerations

People who decide they need to reduce their debt ratios should document all of their expenses to determine where their money is going. Bankrate suggests examining expenses to find areas where you can cut costs. You should then take the money you save from cutting back and use it to pay down high interest debts, which usually includes credit cards. High-interest debts make it harder for people to reduce their monthly expenses and lower their debt ratios.

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Step-by-Step Process of Credit Repair

Negative credit can result in the denial of loans, insurance, and employment. It can result in higher rates for standard services like cell phones. Therefore, it's important to know your credit score and to take steps to improve it. The following strategies will help.

Removing Negative Items

The process of credit repair begins with understanding your credit report. You are entitled to one free copy per year from each of the major bureaus--Equifax, Transunion, and Experian. According to Bankrate.com, the reports from each bureau are usually different. Therefore, it's important to study the reports from each. These may be obtained at www.annualcreditreport.com.

When reviewing your reports, look for any negative items. If any listings are incorrect, you must dispute them. When disputing items, prepare a letter that explains your situation, and send it as certified mail to both the creditor that reported you and to the bureaus that are circulating the reports. According to Bankrate.com, the credit bureaus must investigate any dispute within 30 days of receiving your letter. If the creditor cannot verify the item, then it must be removed. The credit bureau will send you a copy of your report when the item is removed.

Building Good Credit

According to Bankrate.com, paying off existing debts and building good credit will help counteract any negative items that are accurate and cannot be removed. If you're unable to make the required payments, call creditors and ask to create payment plans that will allow you to make partial payments each month. If you have fees that have gone to collection, establish a payment plan with the collection agencies and ask that they not report you to the major credit bureaus as long as payments are made. If you have funds available but tend to miss due dates, contact your creditors and arrange for a monthly payment to be automatically withdrawn from your bank account.

Secured credit cards are an excellent option for people with damaged credit. These cards require applicants to make a deposit into a savings account. The deposit sets and secures the credit limit on the card. If a cardholder fails to pay, the bank will simply deduct the payment from the savings account. According to Bankrate.com, the most important consideration when choosing a secured card is to make sure that the creditor is reporting to the major credit bureaus every month when you pay on time.

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How to Remove a Deceased Husband's Debt From My Credit Report

Your credit report is a record of how you have managed your credit accounts. A deceased spouse's debt should not appear on your credit file unless you are a joint owner on the account. The Fair Credit Reporting Act allows you to dispute your deceased spouse's accounts, request an investigation and have his debt removed from your credit report.

Instructions

1




Verify the debt information.

Verify that you are not a joint account holder on the debt in question. If you are a joint account holder, you cannot have the account removed from your credit report.

2

Write a letter to the credit reporting agency. Include the account information and state that the account is not your debt and belonged to your deceased spouse. Ask that his account be removed from you credit report immediately. Include a copy of your ID.

3

Allow the credit reporting agency 30 days to investigate your claim. The agency will initiate an investigation, and if the creditor fails to respond in 30 days or if the creditor responds that the account is not joint, the agency will remove the item in question.

4

Examine the credit report results that are returned to you. You should receive the updated credit report within 40 days of mailing your dispute.

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How to Get Help Paying Medical Bills Debt

You can get help paying medical bills debt from a variety of sources. Whether due to a catastrophic illness or loss of a job, there are ways to find relief from medical bills.

Instructions

1

SCRUTINIZE HOSPITAL CHARGES: Did you know that 80% of hospital bills are wrong? That is an amazing statistic. From overcharges for items used or unused but billed for, to charges for services that never took place, hospital bills are full of errors. Never just pay the bill. Always look it over carefully, and if the hospital only sent you a summary, ask for a copy of the full details of services rendered. Dispute any errors you find.

2

GET MEDICAL BILL CLAIMS ASSISTANCE: If you have a very large and complicated bill to sort through, hire the help of a professional. A Claims Assistant Professional, or CAP, can help you find errors in your bill, help you dispute the charges with the hospital, and help getting the insurance company to cover costs they are refusing to pay. The Alliance of Claims Assistant Professionals can assist you in finding a CAP near you. A CAP will charge for their services, but they can save you thousands on your bill.

3

INQUIRE ABOUT HOSPITAL DEBT PROGRAMS: Most hospitals have debt programs that can assist you in coming up with a plan to reduce your bill. Sometimes you can get your bill reduced by up to 25%, just for asking for help. They will work with you to come up with a plan for making payments that you can afford.

4

APPLY FOR GOVERNMENT ASSISTANCE: Many states and counties offer some help with medical bills debt. Check with the hospital billing or social services department. They can help you find out if you meet eligibility requirements.

5

CONNECT WITH CHARITIES: If you have a certain illness or condition, and there is a non-profit or charitable organization dedicated to it, you may be able to get help paying medical bill debt related to that illness. For instance, if you have cancer, you can find many such organizations on the National Cancer Institutes website where you can get information and financial assistance.

6

HIRE DEBT RELIEF AGENCIES: There are many agencies who would love to help you with paying medical bills debt. For a fee, they will help you reduce the amount you owe and set up payment plans that can get you out of debt. They will negotiate with the hospital or doctors to get a plan that you can live with. The cost you pay for the fee is usually worth it for the amount of money you will save on your bill.

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How to Manage Settlement Risks

Settling a past due or delinquent account allows you to clear outstanding debt at a reduced rate. A debt settlement can adversely affect your credit rating and leave you susceptible to lawsuits if the settlement is not properly documented and followed as agreed upon by both parties. By managing the terms of your debt settlement agreement properly, you can be sure you and your credit report are protected against incorrect information.

Instructions

1

Prevent a negative or derogatory report on your credit rating. Ask the creditor to report the settlement as "paid in full." A "settled" or "settlement" report can adversely affect your credit rating.

2

Request a settlement agreement in writing. A written agreement prevents a creditor from collecting more than the agreed amount in court. Include the dollar amount at which the creditor agrees to settle the debt, the settlement due date and the date by which the creditor must report the debt as "paid in full."

3

Add a personal statement to your credit reports. Include the date by which the creditor must report the account as "paid in full." This statement will notify creditors of the account's status during the interim period.

4

Manage your credit rating. Purchase a copy of your credit report from each of the three national credit reporting bureaus. Don't assume your creditor will update each report at the same time, so follow up with each bureau within one to two months of the creditor's deadline to ensure all three of your reports are accurate.

5

Retain original billing statements along with a copy of your settlement check(s) and your original settlement agreement. Check the statue of limitations for debt collection in your state. Maintain your records until this period expires.

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Fast-track Method to Get Out of Debt

According to Bankrate.com, the average household debt in the United States is $14,500, as of 2011. If you are simply making the minimum payment on your credit cards, it can take years to pay off those debts. Spending $1,000 on a credit card takes an average of 22 years to pay off. If you have an excessive amount of credit card debt, you can reduce this debt faster using the fast-track method.

Review

Before solving your debt problem, get the facts down on paper. Many people don't realize the extent of their debt until they list all of it. Make a list of all the credit cards you hold with the name of the credit card company and its telephone number and address. List the amount you owe for each card, the interest rate, balance outstanding and minimum required payment amount.

Pay by Cash

A typical credit card purchase, says Bankrate.com, costs 12 percent more than a purchase made in cash. Stop using your card and piling up additional debt. Make purchases with cash or by debit card. This will increase your awareness of the money you are spending and make you more careful about your purchases.

Ask for a Lower Rate

Call all of your credit card companies and tell them you are considering paying off and transferring the balance to another credit card company that is offering you a lower interest rate. Simply asking for a lower rate often gets you a reduction since companies don't want to lose profitable customers.

Payment Priorities

Continue paying the minimum amount due on each card so that you will not incur additional fees such as late payment charges. Focus on paying off your small debts first. Start with the smallest amount and, when that card is paid off, go the next smallest. As you pay off one card balance, add the monthly payment amount you were paying on that card to the monthly payment of the card with the next lowest balance. For example, if your smallest credit card balance payment required a $50 minimum payment and you paid that off, add that monthly payment to the minimum payment you were making on the next lowest credit card balance. This approach will speed the rate you will pay off all of your debt.

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Difference Between Debt Consolidation & Debt

When people decide to dig themselves out of debt, they often consider using debt consolidation to reach financial freedom faster. However, debt consolidation actually ends up adding to debt, so it's vital to remain 100 percent committed to paying off your debt and keeping it paid off if you decide to use consolidation. Otherwise, you could end up even further in the red.

Debt

In simple terms, any money you owe is debt. You may have credit card debt, or debt in the form of a mortgage, vehicle loans or student loans, for example. The amount of debt you carry accounts for roughly one-third of your overall credit score. If you're carrying high balances in relationship to your credit limits, you're hurting your credit score.

Debt Consolidation

Debt consolidation is a method that people use in hopes of combating their debt faster. Individuals have a range of debt consolidation options to choose from, including debt consolidation loans, home equity lines of credit and 0 percent interest rate credit cards. These methods all fall under the term "debt consolidation" because you can gather up multiple debts under each so that you only have to make one monthly payment rather than multiple payments. Although debt consolidation is a tool to combat debt, it is also another type of debt.

Warnings

Since debt consolidation actually adds to your debt, it may be a dangerous strategy if you have problems with overspending. Whichever debt consolidation method you choose, it will wipe out the balances on the debts that you consolidate. However, debt consolidation is like fighting fire with fire. According to credit union manager Chris Viale, 70 percent of those who use debt consolidation end up with the same or more debt within two years.

Considerations

You may find more success paying off your debt by requesting lower interest rates on your credit cards and then following through with a payment strategy than by utilizing debt consolidation. With a home equity loan, you could lose your house if you fail to pay. With a 0 percent interest credit card, the introductory rate comes to an end and you will have to pay interest on the remaining debt. And with a debt consolidation loan, you may not qualify for the ultra-low advertised interest rates. By negotiating lower interest rates and either paying off the card with the lowest balance or the highest interest rate first, then moving through the cards progressively, you will attack your debt without being at risk of falling deeper into debt.

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Tips to Help Relieve Debt

When you are looking for debt relief, knowing you available options may save you time and money. Programs such as credit counseling and debt management plans help with negotiating a resolution. Budgeting is an important part of debt relief. According to the Federal Trade Commission, the first step in taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend.

Credit counseling

Credit counseling and debt relief services are an option if you have trouble maintaining your budget or establishing repayment plans with your creditor. Nonprofit credit counseling organizations extends relief services to individuals with low-to-moderate credit problems. Although these organizations are typically nonprofits, it doesn't mean they won't charge. Ask your representative about any fees associated with their services.

Debt Management Plan

Debt management plans are not consider credit counseling, according to the Federal Trade Commission. DMPs are designed for individuals with moderate-to-severe credit problems. A DMP is established by setting you up with a private bank account for regular deposits; once your account reaches a certain level, professionals negotiate on your behalf in an attempt to satisfy your debt. A successful debt management plan takes about 48 months.

Budgeting Software

Creating and sticking to a budget is a reliable way to avoid debt problems. Personal money management software helps individuals who do not have a lot of debt problems, but need to get their financial situation in order. Software solutions show you a picture of your spending habits and problem areas within your finances. According to the Federal Trade Commission, the use of budgeting software helps you maintain a budget.

Bankruptcy

Bankruptcy is often considered the last option for relieving debt. There are essentially two types of personal bankruptcy: Chapter 13 and Chapter 7. Both types of bankruptcy may get rid of unsecured debts, according to the Federal Trade Commission. If you are considering bankruptcy, you must file with a federal bankruptcy court, and could cost you hundreds of dollars. Bankruptcy is a long and tedious process, but resolves certain financial problems such as repossessions, utility shut-offs, foreclosures and debt collection agencies.

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Can Self Employment Income Be Garnisheed for a Collection in Colorado?

In most cases, getting behind on your credit card or installment loan payments results in phone calls and letters from your creditors or collection agencies. However, if you do not work out an agreement to catch up on your debt payments, a creditor may take steps to garnishee your earnings. Garnishment is the process of taking a portion of your wages out of your paycheck to apply toward your debt. Colorado permits garnishment of both traditional employer wages and self-employment earnings.

Procedure

A creditor seeking garnishment of self-employment income must first obtain a legal judgment against you for the debt you owe. It files a lawsuit in the county where you live, and if you cannot show you already paid the debt or raise another valid defense, the court typically grants a judgment in the creditor's favor. After the creditor has won a judgment, it may apply for a writ of garnishment, which allows it to take part of your earnings.

Finding Your Earnings

Judgment creditors typically have little difficulty finding out where a traditional employee works for the purpose of carrying out garnishment proceedings. However, the process of finding a self-employed debtor's income sources can be difficult, particularly if the person works on a freelance basis. To streamline the process and keep you from hiding income, a judgment creditor may apply to the court for a debtor examination under Rule 69 of the Colorado Civil Code. In a debtor examination, you must appear in court with documentation of your earnings and assets, and answer financial questions posed by the creditor.

Garnishment Limits

Colorado follows federal law regarding the amounts a judgment creditor can garnishee from your earnings, whether derived from traditional employment or self-employment. A creditor can only take 25 percent of your earnings after taxes. The "after tax" provision can be a disadvantage for a self-employed debtor -- since self-employment income is typically not taxed up front, a creditor can take 25 percent of your entire earnings, even though you will have to pay taxes on garnisheed earnings at the end of the tax period.

Time Limits

Under Colorado law, a judgment creditor can garnishee your earnings for six years after the date of judgment. However, before the expiration of the six-year period, the creditor may apply to the court for a renewal of the judgment if you have not satisfied the debt. A renewal gives the creditor an additional six years to garnishee your self-employment earnings.

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How to Freeze Credit Report Information in Virginia

Consumers residing in Virginia can request a freeze on their credit reports. The freeze prevents creditors from pulling their credit file. This is useful for those concerned with identity theft, or who have been victims of identity and credit fraud. Contacting the three major credit bureaus (Experian, Equifax and Trans Union) and requesting a credit report freeze will significantly reduce such risk. You can request a temporary or permanent freeze and also temporarily or permanently remove a freeze.

Instructions

How to Freeze Credit Report Information in Virginia

1

Contact the major credit bureaus or reporting agencies. The three major credit bureaus are Experian, Equifax and Trans Union. You can contact them by phone, mail or company website. Tell them you want to request a security freeze on your credit report. You will need to provide personal information such as your Social Security number, driver's license number, date of birth, current address and previous address from the past two years. There is a $10 charge per credit bureau to request a security freeze. You will need to decide whether you want the credit report freeze to be permanent or temporary.

2

Provide information regarding identity theft. If you have suffered credit or identity fraud, you can request a security freeze for free. You will need to provide a copy of a police report regarding the fraud incident in order to receive the security freeze for free.

3

Receive confirmation. The credit bureaus are required to provide you with a confirmation notice once a security freeze has been added. If you do not receive a confirmation from all three credit bureaus (Experian, Equifax and Trans Union), re-contact them and tell them you have not received the security freeze confirmation. Make sure they send the confirmation to you in writing for proof it has been executed.

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Can Unpaid Medical Bills Hurt Your Credit?

If you do not have insurance or your insurance does not completely cover a hospital visit or expensive treatment plan, you could end up with unexpected medical bills that you cannot afford to pay. Unfortunately, unpaid medical debt that ends up on your credit report can severely damage your credit rating--leaving you ineligible for loans and lines of credit you apply for in the future.

Collection Accounts

Hospitals and doctors offices do not directly report to the credit bureaus. After all attempts to procure payment from you fail, however, your medical provider will sell the unpaid account to a collection agency.

Collection agencies report medical debts to the credit bureaus as collection accounts. Collection accounts are derogatory entries within your credit record. Provided the collection account in question exceeds $100, it will have a negative effect on your credit scores.

Reporting Period

Medical collections are subject to a limited reporting period. Under the Fair Credit Reporting Act, a collection account can only remain a part of your credit file for seven years from the date the debt was first classified as 180 days past due. Thus, the credit bureaus must remove all damaging medical collections from your credit report seven and a half years from the date the debt was originally due.

Credit Damage

Although an unpaid medical bill will damage your credit rating if it ends up with a collection agency, the degree to which each debtor's credit scores will suffer varies considerably. When calculating credit scores, the credit bureaus use a mathematical formula that has never been publicly released. Aspects of the formula, however, are public knowledge. For example, because recent debts carry greater weight within the formula, the more recently a medical collection was inserted into your credit file, the lower your credit score will be.

Paying Medical Bills

If you cannot pay off your medical debt in full, you have the option of negotiating a payment plan with your medical care provider. Through a payment plan, you can pay off the debt you owe via periodic payments over time. This helps you satisfy your debt and protects your good credit rating--since a creditor that receives regular payments has no incentive to turn your account over to a collection agency.

Unfortunately, once your medical debt results in a collection account that subsequently appears within your credit record, paying off the debt does not improve your credit score or result in the account's removal from your report.

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Customized Debt Management Plan

The phrase "debt management" has different meanings for everyone, but it is necessary when you either have a small or fixed income or are trying to get out of debt. To formulate your customized debt-management program, you need to understand basic money-management ideas and then tailor those rules and ideas to your particular situation.

Credit Cards

Credit cards are the primary reason that many people get into and stay in debt. You will need to adopt a different attitude toward your credit cards. Some people may need to eliminate them from their lives forever. Others may simply need to stop using their credit cards until they are paid off and then only use them as a replacement for cash and pay off the entire bill at the end of each cycle. Get familiar with the terms of all your credit cards, and know their limits, fees, interest rates and due dates.

Paying Bills

The best strategy for paying off credit cards and other interest-accruing bills is to pay as much as you can toward the balances on the cards and bills with higher interest rates first without skipping payments on your other bills.

Elimination

You must eliminate as many expenses as possible, which means you will have to do without some things until you get rid of your debt. Determine which expenses you know you can live without, and cancel those services. Pare down or eliminate every expense you have unless it is for food, bills you already owe, housing, clothing or other basic essentials. Morning coffee from a drive-through and 300 digital-cable channels are not necessities.

Budget

Develop a realistic budget that you can live with. Add up all your income sources. Write down all your possible expenses, including seasonal expenses. Figure out how much you must pay out each month and how much you take in each month. You must balance your budget, or you will get into debt again. Once you are out of debt, you should continue to live on a budget.

Customize

Customize the previous rules to fit your situation. If you are a single mom, you may need to eliminate some of your entertainment budget and spend more time with your kids at free activities, such as story time at the library. If you are working with a large family budget, making a choice as simple as eliminating restaurant meals may seriously cut into your debt. Consult each member of your family to help figure out exactly where your debt issues are coming from and what each person is willing to do to help reduce the debt.

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How to Find a Reputable Credit Counseling Service in Your State

Credit scams tend to abound these days, and unscrupulous credit counseling services can rip off unsuspecting consumers-especially since consumer debt management is a highly profitable business. However, there are credit counseling services in your state with untainted reputations who offer high-quality debt management services for FREE or at reasonable prices. These tips will help you find a reputable credit counseling service in your area.

Instructions

1

Check out the National Foundation for Credit Counseling Services (NFCCS) website to see which of its members have offices in your state and within 50 miles of your zip code. NFCCS is a non-profit organization that provides detailed information on credit counseling and has a list of approved member agencies that offer solid debt management advice and assistance (see resources below).

2

The U.S. Department of Justice maintains a list of certified consumer credit counseling agencies as part of its education process for those who are applying for bankruptcy. This list is updated regularly and is categorized by state (see resources below for address). You can use this list to find an approved credit counseling service in your area even if you are not filing for bankruptcy.

3

Check to see if any non-profit agency you select is a member of The Association of Independent Consumer Credit Counseling Agencies (AICCCA). This national organization sets industry standards and provides compliance oversight for its members (see resources below).

4

ALWAYS check to see if the credit counseling service you select is accredited by the Better Business Bureau (BBB). The BBB provides standards and best practices for its member businesses that demonstrate how they should treat the public in a fair and honest manner.

5

Choose three to five agencies to evaluate for final selection. Prepare a list of questions to ask in order to narrow your search. You will want to get answers to questions about fees and timing of payments, online access, experience of credit counselors, the amount of information you will have to prepare, and anything else you would like to know about the credit counseling process.

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Am I Responsible for My Spouse's Credit Card Debt?

Spouses with irresponsible spending habits or poor money management skills not only cause stress in a marriage but may also impact your ability to obtain loans, qualify for rentals and even to be hired for certain jobs. Maintaining separate accounts generally keeps your debts separate; however, in some instances collections officers may still get in touch with you over debts that belong solely to your spouse.

Type of Account

If you have kept your finances separate, you are generally liable only for your own accounts. Your credit is impacted only by the debt that you accrue on accounts in your name. Therefore, you are responsible for accounts that you and your spouse own jointly. Both parties are equally accountable for the debt on a joint account, so if your spouse refuses to make payments on the account and it goes into default status, collectors may contact you.

Community Property States

In community property states, you may be held accountable for your spouse's debt even if you have separate accounts. The idea is that you have equal rights to the income you bring in jointly and must therefore share responsibility for each other's debts. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington. The state of Wisconsin also practices community property rules under the Uniform Marital Property Act.

Considerations

If debt collectors begin to hassle you regarding debts that belong solely to your spouse, you may take action to prevent them from contacting you. Get in touch with the Federal Trade Commission or your state attorney general to report the collection agency in question. Also, order your credit report from the Annual Credit Report website and review it to make sure that you are not listed as a joint owner of any of the accounts that should only be in your spouse's name.

Closing Joint Accounts

It is much easier to open a joint credit card account than to close one, simply because the account must be paid off to close it. If you and your spouse no longer want to have any joint accounts, you must pay off the full balance of the joint account. The Federal Trade Commission explains that either account holder may close the account, however, the creditor is not required to turn the joint account into individual accounts.

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How to Repay Debt

When you have outstanding debt there are several ways to go about repaying it. The way you pay your debt will determine the shape of your credit score and it will establish how long you will be in debt. Establishing an effective and efficient repayment plan will save you money in terms of the amount of finance charges you receive on a regular basis. Some forms of credit don't have clear cut repayment plans. In other words you don't know when the debt will be paid off.

Instructions

1

Determine how much debt and how many creditors you have. Once you have all of your creditors listed on a single page you can determine how you will repay them. List the creditors from smallest balance to largest, and each monthly payment as well as the interest rate should be listed as well. When you have all of the information for your debts you can decide how you will pay. You may decide to pay off accounts based on the various categories such as balance owed, interest or monthly payment. Calculate which category works best for you. Sometimes you may want to eliminate the account with the largest monthly payment or the highest interest rate. One method is starting with the lowest balance owed first.

2

Pay off your debt by balance owed. Start paying your debt based on the smallest balance owed. When you have paid off your first balance you feel a sense of accomplishment. You can mark this balance off your sheet and you get the feeling that you are making immediate progress. This form of payment has a psychological advantage.

3

Increase your payments. When you have paid off a debt, add the monthly payment to the payment for the next credit card account. For example if your monthly payment was $20 for an account which you just paid off you would now apply the $20 to the next account balance plus the payment already being paid. Continue this process until all of your debts are paid. Always pay as much as you can. Never limit yourself to the minimum payment. This process saves you money in finance charges.

4

Apply bonuses and other income to your debt. If you receive a tax refund, or bonus or incentive or even work overtime, take that money and apply it to your debt. This will help reduce your debt a lot faster and move you quickly towards a financial goal of being debt free.

5

Consolidate your balances. Look for balances that have high rates of interest and try to consolidate them with a lower interest rate. There will be a balance transfer fee but you should be able to save money in finance charges by combining your debt.

6

Pay all debts on time. When you pay on time you avoid late fees and you help your credit score. Approximately 30 percent credit score is your pay history. An on-time payment history allows you to receive lower rates of interest in the future.

7

Pay your debts online. When you pay online you save time and postage stamps. Payments are posted the same day, in many cases, to your account. There is no delay from mail time. Make payments twice per month. When you pay your debts twice a month you pay them off faster and save money with finance charges. Always pay your entire balance when your statement is received if possible.

Use a credit card calculator. If you have a large credit card balance key in the information such as balance, interest rate and the number of months you would like to take to pay the debt off. This gives you peace of mind knowing that you have pinpointed a specific target date.

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Help With Funeral Bills

Help with funeral bills may be available from local charities in your community and possibly from local governments. However, family members are usually expected to pay for funeral costs as they tap into savings accounts or the assets of the deceased, such as a life insurance policy. Help from charities and local governments is generally available only when the deceased left behind little of value and family members simply cannot afford to help.

Veterans Affairs

Qualified military veterans may be eligible for some free funeral benefits through the U.S. Department of Veteran Affairs. Spouses and dependents of a veteran may also be eligible for burial benefits. The agency will not pay for any services performed by a funeral home but will provide a gravesite and marker. The family must pay for the casket and the preparation of the body for the burial. Inquire about benefits by calling 800-827-1000.

Social Services

Social services departments run by counties can offer information about local government resources for help with funeral bills. However, county payments for funeral expenses are almost always reserved for special cases, such as a body that was discovered by police and never identified or claimed. A local organization such as the United Way or Salvation Army can provide the telephone number for the nearest social services office.

Local Charities

The United Way, Urban League and other charities can also offer information about private sources of help with funeral bills. Charitable organizations know about churches and private donors willing to help with funeral bills when there are no known family members or the family cannot afford to contribute.

Social Security

The Social Security Administration does not make direct payments for funerals. However, a surviving child or spouse may be eligible for a one-time payment of $255 following the death of a person who was receiving Social Security benefits. That won't pay for a funeral but could act as a start. Also, Social Security expressly forbids families from continuing to receive the deceased's Social Security paychecks, even if the intent is to use the money to help pay for funeral costs. Social Security reports that monthly benefits end immediately upon a person's death. Money received from Social Security in the month of a person's death are required to be returned by family members. No other federal agencies pay funeral benefits. Contact Social Security at 800-772-1213.

Funeral Homes

Many funeral homes offer financing through third-party lenders, but the interest rates can be high. An installment loan through a bank or credit union will almost always offer a better interest rate.

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How to Get a Scholarship at Ball State

Ball State University is located in Muncie, Indiana. Classified as a research university by the Carnegie Classification of Institutions of Higher Education, Ball State's tuition at the time of publication is $7,912 per year for in-state students and triple that, $21,892, for out-of-state students. Those applicants who are accepted to study at Ball State University may wish to obtain scholarships that will greatly reduce, or cover completely, the school's tuition fees.

Instructions

1

Fill out a FAFSA application once per year. Use Ball State Universitys Federal School Code on the form to ensure any scholarships the school is offering are considered. The code is 001786. You will also be notified if you meet the criteria for any of the state or federal grants and scholarships.

2

Search through Ball State University's free Scholarship Search page. Ball State provides links to Petersons Scholarship Search, the College Toolkit, the Scholarship Hunter, the College Board and ScholarshipHelp.org. Apply for any scholarships you find that fit your circumstances. Many of these scholarships have online applications.

3

Visit Ball State University's library to search for foundations that have scholarships you can apply for. The school librarian should also be able to help you locate these foundations if you have any trouble finding them.

4

Submit any scholarships you get to Ball State University's Bursar's Office. Any scholarship checks over $500 will be equally divided between the two semesters that make up the school year. All amounts under $500 will be credited toward the semester they were turned in.

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Can Leasing an Apartment Help Increase Your Credit Score?

When a person takes out a lease on an apartment, he signs a contract agreeing to pay the landlord of the property a certain amount of money over a certain period of time in exchange for use of the property. While this contract may resemble a loan in some ways, tenants generally pay for a lease upfront and do not receive use of the apartment on credit. Renting an apartment generally does not increase a person's credit score.

Credit Scores

Credit scores are computed through information related to your lending history. If you are late paying back loans or incur large debts, your score will go down. If you pay back your loans on time, your score will go up. If you take out a lease on an apartment, this information will not be reported to a credit reporting agency, as it is not a loan. Therefore, this leasing will not increase your credit score.

Credit Checks

Often, before a landlord will lease a residence to a prospective tenant, the landlord will ask to check the tenant's credit history to get a sense of whether the tenant is financially viable and whether he pays his debts on time. It is a common misconception that a credit check run by a landlord will hurt your score. In fact, only credit checks by lenders to whom you have inquired about rates will hurt your score, and then only by a few points.

Delinquent Payments

Although a lease is generally not reported to a credit reporting agency, it may be if you fall behind in payments. Generally, tenants are required to pay a lease in advance. However, if you fall behind in payments and continue to occupy the property, the landlord may attempt to collect payment through a collection agency. When this happens, this collection account is noted on your credit report. Such an account will always hurt your score.

Credit Cards

The only way that leasing an apartment could have a positive effect on your credit score would be if you were to pay for the lease through a line of credit, such as a credit card, and then pay off this loan on time. A consistent history of paying back loans on time will result in a higher credit rating, as credit rating agencies take this consistency as a sign that you are credit worthy.

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Is a Spouse's Property Exempt From Debtor Judgment?

Nine of the 50 states are so-called community property states, which treat almost everything acquired during a marriage as belonging to both spouses. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Spouses in these states are thus most vulnerable to debtor judgments against the other spouse. The other 41 states are called common law or equitable distribution states, where the rights of each spouse are protected by law, though Alaska makes exceptions for prenuptial agreements.

Wages

If you live in one of the nine community property states, a creditor with a judgment against your spouse can usually garnish your wages to collect on the debt, even if the judgment arises from a debt in her name alone. This is because your wages are also her property under the laws of these states. However, some community property states, such as California, require the creditor to get a special court order before it can garnish a non-debtor spouse's wages. This gives you an opportunity to try to fight the garnishment, though you might not be successful. In the 41 non-community property states, also called common law or equitable distribution states, the wages of a non-debtor spouse are usually safe.

Tangible Property

Spouses often purchase significant items of tangible property in joint names, such as real estate or automobiles. Even in common law states, a creditor with a judgment against one spouse can usually use that judgment to place a lien against property owned in this way, especially if your spouse incurred the debt in order to benefit the entire family. However, property you own in your name alone is usually out of reach of your spouse's creditors. This isn't true in community property states, however, where everything you acquire during the marriage is joint property, even if it's in your name alone.

Marital vs. Premarital Property

Even in community property states, the law allows that some property is yours alone and not a community asset, and this property is usually safe from your spouse's creditors. For example, if you own a vintage automobile that you purchased before you got married, this is your separate property and your spouse's creditors can't impose a judgment lien against it. Inheritances are exempt, even if you receive them during the marriage, as long as the assets remain in your name alone.

Tips

No matter where you live, it's usually illegal to transfer assets out of your name to try to avoid a creditor's reach. In common law states, you cannot transfer assets out of your name or joint names and into your spouse's sole name to protect them from your separate debt. However, you have the right to do this before you get married, even in community property states. Prenuptial agreements can legally determine who is responsible for paying debts incurred in one spouse's name, and when done correctly, they trump state law. In Alaska, you can draft a prenuptial agreement to have the opposite effect. Normally a common law state, Alaska recognizes an asset as community property if your prenuptial or other agreement states that you want it to be treated as such.

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Do I Have to Pay My Mother's Debt When She Dies?

When a person dies leaving debt, that debt is often paid --- either partially, or in full --- depending on the amount of the deceased person's remaining assets. Typically, a child is not personally liable for their deceased parent's debts and is not expected to pay any debts with their own money. Usually, the only impact a deceased's parent's debt has on children is a reduction in the amount children inherit.

Probate

If your mother's estate is large enough to be probated, her debts will be paid during the process. In probate, the executor --- either someone the court appoints, or the person named in your mother's will --- has a duty to notify all of her creditors. Once this occurs, her creditors have a certain amount of time in which to file a claim. If the probate court approves the claim, the executor must pay the claim using money from your mother's estate assets.

No Probate

Often, a deceased person's estate won't go through probate if the remaining assets are insignificant. If your mother's estate is not being probated, whoever is handling her estate (i.e., the executor) should pay her debts. However, if there's not enough estate assets to pay her creditors, her creditors simply don't get paid. Because these debts were hers, you are not personally responsible for paying them with your own money. The same is true even if her estate is probated.

Executor's Duties

If you were named as the executor of your mother's estate in her will, and she left enough money to pay her creditors, you will be required to pay these debts using her remaining assets. Although you are not required to use your own money to pay her debts, the money you would otherwise receive through inheritance will be reduced because inheritance is not distributed until after debts are paid.

Medical Bills

In some states, children or other family members might be responsible for paying any remaining medical bills left by a parent, using their own money. You might be responsible for your mother's medical bills because children are considered beneficiaries of their parent's medical procedures; however, this is not true in all states. It's important to research the laws of your particular state to know whether you might be responsible for your mother's medical bills. It's also advisable to consult an attorney if your mother's creditors call you in an attempt to collect on her debt after her death.

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How to Change the Due Date on Auto Insurance

Changing the due date on your auto insurance policy is important if you are having trouble making the payment on the current date. Paying your insurance on time is extremely important, because the insurance company has the right to cancel your policy if you miss a payment. Generally, there is a grace period, but you could find yourself in a critical situation if you are involved in a car accident and you missed the due date, allowing your policy to lapse. The insurance company could say your policy was no longer valid because of the missed payment.

Instructions

1

Check your billing statement for the account number and the telephone number of your insurance agent. Or look for the general toll-free number for customer service.

2

Call your agent or the toll-free number. Tell the representative you wish to change the due date on your policy. Ask the agent for a new due date after you provide your account number and any other necessary information to identify yourself.

3

Confirm the new due date on your next billing statement and make on-time payments on your policy.

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Help for Senior Citizens With Credit Card Debt

Credit card debt for senior citizens jumped 217 percent between 1994 and 2004. Even though seniors tend to spend credit on essentials, such as food and utilities, there's little help for them that's not available to anyone else. Unlike younger people, senior citizens are more likely to have the ability to ignore the debt with few consequences.

Considerations

Seniors may be able to ignore debt because they often have no assets, such as a home, that lenders can pursue in court. If a senior is judgment proof, creditors frequently write down the debt as noncollectable. Creditors can't pursue certain assets, such as life insurance policies. Thus, it usually doesn't make sense to tap savings to pay off debts, according to Aleksandra Todorova of Smart Money. A similar option would be bankruptcy, but bankruptcy requires filing fees and, typically, legal fees for a lawyer.

Credit Counseling

Credit counselors often offer free services to the elderly. The counselor may help the senior refine his budget, which may leave enough disposable income to tackle the balance on the credit card. He may also advise the senior of the best way to eliminate the debt in case the senior can't afford the debt at all. For instance, he may suggest negotiating with creditors to settle the account for a fraction of the balance.

Government Help

The government and private charities may offer the elderly assistance to help pay for essentials, which may open up enough in a senior's budget to pay down credit card debt. For instance, nearly everyone that reaches the age of 65 qualifies for Medicare medical assistance. The Department of Housing and Urban Development may issue housing vouchers if the senior makes below a certain income.

Tip

The credit card company will probably agree to certain concessions if the senior tells the company about her problems. Even if the credit card company doesn't agree to a debt settlement, it may defer payments for a few months or reduce the interest rate on the balance. The senior can convert equity into cash with a reverse mortgage, but she risks losing her home.

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Consumer Rights for Credit Collections

Collection agencies are notorious for their strong-arm tactics in trying to collect debt. Federal law is clear, however, that debtors have the right not to be bullied by collection agencies.

Debt Collection Law

The law that governs consumer rights in debt collection is called the Fair Debt Collection Practices Act, and it covers debt a person or household might owe for car payments, health care and other consumer credit. According to the law, debt collectors cannot deceive or harass or otherwise abuse debtors while trying to collect a debt.

Prohibited Collection Tactics

Debt collectors must say who they are on the phone, and cannot call before 8 a.m. or after 9 p.m. They cannot call you at work without your permission, and cannot make repeated phone calls within a short period, lie about your debt, or threatening you with prison or other impossible punishments. If you ask them in writing to stop calling, they must stop.

What to Do

If a collection agency violates the law, document as much of their activities as you can. Some states allow consumers to tape phone calls. Then file a complaint with the Federal Trade Commission, by mail or on line. Also send a copy of your complaint to the consumer protection agency of your state, as well as the creditor on whose behalf the debt collector works. If the violations are extreme enough, you might have grounds to sue the collection agency and your creditor in small claims or another court.

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Texas Statute of Limitations on Auto Loans

If you default on an auto loan, your creditor has the right to take legal action against you, such as filing a lawsuit or repossessing the vehicle. Most states have statute of limitations laws limiting the amount of time lenders have to file a lawsuit against a debtor for an unpaid loan. In Texas, that statute of limitations is four years. Creditors may take other action against you even if the statute of limitations has expired.

Lawsuit Limitation

As of 2011, Texas law allows creditors to sue debtors for defaulting on the debt for up to four years after the default occurs. Note that the statute of limitations begins on the date of default, not the date the loan was taken out. Thus, if you default on your auto loan two years after taking it out, your lender has four years to sue you to recover the debt, and the two years of payments you have made do not count towards the statute of limitations.

Contract Law

Auto loans are considered contracts under Texas law; thus, the statute of limitations for contract debts applies. In Texas' case, this is insignificant in terms of statute of limitations law because Texas enforces the same statute of limitations of four years regardless of the type of debt as of 2011. However, if Texas law were to change so that contract debts had a different statute of limitations than other types of debt, Texas courts would use the contract debt statute of limitations.

Conflict of Contracts

If a debtor purchases a vehicle in a different state and fails to make payments after moving to Texas, the Texas courts must determine which state's statute of limitations applies. Bills.com states that courts use the "significant relationship" test to determine which statute of limitations to follow. Texas courts must use the statute of limitations for whichever state has more of a relationship to the debt. The court must look at where the vehicle was purchased and where the debtor made the majority of payments.

Other Remedies

Statute of limitations law refers only to the length of time a creditor has to bring a lawsuit against a debtor for failure to pay. Creditors can still take other collection action against a debtor who has not paid an auto loan even after the statute of limitations expires. For example, the auto lender can still report negative information to the credit bureaus or contact the debtor regarding repayment. Auto loans are secured debts, so lenders can repossess the auto if the debtor defaults on his debt, and generally will do so long before the statute of limitations runs out.

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Overview of the Debt Adjustment Act

The Debt Adjustment Act is a 2003 Georgia law regulating companies offering credit counseling and renegotiation and payoff of consumer debt. It limits fees to 7.5 percent and requires annual audits, payment to creditors within 30 days and insurance covering employee dishonesty, depositor forgery and computer fraud.

Introduced by Rep. Ashe

House Bill 385 was introduced Feb. 14, 2003 by Rep. Kathy Ashe, a Democrat from Georgia's 56th District (metropolitan Atlanta), and five co-sponsors. It passed the House on March 26 and the Senate on April 25. Gov. Sonny Perdue signed it on May 30, 2003.

What The Law Does

The law limits debt adjustment company fees to 7.5 percent of what the debtor is paying monthly. So the maximum fee on a plan with a $300 monthly debt payment is $22.50. Debt adjustment company owners must be audited annually and provide the results when requested, pay creditors within 30 days of being paid by the debtor and maintain insurance against dishonesty, forgery and fraud equal to 10 percent of the average monthly receipts.

Penalties

Violation of the Debt Adjustment Act is a misdemeanor punishable at least a $50,000 fine and repayment to the debtor of all "fees, charges or contributions," plus $5,000. It is also a violation of the state's Fair Business Practices Act of 1975. The legislation authorizes criminal prosecution but contains no specific jail sentences.

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Does an Employer Receive Your Credit Report or Credit Score?

Employers cannot check credit reports or obtain credit scores without written authorization from the employee. However, authorization is usually granted during the hiring process and in most states allows the company to continue making periodic credit checks without further permission. Some companies use information on credit reports to gauge an employee's level of responsibility as the employee is being considered for key promotions.

Credit Scores

Poor credit scores can hinder a job search, although not all companies check credit records. Credit scores are three-digit numbers ranging from 350 to 850. Scores of 720 or higher represent excellent credit. Scores below 620 indicate credit problems such as excessive debt or late payments on several accounts. Companies checking credit reports may focus little on scores and instead scan the report for major negative information such as court judgments or bankruptcies.

Considerations

The Fair Credit Reporting Act allows employers to credit information for considering employees for transfers, retention and promotions. Some companies may conduct periodic credit checks to identify employees with high debt-to-salary ratios, according to Privacy Rights Clearinghouse. Some employers may assume that employees with excessive debt or financial problems may be more prone to theft than other employees.

Discretion

Generally, employers conduct credit checks only for new hires or current employees being considered for key positions in sensitive roles handling money or budgets. Some states have specific laws prohibiting employers or potential employers from conducting credit checks unless there is a reasonable connection to credit backgrounds and the type of job being considered. Police officers susceptible to being offered bribes are likely to receive regular credit checks, but there may be little need to periodically review the credit report of an elementary school teacher, for example.

Preparation

Prospective or current employees concerned about background checks should examine their credit reports periodically. Credit reports are available for free through AnnualCreditReport.com, a website endorsed by the Federal Trade Commission. Visit the website to order a credit report and then follow instructions on the report to order a credit score separately, for a fee.

Disclosure

Employees not hired because of information on their credit report must be told so by the employer, according to the Federal Trade Commission. The disclosure is similar to notices credit card companies and other creditors send when turning down requests for credit. Most employers get around this requirement by not stating any reason for not hiring a candidate. Typically, employers provide only generic feedback for candidates not selected for a position, with many companies offering no information at all.

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How to Get a Government Land Grant

If you're the owner, administrator or manager of a type of organization that gives back to the community, chances are you can get a government land grant. This is when the government gives you a portion of land on which to operate your organization, school or program for the community. One of the most approved types of land grant applications include those that are for schools or organizations that provide a service to the community which is not already there. For instance, many schools have received grants for serving the minority community. Below, you will find some more information on how to get a government land grant.

Instructions

1

Estimated costs. If you're planning on building a school or foundation on the land, you should have an estimation of costs available. Depending upon what you plan to build, your estimation should be quite in-depth. You should include costs of building, materials, labor, supplies, running the building...etc. This way, the organization or the government knows exactly what you're getting into with your project. Often times, land grant applications can be very strict and it's important to include all relevant information.

2

Writing the proposal. The proposal is very important. This is basically where you plead your case to the grantor and it has a large affect on whether or not you get chosen to receive the land grant. You may want to include the reason you are seeking the land, what you plan to do with the land, how it would help your community, the values and advantages of your plan and anything else that you find relevant. For this step of the application, many individuals hire a professional grant writer. This is someone who writes grant proposals for a living and who is very familiar with the types of things grantors look for when reading over grant applications. If you do decide to hire a professional grant writer, be sure to fill them in on each and every detail of what you're planning and why you're doing it. This will help them to write the proposal more effectively - increasing your chances of being chosen.

3

Including all relevant information. Pay special attention to the details of the grant application or what is to be included. It's really important that you include all information that the grantor has asked for. By ensuring that everything the grantor has required is included in the grant application, you will make things go faster and you will have a better chance of receiving the grant. You may need to include personal information such as income or similar information.

4

Receiving a grant for land from the government is possible, but it's important that your application is filled out perfectly. By ensuring that you have done this, you will have a better chance of being chosen for the government land grant. Good luck.

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How to Explain the Collections on Your Credit

Although many consumers realize that lenders and creditors review their credit records before granting them new lines of credit and loans, some do not know that insurance companies, landlords and even employers also pull and review credit reports. Collection accounts on your credit report signify that you did not responsibly pay off your debts in the past and thus may not do so in the future. The Fair Credit Reporting Act (FCRA) gives you a way to explain the circumstances behind collection accounts to anyone reviewing your credit history.

Instructions

1

Pull your credit reports and review them for collection accounts. The credit-reporting bureaus (Experian, Equifax and TransUnion) do not share information with one another unless a consumer files a complaint about identity theft. Because of this, collection accounts may not appear on all three of your credit reports. The federal government gives you the right to request one free credit report each year by visiting AnnualCreditReport.com.

2

Dispute the collection accounts with the credit bureaus reporting them. The FCRA allows you to dispute collection accounts that you do not recognize or that contain incorrect information. You can file your disputes by mail, by phone or online. Credit bureaus must resolve a consumer's dispute in 30 days or less. You need to file a dispute before you can insert a consumer statement in your credit report.

3

Write a statement no longer than 100 words explaining the circumstances surrounding your collection accounts.

4

Visit the website of each credit bureau and submit your consumer statement online. If you are not comfortable submitting your statement online, you can call the credit bureaus and file your consumer statement directly with a customer service representative, who will then add the statement to your credit report.

5

Explain the circumstances surrounding your diminished credit score to any business that you know plans to pull only your credit score. Your 100-word consumer statement is not visible to individuals and businesses that pull only your credit score rather than your full credit history.

6

Write a letter explaining your collection accounts and why future collection accounts will not occur. Submit this letter to any lender, creditor, landlord or employer you apply with, to place within your files. Thus, multiple individuals reviewing your credit report or scores and application history will read your letter and, you hope, take it into consideration when determining whether to approve your application.

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How to Get Help With a Credit Card Judgement With a Debt Collector?

In good or bad financial times, you may come across debt collectors. Some may harass you by calling you at odd hours of the day, swearing or yelling at you or making threats of violence to get you to pay the debt they say you owe. The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from engaging in these behaviors, threatening to harm your reputation or property, advertising the fact that you owe a debt, calling you with the intent of harassing you, not disclosing their identity or misrepresenting themselves.

Instructions

1

Tell the debt collector you do not owe the debt if you believe you do not owe money. Gather past credit card bills and payment receipts that prove you paid each month's bill on time. Keep written documentation of every call you receive from the debt collector -- date and time of each call and what was said, according to Consumer Ed.

2

Inform the debt collector that you do not want to get any more calls from him. Follow up with a Cease Communication letter, directing the debt collector to immediately stop all communications regarding the debt. Do not admit to owing anything. Include why you do not believe you owe any more money and inform the debt collector that any more communication from them violates the Fair Debt Collection Practices Act. Sign the letter and mail it, certified mail, return receipt requested, according to Community Legal Aid. Keep a copy of your letter for your records.

3

Read the information in the letter the debt collector sends to you. It should let you know who the original creditor is, the amount of the debt, language letting you know that, if you don't dispute the correctness of the debt within 30 days of the date you get the letter, the debt collector will move ahead, assuming the debt is valid. The debt collector must let you know that if you dispute all or part of the debt, he has to send you written verification that you owe the debt. He should also tell you that, if you request, he will send the name and address of the original creditor if it is different from the current creditor, according to Consumer Ed.

4

Write a letter disputing the debt (either the whole debt or a part of it). Include as much documentation proving your position as you can -- copies of receipts, money order receipts or checks and any other information that proves your point. Include a statement in your letter that you are not acknowledging that you owe money on this or any other debt, according to Consumer Ed. Mail your letter within 30 days of receiving written notice from the debt collector. Again, sign and date your letter and mail it by certified mail, return receipt requested. Keep a copy of this letter for your records.

5

Contact the Legal Aid office in your community. Depending on your income, you may qualify for help from a Legal Aid attorney to help you as you negotiate with the debt collector. Ask your attorney what your rights are regarding debt collections.

6

Call a credit counseling agency to help you with your credit card negotiation. Don't pick the first one in the phone book -- instead, check your resources and find out which agencies are listed as nonprofit and which are listed as for-profit. Check with the Better Business Bureau and the Federal Trade Commission to determine whether complaints have been filed against agencies with which you are considering working. A good credit consumer counseling agency will not charge you any up front fees. Instead, they will work with the credit card company to set up lower interest rates and get punitive fees waived. You pay the agency, which then pays the credit card company. The credit card company pays a commission to the agency. Once your agreed-upon debt is paid, you are done. Several agencies that claim to help those experiencing debt problems -- instead, they help themselves by scamming customers, making it necessary for you to do your homework.

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Can My Wages Be Garnished for My Husband's Debt?

A debt can result in a wage garnishment if the borrower does not pay according to the terms of the agreement and a court grants a judgment against the borrower. In most cases, a debt is a contract exclusive to the people who entered into it. However, there are circumstances in which a creditor can come after you as the wife of a husband behind on his debt.

Co-Signer, Co-Borrower or Guarantor?

You need to find whether you created a legal agreement to pay back the debt. If you signed up for a credit card or loan as a co-signer, co-borrower or co-applicant, then the debt is legally yours, too. The creditor can garnish your wages, even if privately you and your husband agreed that the loan was his obligation. In addition, if you signed as a guarantor of a loan or other kind of transaction, then you agreed to be legally responsible for the debt if your husband did not pay. However, if you are an authorized user of the account, you have the privileges of using the credit but none of the responsibilities for paying it back or making credit decisions. Your wages cannot be garnished if a creditor seeks a judgment on a default credit account on which you were only an authorized user.

When Did the Debt Occur?

You are not liable for any debts your husband incurred before you married him. Nor are you responsible for any debts he incurs following a divorce. What can happen is the garnishment order can attach a bank account you share with him. If your income gets deposited into that account, your money can be seized. However, banks must provide you with advance notice, and you should be aware of when a court renders a judgment against your husband. This should give you enough time to make arrangements to protect your money or help pay the debt.

Community Property Laws

Under community property laws, the husband and the wife equally own all income and property acquired in marriage. Unfortunately, so are the debts. And if a default happens, you could get your wages garnished even if your husband is the one who always paid the bill. The states that observe community property are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Washington and Wisconsin (as well as Puerto Rico). Some tribal communities also follow community property laws. If you live in a community property state, you can create a postnuptial agreement to treat your debts as separate. Other states go by what's known as "equitable distribution." That means a judge can decide who's responsible for the debt. Just remember a judge's divorce case ruling can't supersede the credit contract. So if a judge orders your husband to pay a debt of yours and he doesn't, you still have to pay that creditor. Your recourse would be taking him back to court to enforce the judge's order.

Doctrine of Necessaries

A little-known law borrowed from British common law says that it's a husband's duty to provide for any necessary expenses of his wife and children. A person selling something to you as a wife can then charge your husband or hold him responsible for making payment on the transaction. The condition is that whatever the transaction, it must be critical to your sustenance. In practice today, the law is gender-neutral. It often plays out in cases where a husband gets sick and dies before his medical bills are paid, and the hospital sues the wife. Or if spouses separate for a time and one of them doesn't pay utility bills, for instance. Seek the advice of an attorney to defend yourself in such a case to avoid garnishment.

Be Pre-emptive

If you know your husband is having a difficult time paying bills, protect yourself from becoming liable for his debts by working out a new household budget so you can make payment arrangements. In addition, if bill collectors begin calling about your husband's debts, it's best not to speak with them about it. They are especially trained in making people think they are responsible for debts when they are not. Instead, work things out so the bills get paid and you can avoid a judgment altogether.

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Can Credit Card Companies Take My Home If I Quit Paying Them?

Credit card debt is usually unsecured debt; there is no collateral that can be seized by a credit card company in lieu of payment. However, if a credit card company wins a lawsuit against a debtor, they may place a lien on his home.

Winning a Judgment

Credit card companies cannot seize any assets without first winning a court judgment. State and federal law restricts the way in which a judgment creditor can seize assets, but creditors are typically restricted to garnishing a debtor's bank account, wages and placing a lien on a debtor's home.

Lien

While a credit card company cannot seize a house, it can place a lien on it. A lien is filed with the local land records office. If the home is sold or refinanced, any proceeds from the sale will be given to creditors who hold liens on the property to satisfy the debt.

Bankruptcy

When a debtor who files for Chapter 7 bankruptcy has significant equity in a home, the bankruptcy trustee may sell the home and distribute the proceeds to creditors, including credit card companies. Each state has its own "homestead exemption" that exempts a certain amount of home equity from distribution to creditors.

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How Can You Eliminate Debt?

Eliminating debt can free up your cash and allow you to save more of your money. Debt can accumulate from excessive credit card use or taking out several personal loans. Creditors charge interest rates, and if paying a high rate, it can take longer to pay down your balances. There are tricks to help you eliminate your debt faster. Establish a plan to get rid of balances, and stick with your strategy to enjoy debt-free living.

Instructions

1

Write a list to see how much you owe each of your creditors. Make a spreadsheet or write out your creditors and the amounts you owe on a paper. Include the interest rate for each debt and the minimum monthly payment.

2

Assess how you spend your money. Keep track of all your expenditures for an entire month to see where you can cut back and save money. Include recurring expenses in your budget such as housing and transportation, and then track how much you spend on extras like shopping or dining out.

3

Reduce spending. Resolve to spend less on nonessentials. Give yourself a modest spending budget for extras. Do not go over your budget. Take the savings and use this money to pay down your outstanding debt balances.

4

Increase monthly payments to creditors. Break the habit of paying only minimum payments each month. For example, if you have an extra $300 in spending cash each month, put this money towards a credit card to eliminate the debt. This amount of money can pay off a $1,500 balance in five months.

5

Eliminate some recurring monthly expenses. Cancel cable services or get rid of your house telephone service (use a cell phone instead) to save money each month and help bring down debt balances. Other services to possibly cancel include lawn services and other household maintenance plans.

6

Negotiate your interest rates. Credit card interest rates are negotiable. Ask your card companies to reduce your present interest rates in order to pay less interest each month. With higher monthly payments and fewer interest charges, you can reduce the balance quicker.

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What Is the Smartest Way to Lessen Debt & Keep Good Credit Scores?

Paying off your debt is important to keeping good credit or improving your credit. It's also important to pay off your debt so that you can be trustworthy and honorable. Paying off debt is not easy because we often take the long road to get into debt and so we must take the long road out of debt. Dealing with finances can also be emotionally draining as well as financially draining. Learning how to pay off your debt without getting further in the hole is the best investment you can make.

Paying off debt

One of the most important things in paying off debt is to be consistent. Even if it is only a small amount, you need to pay off some of what you owe and lower your debt amount at least a little every month. The more you can pay off, the better. You must keep good records of your bills and what you pay to make sure your payments are being applied correctly and that you are not charged for fees you don't deserve.

There are two methods to paying off debt: One focuses on financial sense and the other focuses on the emotional toll of debt. You can put more money into paying off your highest interest debts first, which reduces your total interest payments over time and reduces the cost of reducing your total debts to zero. Or you can put more money into eliminating the smallest bills first to gain the emotional satisfaction of getting some creditors off your list as quickly as possible. You must pay at least the minimum payments on all of your bills every month, of course, as you follow either course.

Keeping good credit

The best thing you can do to keep good credit is to pay off your bills on time. The best way to lessen debt is not only to pay off your debt smartly but to start eliminating unnecessary spending. If possible it will also help to increase your income, possibly by adding another job, even if just temporarily. If you can't afford to pay all of your bills every month no matter what you do, you should seek help from a consumer credit counseling company. Be wary however, as some credit counseling services are run by credit card companies and others may be scams. Check the history of the service and look for a nonprofit service. They may be able to negotiate better rates and possibly arrange a consolidation loan. It is better to get credit help than to keep missing bill payments.

Find a link to a reputable agency in Resources.

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Charge-Off Law

A charge-off is when a company reports an account to the Internal Revenue Service as a loss. Bad debts and uncollectible accounts are other names for charge-off accounts.

Considerations

Charge-off law dictates that companies must write accounts off as bad debts when there has not been a payment in 180 days.

Credit File

Once an account is charged off, it will remain on the credit file of the borrower for approximately seven years. If the account is paid off prior to the seven-year time frame, it still remains on the borrowers file, according to Card Report. A charge-off can decrease a borrowers chances of receiving future credit.

Collection Agency

Lenders will often forward their charge-off accounts to collection agencies for further collection activity. Collection agencies may start a series of phone calls and letters in an effort to collect the balance. The final result could be legal action.

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Reasons to Dispute Items on Your Credit

The website of the U.S. Federal Trade Commission provides information on how to get free credit reports from the three major credit-reporting companies. It's worth getting those reports and checking them for inaccurate information that could negatively impact your credit score. Not disputing such information could cause you to pay more for loans and credit cards or prevent you from getting a job.

Credit Checks

Credit-reporting companies provide information in your credit file to lenders, employers, insurers and others. That information is used to determine your creditworthiness and to evaluate how well you've managed your financial affairs. For example, a potential employer may check your credit report if you apply for a job in which you would handle financial transactions. Therefore, you should dispute any inaccurate information in your credit files that indicates you made late payments or that you exceeded a credit limit. That incorrect data could suggest to an employer that you're irresponsible when handling money matters. An MSN Money article titled "How Bad Credit Can Cost You a Job" also notes that a 2006 survey by the Society for Human Resource Management found that 43 percent of its members ran credit checks on some or all of their job applicants.

Scoring Models

Different scoring models are used to evaluate a person's creditworthiness, but they have many similarities. A Bankrate.com article titled "What is a Credit Score" notes that scoring models place more emphasis on some financial factors than others. Payment history generally receives the most attention from creditors, and it can make up as much as 35 percent of your credit score. Therefore, not disputing inaccurate account delinquencies on a credit report can lower your overall score. You also should verify that account limits are accurately listed. Thirty percent of your score can be impacted by how much of your credit lines you use. It may appear you're maxing out credit cards and lower your score if your account limits are reported to be lower than they are.

Credit History

Dispute a date pertaining to when you opened an account if it makes it appear you've had an account for a shorter time than you have. The length of time people maintain accounts in good standing can affect their credit scores. A person who doesn't have a lengthy credit history may have a more difficult time getting approved for loans and credit cards. Creditors and lenders tend to view lengthy credit histories in good standing more favorably, which often results in better loan and credit terms with lower interest rates.

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Does a Collection Agency Ever Sell a Debt Back?

When a person takes out a debt, he signs a contract that obligates him to pay back the debt under specific terms, such as at a particular rate of interest. This contract functions very much like any other debt obligation, such as a bond. In fact, this debt can be treated as a financial security by the creditor, meaning it can be sold to other parties, such as collection agencies.

Selling Debt

When a company sells a debt a collection agency, the two parties sign a contract legitimizing the transfer of the debt from one party to the other. Unless the debt contract specifically forbids the debt from being sold from one party to another, this debt can be sold as many times as its owners wish. This means that a debt sold by a creditor could, theoretically, be bought back by him later.

Collection Agencies

Collection agencies sometimes work on commission for creditors but also often choose to buy debt outright. When this happens, the collection agencies will usually only have to pay a fraction of the price that the debt entitles them to, as their ability to collect on the debt may be uncertain. Sometimes, the collection agency, rather than attempt to collect on the debt, with resell the debt to another party.

Selling Debt To A Creditor

While it doesn't happen regularly, a creditor could seek to buy back his debt from the collection agency. This could happen if the creditor has received new information indicating there is a strong likelihood the person will make good on his debt in the future. However, in order to do this, the collection agency would have to be willing to sell the debt to the creditor.

Selling Debt to the Debtor

Sometimes, a debtor will attempt to get out of debt by purchasing his own debt from a collection agency. While sometimes a collection agency will simply wish to receive payment on the debt, either in part of in full, other times the agency will agree to allow the person to buy his debt outright. At this point, the debtor would be effectively absolved of the debt, as he would only owe the money to himself.

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Tips on Negotiating Debt Settlement for Credit Cards

If you're a consumer facing mounting debts, credit card debt settlements can be a great help. Settling a credit card debt means you and the lender agree to new terms, allowing you to eliminate the debt by paying off a portion of it. These settlements are not without their downsides, so take care. Talk to a nonprofit credit counselor or a qualified attorney if you need advice about your debt problems.

Review the Situation

Most credit cards are unsecured forms of credit, meaning the creditor takes no collateral or security interest to protect itself from an unpaid debt. Always review the terms of your credit agreement so you know exactly what the agreement requires and what the terms are. Then review your financial situation, including your income and total debt obligations. You will be in a much better position to negotiate if you know what you can and can't pay before you start settlement talks.

Open Negotiation

You and your credit card company can enter into any agreement you choose, as long as you do not break any laws. You can negotiate any settlement terms you like even if they include terms that are not included in the original agreement. For example, you can agree to pay off a $5,000 debt for a $2,500 lump sum payment. You can also agree to pay off a debt in installments or even get the credit card company to completely forgive the debt.

Credit Scores

Your credit score is a number that represents how reliable a debtor you are. When you settle a credit card debt, credit card companies will typically report this settlement to the credit reporting bureaus that create the credit scores. A settlement negatively impacts your credit score even though you no longer owe the money. However, you can negotiate what the credit card company reports. Try to get the credit card company to agree to not report a settlement and instead mark the debt as paid, not settled.

Beware Debt Settlement Scams

Some organizations offer themselves up as debt settlement experts that can help consumers get out of their debt problems. While there are credit counseling organizations that can offer legitimate help, many of these organizations are not trustworthy. The Federal Trade Commission recommends that consumers chose an organization that is part of a university, a credit bureau or another nonprofit organization. Reputable companies and organizations will be able to offer free educational materials and can provide their fees up front and in writing.

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The Good & Bad About Credit Card Debt Relief

When you're up to your head in credit card debt, you may wish there was an easier way fix the problem. Maybe you saw an infomercial for a company that says it can chop your debt obligations in half, or some other great amount. As with most endeavors, there are potential benefits and drawbacks in contacting a debt relief agency to help your situation.

Good: Relief

The greatest benefit by contacting a deft relief company is the financial savings you can receive. This will allow you to pay your credit card debts off sooner. Once you are free from your debts, you can use the opportunity to rebuild your credit score, which will have suffered through your late payments and mounting debt.

Good: Avoid Bankruptcy

If you are considering filing for bankruptcy, you should at least consider settling your credit card debt. Bankruptcy stays on your credit report for 10 years, making it a bigger and longer-lasting bruise. Going down the path of settlement and getting some relief from your debt is a preferable option for many people since they can avoid the stigma of having gone through bankruptcy.

Bad: Fees

What people cite as being the top complaint for debt settlement agencies is the amount of fees associated with hiring someone to negotiate with your creditors. Agencies are known for charging various fees for their services. While each company may be different, companies generally charge an up-front fee and monthly fees. You may also be charged a percentage of your debt savings, meaning if you saved $5,000, a percentage of that amount would be owed to the agency.

Bad: No Guarantees

There is no guarantee that your creditors will settle your debt with you. First of all, you must stop making payments to the credit card company for at least three months in order to give the appearance that you are unable to meet your obligations. This will hurt your credit score. If the creditor is fearful that it won't recoup the money, it may be willing to negotiate a settlement. Again, it may choose that route, but it has no obligation to do so.

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Do Debt Settlement Programs Work?

Debt settlement programs work to help you get control of your debt. A debt settlement program will negotiate with your creditors to lower your interest rates and reduce the amount of debt you pay. There are several different companies you can choose from, and you need to research the company before choosing a program to work with.

Benefits of Programs

In addition to working with your creditors, many debt settlement programs offer financial counseling. They will help you set up a monthly budget and teach you how to manage your money so you will not be in this situation again. They will handle the stress of talking to your creditors and make it so all you have to do is send them one monthly payment. This makes it easier to move forward and focus on your current financial situation.

Negative Aspects

When you work with a debt settlement company it will show on your credit report. This can lower your credit score, although it is less harmful than bankruptcy. Debt settlement can be expensive, and many debt settlement companies do not deliver on what they promise. They will take your money and not pay your debts, without you realizing what happened. Some companies are reputable, but you must do your research before choosing one.

Choosing the Right One

Contact your local Better Business Bureau to see if the debt settlement program has any complaints against it. You should also check to see if the company has been in business for several years. A new company may be more likely to disappear one day without notice, as opposed to one that has several years of experience. If you do not feel comfortable with the people who work there or with the operation do not do it.

Other Options

It is possible to work through debt settlement yourself by contacting your creditors. Most creditors will not settle debts until you have fallen behind on payments. If you are already behind, save up approximately 50 percent of what you owe and call and offer it as a settlement for payment in full. If the creditor agrees to the settlement, wait until it sends you a letter in writing that states it will accept the payment amount as payment in full for the debt. Keep the letter on file indefinitely. If you are not behind on payments, you can call your creditors to see if they will lower your monthly payments and interest rates. Then set up a debt payment plan to get out of debt. There are also non-profit credit counseling services that can help you with debt settlement for free.

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